House of Commons

Wednesday 13th October 2010 Commons Chamber

Wednesday 13 October 2010

The House met at half-past Eleven o’clock

Prayers

Wednesday 13th October 2010 Commons Chamber

[Mr Speaker in the Chair]

business before questions

committee of selection

Ordered,

That Helen Jones, Mr Frank Roy and Mr John Spellar be discharged from the Committee of Selection and Mr Alan Campbell, Mark Tami and David Wright be added.—(Mr Randall.)

Oral Answers to Questions

Wednesday 13th October 2010 Commons Chamber

The Secretary of State was asked—

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

1. What steps he is taking to increase the transparency of arrangements for distribution of overseas aid.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

The new UK aid transparency guarantee will deliver a step change in the transparency of British aid. Under the guarantee, we will publish full and detailed information on our projects and policies, strengthen accessibility and feedback, and press international partners to follow our lead.

[Andrew Selous]

Hard-pressed British taxpayers will be pleased to have heard what my right hon. Friend has said, but could he tell us how transparency will be assured for the fairly large part of the British aid budget that is spent through the United Nations, the World Bank and international development charities?

[Mr Mitchell]

My hon. Friend is right about this, because there are some 44 international and multilateral aid agencies through which we spend British taxpayers’ money. All of them are being looked at under the multilateral aid review, which we set up immediately after this Government took office. The review will report by the end of January next year and we will decide upon our spending allocations in accordance with the results that we are achieving, which will be examined by that review.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Given the positive response to the annual report arising from the International Development (Reporting and Transparency) Act 2006, will the right hon. Gentleman use his influence to ensure that the report goes directly to Parliament and that we have an annual debate on the Floor of this House?

[Mr Mitchell]

The right hon. Gentleman has some credit for having masterminded and pioneered the Bill that became that Act through the House of Commons. He is right to underline the importance of the transparency that the Act ushered in and the importance of the House of Commons being able to discuss it, with Ministers being accountable to this House for that. So I can assure him that, through the usual channels, I will underline the point that he has made.

[Malcolm Bruce (Gordon) (LD)]

The Select Committee on International Development warmly welcomes the Secretary of State’s initiatives to make aid more transparent, and will co-operate with him and with Parliament to ensure that we give effective voice to that. Does he acknowledge that there are some concerns that ensuring that everything is transparent means that we might sacrifice longer-term, less measurable outcomes for shorter-term ones? Can he assure me and the Committee that that compromise will not undermine the effectiveness of British aid?

[Mr Mitchell]

As the Chairman of the Select Committee rightly says, transparency is about accountability not only to our own taxpayers in Britain, but for the people whom we are trying to help in the poor world; it is about enabling them to hold their own leaders to account. On the nature of evaluation, to which his question also referred, it is important that this should be about not only value for money and the accountancy-driven approach to that, but development expertise. As he says, a lot of development is very long-tailed, so we need to meld both those two streams of expertise together to achieve the right results.

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

I thank the Secretary of State for yesterday’s written statement on the UN millennium development goals summit, which highlighted the decision to record all the commitments made. Making sure that everyone can see and track the progress towards the MDGs is vital, because international effort is simply not enough right now. Those goals can be met, with the international will to do so. Following the summit, can he tell the House what further steps he and his Government colleagues will be taking to increase momentum?

[Mr Mitchell]

May I welcome the right hon. and learned Lady to her new position? I think I hold the record for having shadowed this portfolio for the longest time—five years—and I wish her every success in beating my record. The whole House knows of her passion for gender equality and I am sure that we will work well together on that. We put girls and women at the heart of development, and I look forward to progressing that policy with her. Frankly, we are delighted that someone so senior on the Labour Benches is now shadowing this portfolio.

As she said, the Secretary-General of the United Nations has set in train work to bring together all the commitments that were made by different countries at the summit. ECOSOC—the Economic and Social Council—which is the relevant body of the UN, will be monitoring this on an annual basis and we will ensure that other countries that have made commitments stand up for those commitments and fulfil them, just as Britain must fulfil its commitments.

[Joseph Johnson (Orpington) (Con)]

2. What mechanisms are in place to monitor value for money derived from overseas aid; and if he will make a statement.

[Andrea Leadsom (South Northamptonshire) (Con)]

10. What mechanisms are in place to monitor the value for money derived from overseas aid; and if he will make a statement.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

We are moving from a focus on inputs to a focus on outputs and outcomes—the results our money actually achieves. We will gain maximum value for money for every pound we spend through greater transparency, rigorous independent evaluation and an unremitting focus on results.

[Joseph Johnson]

Will the Secretary of State say what assessment he has made of value for money from the more than £2 billion that the Department has given to the International Development Association over the three years ending June 2011, indicating whether he intends to match past commitments in the next funding period—that is, the 16th replenishment of the IDA?

[Mr Mitchell]

My hon. Friend raises an important point about the next replenishment of the World Bank IDA funds. As I mentioned in answer to the last question, the multilateral aid review will be the body that looks at value for money. At the last replenishment—IDA15—as anyone who follows these things closely knows, Britain was the biggest contributor and that contribution was £2 billion. What I what from the next replenishment is for people to know to what extent we are getting clean water, sanitation, basic education and health care to the people at the end of the track, who do not have them in our world today.

[Andrea Leadsom]

Value for money is, of course, crucial, but there is another issue, which is getting the money to the front line once it has been allocated. Will my right hon. Friend explain what steps he will be taking to ensure that money gets to the front line, unlike in Haiti where, I gather, the vast bulk of aid that has been allocated has yet to reach the areas where it is needed most?

[Mr Mitchell]

My hon. Friend makes an important point about the effectiveness of emergency relief. There are undoubtedly lessons for us all to learn from what happened in Haiti. That is why I have set up an emergency review of the way in which Britain does emergency relief, which is being chaired by Lord Ashdown. That review will focus on all aspects of how Britain does relief and how we co-ordinated with the UN cluster system, and it will focus particularly on the importance of the immediacy of that relief, getting shelter, food and medicine through to people in such desperate circumstances.

[Ann Clwyd (Cynon Valley) (Lab)]

How much money is spent on external consultants to monitor the effectiveness of British aid?

[Mr Mitchell]

Monitoring the effectiveness of British aid in the future will, at least in part, be done by external evaluation in the independent evaluation agency that we have set up. To some extent, evaluation should be built into all projects and into all the work that we are doing, and we are trying to ensure that that happens in the future.

[Ms Margaret Ritchie (South Down) (SDLP)]

Given the success of the global development engagement fund, what steps will the Secretary of State take to reinstate that fund to ensure that the good work done in schools and communities throughout Britain and Northern Ireland can be continued?

[Mr Mitchell]

We are reviewing the way in which such development awareness work is done. I am looking specifically at trying to ensure that global citizenship is enshrined in the work that schools do. In general, however, I do not think that British taxpayers’ hard-earned money meant for development should be spent in the UK. It should be spent helping the poorest in the world—those whom it is the intention of the House that we should be assisting.

[Guy Opperman (Hexham) (Con)]

3. What steps he is taking to improve arrangements for monitoring the effectiveness of the delivery of overseas aid.

[The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien)]

What really matters for the world’s poorest is the development results they see on the ground. It is our duty to spend every pound of aid effectively. We will set out expected results for everything we do and monitor them carefully, working with our partners.

[Guy Opperman]

Following the Paris declaration and the subsequent decisions made in Accra in 2008, will the Secretary of State update us on the ability to harmonise the way forward for such donors’ work, rather than being in a position in which that is not complementary, or involves cooking the books?

[Mr O'Brien]

My hon. Friend makes an important point. The commitments in the Paris declaration are based on the lessons learned in relation to improving the impact of aid, including having more focus on results while supporting partner countries’ priorities, not least co-ordinating how various multilateral and bilateral donors come together. When I was in Uganda recently I was heartened to see our DFID office taking a leadership role in bringing multilateral donors together as part of the commitment following the Paris declaration and the Accra agenda thereafter.

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

Let me strongly endorse what the Secretary of State said at his party conference. He said that we have a

“duty to bring an end to the injustice of millions of children dying every year from drinking dirty water.”

Will he reassure the House that he will reject the recent option presented to him by his Department to drop the vital commitments to help 25 million people to gain access to water and sanitation in Africa over the next five years and to help 30 million people in south Asia by 2011? Will he reassure the House that that commitment still stands?

[Mr O'Brien]

First, may I take this opportunity warmly to welcome the hon. Lady to her new post and to congratulate her on it? I look forward to the numerous exchanges that we shall have in the House. She will be aware that we are reviewing all programmes, be they bilateral or multilateral. As we are focusing so much more on outcomes rather than inputs, I think that she can look forward positively to the likely result of the review, particularly in relation to water and sanitation. She is right that they are crucial, and I dare say that during the recent conference season, she, as much as I, was engaged with a number of those making representations to ensure that that emphasis is reflected in programmes as they come through the review of bilateral and multilateral aid.

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

4. What steps he is taking to ensure that people in Gaza receive the humanitarian aid allocated by his Department.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

The humanitarian aid we provided to Gaza following Israel’s Operation Cast Lead was disbursed through United Nations agencies and reputable non-governmental organisations with a proven track record of delivery. DFID officials regularly visit Gaza to monitor projects and we will carry out a formal assessment of what those projects have achieved early next year.

[Stephen Phillips]

I thank the Minister for that answer. The whole House is aware of the plight of the people of Gaza, who have effectively been imprisoned in their country by successive Israeli Governments in breach of United Nations resolutions. For that reason, aid is particularly important to the people in Gaza, but at the turn of the year we learned from the head of the United States mission to the United Nations that the United Nations Relief and Works Agency will be underfunded this year to the tune of $140 million. We are paying our share and the United States is paying hers; what steps is he taking to ensure that our other partners pay theirs?

[Mr Duncan]

My hon. Friend is absolutely right. UNRWA is facing a serious shortfall in its funding this year: our estimate is that it is currently about $80 million. I met Filippo Grandi, the head of UNRWA in New York, two weeks ago. We are doing our best to urge people to contribute and we will do our bit as well. We hope also to talk to potential Arab donors to assist in making good the shortfall.

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

The very welcome increase in aid and economic activity in Gaza is due partly to the co-operation between Israel and the Palestinian Authority. Is Hamas jeopardising further progress?

[Mr Duncan]

The hon. Lady will know that we have no dealings with Hamas, but I am afraid that her interpretation of what is going on in Gaza is not entirely accurate. There are still very severe restrictions in the movement of goods, and we are doing our utmost to urge the Israelis to make more and simpler access possible, especially for products that are necessary for the long overdue reconstruction.

[Dr Julian Huppert (Cambridge) (LD)]

Is the right hon. Gentleman aware that the Gaza blockade is currently preventing UNRWA from building eight urgently needed schools in order to teach thousands of children? Money for the schools has already been provided by international donors and the plans are there, but access to cement and steel bars is not. Will he take urgent steps to make sure that those schools can go ahead for the new school year?

[Mr Duncan]

My hon. Friend is largely correct. Although it is true that some building materials are getting through to multilateral organisations, they certainly are not getting through to private citizens—for the building of houses for example. Schools must be rebuilt, and we certainly urge the Israelis to ensure that any materials that can be used for the essential reconstruction of schools and the like can be allowed through.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

5. What recent assessment he has made of the effectiveness of UK-Israeli co-operation on international development.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

Israel’s international development agency, Mashav, which is part of the Ministry of Foreign Affairs, has a small programme focusing on sharing technical knowledge and humanitarian aid. Mashav operates in a number of countries, including, within the region, Jordan and Egypt, but not in the occupied Palestinian territories. The UK currently has no direct co-operation with Israel on international development. We hope that Israel, having recently become a member of the OECD, will consider joining the OECD’s development assistance committee, which verifies the validity of its aid.

[Mr McCann]

Given the Israeli President’s offer at the United Nations to share its scientific innovations to help to tackle global poverty, as well as its recent membership of the OECD, will the Government be sending a delegate to the forthcoming OECD conference in Jerusalem? If not, why not?

[Mr Duncan]

We will certainly, in the normal way, consider the suggestion that the hon. Gentleman has made, and look at it very seriously indeed.

[Mr Philip Hollobone (Kettering) (Con)]

6. How much each of the three poorest countries in receipt of aid from his Department received in such aid in the last 12 months for which figures are available.

[The Parliamentary Under-Secretary of State for International Development (Mr Stephen O'Brien)]

In 2009-10, the Department for International Development provided £13 million of bilateral aid to Burundi, £12 million to Liberia and £109 million to the Democratic Republic of the Congo. Those figures were published in “Statistics on International Development” on 7 October. I will place a copy in the House of Commons Library. [Interruption.]

[Mr Speaker]

Order. There are far too many private conversations taking place in the Chamber. I want to hear the question from Mr Philip Hollobone.

[Mr Hollobone]

Taxpayers in the Kettering constituency would like to know what steps my hon. Friend is taking to ensure that the poorest, most deserving countries receive most British aid, where British aid can make the biggest difference. Will he please tell them?

[Mr O'Brien]

I am grateful to my hon. Friend because he makes an important point, not least following the recent Institute of Development Studies report, which states that the bottom billion reside as much in middle-income countries as in low-income countries. However, the key for us, as we go through our bilateral and multilateral aid review, is to measure and to design programmes that will carry the highest impact. The poorest countries of the world are where we can make the most impact with well-designed programmes and with great transparency, monitoring and evaluation.

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

If we are to meet our commitments, not just to the poorest countries but to the developing world as a whole, we must reach the 0.7% aid target by 2013. Will the Minister assure the House that he and the Secretary of State will fight to ensure that the comprehensive spending review means year-on-year progress to the 2013 target? We have asked before, but can he now tell us when the Government will introduce legislation to make the target binding?

[Mr O'Brien]

First, may I take this opportunity to welcome the hon. Gentleman to his post and congratulate him on his appointment? We are committed to ensuring not only that we get to 0.7%, but that we introduce legislation as and when we have had the opportunity to finalise the work on it. He can be assured that, as we run up to the CSR announcement, he should have, I hope, something to look forward to. However, he will have to wait for the precise details at that time and during the days immediately thereafter.

[Mr James Clappison (Hertsmere) (Con)]

Is the Minister concerned by how little of the aid that we spend through the EU goes to the poorest countries in the world, given that less than half the EU aid budget goes to lower-income countries and that some of the largest recipients of EU aid are countries that we would not normally consider poor? Could we not get more money to poorer people and poorer countries if we spent through our own Department, rather than through the EU?

[Mr O'Brien]

I thank my hon. Friend for his important question, because a considerable amount of our aid budget does indeed go through the EU. However, that is as subject to the multilateral aid review as any other part of our programme. The question that he raises will be closely examined during that process. Indeed, I shall be going to meet like-minded European Ministers later today and spending time in Brussels on Friday, so I will be able to take his message directly to those who are engaged in that programme.

[Heidi Alexander (Lewisham East) (Lab)]

7. What recent assessment he had made of the effectiveness of his Department’s projects to support internally displaced people in Sri Lanka.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

DFID has no direct bilateral development programmes with Sri Lanka. However, over the past two years we have committed £13.5 million to humanitarian funding, all through the UN, the Red Cross and NGOs, to target conflict-affected civilians and displaced persons. Our humanitarian programme has been effective and made a significant difference to thousands of Sri Lankan families.

[Heidi Alexander]

As a Member with a large Tamil community in my constituency, I am repeatedly approached by my constituents who are struggling to locate loved ones displaced as a result of the conflict in Sri Lanka. What recent discussions has the Minister had with the Sri Lankan Government about these matters, and what reassurance can I give to my constituents that the UK Government are doing all they can to assist members of the Tamil diaspora in their attempts to find their friends and families?

[Mr Duncan]

We work closely with the Foreign Office, and Ministers in both Departments are speaking to the Sri Lankans about that matter. Some 270,000 displaced people were released or returned to their homes. There are now only about 30,000 remaining in camps. There is access to most of these, except where the camps contain about 7,500 former combatants.

[Claire Perry (Devizes) (Con)]

8. What assessment he made of the outcomes of the recent UN millennium development goals summit in New York.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

The summit in New York achieved real progress and resulted in global commitments to save 16 million women and children, reverse the spread of malaria and tackle hunger and under-nutrition. The UK’s leadership, and in particular the Government’s commitments on aid and results, was noted by all our international partners.

[Claire Perry]

My right hon. Friend mentioned malaria. I am sure he is aware that today 4,000 people in the world will die from that disease, 75% of them under the age of five. Can he please assure the House that he is putting malaria prevention and treatment at the heart of his Department’s programmes?

[Mr Mitchell]

The fight against malaria will be included in every bilateral programme where it is relevant as a part of the bilateral aid review, but I can tell my hon. Friend—[Interruption.] My comments on the fight against malaria do not usually get such a warm reaction from the House. Britain is committed to halving the number of malaria deaths in 10 African countries by 2015.

[Mr Gregory Campbell (East Londonderry) (DUP)]

What steps will be put in place to monitor the outcome of the summit and ensure that year on year we try to reach the targets set through the summit?

[Mr Mitchell]

The hon. Gentleman is right. It is extremely important that people should be held to their commitments. That is why the Secretary-General is pulling together all the commitments that were made at the summit, and why every year ECOSOC will make sure that we have an assessment of the extent to which those commitments have been met.

[Graham Evans (Weaver Vale) (Con)]

9. What recent assessment he made of the effectiveness of projects funded by his Department in Yemen.

[The Minister of State, Department for International Development (Mr Alan Duncan)]

I saw for myself—[Interruption.]

[Mr Speaker]

Order. I understand that the House is in an excitable state. That is perfectly proper, but the mellifluous tones of the Minister of State deserve a better audience.

[Mr Duncan]

I saw for myself the challenges faced in Yemen and the impact of DFID’s programmes when I visited in July. I was also encouraged by the outcomes of the recent Friends of Yemen meeting in New York chaired by my right hon. Friend the Foreign Secretary.

[Graham Evans]

Given the strategic importance of Yemen in the fight against terrorism, can my right hon. Friend give me an update on his conversations with his counterparts in other nations to support Yemen?

[Mr Duncan]

The Friends of Yemen process to which I referred, chaired jointly by my right hon. Friend and by the Saudis and the Yemenis, took some important steps in confirming that they would implement an International Monetary Fund programme. There is, however, a deteriorating security situation and it is essential that we do our utmost to make sure that Yemen does not become a failed state.

[Keith Vaz (Leicester East) (Lab)]

I warmly welcome the Minister’s recent visit to Yemen, continuing the good work that was done by the previous Government. Will he assure us that despite recent events, including the attempted assassination of the deputy ambassador, we will continue to fund projects in that crucial middle eastern country?

[Mr Duncan]

I agree with the right hon. Gentleman. Nothing could be more important than spending money now to stop Yemen failing, as the costs and the danger that would follow if it were to fail would be a massive multiple of anything we might do now. It is a serious priority for the Foreign Office, for my Department and for the coalition Government.

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

11. What discussions he has had with international organisations on relief and reconstruction following the floods in Pakistan.

[The Secretary of State for International Development (Mr Andrew Mitchell)]

The situation in Pakistan remains extremely difficult. In some areas of the country early recovery is beginning, while in other areas emergency relief is still needed, particularly in Sindh province. My Department continues to monitor the situation closely to identify and deliver aid appropriately.

[Mr Bain]

A new report by the World Bank and the Asian Development Bank estimates the losses in crops, property and infrastructure caused by the floods to amount to $9.5 billion. Will the Government continue to make representations to the International Monetary Fund and to the World Bank to increase the assistance available for the reconstruction of Pakistan?

[Mr Mitchell]

First, I congratulate the hon. Gentleman on his elevation to the post of shadow Environment Minister. Secondly, I assure him that we will continue to lead from the front on Pakistan. In particular, in respect of food security, crops and livestock, which he mentioned, we have made a specific intervention with the recent announcement of £70 million of emergency aid for Pakistan.

The Prime Minister was asked—

[Mr David Evennett (Bexleyheath and Crayford) (Con)]

Q1. If he will list his official engagements for Wednesday 13 October.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to those soldiers who have been killed in Afghanistan in the past few weeks. They were Sergeant Andrew Jones of the Royal Engineers and Trooper Andrew Howarth of the Queen’s Royal Lancers, who died on 18 September; Corporal Matthew Thomas from the Royal Electrical and Mechanical Engineers, who died on 25 September; Rifleman Suraj Gurung from 1st Battalion the Royal Gurkha Rifles, who died on 2 October; and Sergeant Peter Rayner from 2nd Battalion the Duke of Lancaster’s Regiment, who died on 8 October. They were incredibly courageous and selfless individuals who gave their lives in the service of our country and for the safety of the British people, and we should send our deepest condolences to their families and to their loved ones.

In the weeks since the House last met, UK forces have completed the latest stage of restructuring in Helmand province. There are now more than 8,000 UK troops and 20,000 American troops there. We now protect one third of the Helmand population, and in my view that is the right proportion.

I am sure that the whole House will want to join me in paying tribute to Brigadier Richard Felton and the troops of 4 Mechanised Brigade for their commitment and sacrifice over the past six months. They have done an outstanding job, and I am sure that 16 Air Assault Brigade, which took over command on 10 October, will carry on that effort.

The House will also wish to join me in sending our sincere condolences to the family of Linda Norgrove, who died late on Friday evening. She was a dedicated professional doing a job that she loved in a country that she loved.

Finally—and I am sorry for the long opening of my remarks—I am sure that everyone would like me, on their behalf, to send our best wishes to the President and people of Chile, as they celebrate the trapped miners coming to the surface. We can see the glorious pictures on our television screens.

This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall have further such meetings later today.

[Mr Evennett]

I associate myself with the Prime Minister’s expressions of condolence and sympathy.

Will my right hon. Friend join me in congratulating Opposition Members on their choice of leader—even though he is not on the Front Bench and did not win? Has the outcome of that election changed my right hon. Friend’s assessment of the effectiveness of the alternative vote system?

[The Prime Minister]

I thank my hon. Friend for that question. It was good to see the alternative vote in practice, if I can put it that way, although of course, to be fair to my colleagues on the Government Benches, when it comes to the referendum the trade unions will not have quite such a large involvement.

I should like to take this opportunity to congratulate the right hon. Member for Doncaster North (Edward Miliband). It is an important job that he does, calling the Government to account and standing up for Opposition Members. I am sure that there will be many times when we can work together on issues of national interest, such as on Afghanistan, which I was just talking about. I hope that he will not mind me saying that, as well as wishing him well, I hope that he does the job for many, many years to come.

[Edward Miliband (Doncaster North) (Lab)]

May I start by thanking the Prime Minister for his kind words just then, and for the kind words that he gave to me when I was elected leader of the Labour party? As he said, there will be issues on which we can work constructively, including on Afghanistan.

I join him in paying tribute to our troops who have died in Afghanistan. They were Sergeant Andrew Jones of the Royal Engineers and Trooper Andrew Howarth of the Queen’s Royal Lancers, who died on 18 September; Corporal Matthew Thomas from the Royal Electrical and Mechanical Engineers, who died on 25 September, Rifleman Suraj Gurung from 1st Battalion the Royal Gurkha Rifles, who died on 2 October and Sergeant Peter Rayner from 2nd Battalion the Duke of Lancaster’s Regiment, who died on 8 October. Each of them showed the highest dedication, commitment and bravery. We honour their memory and pass deep condolences to their families.

We also honour Linda Norgrove, who died doing a simple job trying to make the lives of people in Afghanistan better—a necessary part of any political settlement. She too showed immense bravery. May I say to the Prime Minister that we fully support the decision the Foreign Secretary took to authorise her rescue? We must always make it clear from all parts of this House that responsibility for her death lies solely and squarely with those who took her hostage. May I ask the Prime Minister to update the House on his phone call with President Obama about the circumstances surrounding Linda Norgrove’s death and the progress on the inquiry into those circumstances?

[The Prime Minister]

I am grateful for what the right hon. Gentleman says and the way that he says it, both about our troops and about the tragic case of Linda Norgrove. As he knows, I spoke to President Obama to stress the point that we think it is extremely important that this is a joint US and UK investigation. I do not think there are any further details I can give about what happened that night—the picture is still unclear—but it was right, I think, to correct the early information, which most likely was wrong, about how Linda died. This investigation is now under way. When there is new information to bring to the House, we will bring it to the House. Most important of all, though, is to keep the family informed at every stage. I will meet General Petraeus tomorrow to discuss this further. I particularly want to echo what the right hon. Gentleman says about the responsibility for this. It is an impossibly difficult decision to make about whether to launch a raid and try to free a hostage. In the end we must all be clear: the responsibility for Linda’s death lies with those cowardly, ruthless people who took her hostage in the first place.

[Edward Miliband]

I thank the Prime Minister for that answer and for undertaking to keep the House informed. He has our full support on the issue.

Let me turn to the issue of benefits and say to the Prime Minister that we will work with him on his reforms to disability living allowance and to sickness benefits, because they are important reforms and they need to be done. On child benefit, though, I think that those on his own Benches and the country at large do have concerns. May I ask him, first, how many families where one parent stays at home will be affected by the changes that he has proposed to child benefit?

[The Prime Minister]

In terms of the number of families who will be affected, higher-rate tax is paid by 15% of taxpayers, and the decision that we have taken is to say that child benefit should not be received by families where there is a higher-rate taxpayer. I accept that this is a difficult choice, but the fact is—

[Mr Dennis Skinner (Bolsover) (Lab)]

How many?

[The Prime Minister]

I have answered the question, “How many?” The answer is that 15% of taxpayers are higher-rate taxpayers. This is a difficult choice, because as we deal with the deficit we have to ask better-off people to bear their share of the burden. The fact is that today we spend £1 billion giving money through child benefit to relatively better-off homes. We think that has to change, and I have to ask the right hon. Gentleman why he thinks that that is not the case.

[Edward Miliband]

I may be new to this game, but I think that I ask the questions and the Prime Minister should answer them.

I am afraid that that the Prime Minister did not provide an answer to the specific question I asked. By my reckoning, there are hundreds of thousands of families where one parent stays at home, and the question they are asking is this: why should a family on £45,000 where one person stays at home lose their child benefit—£1,000, £2,000, £3,000 a year—but a family on £80,000 where both partners in the couple are working should keep their child benefit? That does not strike people as fair, and it does not strike me as fair: does it strike the Prime Minister as fair?

[The Prime Minister]

What I believe is fair is asking better-off people to make a contribution to reducing the deficit. Let me try putting it this way to the right hon. Gentleman—think about it like this: there are thousands of people in his constituency earning one sixth of what he earns. Through their taxes, they will be paying for his child benefit. Is that really fair?

[Edward Miliband]

I am afraid it is nought out of two on straight answers. We should try to change the tone of these exchanges, but the Prime Minister must provide straight answers to straight questions that I ask him. I am not defending the rich—[Interruption.]

[Mr Speaker]

Order. The Leader of the Opposition will be heard, and if there are colleagues chuntering away who then hope to catch the eye of the Chair, I am afraid they are deluded.

[Edward Miliband]

I am defending the deputy head teacher in her primary school and the police inspector, who are asking a simple question. The Prime Minister used to agree with me. Before the election he went to Bolton, in an event that I gather was called “Cameron Direct”, and he said:

“I’m not going to flannel you. I’m going to give it to you straight. I like child benefit. . . I wouldn’t change child benefit, I wouldn’t means test it, I don’t think that’s a good idea.”

I agree with the Prime Minister: why doesn’t he?

[The Prime Minister]

The problem that the right hon. Gentleman has to face up to is that he left us the biggest budget deficit in the G20, and he has absolutely no proposals to deal with it. He opposes our changes on housing benefit, yes? You oppose those? He opposes our changes on a benefit cap—[Interruption.]

[Mr Speaker]

Order. Just as the Leader of the Opposition must be heard, so must the Prime Minister.

[The Prime Minister]

The right hon. Gentleman opposes our changes on a benefit cap, yes? Just nod. And he opposes our changes on child benefit. He quoted something to me; let me quote him something back:

“We have to be frank with people and show our mettle. In times of plenty, giving child benefit to high earners is a luxury the country”

cannot afford. That was Alan Milburn, someone who cared—[Interruption.] Ah, he’s gone. I love this—all the Labour politicians who used to win elections have been thrown out of the window. The right hon. Gentleman has to face up to the truth. We have a big budget deficit, and we have to ask better-off people to make their contribution. We say higher earners should not get child benefit. Their child benefit is being paid for by some of the poorest people in our country, and it is about time he protected them.

[Edward Miliband]

I really want the Prime Minister to face up to the scale of the changes he is proposing, and I say to right hon. and hon. Members on the Government Benches that they should face up to the scale of the loss. Take a family on £33,000 after tax. If they have three kids, they will be losing £2,500 as a result of these changes. That is the equivalent of 6p on the basic rate of income tax. That is an enormous loss that the Prime Minister is inflicting on a particular group in the population. If he wants to take people with him on deficit reduction, he has to show that his changes are fair and reasonable. I come back to this point: I do not believe his changes are fair and reasonable—does he?

[The Prime Minister]

I do not think it is fair for the poorest constituents in the right hon. Gentleman’s constituency to contribute to his child benefit. That is what he is asking them to do. Let me remind him of something he said in July, which was that

“whoever is the Labour leader will, by the time of the spending review, have to show that they have an alternative plan”.

Where is the alternative plan? That was a speech he made to an organisation called Left Foot Forward. Could I suggest that he put both his left feet forward and tell us what the plan is?

[Edward Miliband]

The truth is, as the whole country will have heard—[Interruption.]

[Mr Speaker]

Order. People should stop shouting. The public hate it, it is bad for politics and it should not happen.

[Edward Miliband]

The truth is that the Prime Minister has no defence of that policy. He cannot explain to families up and down the country why they will sustain that loss. I see the Chancellor sitting there. Let us be honest: the policy has been a shambles from day one. The rest of the Cabinet knew nothing about it, and the Local Government Secretary said he found out from the media that it would be announced. The Children’s Minister, whom I cannot see in the Chamber, went on the run because he was too scared to defend the policy. I bet the Prime Minister wishes the BBC blackout had gone ahead, given that his conference was such a shambles.

On child benefit, is it not time that the Prime Minister had the grown-up sense to admit that he has got it wrong and that he has made the wrong decision? He should tell middle-income families up and down Britain that he will think again.

[The Prime Minister]

The right hon. Gentleman has suddenly discovered middle-income families. We are now hearing about the squeezed middle, but who squeezed the middle? Who doubled the council tax and put up tax 122 times, and who taxed the pensions, the petrol, the marriages and the mortgages? Suddenly, having done all that to middle-income earners, Labour wants to stand up for them. That is a completely transparent political strategy to cover up the inconvenient truth that he was put where he is by the trade union movement. It is short-term tactics and political positioning: it is not red, it is Brown.

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

Q2. As vice-chairman of the parliamentary football club and a qualified football referee, I am well aware that there are just 50 days left before FIFA makes its momentous decision on the location of the 2018 World cup. Will the Prime Minister join me in supporting the English bid, which is in the interests not only of football, but of the entire country?

[The Prime Minister]

I thank my hon. Friend for his question. I am sure the whole country, and indeed everyone in the House, will want to get behind our bid for the 2018 World cup. I think we can launch and run an incredible World cup. We have the best fans, the best teams and the best stadiums, but above all this country has the biggest enthusiasm for football. We can make it a success for Britain and for the world.

I should also like to welcome Sepp Blatter, the president of FIFA, who will be coming to No. 10 Downing street after Prime Minister’s questions. Indeed, he is in the House of Commons today. I would like to reassure him on everyone’s behalf that behaviour in this House is always worse than behaviour either on the pitch or on the terraces.

[Mr Speaker]

This is my cue for saying that the House must now calm down.

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

It is sometimes easy to forget how far Northern Ireland has come in recent years, but there are still immense challenges to stability. In the light of discussions with the Chancellor on the part of the Northern Ireland Executive and the recent visit by the Deputy Prime Minister, can the Prime Minister confirm today that he will stand by the formal guarantees given to the Executive at the time of the restoration of devolution, especially in relation to the financial package and capital investment stretching through to 2018? Those are critical matters if we are to establish and embed devolution in Northern Ireland in a power-sharing Executive.

[The Prime Minister]

The right hon. Gentleman makes very good points on how far Northern Ireland has come. Everyone on both sides of the House wants to continue that process, make the institutions work and embed the peace that we have achieved in Northern Ireland. I pay tribute to my predecessors, who put so much hard work into that.

On the specific issues, the previous Prime Minister made a series of promises, particularly about policing and justice in Northern Ireland, which we discussed when we were the Opposition. We stand by those promises. On the Presbyterian Mutual Society and a group of people who did lose money in the financial crunch—I know how angry it can make people in Northern Ireland when people say, “Nobody lost money”, because they did—we are working very hard to try to find a fair and equitable solution.

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

Q3. Does the Prime Minister agree with the previous Government’s policy of part privatisation of Royal Mail? Will he urge those on both sides of the House to work together to help to revitalise that great British institution?

[The Prime Minister]

I am grateful for what my hon. Friend says. The fact is that Royal Mail is a business that has falling volumes of mail and a £10 billion pension fund deficit, and it badly needs investment, modernisation and change right now. The last Labour Secretary of State supported such reform, the Conservative party supports that reform and the Business Secretary supports that reform, and we are publishing the Bill today, which includes a minimum of 10% employee share ownership and participation in this important move. I hope that the Opposition will not turn their backs on the future, but will back this change, rather than stepping back into their comfort zone.

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

We were all deeply saddened, especially in the Hebridean community, by the death at the weekend of Linda Norgrove, the aid worker from the Isle of Lewis. It was welcome that the Prime Minister took time to speak to her father on Monday. The family have asked me to convey that they are pleased that the US Administration corrected accounts of the events surrounding her attempted rescue and did not attempt to sweep information under the carpet. At a difficult time, the family are grateful for that openness, as they are for the care and support of the wider community in Uig at this time of grief. As Linda’s remains are expected to arrive in the UK this week, may I ask the Prime Minister that if the family need any help, independent or otherwise, in coming to a true understanding of what happened to their daughter in Afghanistan, they will receive it?

[The Prime Minister]

I thank the hon. Gentleman for his question and the way in which he put it. Linda’s family must have all the help that they need, and I have said that we will do anything that we can to help them and get them any information that they need. Tragically, nothing will bring Linda—that wonderful daughter who led an incredible life—back, but it can help to get all the information about what happened. The British ambassador to Afghanistan, William Patey, has met the family and will meet them again. Along with others, I hope that he can give them information on the background of what happened and why so that they, and the community that the hon. Gentleman mentioned, can try to find some closure to this terrible episode.

[Esther McVey (Wirral West) (Con)]

Q4. Lord Adonis said that a pure graduate tax would be unworkable and a catastrophe. Will the Prime Minister take the advice of the shadow Chancellor, who said:“Oh, and for goodness’ sake, don't pursue a graduate tax.”?

[The Prime Minister]

I thank my hon. Friend and she is right. We looked at this policy carefully over the summer—I am glad to see that the shadow Chancellor is laughing. I gather that at a lively shadow Cabinet meeting they could not agree on their policy. We looked at this in detail, and a pure graduate tax does not work. I recommend to the Opposition the document “Why not a Pure Graduate Tax?”, published by the Department for Education and Skills under the previous Government. It points out that

“there is no guarantee universities would receive the additional funding raised. There would be no direct relationship between what the student paid and the…value…of their course.”

A graduate tax would put up the deficit as it would not break even until 2041. It is a completely flawed policy, totally unworkable and expensive. As a first choice of policy to go out on, it is a complete disaster.

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

Q5. Can the Prime Minister confirm that he will retain the winter fuel allowance without any changes to the criteria?

[The Prime Minister]

I am extremely sorry, but I did not catch the hon. Gentleman’s question. I will either write to him—[Interruption.] Short questions are a very good thing, but I am afraid that I missed it. Is it in order for him to have another go?

[Mr Speaker]

If it was not heard, let us hear it.

[Mr Cunningham]

Will the Prime Minister retain the winter fuel allowance without any changes to the criteria used?

[The Prime Minister]

I made a very clear promise at the election and I stand by that.

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

Q6. This year, four British scientists have gained Nobel prizes, confirming their position in the premier league of world science. The comprehensive spending review gives an opportunity to identify areas for investment as well as reducing costs. Does the Prime Minister agree that, with the US, Germany, France and other countries increasing their expenditure on science, it would be prudent for Britain to do likewise?

[The Prime Minister]

It is vital that we retain a good science budget and invest in our science base, but I cannot hide from the hon. Gentleman—or anyone in this House—the fact that we inherited a budget deficit of £155 billion. [Interruption.] I know that the Opposition do not like hearing it, but it is the truth. Those are the facts, and we have to deal with that. We will do what we can to ensure that as we go through this process we help to keep science and scientists in this country. That is what we must do, but it is very difficult to make all areas immune from the spending reductions forced on us by the complete incompetence of the people now sitting on the Opposition Benches.

[Ian Austin (Dudley North) (Lab)]

Q7. In the past two years, Britain’s cold weather payments were increased to £25, but the small print of this year’s legislation does not contain that guarantee. Is the Prime Minister really saying that 4 million of Britain’s poorest families and pensioners will have their payments cut by two thirds and receive just £8.50 this year?

[The Prime Minister]

The hon. Gentleman will know, as he worked closely with the previous Prime Minister, that there was never a guarantee about the scheme. We will look at it carefully and make our announcement in the spending review. [Interruption.] He asked a question; he might wait for the answer. He will have an announcement in the spending review.

[Margot James (Stourbridge) (Con)]

Q13. Clare Rayner, the president of the Patients Association, sadly died yesterday. Her final words were a warning to the Prime Minister that if he screws up the NHS she is going to come back and haunt him. With the enormity of the financial crisis becoming ever clearer and the comprehensive spending review getting closer, can the Prime Minister reassure the House that we will honour our commitment to spend more on the NHS and improve outcomes to match the best in Europe?

[The Prime Minister]

I am grateful for what my hon. Friend says. I was brought up listening to Dr Rayner on Capital Radio, and I would never want to do anything to upset her or her memory. The House will know that we have protected the national health service and will invest in it, unlike the Opposition, who proposed to cut it.

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

Q8. The Prime Minister is aware that many small Presbyterian Mutual Society savers are at wits’ end corner. When do we expect to have a satisfactory conclusion to this whole issue, and will he assure the House that the Government will recognise the danger of a double-dip recession in Northern Ireland when the Chancellor makes his speech next week?

[The Prime Minister]

I know that the hon. Gentleman knows how difficult this issue with the PMS is. Achieving a fair resolution is not easy. I believe that we will have it done by the announcement of the spending review on 20 October. That is our goal. An announcement will be made, and he will be able to explain to his constituents what we are going to do.

[Sajid Javid (Bromsgrove) (Con)]

Q12. This past summer, my constituents in Bromsgrove have had to endure Travellers trespassing on their land, vandalising it and causing thousands of pounds of damage. Will my right hon. Friend consider bringing forward legislation to create a new offence of intentional trespass, so that people who go on to land without the owner’s permission can be prosecuted without the need for a court order?

[The Prime Minister]

We will certainly look at the issue. The basic point is that this is an issue of fairness. If everyone else in the country has to obey planning laws, that should be the same for the Traveller community as well. We should have one law that everybody obeys. That is what we will aim for, and we will look at the proposal that my hon. Friend makes.

[Kevin Brennan (Cardiff West) (Lab)]

Q9. When the Prime Minister did the deal with the Deputy Prime Minister on the coalition, was it sealed with a traditional gentleman’s handshake or was there some kind of written pledge involved? If a written pledge was involved, why does the Prime Minister think that the Deputy Prime Minister is any more likely to honour his pledge to him than he was to honour the pledge that he gave to students and their families in this country?

[The Prime Minister]

What we fundamentally agreed between us was that it was going to take two parties to dig the country out of the mess that the hon. Gentleman’s party left us in.

[Paul Uppal (Wolverhampton South West) (Con)]

Q10. One of the most short-sighted mistakes of the previous Labour Government was the repeal of business rate relief on empty commercial property. What measures can the Prime Minister take to reverse that decision or at least have a moratorium, to give a boost to regeneration, investment and business in the urban west midlands and my constituency of Wolverhampton South West?

[The Prime Minister]

I am afraid that I have to disappoint my hon. Friend a little bit. This was a bad tax. Properties were being left empty not because business people chose to do that; they were being left empty because of the recession. However, we are not in a position, with this massive budget deficit, where we can undo all the bad things done in one go. What we have focused on is getting a lower rate of corporation tax, cutting national insurance on new businesses and giving small business rate relief. Those are all things that will help to get our economy growing. As evidence of that, we can welcome today’s fall in unemployment figures and the growth in employment that we have seen over the past three months.

[Joan Ruddock (Lewisham, Deptford) (Lab)]

After years of falling as a result of Labour policies, unemployment in my constituency rose by 80% during the global recession. Will the Prime Minister therefore explain why his Government are going to close the only jobcentre in my constituency?

[The Prime Minister]

I want to take the right hon. Lady up on the way in which she put her question. She talked about falling unemployment under Labour, but omitted to point out that it rose under Labour in the past three years. What matters is helping people back into work, and what she will see with the Work programme is the biggest, boldest effort to get people out of benefits and into work that this country has ever seen.

[Dr Daniel Poulter (Central Suffolk and North Ipswich) (Con)]

Q11. My constituents very much welcome the fact that the Prime Minister is leading by example in these difficult economic times by taking a 5% reduction in his prime ministerial salary. Is he aware that the chief executive of Suffolk county council is paid a salary of £220,000 a year? Will he join me in calling on her and other senior public sector managers to set an example through leadership by taking a reduction in their salaries, especially given the fact that they are paid 15 or 20 times more than front-line public sector workers?

[The Prime Minister]

My hon. Friend makes an extremely good point. It is right to have complete transparency in pay levels throughout the public sector. For the first time in a long time, we have been able to find out what all these people are being paid and, as a result, there is downward pressure and better value for money throughout local government. I think that this revolution in transparency should continue.

Bill presented

Postal Services Bill

Presentation and First Reading (Standing Order No. 57)

Secretary Vince Cable, supported by the Prime Minister, the Deputy Prime Minister, Mr Chancellor of the Exchequer, Mrs Secretary May, Mr Secretary Paterson, Secretary Michael Moore, Mrs Secretary Gillan, Mr David Willetts, Mr Edward Davey and Mr Edward Vaizey, presented a Bill to make provision for the restructuring of the Royal Mail group and about the Royal Mail Pension Plan; to make new provision about the regulation of postal services, including provision for a special administration regime; and for connected purposes.

Bill read the First time; to be read a Second time tomorrow; and to be printed (Bill 78) with explanatory notes (Bill 78-EN).

Intercity Express Programme

Wednesday 13th October 2010 Commons Chamber

Phil Wilson (Sedgefield) (Lab)

- Hansard - - Excerpts

The petition states:

The Petition of residents of the Sedgefield constituency, and others,

Declares that the petitioners believe that the Government should implement the procurement of rolling stock through the Intercity Express programme, which would lead to Hitachi building a manufacturing site in Newton Aycliffe; and further declares that this would result in the creation of hundreds of direct jobs and thousands of jobs in the supply chain, of which the majority would be in manufacturing, giving a much needed boost to the North East economy and improving rail services nationwide.

The Petitioners therefore request that the House of Commons urges the Government to implement the procurement of rolling stock through the Intercity Express Programme.

And the Petitioners remain, etc. [P000863]

Public Houses and Private Members’ Clubs (Smoking) Bill

Wednesday 13th October 2010 Commons Chamber

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

12:32

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

I beg to move,

That leave be given to bring in a Bill to exempt public houses and private members’ clubs from the requirements of part 1 of the Health Act 2006 relating to smoke-free premises; and for connected purposes.

Let me first declare an interest, in that I am a member of the Salisbury Conservative club in Bury, which is a private members’ club. In common, no doubt, with many right hon. and hon. Members on both sides of the House, I also visit public houses from time to time. I must also declare at the outset that I am a devout non-smoker. I have never smoked, and indeed I would encourage others not to start smoking. I would also encourage those who do smoke to stop. I am entirely persuaded that smoking can cause potentially fatal diseases. That said, however, smoking remains entirely legal, and the Treasury benefits by many billions of pounds each year from excise duties and VAT on the sale of tobacco products.

It is now more than three years since the outright prohibition on smoking in public places was introduced on 1 July 2007. Since that time, the ban has been widely accepted in most areas. Although there are arguments for it to be completely repealed, this Bill aims to deal with what has perhaps been the most contentious aspect of the ban—namely, its application to public houses and private members’ clubs. This Bill would exempt such premises from part 1 of the Health Act 2006 and allow them to reintroduce a smoking room if those in charge chose to do so. Smoking would be permitted in a separate room, provided that appropriate and effective air extraction equipment was fitted. Smoking would continue to be prohibited where food was being served.

In considering this motion, it is worth recalling that the Labour party’s 2005 manifesto stated that

“all restaurants will be smoke-free, all pubs and bars preparing and serving food will be smoke-free; and other pubs and bars will be free to choose whether to allow smoking or be smoke-free. In membership clubs the members will be free to choose whether to allow smoking or to be smoke-free.”

If only the previous Labour Government had stuck to their manifesto commitment, there would perhaps have been no need for this Bill.

I submit that there are two main reasons why the blanket ban should be relaxed and smoking should once again be permitted in public houses and private members’ clubs. First, there is the economic case; and, secondly, there is what I believe to be an even more important reason—namely, freedom of choice and the desirability of devolving decisions to the lowest appropriate level.

Let me deal briefly with the economic argument. Since the ban was introduced, thousands of public houses have closed down. As ever with statistics, it is possible to choose the ones that best suit the desired argument. Few could argue against the fact, however, that since the introduction of the smoking ban, thousands of public houses have closed down. I do not claim that the smoking ban was the only cause of all those closures, as other factors such as the availability of lower-price drinks from supermarkets, the cost of satellite television and the general economic climate no doubt all played a part. For many, however, the smoking ban was the final straw.

One does not have to travel very far in my constituency to find a public house that has called time for the very last time. There are closed public houses in Bury and in Ramsbottom that are now for sale, and “To let” signs outside public houses are becoming increasingly commonplace. This picture appears to be replicated in constituencies throughout the country. When a rural pub or a local community pub closes down, everyone loses out, not just those who wish to smoke.

Let me turn to deal with the second reason—freedom of choice and localism. I believe that in the case of a private members’ club, the decision should be taken by the members of that club. I believe that the decision on whether smoking takes place in a public house should be taken by the pub landlord. I believe in trusting the people. This means giving individuals the power and the responsibility to take decisions for themselves.

Pub landlords are the right people to decide whether allowing a smoking room is the best thing to do for their establishments. Some would no doubt choose to take advantage of the freedom that the Bill would give them, but I know from my own constituency that many would not. As smoking would continue to be prohibited where food was being served, many public houses would remain just as they are today. Customers would have a choice whether to use a completely non-smoking pub or to use one with a smoking room. The establishment of separate smoking rooms in some pubs would also reduce the incidence of smokers’ being forced to gather on the pavements outside pubs.

The Bill puts into practice the principle of localism that my right hon. Friend the Prime Minister set out with such clarity in his speech to the Conservative party conference last week. It transfers power from the state to the citizen, from politicians to people. It puts the “local” back into localism, and I commend it to the House.

12:41

[Mr Kevin Barron (Rother Valley) (Lab)]

I oppose the Bill. The same argument was put to the House not so many years ago in a debate that resulted in the current legislation. The hon. Member for Bury North (Mr Nuttall) was right to say that the original legislation, proposed by the then Labour Government, did not provide for a comprehensive ban in areas of all public houses or private members’ clubs. In 2005 the Select Committee on Health, which I chaired, conducted a detailed inquiry into the issues before the Bill that became the Health Act 2006 had completed its passage. When it had done so, the amendments that had been tabled were put to the vote. Labour Members were eventually given a free vote, as, I understand, were Opposition Members.

Let me give the House a flavour of the results of that vote. The hon. Gentleman described this as a contentious issue. The result of the vote on clause stand part, as amended—there had been an attempt to remove the amendment—was 452 Ayes and 127 Noes. At no time did any Member trying to defend the hon. Gentleman’s position manage to persuade more than 200 Members into the Lobby. It followed a great tradition that in the other place, shortly after the votes in February 2006, Lord Tebbit rose to defend the Labour party manifesto of 2005. At the time some of us, although we had stood on that manifesto, thought it was nonsense from the point of view of public health.

In the same year that the House made that decision, Spain implemented a smoking ban exempting small bars and restaurants. The law was not seen as a success, and as a result of public dissatisfaction with the exemptions the Spanish Government have proposed to extend the ban to all pubs and restaurants, although they are considering an exemption for private smokers’ clubs. An evaluation of the Spanish law found that levels of second-hand smoke were reduced only in bars where smoking was prohibited by law, and that

“Most hospitality workers continue to be exposed to very high levels of SHS”—

that is, second-hand smoke.

That was the issue then, and it is still the issue today: people who work in the leisure sector are exposed to people’s life-threatening habits. It was the issue in 2006, when the original legislation went through the House, and it remains the issue today. Unless bars contain NHS operating theatres with doors that are rarely opened, it will never be possible to avoid the effect of Bills such as this on workers. Evaluations of other partial bans have found limited evidence of health gain, and they are believed to aggravate health inequalities.

I remind Government Members that they have just fought and won a general election criticising the then Labour Government for not ending health inequalities in this country. I agree: they did not do away with health inequalities, and some 50% of health inequalities are created by tobacco use. If Members on the Government Benches are going to continue saying what they said when in opposition, this Bill is the last measure I would expect their Front-Bench team to support, because health inequalities are writ large in tobacco use in this country.

An Australian study of 2004 found that no-smoking areas in licensed premises contained as many tobacco toxins as smoking areas. Even in clubs with completely separate no-smoking rooms there was no material reduction in the levels of harmful toxins in the air. Ventilation systems in smoking areas in rooms that are not fully segregated will not protect people in non-smoking areas. The Select Committee on Health—an all-party Committee, I might add—came to that conclusion. It is also the finding of research by D. Kotzias and others at the European Commission Joint Research Centre. We cannot isolate smoking in smoking rooms and think it has no effect elsewhere. That will not work, and it is the reason why the original Health Bill put before the House in 2005 was changed in the House in 2006.

Let us look at the health gains, because that is what this is about. It is not about leisure; it is about the health of the public. Hospitality industry workers have benefited most from the UK legislation. Evaluation of the Spanish partial ban found that the law had failed to protect them significantly. The most notable health gain for members of the public is the fall in the number of admissions for acute myocardial infarction. Researchers at the university of Bath have calculated that there has been a 5% drop in the number of heart attacks in England, attributable to smoke-free legislation. The figure was higher for Scotland and it was measured within 12 months of the ban coming into force—as Members will know, the ban was introduced earlier in Scotland than in the rest of the UK. Similar reductions have been observed in other jurisdictions with a comprehensive ban, including New York, Ireland and Italy. Indeed, the Health Committee went to Ireland when taking evidence for our report.

It has also been suggested that having more people smoking out on the street might increase young people’s perception that smoking is a normal adult activity and so increase the number of under-age smokers. In fact, international research shows that smoking bans are associated with reducing smoking among teenage boys in particular, possibly because it is seen as less normal. This topic has been debated in the House throughout the decades during which I have been a Member, and I have frequently argued for legislation to de-normalise smoking.

Some 50% of people who smoke will die a premature death, as well as having suffered from various diseases and all the other burdens they will carry throughout their life—and that taxpayers will carry for the rest of their lives in having to treat these people in the NHS. It is sometimes argued that we must recognise that smokers put money into the Treasury as opposed to looking at the ill health that is suffered as a result of tobacco use. That is a ridiculous argument.

It was claimed at the time of the Health Bill that banning smoking in pubs would displace smoking into the home, thereby increasing children’s exposure. The reverse has been true. The proportion of homes in England where smoking is prohibited throughout has increased to 79% and children’s exposure has fallen because of that. I have not got the figures to hand, but recently—within the past 12 months—research has found a link between cot death and smoking. That affects young children who do not have anything directly to do with cigarettes, but who are exposed to them through passive smoking. It is irresponsible for any Member to stand up in this House and say we should reverse this measure which has led to such great health gains in this country.

Support for smoke-free legislation in England has risen to more then 80% of adults, many of them smokers themselves who agree that this legislation is right. Support has risen fastest among smokers, half of whom support the legislation as it stands. Most smokers believe the law has been good for their health, good for the health of the public and good for the health of most workers.

There is an issue with the effect on business. I have looked at all the evidence and I must say that trying to introduce smoke-free rooms ventilated to the level that would be necessary would have a negative effect on business; there is no way that will benefit businesses.

Let me finish by discussing the issue of trusting the people. This morning, I found the following words on the hon. Member for Bury North’s website—he has a blog and people post things on it. He said that we should trust the people, and these are the comments of someone called Jim:

“Mr Nuttall, I am a tory voter and a pub landlord, you are so wrong on this and I suggest you use your common sense to drop this headline catching cause.

The smoking ban was one of the few things labour got right in their last reign.”

I dispute that, to some extent. He continued:

“To even suggest undoing it in this manner brings yourself and the party into disrepute. As a landlord my biggest fear about the smoking ban was the proposal you are advocating. In my humble opinion it will create an unfair playing field, that panders to the weak and stupid.

Many people because of the ban have given up smoking, myself included, I do not want to go back to the days of smoky pubs, the blanket ban has worked. My business is proof, I am still trading and making a living”.

I shall not read out the rest, but there are many other comments on the hon. Gentleman’s blog, including some from nurses in his constituency. One of them says that they wished he had put this proposal in his manifesto when he stood for election in May, because they may have then had a different view about the Conservative candidate. I would like to oppose this Bill. [Interruption.]

[Mr Speaker]

Order. The hon. Member for Northampton South (Mr Binley) has been in the House for five years, so I feel sure that he is keenly conscious of the fact that there are two speeches on these occasions and no more.

Question put (Standing Order No. 23).

12:51

Division 70

Ayes: 86

---

Conservative: 74
Labour: 4
Liberal Democrat: 4
Democratic Unionist Party: 3

Noes: 141

---

Labour: 81
Conservative: 37
Liberal Democrat: 18
Democratic Unionist Party: 3
Social Democratic & Labour Party: 2
Alliance: 1
Green Party: 1

Superannuation Bill

Wednesday 13th October 2010 Commons Chamber

Consideration of Bill, not amended in the Public Bill Committee.

New Clause 1

Consents required for civil service compensation scheme modifications

‘(1) Section 2 of the Superannuation Act 1972 is amended as follows.

(2) In subsection (3), at the beginning insert “Subject to subsection (3A) below,”.

(3) After subsection (3) insert—

“(3A) Subsection (3) above does not apply to a provision which would have the effect of reducing the amount of a compensation benefit except in so far as the compensation benefit is one provided in respect of a loss of office or employment which is the consequence of—

(a) a notice of dismissal given before the coming into operation of the scheme which would have that effect, or

(b) an agreement made before the coming into operation of that scheme.

(3B) In this section—

“compensation benefit” means so much of any pension, allowance or gratuity as is provided under the civil service compensation scheme by way of compensation to or in respect of a person by reason only of the person’s having suffered loss of office or employment;

“the civil service compensation scheme” means so much of any scheme under the said section 1 (whenever made) as provides by virtue of subsection (2) above for benefits to be provided by way of compensation to or in respect of persons who suffer loss of office or employment.

(3C) In subsection (3B) above a reference to suffering loss of office or employment includes a reference to suffering loss or diminution of emoluments as a consequence of suffering loss of office or employment.”

(4) The amendments made by this section apply in relation to reductions to which effect is given by a scheme made under section 1 of the 1972 Act after the coming into force of this section.

(5) Subsection (6) applies if—

(a) a scheme under section 1 of the 1972 Act is made after this section comes into force, and

(b) consultation on the proposed scheme took place to any extent before this section came into force.

(6) The fact that the amendments made by this section were not in force when that consultation took place does not affect the question whether the consultation satisfied the requirements of section 1(3) of the 1972 Act.’.—(Mr Maude.)

Brought up, and read the First time.

13:02

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

I beg to move, That the clause be read a Second time.

[Mr Speaker]

With this it will be convenient to take the following:

Amendment 4, page 1, line 1, leave out clause 1.

Amendment 3, in clause 2, page 3, line 14, at beginning insert ‘Subject to subsection (2A),’.

Amendment 2, page 3, line 14, at end insert—

‘(2A) Section 1 shall not come into force until the Minister has laid a report stating that the affected members of the relevant trade unions under section 2(3) of the Superannuation Act 1972 have given their approval by means of ballots to the terms of section 1, and the House of Commons has come to a Resolution on a Motion in the name of a Minister of the Crown approving the report.’.

Amendment 5, in title, leave out from ‘provision’ to end and insert

‘modifying the effect of section 2 (3) of the Superannuation Act 1972 for benefits to be provided by way of compensation to or in respect of persons who suffer loss of office or employment.’.

Government amendment 1.

[Mr Maude]

In my statement to the House in July and again on Second Reading in September, I made it clear the Government’s intention is to make the civil service compensation scheme affordable, and I set out our intention to legislate to underpin the negotiations to achieve that. However, I have made it clear at all stages—and I make it clear again today—that our principal aim has been to reach a negotiated settlement with all six civil service unions to introduce a new successor scheme that would provide, in particular, better protection for lower-paid civil servants.

The current civil service compensation scheme is unaffordable and completely out of kilter with practice in the rest of the public sector, let alone in the private sector, and it actually makes more likely redundancies among the lowest paid and shortest-tenured civil servants. The previous Government recognised that and engaged in protracted negotiations over many months—indeed, over several years—with the Council of Civil Service Unions to try to reach agreement on a successor scheme. I pay tribute today, as I did on the previous occasion, to the right hon. Member for Dulwich and West Norwood (Tessa Jowell) and her predecessors, who persisted in trying to get full agreement from all members of the Council of Civil Service Unions.

Despite those months of negotiations, the previous Government were unable to achieve full agreement. I understand that it looked as though an agreement was there, but at the last minute the PCS—the Public and Commercial Services Union, the largest of the civil service unions—pulled out, leaving a proposed new scheme in place that had been agreed by five unions, but not by the sixth.

Given the extensive consultations and negotiations that took place, which gained agreement from five out of the six unions, the previous Government felt and concluded—I said at the time that I agreed—that it was only right that one union should not hold the right of veto on any change. So in April the previous Government imposed a new compensation scheme that reflected the agreement with the five unions. But for the action of the PCS, that might have been where the story ended, but the subsequent actions of the PCS have led us to where we are today.

The PCS challenged in the High Court the right of the Government to impose a settlement in such circumstances and the Court subsequently quashed the February scheme. So almost literally on my first day in office after the election, I was confronted with a situation in which the previous civil service compensation scheme was still in force and had not been reformed at all. That scheme, as I have said, is completely unaffordable, inherently unfair and in urgent need of reform. It was striking that on Second Reading, when this issue was extensively and thoroughly debated in a constructive and open spirit with no element of partisanship creeping in, every Member who spoke agreed that the current scheme was unsustainable and needed reform. There was complete consensus across the House.

The current compensation scheme is extremely generous compared with the rest of the public sector, let alone private sector, equivalents. A comparison with the statutory redundancy scheme shows that payouts, particularly for lower-paid workers in the private sector, are capped at 32 weeks’ pay at a maximum weekly pay that is still, I think, capped at £380. The maximum that can be paid out to anyone under that scheme is less than £12,000. By contrast, the maximum value under the civil service scheme is the equivalent of six years and eight months’ salary. Typical schemes in the private sector—particularly the statutory scheme—pay one week’s salary for each year worked. The civil service scheme pays at least four times that amount—a month’s salary for each year worked, and in some cases up to three months’ salary for each year of service.

The previous Government spent £1.8 billion on civil service redundancy payouts in the last three years, including a number of spectacular six-figure settlements for individuals. The result of the scheme’s being so generous and unaffordable is that Departments cannot afford to make civil servants redundant, even if they are willing to go voluntarily, if they are highly paid and of long tenure. If Departments need to save money—as they had to under the previous Government and as they will have to under the coalition Government—through redundancies, they simply cannot afford to choose those individuals on high pay and long tenure. In order to make the same savings in salary terms, they need to make many more lower-paid and shorter-tenured staff redundant. The unjust effect of the current scheme’s being so badly structured and unsustainable is that if it were allowed to remain in place, more civil servants would lose their jobs and more civil servants on lower pay would lose their jobs. The coalition Government are not willing to see that happen.

[Stewart Hosie (Dundee East) (SNP)]

I understand the logic of the Minister’s argument, but I have a constituent who has a business case for her to take early retirement under the voluntary scheme—I have seen the business case, which will save a great deal of money over the next few years. She is not being allowed to go now because of the uncertainty surrounding this process. Do we not have a little disconnect at the moment in that this process and this Bill are stopping people leaving early when it suits them and would save money right now for that Department?

[Mr Maude]

Depending on what the House decides today, some of that uncertainty should be removed. I want Parliament to be able to move quickly to enable the new scheme to be put in place, because it will provide certainty. I absolutely understand the uncertainty that exists for many dedicated, hard-working public servants who know that there might not be a future for them because of the situation—because, frankly, of the previous Government’s legacy of the fiscal deficit—and it is really unfair to leave people in limbo and with that kind of uncertainty. I want us to achieve the greatest certainty at the earliest time so that people know where they stand and so that Departments and agencies that have to make redundancies can go ahead with them and enable people to make the break and start the next phase of their lives.

The caps contained in the Bill are, as I said on Second Reading, a blunt instrument that will immediately limit the amount that can be paid to any individual. Those caps were never intended to be a long-term solution. It is and has always been our absolute priority to create a scheme that is affordable but that provides protection for the lower-paid. However, those protections are complicated to engineer and we felt—I do not resile from this at all—that it is incredibly important to consult thoroughly and to discuss properly how those protections should be configured. The discussions with the unions have been very productive and have led to the scheme, which I shall describe, being configured.

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

Widespread concern has been expressed throughout the House about the impact of the Bill on hundreds of thousands of civil servants. I welcome the fact that the Government have improved the offer to the civil service, but that offer is not as generous as what was on offer in February and agreement has yet to be reached. Will the Minister agree personally to meet the six unions concerned to try to achieve a negotiated solution? Negotiation has to be better than the blunt instrument that will impose serious changes for the worse to the employment contracts of, for example, defence civilians in the Ministry of Defence who are serving in support of our forces in Afghanistan right now. That instrument will establish a chilling precedent for the future and it is worrying all public servants. Will he make one final effort before the Bill becomes law?

[Mr Maude]

Absolutely and unequivocally, yes. I shall talk a little about the process we have been through and where we are in the negotiations. I say clearly to the hon. Gentleman and to the House that if it is at all possible to achieve a fully negotiated settlement that is affordable and fair to the taxpayer and that meets the concerns of all the unions, we will certainly try to achieve such an agreement with all six unions. I shall say a little more about that in a while, but the answer is definitively yes.

[John Hemming (Birmingham, Yardley) (LD)]

In Committee, the hon. Member for Birmingham, Erdington (Jack Dromey) made some good points about individual exceptions in which even the terms proposed in the negotiations with the trade unions might be unfair to individuals who have been through particular hardship. Does the Minister agree that that can be resolved only through negotiation and that aiming to resolve it through legislation would be a mistake?

[Mr Maude]

My hon. Friend is completely right: there has to be flexibility. That is why I have always said that the caps imposed by the Bill are not right for a permanent system because they do not provide that flexibility. The scheme that has been brokered between the negotiators for five of the unions would provide much greater flexibility and would, I think, meet the concerns that he raises.

[John Hemming]

Also in Committee, Dusty Amroliwala, the civil servant responsible for handling the scheme, said that he would have advised any Government to take that approach to break the legislative logjam. He also said that there had been no estimates of what the Bill would save because there was no expectation that what it proposed would be the end result. In that sense, does the Minister agree that this is part of the process of breaking the legislative logjam?

[Mr Maude]

Yes, indeed. If the result of the process that we have been through with the Bill is that it makes a negotiated settlement more likely, that will be extremely beneficial. I do not want the outcome of all this to be that the existing scheme remains in place with the crude caps that the Bill imports. What we want is a new, successor scheme, and there is now a serious prospect of that being achieved. If it can be achieved with the support and agreement of all six civil service unions, no one will be more delighted than I. However, if we have to go down the path of having a new scheme that is supported by fewer unions, that would still be better because it would mean that many of the concerns that have been raised would be met better than by the Bill. That would be infinitely better than the current scheme remaining in place, as it is simply unaffordable and unsustainable, as the previous Government openly accepted.

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

In response to the points raised by Opposition Members regarding the difference between the deal that was done by the previous Government and deal being done now, how would the impact on low-income workers in the civil service differ?

13:15

[Mr Maude]

If my hon. Friend will allow me I shall come to that later, because I want to talk in a little more detail about the terms of the scheme that has been brokered by the negotiators for five of the unions.

I repeat that we want a long-term negotiated successor scheme. We want a package of reform that provides genuine protection for lower-paid civil servants, that caps the total amount that can be paid out, that provides protection for those closest to retirement and that reforms the accrual rates. It takes time to negotiate such a scheme and it has been a very intensive process. That is why the caps were put in place in the Bill—as a safeguard to ensure that if agreement could not be reached, we could at least limit the payouts in the short term. I have always been hopeful that we could reach agreement with all six unions by the time the Bill reached Report.

After the intensive negotiations throughout the summer, we reached an impasse. The same five unions that agreed the February deal with the right hon. Member for Dulwich and West Norwood came together once again and put to me concrete proposals for reform. Sadly, the PCS refused to join them in that approach. That was disappointing, but I made it clear to the PCS that it was welcome back at any stage if it was willing to put forward concrete proposals, and I wrote to Mark Serwotka, the general secretary, to that effect. In the meantime, my officials and I engaged productively with the remaining five unions to attempt to reach agreement. Last week, all five union negotiators, representing Unite, GMB, Prospect, the First Division Association and the Prison Officers Association, agreed terms with us that they were prepared to recommend to their executives. The terms of that agreement represent a reasonable outcome for everyone involved and deliver on our objectives of being fair, affordable and sustainable.

It is worth dwelling a little on the terms of the agreement. We reached agreement on a standard tariff in which each year of service would provide one month’s salary in the event of redundancy. That compares with one week’s salary for every year of service under the statutory redundancy scheme. The tariff would be capped at 12 months for compulsory redundancy and at 21 months for voluntary redundancy. All civil servants being made redundant would be entitled to a three-month notice period. That is in contrast to a cap, in some circumstances, of well over six years’ pay—six and two-thirds years—and paying up to three months’ pay for every year of service, as is the case currently. It contrasts with the current situation of having a six-month notice period for all compulsory redundancies, but no equivalent notice period for voluntary redundancies. The new scheme will be simpler, fairer and more affordable.

We also agreed on significant protection for lower-paid civil servants. Under the terms of the scheme, any civil servant on a full-time equivalent salary of less than £23,000 who was made redundant would be deemed to earn £23,000 when their redundancy payment was calculated. So for someone earning £13,000 in those circumstances, the multiplier by which the number of years would be multiplied to calculate the redundancy payment would be deemed to be £23,000. For the very lowest paid in the civil service, that is significant additional protection and, I have to say, better protection for the lowest paid than the February scheme. I say again that that would be a permanent feature of the scheme, not a transitional feature of it. It would be in place for all time, or for all time until some subsequent Government chose to revisit it.

Conversely, staff earning more than six times the private sector median average earnings, which is around £150,000, would have their salary capped at that figure for the purpose of calculating their redundancy payment. That would be an end to the mega-payouts, which have been highlighted in a national newspaper recently and which cause a certain amount of offence to taxpayers.

We also agreed on protection for staff who have reached the minimum pension age of 50, allowing them to opt for early retirement when they leave, in return for surrendering the appropriate amount of any redundancy payment. Again I stress to the House that under this proposal that will be a permanent feature of the scheme, whereas in the February scheme, which the right hon. Member for Dulwich and West Norwood attempted to impose, it was framed as a transitional arrangement that would run out over time.

I believe that that is a fair deal for civil servants and for taxpayers. Given that we had agreement from five of the six union negotiators on the terms of the new scheme, I therefore proposed an amendment—the new clause that we are now discussing—to allow the Government to impose that scheme, which is a power that the Government thought they had and used when the right hon. Lady was in office, but which was subsequently struck down by the High Court.

I want to make it absolutely clear that there will be an obligation for the Government to consult properly before any scheme is imposed. I believe that that obligation already exists in section 1(3) of the Superannuation Act 1972, but lest there be any doubt, I undertake that we will introduce a further amendment in the other place to put the matter beyond doubt. In the intervening period, I shall want to discuss with the right hon. Lady and with the unions how we can frame that measure in a way that gives the necessary comfort that this is a serious process. That commitment is there. There is already in the existing Act an obligation to consult the unions. It is not framed in quite that way, but that is the effect of it. We shall introduce further amendments if they are regarded collectively, by us all, to be necessary to put the matter absolutely beyond doubt.

I want now to make it absolutely clear what the new clause does. It does not create any unprecedented power for me that has not been available to my predecessors. It simply recreates precisely the power that the right hon. Lady had when she imposed the February scheme. It does not go one whit beyond that. It is rigorously framed so that it goes no further at all than the power in the original Act, on the basis of which the right hon. Lady—in good faith, and with our full support—acted before the election.

Let me say a word about the PCS. I have no wish at all to exclude the PCS from the negotiations. Late last week, the leadership of the PCS came back to me and indicated that they would like to return to the negotiating table. I welcome that and have told them that I am looking forward to seeing their proposals. The other five unions have been making constructive proposals for some little time now, and those suggestions have formed the basis of the proposed new scheme brokered and agreed by the negotiators for those five unions. I have stressed to the PCS that any changes to the proposed scheme cannot exceed the cost envelope of the scheme already agreed, and that any changes must be agreed with the other unions, which have already worked hard to reach this agreement.

May I say a word about the Opposition amendments, which have been grouped with the Government new clause and amendment? The Opposition amendments would effectively invalidate the effect of the Bill, as they would remove the caps, which are the essence of the Bill. There is nothing more to say about that. On Second Reading, I set out the reasons for having the Bill at all, and I have reiterated them today. I say again that no one would be more happy than I would if, the day after Royal Assent is given to the Bill, should it get that far, I am able to put those provisions into abeyance; I do not want us to be in a position whereby those caps are what applies in practice. I want there to be a new scheme—ideally agreed by six unions, but if not, agreed by as many as possible, and imposed using the powers that the right hon. Lady herself used, which the Government new clause will put into effect and allow to be used.

I earnestly hope that a successfully negotiated new scheme agreed by all six unions will follow from today’s debate. I stress that I remain completely committed to achieving that. If we can achieve it, neither the caps in the Bill nor the power contained in the new clause will be needed, but if there were no such agreement, it would be wrong for the PCS to be able to veto any changes to the current scheme, because that scheme has been universally agreed in the House to be unsustainable. This amendment will simply put the current Government in the same position as the previous Government—committed to consultation and to negotiation, but able, in the end, to decide. I commend it to the House.

[Tessa Jowell (Dulwich and West Norwood) (Lab)]

I shall speak against Government new clause 1 and in favour of the amendments standing in my name and that of my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins). I give notice that I intend press amendment 4 to a Division, subject to your will, Mr Speaker.

I also want to put on record my appreciation of the conciliatory tone in which the Minister has addressed the House today and note what I think was very constructive scrutiny of the Bill in Committee, which gave the opportunity to hear witnesses.

I would like to identify the common ground that we share, but also what still divides us. We agree that the civil service compensation scheme is in need of reform—as the Minister observed, I spent many hours trying to secure that reform—but it is also important that new legislation take account of the conclusions of the judicial review. It is important, too, that that is done in the right way, giving the 500,000 or so civil servants who are liable to be affected the confidence that the process will be fair and that the fairness of that process is institutional.

The legislation represents very high stakes for the 500,000 or so civil servants whose lives stand to be directly affected by its provisions. The Bill is not simply a blunt instrument for negotiating purposes. For those 500,000 civil servants, it could be a matter of their keeping their home, helping their children through university or averting financial hardship while they look for a new job. We heard eloquent evidence of that anxiety from witnesses who appeared before the Public Bill Committee.

To summarise, we have two central problems with the Government’s position on the Bill. The first problem, as we argued from the outset on Second Reading, is with the unacceptable caps set out in clause 1. Our amendment 4 is intended to deal with that. The second is the unbridled powers that the Government are seeking to impose on any new scheme that fails to secure a negotiated agreement. We will take every step we can to insist that a requirement for consultation and due process appears in the Bill.

13:30

[Mr Maude]

The right hon. Lady describes the powers that we are seeking in the new clause as unbridled, but does she accept that they would be precisely the same powers as she had and exercised only eight months ago?

[Tessa Jowell]

I accept that only in part, in that the scheme set out in the Bill, with the caps, is substantially less generous than the scheme that we negotiated with the trade unions only a few months ago.

[Mr Maude]

I am not talking about the scheme; I am talking about the power in the new clause for the Government to impose a new scheme, which the right hon. Lady has just described as an unbridled power. I am asking her to agree what is certainly the case: that the power that the new clause would give to me is precisely the same power as she had and exercised when she held my job eight months ago.

[Tessa Jowell]

Let me come back on that point. When I was responsible for the negotiations, they were long, as the Minister outlined, and involved a serious and concerted attempt to reach a negotiated agreement. New clause 1 is a necessary way of dealing with the unexpected outcome of the judicial review earlier this year. Had we been returned at the general election, we would no doubt have had to amend the 1972 Act in the light of that, but the critical difference is that we would not have introduced legislation simply to impose a settlement in the absence of a clear commitment in the Bill to negotiation in good faith in order to try to achieve a proper agreement. That is why I stand by my description of the powers, as drafted in the Government’s new clause, as unbridled.

We recognise the need for an amendment to the Superannuation Act 1972. The High Court judgment made a clear case for ensuring that the Government are able to compel a settlement and that no union should be able to veto changes. That is a position that we would support.

[John Hemming]

The right hon. Lady’s amendment (a) would mean that the unions would have to consult their members in accordance with the rules before any new scheme could come in. Does she agree that that would provide the opportunity for a trade union to veto any changes merely by refusing to negotiate or consult its members?

[Tessa Jowell]

If the hon. Gentleman reads the amendment carefully, it will be clear to him that it is intended not to give the trade unions a veto, but to require a report to Parliament on the progress of the negotiations where the power is intended to be used, giving the effect of the imposition of a settlement in the absence of the agreement of all six unions.

[John Hemming]

The amendment states that the Minister must lay

“a report of the consultations that have taken place with the workforce and their recognised representative trades unions with a view to agreement”

and that the report should contain

“a statement that the representative trades unions have consulted their members in accordance with their rules”.

The report cannot include such a statement unless that has happened. That, in essence, would revert to a veto for the trade unions. I should think amendment (a) should not be moved.

[Tessa Jowell]

The approach is intended to ensure that what appears in the Bill when it receives Royal Assent represents a right and proper balance between the responsibility of the Government to secure a settlement and the entitlement of the trade unions to be properly consulted. However, as the hon. Gentleman may not quite be aware, in Mr Speaker’s wisdom he did not select that amendment for debate.

I return to our clear view that no one union should be able to veto a change to the civil service compensation scheme that is the result of negotiated agreement with the majority of unions. The Government’s ability to compel a settlement should be the course of last resort, once it is clear that common agreement cannot be reached—

[John Hemming]

rose—

[Tessa Jowell]

I shall make progress. Many Back Benchers want to speak in the debate and the hon. Gentleman will have a further opportunity.

We cannot support the Government new clause as drafted because it allows the Government to impose changes to the scheme at any point, without the contingent obligation to consult the work force or their representative trade unions.

[Mr Maude]

To be absolutely clear, the Superannuation Act states, at section 1(3):

“ Before making any scheme”—

this would refer to the schemes that we are discussing—

“under this section the Minister . . . shall consult with persons appearing to the Minister . . . to represent persons likely to be affected by the proposed scheme”.

So there is an explicit obligation in the 1972 Act to consult representatives of staff affected by any new scheme. That is absolutely explicit. It was the obligation that the right hon. Lady herself followed scrupulously when holding the job that I now hold, and it is the obligation that I absolutely undertake we have been following. If there is any doubt about it, we will make that even more explicit with an amendment tabled in the other place.

[Tessa Jowell]

I am grateful to the Minister for that clarification, but as nearly 30 years have passed since the Superannuation Act was introduced, both the terminology and the reference to the negotiating structure could be updated to make the two commitments clear—the right to impose in the absence of unanimity among the unions, but a right that is exercised only on the basis of clear, systematic, open and proper negotiation with the appropriate trade unions and work force representatives.

The other underlying issue is the lack of confidence in the process so far. The Bill was published before the civil service unions had even met the Minister or his officials. None of the work force had the opportunity, unlike during the negotiations that we undertook, to comment on the proposed reforms, despite the fact that they marked a significant and detrimental departure from the previous package. The obligation to consult the work force at every stage is missing from the Bill.

Given the powers that the Government have asked the House to grant them through the new clause, it is only right that safeguards be put in place to ensure a fair and reliable process whereby the work force have a right to be consulted, the Government are obliged to seek an agreement with the representative trade unions and the House is the arbiter of whether that process has been fair and transparent. If those safeguards had been put in place, we would have supported the Government and not sought to vote against the new clause.

We have outlined a very clear basis for our opposition to the proposed change, but we make it equally clear that if the Minister for the Cabinet Office seeks to introduce in the other place a revised amendment that addresses the judicial review and puts consultation and proper process in the Bill, we will support him. That is dependent on Mr Speaker taking his usual principled and pragmatic view and not judging the Bill to be a money Bill, which would eliminate the possibility of any such constructive amendment and scrutiny in another place.

[Mr Maude]

To be absolutely clear, I am advised that if the new clause were not agreed to and the Bill remained as drafted, it would be possible for Mr Speaker to exercise his discretion—and it is a discretion—and certify it as a money Bill. However, I am also advised that if the Bill were to include the new clause and amendment that I have tabled, the question of its being a money Bill would not even arise. So, if the House were to carry our proposed changes, there would be no question of the Bill’s continuing to be a money Bill for the purposes of the other place; it would go through the full and usual processes there.

[Tessa Jowell]

The Opposition would very much welcome full and further scrutiny, as the negotiations are ongoing.

The issue is about the right reforms, which we seek to put forward through our amendments 4 and 5, whose purpose is to strike out the arbitrary caps that the Government introduced at the start of the process. Those caps have led to an improved offer, as my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) said, as a result of negotiation, and we welcome that. There is now an improved offer on the table, so we do not understand why the Government oppose our amendment. Given that new clause 1 would give them the power to impose any settlement, why have the caps, which have caused such distress and anxiety to civil servants, remained in the Bill?

We are pleased that the Government claim to have reached an agreement with at least some of the trade unions, and the Government have declared that that will supersede the terms before us. To echo the Minister’s language, I note that he has managed to introduce a “sharp instrument” to replace the “blunt” one, but that leads us to question why the Government persist in wanting those terms to remain in the legislation.

The caps are simply out of kilter with the subsequent agreement that the Minister claims to have reached. He, his colleagues and his officials have told us that he wants a negotiated settlement, and on both sides of the House the consensus is that that would be the right course of action. Instead, however, the Government want to proceed to impose the arbitrary caps that they sought to impose at the beginning of the process. For those reasons, we ask the House to oppose the Government’s proposed changes and to support our amendments 4 and 5.

13:45

The Government, in their handling of the Bill, have already tried the patience of the House to its limit. First, they asked us to agree to caps that they never intended to use, or hoped would never be used or reach the statute book. Then, they asked us to support a set of final provisions that would allow those terms to expire and be resurrected at any time in the future. Now they implore us to support a new clause that, in effect, would give them a blank cheque to draw up a new scheme at any time, with no guarantee that the work force, the trade unions or the House would be engaged in or influence the outcome.

The handling of this Bill has been an absolute shambles, and it is with some sympathy that I say to the Minister that he is now in a hole. The Treasury is breathing down his neck and insisting that he makes whatever savings that earlier in the process he might have pledged, but that now will take a little longer to realise. We will oppose the new clause and press the House to a vote on our amendment 4, simply because the legislation before us will have a profound effect on the lives of thousands and thousands of civil servants, and they deserve better.

[John Hemming]

This has been a rather depressing debate, because the Opposition have demonstrated “oppositionism” at its worst. Everybody recognises that there is a problem and, basically, we cannot afford to pay six and two thirds years’ redundancy payments to some senior civil servants. The Government are trying to look after the low-paid, and our proposals are better than the Opposition’s. The Opposition’s amendment, which admittedly has not been selected, would have reinstated a veto for the trade unions on any proposals for change, something that the Opposition disagreed with when they were in government.

[Tessa Jowell]

Will the hon. Gentleman explain why the proposals in the Bill provide a better deal for low-paid civil servants earning less than £20,000 a year than the proposals in the February 2010 package?

[John Hemming]

I accept the shadow Minister’s point that the Opposition’s proposals are the same as those in the negotiations, but the whole point of the Bill is that it is not supposed to be the end result. Civil servants have not made any estimate of the savings as a result of the Bill, because it is not supposed to be the end result. This legislation is what the civil service has advised us to undertake in order to break the legislative logjam that the previous Government created. It is about making progress.

On the issue of how we manage the civil service, I think that we should try to look after our employees and aim to minimise redundancies. In the absence of the Bill, however, that would become harder and harder. One thing that must be recognised is that reorganisation has essentially come to a halt, because we will not be able to save money if we have to pay six years’ redundancy to somebody. Paying six years’ redundancy will mean that we increase the deficit.

[Mr Michael McCann (East Kilbride, Strathaven and Lesmahagow) (Lab)]

The hon. Gentleman keeps using the figure of six and two thirds, but will he concede that that is wholly inaccurate? Under the current terms, the maximum payment is three years. The six and two thirds figure to which he refers includes the enhanced pension that somebody would receive if they were over 50 years old. Will he therefore accept that his explanation is inaccurate?

[John Hemming]

The question is about what we add to the deficit—the actual cash costs. That is the key. The proposals that the previous Government tried to impose were struck down by a judicial review, so we have reverted to the original scheme.

In essence we are trying to reduce the deficit and reduce borrowing, and, if by making redundancies we increase borrowing, that will not get us anywhere at all. That is the reality of life. Underlying that, however, things can be done to reduce the full-time equivalent headcount without reducing staff—finding ways in which people can go part-time and so on. But, there is a legislative logjam that needs to be broken, and we need negotiations. Indeed, the 1972 Act requires them. The Public and Commercial Services Union argues in its briefing that there needs to be a trade union veto because there is no contract. However, those people who have contracts can find that their contracts are changed.

To be fair, I should take a very different view if there were any threat to pension rights. Pension rights are different, but an unaffordable redundancy scheme, in which we cannot reorganise organisations and save any money, is one that we cannot deal with in these circumstances—much that the priority has to be otherwise. To that extent, new clause 1 is the right way forward. I am surprised that the Opposition have taken the view that they would rather this were a money Bill than not, because their amendment would create the situation whereby it suddenly became a money Bill.

[Tessa Jowell]

We want the Bill to have full and proper parliamentary scrutiny in both Houses of Parliament.

[John Hemming]

I thank the shadow Minister for saying what her objectives are. In the past, the Opposition have often had objectives that they failed to achieve. Their objective was to remove the trade union veto, but the amendment would reinstate it. Their objective is for this not to be a money Bill, but by voting against new clause 1 they would, if successful, make it a money Bill. I accept that the shadow Minister has particular objectives, but what she does tends not to work; that is the reality of the situation.

We have to be effective in terms of running Government. We must do things that work—that achieve results. This Bill is about achieving results: it is about creating a situation whereby there can be negotiations with the trade unions in which we can deal with difficult cases where individuals are suffering particular hardship. In the Public Bill Committee, there was an attempt to negotiate through discussions with the trade unions. That was dreadful—it was almost impossible to get anywhere, and I find it rather sad that anyone tried. The reality is that negotiations have to work in a particular way; one cannot negotiate through a process of producing legislation. We need a blunt instrument that creates an environment in which a negotiated settlement can be arrived at. To that extent, I support new clause 1.

[John McDonnell (Hayes and Harlington) (Lab)]

Following the final comments by the hon. Member for Birmingham, Yardley (John Hemming), I fully agree that we have been trying to create an environment in which agreement can be reached. However, if I were a civil servant watching this debate, with the prospect of the large-scale redundancies that will happen after the comprehensive spending review, I would almost despair. It will be extremely difficult for all of them to come to terms with the loss of their jobs. As a manager in the public sector in a former life, I have always found that people are realistic as long as their views are respected and they are involved in the discussions and negotiations, which have been entered into in a spirit of good will. To achieve that, we need to create a climate of good will where people feel that their views are being heard.

Despite my having opposed every cut of every job in recent years under the previous Government, we were told in the Public Bill Committee that 80,000 jobs were lost but there were only 80 compulsory redundancies. The negotiations that took place on the basis of the protocols established with regard to redundancies and transfer between Departments resulted in a system whereby large-scale compulsory redundancies were avoided. The Minister referred to past practice under the previous Government. As I said, I did not support the cuts that went on, but I genuinely think that they were committed to a negotiated settlement. In my view, had it not been for the interference of No. 10 and the Treasury—this is almost like history repeating itself—we would have obtained a negotiated settlement that all unions would have accepted. However, the settlement was imposed, and I opposed that. The PCS took the then Government to court because it believed that the accrued rights of its members were being interfered with contrary to law because it was an imposed settlement, not an agreed one. It was proved right in the court of law, and we have to come to terms with the reality of that.

[Harriett Baldwin (West Worcestershire) (Con)]

I am interested in the hon. Gentleman’s point of view on this. Does he believe that it is possible for the Government to negotiate to a satisfactory conclusion with the PCS given its position in all the negotiations?

[John McDonnell]

I do. I will come to that in a few minutes.

The position of the unions in the Public Bill Committee represented an attempt to acknowledge their responsibilities to their members. The PCS was in a similar position whereby, if it had not taken the Government to court to assert its members’ rights to their accrued rights and to consultation and agreement, it could have been taken to court by any individual member for failing to undertake its duty to its members.

Under the previous Government, there was a genuine attempt to negotiate a settlement. Under the current Government, I have found in my discussions with civil servants—not only PCS members but members of the other unions—that there is uncertainty among many of the people who may well be affected by the cuts to come as to whether the Government genuinely want a settlement, and anxiety that the Government are seeking to provoke a dispute. I listened to the Minister’s words, and I am grateful for them: they were positive and tried to create the climate in which a negotiated settlement can be achieved. However, the pattern of negotiations and ministerial statements in the past few months has not engendered an atmosphere in which a negotiated settlement can be brought about. That is why the Opposition have tabled their amendments. Every trade union representative at the Public Bill Committee made it clear to us that it was unprecedented for a Government, in the midst of negotiations, to introduce a Bill to impose a settlement in this way. It has never happened before in negotiations between a Government and the public sector.

[John Hemming]

Does the hon. Gentleman recall from the Committee that the senior civil servant responsible for the issue said that he would have advised any Government to take this sort of approach?

[John McDonnell]

That very civil servant’s advice landed the last Government in court, where they lost. I met him in the week before the general election and said to him: “You will lose in court because this is inaccurate advice on legal grounds, but in addition, it will not contribute to the conclusion of a negotiated settlement, and we’ll be back again within weeks”—and we were.

[John Hemming]

Does the hon. Gentleman accept that this is not ideologically driven but driven merely by the difficulties of our current circumstances?

[John McDonnell]

I do not believe that many civil servants who will be affected by job losses believe that the Government are seeking to resolve this matter by negotiation, and I am trying to reflect those views. We in this House, and the Government in particular, need to go the extra mile to get back to an atmosphere where there is confidence among the people who may well be threatened with the loss of their jobs, and we need to convince them that there is the opportunity of a genuine negotiated settlement. As I said in Committee, our responsibility is to seek to create a climate in which a just, negotiated settlement can be engendered.

[John Hemming]

Does the hon. Gentleman accept that the fact that the Government are inserting a new clause that prevents this from being a money Bill is a sign of good faith from them?

[John McDonnell]

I will come to that.

There has been a litany of disasters during these negotiations. If we want to secure an agreement, we need to try to keep everyone on board. The puerile attempts to divide the unions have been completely counter-productive. The first attempt was to try to insinuate that the PCS negotiator had agreed the terms but had been overturned by the PCS executive. That was put to the PCS negotiator in the Public Bill Committee and it was denied, so it is not true. In fact, the PCS did what it always does as a democratic union—it takes the issues back to the executive. It is probably one of those unions that consults its members more than any other.

The second attempt to divide the unions was by the reference to five unions having agreed a settlement and only the PCS being excluded by refusing to do so. The Minister put out a press release that caused anger among the trade unions. The Prison Officers Association immediately issued a press release saying that letters written to the Minister, in confidence and without prejudice, were put in the public domain. The result is that this week the POA has rejected the deal.

It seems that four of the six unions were originally going to put the deal to their members, but the POA and PCS represent more than 90% of the people who will be affected. They are the unions that we have to convince if we want a negotiated settlement, and they are negotiating on behalf of their members based on what those members tell them through their executive.

14:00

[Mr Maude]

The hon. Gentleman asserts that the POA and PCS represent more than 90% of the people affected, but only 60% of civil servants are members of trade unions to begin with.

[John McDonnell]

I meant 90% of the trade union members with whom the Government are negotiating.

May I tell the Minister what the POA has said about his words? Its general secretary Steve Gillan has said:

“I am annoyed that Mr Maude has leaked without prejudice discussions but I believe this has been deliberate in an attempt to drive a wedge between the POA and PCS. The POA will not allow him to do so.”

The Minister’s actions have meant that the union has now rejected the deal. Those actions were not responsible, and they were in contrast to the words of comfort that he has used here today and elsewhere in trying to engender a good industrial relations climate.

As my right hon. Friend the Member for Dulwich and West Norwood (Tessa Jowell) said, Members need to understand the strength of feeling among PCS, POA and other trade union members about the impact that the changes will have on their lives. We have had heart-rending cases submitted to us by people who have entered into mortgages, for example, believing that they had the security that even if they lost their job, they would have redundancy pay that would cover their mortgages. Now, they might lose their homes. We have heard of other people who were expecting significant compensation related to their salaries, one of whom would now lose £90,000 as a result of the Government’s proposals. No wonder people are angry and concerned. That is why they want their Government and their trade unions to come together to agree a fair way forward.

[Harriett Baldwin]

May I ask again the question that I asked earlier? Can the hon. Gentleman see a way for the PCS to agree to any negotiating position?

[John McDonnell]

Yes I can, and the PCS has written to the Minister again recently asking for meetings. I believe that one meeting has taken place, so there is potential. However, we cannot expect a negotiated settlement to take place when tactics are used that undermine the confidence not only of the PCS but now of the POA. That lack of confidence is now infesting other unions as well.

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

Does the hon. Gentleman share my concerns about employees beyond those directly affected by the Bill? I am concerned about the hundreds of thousands of employees in the rest of the public sector who will be watching the process closely and wondering what the next stage will be as we rebalance the economy from public sector jobs to private sector jobs.

[John McDonnell]

I take the hon. Gentleman’s point, which is valid and valuable. The Bill sets what many believe is a precedent for what will happen elsewhere, so it behoves us to get it right and ensure that we create a climate in which people at least understand that they will get a fair deal.

The Government’s tactic of the use of a money Bill was derisory. This was never really a money Bill, and when we asked for the justification for its being used as one, nothing was forthcoming. I have seen no note from Minister even defining it as such. It was simply a tactic whereby the Lords would have been excluded from amending the Bill, which would therefore have been implemented earlier. This House would have been denied the second opportunity for debate provided by Lords amendments. That tactic had an impact on people’s confidence in the genuineness of the Government’s approach to the negotiations.

The Government’s approach to the concept of accrued rights has been blasé. Their interpretation of accrued rights—that they are not really accrued but are obtained only at the time of a redundancy—seems contrary to not just law but common sense. I cannot see it standing up in any court of law, and it could indeed be challenged in court. As was said on Second Reading—by the Chair of the Public Administration Committee, I believe—the Bill could be enacted and then the scheme challenged in a court of law and the European courts. The Government could lose again, as they already have once, and then we would have to pay compensation to all the people who had been made redundant in the interim. That is no way to treat people and certainly no way to enact legislation.

I have some anxieties about the Government’s new clause, which is why I support my party’s Front Benchers’ efforts to eradicate it. It is there as a threat that the Government will drive people out of employment on the lowest terms possible. It would also enable them to amend the scheme in future. There are now additional proposals to change the protocol involved, the notice period for redundancy and other matters, which would undermine the protection of people who lose their jobs and the flexibility of a manager to avoid compulsory redundancies, which the hon. Member for Birmingham, Yardley sought.

The Government’s handling of the issue has soured the industrial relations climate in the civil service and sent a message to trade unions in other areas, such as health, teaching and local government, that what has come to the civil service unions affected may be visited on them. If the Government do not learn the lessons of the debates on the Bill over the past few weeks, they will provoke industrial action, and that action will be justifiable. Unions will have sought to negotiate a reasonable settlement, but the Government will have played fast and loose with the process, refused to listen and imposed something that will have a considerable effect on the lives of people threatened with the loss of their jobs.

To answer the question that the hon. Member for West Worcestershire (Harriett Baldwin) asked me, the position of the PCS, and now of all the other unions, is that they would welcome the Government going back to the negotiating table for serious negotiations. I urge the Lords to amend the Bill so that it will be brought back here for debate. I welcome the Government’s proposals for amendments in the Lords, because they would give us the opportunity for further debate and a further period in which there would hopefully be serious negotiations. They would give this House a long-stop role, so that we could determine whether there had been a just settlement and whether the Bill should therefore pass.

Finally, the House should not underestimate the strength of feeling of public servants on this issue. We have a responsibility to them and to our constituents whom they serve. If we undermine their role in any way through the Bill, we will live to regret it and so will the Government.

[Richard Graham (Gloucester) (Con)]

I am puzzled by the logic of the Opposition’s position this afternoon. At the beginning of the Bill’s passage, it was agreed throughout the House that every party recognised the need for change. The right hon. Member for Dulwich and West Norwood (Tessa Jowell) tried to bring it about. She introduced her Bill, but she was blocked and prevented from taking it through. The ball passed to the coalition parties, and we have now introduced a new Bill that recognises the bluntness of the instrument required to achieve a negotiated settlement.

We have heard this afternoon from my right hon. Friend the Minister about the deal on the table, which, if I understand it correctly, will offer up to 21 months’ pay on voluntary terms, plus a notice period of three months, making a maximum total of 24 months’ redundancy pay for all civil servants earning less than £23,000 a year, but based on that £23,000 figure. That is a better deal than the one that the Labour party offered civil servants earlier this year. When the right hon. Member for Dulwich and West Norwood said that she would oppose new clause 1 on the basis that our civil servants deserve better, I was left wondering which civil servants she meant. The truth is that the debate clearly shows that those of us who support new clause 1 do so precisely because we want a much better deal for lower-paid civil servants, which is the whole exercise of the Bill.

[Tessa Jowell]

Again, I would be grateful if the hon. Gentleman were quite specific on the respects in which the Bill’s provisions or those of the improved offer, which are not in the Bill, are better than the February 2010 offer?

[Richard Graham]

The right hon. Lady asks in which ways the Bill’s provisions are better. My understanding is that under the new deal that is being negotiated, a lower-paid civil servant—for example, one on a salary of £10,000—would receive up to 24 months’ statutory redundancy payment based on a salary of £23,000, which is better than the deal put on the table by the Labour party.

[Harriett Baldwin]

One theme that has come up in all debates on the Bill, including in Committee, was that we want better treatment for the low paid. I agree with my hon. Friend. I would have thought that the Opposition would welcome the low-pay aspects of the Bill and the improvement in the negotiating position.

[Richard Graham]

My hon. Friend is absolutely right.

If I may continue where I left off—

[Tessa Jowell]

Will the hon. Gentleman give way?

[Richard Graham]

May I make some progress first?

[Tessa Jowell]

rose—

[Richard Graham]

I will give way to the right hon. Lady for the third time.

[Tessa Jowell]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Is the hon. Member for Gloucester (Richard Graham) giving way?

[The Lord Commissioner of Her Majesty's Treasury (Jeremy Wright)]

No, don’t! She is being discourteous.

[Richard Graham]

The point that I had reached was that many in the House clearly agree that civil servants deserve better. Those of us who support new clause 1 are absolutely clear—I have talked to PCS members in my constituency—that many members of the trade unions involved do not understand, and are indeed being misled by their unions on, what is on offer and what is being negotiated. I therefore put it to the House that Members who believe in supporting lower-paid civil servants will support the new clause, precisely because those people deserve better. That is what the measure will achieve and why I support it.

[Mr Maude]

With the leave of the House, Mr Deputy Speaker, I want to make one or two comments at the end of what has been a good discussion of Government new clause 1, Government amendment 1 and the amendments in the name of the right hon. Member for Dulwich and West Norwood (Tessa Jowell).

My first point is that the coalition Government earnestly hope to avoid redundancies. It is in our mind at all times that every job lost, whether in the public sector or elsewhere, represents a personal disaster for that individual and their family. All hon. Members should bear in mind that these are grave matters for a lot of hard-working, dedicated public servants. Everything that we do in government will bend towards trying to find ways to avoid redundancies in whatever way we can.

Sadly, because of the lamentable state of the public finances, which the coalition Government inherited from their predecessor, it is unrealistic to expect that there will be no redundancies. Our concern throughout the Bill is to ensure that the terms on which people are made redundant are fair to the individuals affected and to the taxpayer. The aim therefore must be, as I have said repeatedly, a secure and sustainable negotiated agreement with which all are willing to live.

The hon. Member for Hayes and Harlington (John McDonnell) has said that the PCS wishes to engage and believes that there should be serious negotiation—he is very close to that union—and I wholeheartedly endorse that approach. The negotiations, which I am bound to say have proceeded without the PCS, have been serious and constructive, and that they have been entered into in a spirit of good will. They may have been fractious from time to time, because these are difficult matters that make a great difference to a lot of people’s lives, but throughout the process, despite repeated invitations to do so, the PCS has not made constructive proposals.

14:15

When Mark Serwotka came to see me at the beginning of this week—I spent a long time with him—and asked to be allowed to put forward proposals to reopen the proposed new scheme that had been brokered by the representatives of, and negotiators for, the other five unions, I said to him, “Yes, I am willing for that to happen, but the PCS must come forward with serious, constructive proposals.” I am still waiting. I want those proposals. I said that they must be discussed with the other five unions, because those unions have put in the hard yards of negotiating among themselves and with the Government on the configuration that best meets their varied needs and requirements.

The PCS must engage with not only the Government—it must do that—but with the other unions, because there is a limit to what can be afforded in these straitened times, and that limit has been reached. Within those constraints, however, there could be scope for reconfiguring the proposed new scheme to meet the PCS’s concerns. However, the first port of call for the PCS is to make genuine proposals to, and to engage with, the other unions involved. As I have said, those unions have been involved much more constructively and in a more open spirit than the PCS.

I want briefly to deal with the points made by the right hon. Member for Dulwich and West Norwood, who led for the Opposition, because her position—I will put this as charitably as I can—is somewhat inconsistent. She has said that amendment 4 would remove the caps, which are at the heart of the Bill. That is possible, because new clause 1 would create a power for the Government to impose a new scheme in any event. There is a certain slender logic in that, but I point out that there is a long way to go in the legislative process before that power comes into existence.

That slender logic completely self-destructed when the right hon. Lady said that she would oppose new clause 1. If the House did as she urged, it would not only remove the caps in the original Bill, but deny the Government any power to impose a new scheme in any event. The Government would therefore have no ability reform the existing scheme, which is what she and everyone who has spoken accepts is needed. Frankly, I am at a loss to understand how she can reconcile her opposition to my new clause and her support for her amendments.

[Tessa Jowell]

For the record, I think I have made the position absolutely clear. The Minister’s words were more of a debating game than a substantive discussion of policy. We oppose new clause 1, because it creates no specific obligation to consult. Removing the caps would remove the structure of a settlement that the Opposition believe is profoundly and fundamentally unfair. The settlement is substantially detrimental to 500,000 civil servants compared with our February 2010 scheme, which has been grossly misrepresented by Government Members.

[Mr Maude]

This is not a debating game. The Bill is deadly serious for hundreds of thousands of hard-working, dedicated public servants. The fact is that the right hon. Lady has today proposed removing everything—the ability to create caps on the existing scheme, which she says needs to be changed, and the Government’s ability to impose changes.

Let us look at what the right hon. Lady has argued on new clause 1. She accepts that my new clause is necessary and needed—both words that she has used at times to describe it—but she plans to vote against it on the grounds that it is, she says, an “unbridled power”. It is exactly the same power that she herself exercised earlier this year. Did she feel then that it was an unbridled power? Of course she did not, because there is already on the face of the Superannuation Act 1972 a clear and explicit obligation on the Minister to consult trade unions before imposing a scheme. Sadly, she seems to be unaware of that, so I am happy for the opportunity to enlighten her. She followed that obligation, and I undertake to follow it as well.

In the spirit of good will that has—broadly—dominated these deliberations, I have made a clear commitment that if further amendments are needed to make it clear in the Bill that proper consultation must take place before a scheme is imposed, they will be introduced in the other place. However, it must be recognised that as a “bridling” of this power—to adopt the right hon. Lady’s word—the legislation already contains an obligation to consult, and it has done so for nearly 40 years.

This new clause is necessary to give effect to a successor scheme to the current unsustainable, unaffordable and frankly unfair scheme, and the whole House accepts the need for that change. I stress again that it is the Government’s aim—we will strain every sinew towards it—to achieve a negotiated scheme that is supported by all six trade unions, in which case neither the caps nor this power will need to be exercised. However, to have any chance of reaching that point, it is necessary to reject the right hon. Lady’s amendments and to support the new clause.

Question put, That the clause be read a Second time.

14:22

Division 71

Ayes: 299

---

Conservative: 259
Liberal Democrat: 39

Noes: 240

---

Labour: 222
Democratic Unionist Party: 5
Scottish National Party: 5
Liberal Democrat: 3
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Independent: 1
Alliance: 1
Green Party: 1

New clause 1 read a Second time, and added to the Bill.

Clause 1

Limits on value of benefits provided under civil service compensation scheme

Amendment proposed: 4, page 1, line 1, leave out clause 1.—(Tessa Jowell.)

Question put, That the amendment be made.

14:35

Division 72

Ayes: 238

---

Labour: 222
Democratic Unionist Party: 5
Scottish National Party: 5
Plaid Cymru: 2
Social Democratic & Labour Party: 1
Independent: 1
Alliance: 1
Green Party: 1
Liberal Democrat: 1

Noes: 316

---

Conservative: 273
Liberal Democrat: 42

Amendment made: 1, in title, at end insert:

“; and to make provision modifying the effect of section 2(3) of the Superannuation Act 1972 in relation to such benefits”.—(Mr Maude.)

Third Reading

14:48

[Mr Maude]

I beg to move, That the Bill be now read the Third time.

The Bill has been debated extensively on Second Reading and in the good deliberations in the Public Bill Committee. We canvassed the central issues again in the course of today’s discussions on the Government new clause and the Opposition amendments. I say again that we are dealing with matters of huge significance to large numbers of dedicated public servants, who are in a state of considerable uncertainty and anxiety about their futures, which I completely understand.

We wish to avoid redundancies wherever that is possible, because we recognise—as everyone in the House should—that every single job lost is a personal disaster for that person and their family. We will therefore do everything we can to avoid them, but where they are inevitable it is important that the terms on which civil servants become redundant are fair, both to the individual and to the taxpayer. That is what we are seeking to achieve. I say again that the Government will strain every nerve to achieve a negotiated new scheme that will make the caps imposed by the Bill unnecessary. That would also mean that the power reinstated by the Government’s new clause and amendment that have just been agreed—which simply reinstate a power that previously existed and that was exercised by the right hon. Member for Dulwich and West Norwood (Tessa Jowell)—would not need to be exercised.

The effect of the passing of the amendments and new clause is that the question of whether this is a money Bill no longer arises, so it will move on to the other place and undergo full scrutiny. As I have said, I undertake to introduce further amendments there to clarify and entrench, to the extent that that is needed, the obligation to consult before any new scheme is imposed. I will ensure that that happens and will discuss the content and format of such amendments with the right hon. Member for Dulwich and West Norwood and with the relevant unions.

The Bill remains as essential today as it was when I announced our intention to introduce it back in July. We have made huge progress since in configuring what a new replacement successor scheme would look like—sustainable, affordable and fair. On that basis, I commend the Bill to the House.

14:50

[Tessa Jowell]

I agree with much that the Minister said, particularly the extent to which the prospects for negotiated settlement on behalf of 500,000 civil servants, although not necessarily the Bill itself, have improved as a direct result of the parliamentary process to date and the probing questions asked by the Opposition. The offer now on the table is substantially improved, and I welcome the Minister’s commitment to introduce further amendments in the other place that will substantially improve what we believe to be a profoundly flawed Bill. I also welcome the Minister’s commitment to avoid redundancy in every available circumstance. I think that the civil servants who service so diligently the purpose of government will be listening closely to what he says.

Perhaps my final piece of advice is to remember that this settlement will have to remain in place for these kinds of negotiations for a very long time, so I urge the Minister to resist the pressure he is doubtless getting from the Treasury to reach the quickest and cheapest settlement, as that will not extend to those deserving civil servants the treatment that not just they but the country expect.

14:53

[John Hemming]

In a sense, it is sad not to see massive press interest in an issue that is very important to many people in this country. I am pleased to hear the Minister express the same views as I have expressed on the need to minimise the number of redundancies, and, if there have to be any, to maximise the number who go voluntarily through agreement so that we absolutely minimise the number of compulsory redundancies. This is about the way we manage staff—I have managed staff for more than half of my lifetime—and I believe it is important to work in consultation with people and to tell them what is going on. Discussions and negotiations are crucial. I very much welcome the Government’s approach to that.

The reality is that this process was started in July 2009 by the previous Government. This is a continuation of a process that everyone recognises was necessary. The Opposition now think that none of this should be done and they want to oppose it all. It is their prerogative to change their minds, but the reality is that we have to get on with it all and manage a very difficult situation. To that extent, we support Third Reading.

14:54

[John McDonnell]

Much has been said about the need for the unions to negotiate. Let me be clear about the unions’ position, as a number of general secretaries are in the building today. The POA makes it clear in its statement that it has rejected the Government’s final offer, but it has left the door open for further dialogue with the Government, which must be meaningful with all the Council of Civil Service Unions present and with no exclusions.

Mark Serwotka of the Public and Commercial Services Union has written to the Government and briefed other MPs to the effect that he is keen to re-enter talks, but stresses again that they must be meaningful. The PCS believes it has worked hard to reach a settlement. Let me quote Mark Serwotka:

“From the outset PCS has worked hard to come to a fair deal. We cannot accept the current offer and are calling for further talks. If those talks do not take place we will continue to oppose the Bill in Parliament and will take legal action when appropriate as we have successfully done in the past.”

The two unions representing the vast bulk of the civil service members who will be affected by the Bill are willing to negotiate.

The problem seems to be not the Minister’s willingness to negotiate, but the Treasury envelope within which he is negotiating. If that is the problem, I suggest that the Treasury gets directly involved in these negotiations as well, so that it can see that its attempt to gain a short-term saving will have a long-term cost to the Government. That might help to get some productive negotiations going. By the time the Bill comes back from the other place, we might have a settlement across all the unions, but any attempt to try to divide the unions again will, I believe, be counter-productive. We now need to create a climate of industrial relations that will enable these negotiations to take place successfully for all the unions, not just for a small minority.

Question put, That the Bill be now read the Third time.

14:56

Division 73

Ayes: 309

---

Conservative: 269
Liberal Democrat: 39

Noes: 242

---

Labour: 221
Liberal Democrat: 6
Democratic Unionist Party: 6
Scottish National Party: 5
Social Democratic & Labour Party: 2
Plaid Cymru: 2
Alliance: 1
Green Party: 1

London Local Authorities Bill [Lords] (By Order)

Wednesday 13th October 2010 Commons Chamber

Second Reading

15:10

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

I beg to move, That the Bill be now read a Second time.

This is the 10th London Local Authorities Bill and it is promoted on behalf of the 32 London boroughs and the City of London Corporation, speaking for Londoners. Although many of us would prefer a reduction in regulation and a lessening of the intrusive nature of government both national and local as that is a laudable aim, we have a responsibility to address the real issues facing Londoners.

[Mr Christopher Chope (Christchurch) (Con)]

As he represents Finchley and Golders Green, my hon. Friend will be aware that today is the 85th anniversary of a distinguished predecessor as Member for that constituency, the noble Baroness Thatcher. Has he had a chance to speak to the noble Baroness about whether she agrees with the proposition he has just put to the House, namely that there is an excuse for why we should not be deregulating but that instead we need to regulate more?

[Mike Freer]

The last time I spoke to the good lady we discussed many things but the London Local Authorities Bill was not one of them. Having said that, however, I know that she took a great interest in the environment. In fact, she was the Prime Minister who pushed through much of the Environmental Protection Act 1990, and many of the regulations we are now seeking to give local authorities power over will allow them to clean up and make the polluter pay. I therefore have no doubt that the good lady would be supportive of the thrust of these proposals even though she is, of course, averse to regulation in itself, as I am too.

The Bill allows local councils to combat the many problems and their effects that we now face in our daily lives. There is a difficulty here in that many of us in this House would like to turn back the clock to a gentler age but, sadly, we live in an irresponsible society in which many traders or other individuals can cause problems for our residents.

The Bill’s main purpose is to replace certain existing regulations and consolidate others. The regulations addressed include those dealing with the sale of vehicles on the highway, nudity in bars, tenant safety in houses of multiple occupation and issues that have serious implications for public health. The Bill seeks to introduce clarity into consumer protection here in London, particularly in respect of food hygiene and the sale of vehicles.

I would like to explain some specific provisions, in order to help Members to come to a decision on the Bill. Let me turn first to clause 4—I do not mean to excite Labour Members by referring to that phrase. Clause 4 allows police community support officers and, most importantly, other authorised individuals—predominantly civil enforcement officers—to require people to give their names and addresses when penalty charge notices have been issued. At present, people are not required to provide that information, thus making enforcement difficult. This measure is particularly important in respect of decriminalised offences such as littering. Those of us who live in urban areas will know the scourge that is the litter left on our doorsteps on a daily basis. That costs all of our councils millions of pounds to clean up. This provision will allow councils to recoup that cost by being able to force those who cause the litter to pay a fixed penalty charge or to pay for the cleaning up. If we believe in the “polluter pays” principle, we should support this provision. Some people might ask whether that is not the role of the police. If we want our police to focus on more serious crimes, it is essential that we allow such low-level crime to be dealt with by civil environment officers and PCSOs. I therefore urge Members to support this clause.

[Mr Peter Bone (Wellingborough) (Con)]

My hon. Friend is making a powerful case, but should this power for police support officers not be a general power decided by this Parliament for the whole country, if that is what Parliament wishes? Why should individual councils have different powers in relation to police support officers?

[Mike Freer]

It is for the Government to decide whether they wish to give that general power to the police. The difficulty here is that, especially with regard to authorised officers such as civil enforcement officers, there is a gap in the legislation. London councils wish to plug that gap. If my hon. Friend wishes to push, through the Backbench Business Committee or other channels, for the Government to pursue this, I will wish him well and support him. However, we have a loophole in London that needs to be addressed.

[Philip Davies (Shipley) (Con)]

The problem with that is that London is unique: it is visited by large numbers of people from all over the country and my constituents, for instance, would not be used to such a regime in the Bradford district. How are they supposed to feel when they find on a day visit to London that these powers have been given to local authorities in the capital? How are they supposed to know whether the people concerned have got that power or not? They should be able to have an expectation of what powers people in this country have and do not have.

[Mike Freer]

My hon. Friend makes a good point, but I believe that the basic premise is that abuse of the law is no excuse. If people are seeking to litter in London, they should take the consequences. I am sure my hon. Friend’s constituents would do no such thing when visiting our fine city of London, however.

Clause 6 corrects an anomaly. At present, only commercial premises are required to prevent the accumulation of litter outside their buildings. This measure allows all public buildings—whether schools, hospitals or police stations—to be covered by the legislation. Closing that anomaly makes all people responsible for keeping their buildings clear of detritus.

Clause 7 includes the rather peculiar measure of the reintroduction of the power to install turnstiles in public lavatories. I never thought I would be elected to talk about public lavatories. I thought I had left that behind when I left Barnet council. However, this is not the old-fashioned, almost portcullis-type turnstile of the 1960s and 1970s; this is the modern turnstile that we are more used to in tube stations, which is fully disability-accessible. This measure will allow particularly the City of Westminster to use the revenue from the turnstiles to be reinvested in the provision of services, including those facilities themselves. We are asking our councils to do more with less and we expect public toilets, particularly in the centre of London, to help in that. This provision will allow the City of Westminster to continue to provide much-valued services.

Clause 8 is predominantly about the “polluter pays” principle. Those of us who live near fast-food establishments will be increasingly annoyed about getting up every morning to find a line of fast-food wrappers all down the highway or pavement. We are used to the people responsible being prosecuted for the litter they generate, but this measure allows councils to recover the costs from the commercial operator trading from the public highway. At present, the council can recover only the cost of the administration of issuing a street-trading licence. This allows the council to recover the costs of clearing and sweeping the highway, and particularly of taking away the litter generated by that street trading. In this age of austerity, if we are asking our councils to do more with less, we should allow them to recoup the cost of providing such services from those who caused the problem.

[Philip Davies]

I am puzzled that my hon. Friend blames local takeaway establishments for litter. Surely he would accept that it is not those establishments that cause the litter, but the individuals who visit them. So why does he want to penalise people who are not responsible and let off those who are?

[Mike Freer]

My hon. Friend makes a very good point, but if he wants to deal with the people who cause the litter, he should support the clause that requires people to supply their name and address when fixed penalty notices are being served. This is a pincer movement, because one provision deals with those who operate the businesses that generate the litter and the other clause deals with those who drop it, and therefore both sides of the argument are covered. The cost of collecting litter in London runs to millions of pounds and it falls on the innocent taxpayer, so either the businesses have to be more responsible or the individuals who cause the litter have to be prosecuted. Either way, the Bill provides the necessary regulations to allow the London councils to get on with it.

[Mr Mark Field (Cities of London and Westminster) (Con)]

I have sympathy with the sentiments expressed by my hon. Friend the Member for Shipley (Philip Davies), because we do not want to have a complicated provision that penalises everybody when, often, the actions of an irresponsibility minority are to blame. Does my hon. Friend the Member for Finchley and Golders Green (Mike Freer) agree that some of the more innovative work has been undertaken in the City of Westminster, although not exclusively there, and that it has aimed at ensuring that as part of a licensing arrangement some of these fast-food outlets must have full-time staff employed outside their establishment—within about 100 yards of it—to ensure that litter is not disposed of there? That takes place at the Oxford street McDonald’s, but I am sure that it is not the only establishment where such an arrangement is in place. I hope that such an approach would get around the concerns expressed by my hon. Friend the Member for Shipley. That sort of voluntary arrangement made at the outset should be encouraged.

[Mike Freer]

My hon. Friend makes a good point. Some operators, such as McDonald’s, are very responsible and do provide regular litter patrols. However, other fast-food operators, in particular the smaller ones, but even some of the national chains—I shall not give names, but one is at the end of my road—simply do not provide them. They take no responsibility for the litter that they generate outside their premises, nor do they try to persuade their customers to act more responsibly. The Bill would allow local councils to deal with both instances.

[Mr Chope]

My hon. Friend must be aware of the concerns of the Society of London Theatre and the Theatrical Management Association. They feel that their members already pay significantly and that this measure will be an additional charge on them. Those bodies have petitioned against the Bill, so what plans does he have to address their concerns?

[Mike Freer]

We do not know what those specific concerns are; I have certainly not been made aware of the detail, but I would be more than happy to give it some close attention because, as a former leader of a London borough, I have some experience in dealing with street licensing. I share my hon. Friend’s concern that many of our businesses pay large sums in business rates, but that money does not go back to the local councils in full. In fact, my local authority is a net contributor of £20 million a year in business rates. I understand the concerns of business, but the real issue, which the Treasury needs to address, is that of having a fair distribution of business rates so that businesses in London do not feel they are paying twice. That does not address the problem we face with litter caused by street trading in London, and it has to be addressed. I do not think it is fair that the council tax payer has to pick up the bill, although I understand the concerns that my hon. Friend raised.

Clauses 9 and 10 are slightly meatier parts of the Bill. They deal with food hygiene, particularly for those businesses involved in the production, processing and distribution of food, requiring them to display their most recent hygiene star rating. In many London boroughs this has been a voluntary scheme and it has performed reasonably well. However, the London boroughs have come together and feel that this needs now to be put on a statutory footing. Over the years, environmental health has become something of a Cinderella service—I hope I am not being too blunt—in that it has been subject to spending reductions. Again, I return to the fact that many London councils will continue to be underfunded and will, in the next few years, have to make ever more efficiency savings and be required to do more with less. Over the past few years, that has led to a risk-based assessment for food hygiene. That means that a good establishment is inspected and receives three, four or five stars and is then left alone for 18 months or so. An establishment that gets one star immediately becomes higher risk and is subject to more frequent inspections, which could take place the following day or the following week. As it is a light-touch, light-regulation regime, the consumer needs some protection. The information on standards should be provided to them at the point of entry to the establishment or should be clearly visible when they are at the establishment.

I do not think that it is unreasonable that food establishments should be required to display their most recent grading. I understand that some members of the British Hospitality Association are concerned that if they get one star, they will be stuck with it. However, a one-star establishment is high risk and will therefore be re-inspected pretty quickly. Nevertheless, I am happy to say that I think that the promoters of the Bill are willing to consider whether those who scored poorly should be able to pay for a quick inspection, if they feel that they have had an off day, in order to improve their score. I think that is quite reasonable.

[Mr Bone]

I congratulate my hon. Friend on the way in which he is introducing the Bill on Second Reading, which is most helpful to Members. In my constituency, there already seems to be such a scheme. The problem is that, even if an establishment’s one-star rating is found on re-inspection the following week to be a blip, the stars cannot be reinstated for a whole year, which has caused one restaurant many problems.

[Mike Freer]

My hon. Friend makes a good point, but that is not my understanding of how the scheme in London would work. I am more than happy to take that away and to get him some reassurance on it, but my understanding is that if an establishment is inspected on a Monday and gets one star, it is deemed to be an off day. The environmental health officers will probably know whether it is an off day; if they have had cause for complaint about an establishment before, they will know of a pattern of behaviour. If they go into somewhere such as McDonald’s and it is a poor visit, they will know that the company takes such matters seriously and that it is likely to have been an off day, but it is less likely to be an off day in a local corner shop that has had a history of complaints, so it will go back on the risk register. I am happy to take away my hon. Friend’s point and to confirm whether the inspection would be within a matter of weeks, if requested by the establishment, to ensure that people are not stuck with an unfortunate grading that they felt to be unfair.

[Philip Davies]

I understand my hon. Friend’s point, although I have a fear that this is a solution looking for a problem. Who will know what a star rating means? If I walked into an establishment that had three stars on the outside, I would have absolutely no idea what those three stars meant. I would not know what the criteria were for one star, two stars or three stars. It might satisfy the bureaucratic instincts of the local authority, but it would not add a great deal to the customer’s experience. I am not even convinced that local councils are best placed to decide these things. I am sure that according to the bureaucratic monsters in local authorities the jam produced by the Mothers’ Union would have only a one-star rating, but I would be perfectly happy to eat it. I am not sure that this is an entirely meaningful measure.

[Mike Freer]

I am sure that the jam made by the women’s institute in Shipley is a fine product. The system with one, two, three, four and five stars is relatively understandable. Most people understand: five stars good; one star bad. My hon. Friend understands a three-star or five-star rating on a hotel, but I suspect that he does not know the mechanics of how that star rating was awarded. If he wants to understand just how the gradings have been arrived at, that information is available to him and I shall happily forward him the details. Most people seem to understand one, two, three, four and five stars.

[Mr Mark Field]

Having been out recently with the environmental protection team at Westminster city council and watched them in action, I can give some comfort to my hon. Friend the Member for Shipley (Philip Davies) that these systems, at least in Westminster, work moderately well although, as he rightly says, the test is fairly objective.

My hon. Friend the Member for Finchley and Golders Green (Mike Freer) must be the first person to have mentioned Cinderella in such seasonal terms in only the second week of October, but this is a Cinderella department and there will clearly be downward pressure on costs for local authorities, so my slight concern is that what is deemed, rightly in my view, to be a deregulatory measure might end up becoming awfully bureaucratic, particularly if a massive set of appeals procedures are to be put in place. My instinctive view is that, if we are going down that route, we should have a review every six or 12 months. The idea that the well-funded muscle of large operators can overturn a hygiene ruling in such a way is unfavourable and would militate against small, independently owned and family-run establishments that had fallen foul of clauses 8 or 9 when it came to their hygiene regulation in any year.

[Mike Freer]

I understand the concern that big operators can dominate the appeals process. That is why larger operators are probably less likely to be high-risk establishments. I understand the concern about burdening our local businesses, but there was an instance in my constituency in which a long-established butcher put many local pensioners into hospital because of its food hygiene standards and the way that chopping boards were used. It was not a chain, but it was a reasonable-sized local business that had been there for many years and had a good reputation among the public. Sadly, it had a bad reputation among environmental health officers. Had there been a grading system on the door, the public might have had a slightly better inkling as to the standard of food hygiene on the cutting boards, which put two or three pensioners into hospital with serious food poisoning. I am keen to avoid regulation, but we have a responsibility, at times, to ensure that consumers have some protection.

[Mr Chope]

Does my hon. Friend accept that the Food Standards Agency, which has been given a national remit to look into these areas, believes in the principle of voluntarism? It is very concerned about introducing a mandatory requirement for premises to put signs on their doors that might reflect the result of a survey or inspection that was carried out many weeks or months previously.

[Mike Freer]

I am surprised that my hon. Friend is lauding a national regulatory quango while arguing against regulation. That seems slightly contradictory. Personally, I have no faith in the FSA. In my time as the leader of a large council that had many food outlets in the borough, I had no knowledge of what the FSA did in the borough, of any prosecutions that it brought to bear or of how it improved food standards. London councils, environmental health officers and practitioners on the ground say that we need a system that provides information to consumers so that they can have consumer protection if we are to have a local, light-touch regulatory regime and if we are not to have environmental health officers knocking on doors every week, which clearly is not going to happen.

Let me address clauses 11 to 20 on houses in multiple occupation. The measures give councils the power to issue management notices on the owners of defective HMOs. There are various amendments, one of which is rather minor, regarding the method of doing so—by post as opposed to registered post. One area that my hon. Friends will be pleased about is the simplification of regulation. Currently, if a housing team believe that an HMO operator is operating unsafe premises, they have to go through a fairly convoluted matrix of assessing the risk, the implications, what needs to be done to be put it right and the relevant time scale. That is very resource-intensive, and is particularly onerous if the issue is simply a damaged stair or a wonky banister. The measures allow councils to simplify that process. Normally, that would involve a 24-hour notice period, but the proposal would allow local councils to waive or avoid that 24-hour notice period if a tenant’s health or safety were at risk.

[Mr Chope]

My hon. Friend will know that no less a person than the right hon. Member for Salford and Eccles (Hazel Blears), Secretary of State for Communities and Local Government in the previous Government, has expressed concern about the measure, and indeed opposed part 4 because she believed that further legislation was not necessary. She was particularly strongly against the idea of giving powers in relation to the fitness of HMO stock in London that were not to be given for the rest of England. To what extent will the Bill’s promoters respond to those concerns, because they do not seem to have responded to them so far?

[Mike Freer]

My understanding is that the promoters have responded in that the power to seek entry is now restricted to the directors, assistant directors and one named individual, and is no longer a more wide-ranging power for members of the housing team. The proposers have offered that restriction and I am sure that we can deal with the matter if the Bill is considered in Committee.

[Mr Chope]

I am grateful to my hon. Friend for giving way once again and I am sorry to have to criticise him on this matter. If he looks at the report produced by the former Secretary of State, he will see that there were two separate issues: total opposition to everything contained in part 4 and concerns over provisions relating to powers of entry under clause 21 in part 5. I accept that modifications have been made in the latter case, but he will also be aware that, even subsequent to that, the former Secretary of State was still not quite sure that those concessions or amendments were sufficient.

[Mike Freer]

I cannot speak for the Secretary of State or the former Secretary of State, but perhaps the Minister wishes to give us some insight into the Department’s view. I am sorry to land him in it, but I cannot speak for him. I understand the concerns, but having a power of entry that is restricted to named individuals or senior members of the housing team is not unreasonable if a tenant is at risk.

I point out to my hon. Friend the Member for Christchurch (Mr Chope) the fact that many HMOs are now operated by offshore companies or overseas owners. Therefore, tracking people down and serving a notice can be particularly difficult. This proposal would allow housing officers to gain access in circumstances where they might be frustrated by an absentee landlord. I am sure that the specific issue and the concerns expressed by the former Secretary of State can be addressed if the Bill reaches Committee.

[John McDonnell (Hayes and Harlington) (Lab)]

The hon. Gentleman has raised an important issue. This is the position: since 2004, the problems of HMOs, particularly in London, have magnified significantly, as every local authority is reporting. The view in 2004 was that certain powers were not required, but local authorities have now made it clear that they are certainly required, as reflected by many constituency MPs. The House must remember that the London Local Authorities Act 2004 took some powers away from local authorities. If we had those powers now, we could use them in these instances.

[Mike Freer]

I am grateful to the hon. Gentleman for that intervention.

[Mr Mark Field]

I thank my hon. Friend for giving way; he is being generous with his time. While I entirely endorse what has just been said, particularly in relation to a number of ownerships that are in the Cayman Islands and some offshore companies that are difficult to police properly, these proposals also raise another rather obvious question, which is, who polices the policeman? Some of the worst offenders are local authorities, through either arm’s length management organisations or directly owning property in multiple occupation. Where are the powers for individuals or other interested parties to be able to stand up and say that local authorities, which have some say in the running of particular properties, should also be subject to the powers being brought into play under clauses 11 to 20? It seems to me essential that there should be such protections, because in some cases local authorities are the worst offender in such instances.

[Mike Freer]

My hon. Friend is quite correct, but the big difference between a local authority or an ALMO and an offshore HMO operator is that the local council has democratically elected members who are responsible and accessible to their local residents. If council tenants, ALMO tenants or housing association tenants have a grievance about the way their stock is being managed, they have direct access to the board of the ALMO, which often includes local councillors, or to the local council.

Although I appreciate that there may be difficulties, the major problem with HMOs is not with local authority stock. If the Government are seeking to loosen the regulation on HMOs and move to light-touch regulation, there must be checks and balances that do not allow us to abdicate responsibility. There must be some form of safety net to ensure that local authorities have the ability to step in if they believe that an HMO operator is putting tenants at risk, however deregulated the market becomes.

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

I am a temporary substitute for my hon. Friend the Member for Carshalton and Wallington (Tom Brake), who has had to go to a ministerial meeting. He and I have both been troubled by the provisions relating to power of entry. Is not the way to protect the rights of absentee occupants under part 5 to make sure that there is a code of practice to back up the way in which senior housing officers or their nominee behave?

The wording is relatively loose because it is a survey in which any delay is likely to give rise to unnecessary and imminent risk. That is serious, but intervention could take place more often than any of us would like. Members will need careful reassurance in Committee that the measure does not allow an officer of the authority to go in without giving an account, maintaining a record and knowing when permission has been granted. A code of practice is needed, as well as a clear record that is examinable as to when it was applied for, why and what the outcome was.

[Mike Freer]

The hon. Gentleman makes a good point. If we get to Committee stage, we can consider defining reasonable grounds for entry and the provision of a record of why, who and when. The problem is not insurmountable.

I shall make progress and deal with some of the other significant clauses, particularly clauses 26 to 28. Members are aware that there have been problems in Westminster concerning hot dog vendors. The City of Westminster has been effective in dealing with those rather disreputable vendors, and the proposal allows the council to confiscate the trolleys as they hit the pavement. It provides Camden council with the same powers. I should point out that the measure does not impact on street pedlars, a subject in which some colleagues in the House take a particular interest.

Clause 25 deals with a problem in many residential areas. Historically, we have seen lines of parked cars for sale causing an obstruction, particularly in residential streets, and causing a nuisance to local residents. These unregulated car dealers have got round placing a handwritten note in the window by advertising the cars on the internet, and possibly holding out as a private seller, meeting the potential purchaser on the pavement. The proposal allows councils to prohibit that and gives some consumer protection to local residents from such rogue traders.

[Mr Chope]

Will my hon. Friend give way?

[Mike Freer]

Indeed. [Interruption.]

[Mr Chope]

I am sorry that the Whip thinks it unreasonable for my hon. Friend to give way. I think it is very reasonable for him to give way. That is how we make progress in the House on contentious legislation. Can my hon. Friend explain whether the vehicles that he has in mind are already licensed with the Driver and Vehicle Licensing Agency, and whether they have resident parking permits if they are in areas with residents parking? If they have those permits and the licence has been paid in respect of each of those vehicles, what is the problem?

[Mike Freer]

The problem is that it is already an offence to advertise cars for sale on the highway. Even if the seller is a private resident selling a car outside his own house, that is an offence. Over the years we have seen a proliferation of rogue dealers with five, six or 10 cars for sale on the highway, previously with handwritten stickers in the window, pretending to be private sellers. Purchasers would not get the consumer protection that they would by buying from a normal dealership. Owing to the prohibition of such advertising, people have moved their activities on to the web, so the Bill allows for the same prohibition to apply to sales on the internet. It does not affect people trying to sell their own car through a local newspaper; it enforces the existing law, whereby it is illegal to sell a car on the highway, and extends it to the internet.

[Simon Hughes]

Will the hon. Gentleman give way?

[Mike Freer]

If I could wind up—

[Simon Hughes]

One last question?

[Mike Freer]

Okay.

[Simon Hughes]

The Whip’s not looking; he’s slipped out of the Chamber for a second.

Will the promoters of the Bill, in collaboration with Ministers, look at whether the same power for dealing with hot dog trolleys—the power to nick them if there is abuse—might apply to car salespeople who put cars on the road outside their premises? That has been a frequent problem in Rotherhithe, with firms selling second-hand vehicles that are always parked illegally on the road. They have never been effectively stopped, and it seems to me that the way to deal with it is to give the local authority the power to remove the car if it is parked illegally on the highway.

[Mike Freer]

My hon. Friend makes a good point, but the Bill deals with only the removal of an obstruction on the pavement. It is a valid point that I am more than happy to take away to the Bill’s promoters, however.

I understand that many Members might be concerned about increasing the regulatory burden, but I urge them—

[Mr Chope]

Will my hon. Friend give way before he finishes his speech?

[Mike Freer]

I shall make progress, because I have been generous with my time.

We need to ensure that Londoners are protected. Consumer protection is important, and the Bill will not only allow local councils to adopt regulations when it suits their local needs, but more importantly put information at the disposal of London residents for their own protection.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I call Chris Williamson. Welcome to the Front Bench.

15:47

[Chris Williamson (Derby North) (Lab)]

Thank you very much, indeed, Mr Deputy Speaker. I am absolutely delighted and somewhat surprised to speak from the Dispatch Box for the first time today, particularly as it is so early in my parliamentary career. It is an incredible privilege, and I genuinely look forward to my exchanges with the Minister in the weeks and months ahead. I am sure that on most occasions we will take entirely different positions, but the Opposition support this Bill, and I believe that the Government are of a similar mind.

The arguments in support of the Bill have already been made, and I do not want to detain the House any longer than is necessary, but I pay tribute to the hon. Member for Finchley and Golders Green (Mike Freer), the former leader of Barnet council, who eloquently set out the rationale behind it.

I shall briefly set out our support for the Bill. It is worth reminding the House that the Bill has already been agreed to by all 33 London local authorities. As the House will know, London’s councils are controlled by all three main political parties, and, although they may disagree on many issues, on this Bill they speak with one voice. It has been subjected to detailed scrutiny for almost three years by those local authorities and, indeed, by Parliament, too.

Many of the Bill’s provisions are eminently sensible. For instance, it gives local authorities the powers to install turnstiles in public lavatories when they consider it appropriate to do so. That measure is necessary because the Public Lavatories (Turnstiles) Act 1963 prohibits the use of turnstiles in any part of a local-authority owned or managed public toilet. The Bill contains many other reasonable provisions.

[Mr Bone]

On that point, if Parliament has expressed a view nationally about turnstiles, why should there be an exemption for one particular local authority?

[Chris Williamson]

The measure was asked for and debated at length by the local authorities. Indeed, there have been debates in this House about the Bill’s provisions. If Members have difficulties with specific aspects, then surely the appropriate time to raise them in more detail would be in Committee.

Let me point out some of the other very reasonable provisions contained in the Bill, which include powers to recover any additional cleaning costs where businesses put out tables and chairs on the street, and the right to improve the regulation of strip clubs. It also provides the ability to put on a mandatory footing the Scores on the Doors scheme, which is an initiative that has driven up food hygiene standards in pubs, bars and restaurants all over London. That should be welcomed.

The Bill is not prescriptive and does not require local authorities in London to do certain things; it simply gives them the powers to use as they see fit. In the end, it is up to local authorities themselves to deploy the powers at their disposal in the interests of the communities they represent. On that basis, I am pleased to offer our support for the Bill.

15:50

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

I congratulate my hon. Friend the Member for Finchley and Golders Green (Mike Freer) on the way in which he introduced the Bill. I pay tribute to the Bill’s proponents, who continue an established tradition for London local authorities in bringing forward private legislation. I also congratulate the hon. Member for Derby North (Chris Williamson) on a very assured debut at the Dispatch Box and on his swift appointment. Indeed, I welcome a very considerable percentage of the new shadow Communities and Local Government team. All I can say is this: welcome to the merry world of local government private legislation. I am delighted to see them there, and I hope they will not take it ill if I wish them a long tenure on the Opposition Benches.

From a localist perspective, I broadly agree with the sentiments of the hon. Member for Derby North. The Bill should be enabled to make progress. However, it may be helpful if I indicate aspects where the Government have concerns and flag up some areas where further attention may be appropriate as the Bill progresses.

Several of the Bill’s provisions are to be welcomed as a genuine step forward, such as those in clause 6 which tackle the proliferation of smoking-related litter outside buildings. Indeed, I understand that the Department for Environment, Food and Rural Affairs is looking for opportunities for primary legislation to introduce a similar change across England. Similarly, clause 33 represents a valiant attempt to deal with enduring problems in dealing with litter emanating from vehicles. At the same time, it remedies a drafting error in the original legislation—the London Local Authorities Act 2007—which rendered the provision inoperable, so there is value-added there as well.

The Bill has had a pretty long gestation; it came into being during the tenure of the previous Administration. Following the change of Government, Departments continue to consider the provisions, in some cases, and will want to scrutinise them with a view to the current legislative programme and in terms of the coalition agreement and the Government’s current priorities. For example, my colleagues in the Home Office will wish to reflect on some of the provisions in clauses 4 and 5. I understand the point that is made as regards their advantages, but we need to be cautious in extending powers to issue fines beyond recognisably uniformed police and police community support officers. While not ruling it out, we must be proportionate and avoid a proliferation of fines for what might be perceived as genuinely minor breaches, as that might create in the public a sense of unfairness.

[Mr Mark Field]

I strongly support much of what is in the Bill, but I have some concerns about these penalty charges. We all know as London MPs—or perhaps I have a particular problem with this—that we get a huge amount in our postbags from local residents or people from outside Westminster concerned about the antics of traffic management people putting tickets on cars. Extending penalty notices, particularly giving a power to PCSOs, creates the risk that there will be a perception, at least, of rather untrammelled and somewhat arbitrary powers being utilised by local authorities. Returning to the point made by my hon. Friend the Member for Shipley (Philip Davies), it may also be somewhat confusing for many people who do not live in London when they suddenly realise that there is an entirely different set of regulations whereby they can fall foul of expensive fines for fairly minor breaches of whatever civil code might be in place. We need to pin this down, as far as we can, to ensure that that level of arbitrariness and untrammelled power is kept to an absolute minimum.

[Robert Neill]

My hon. Friend makes a fair point, but rather than regard that point as fatal to the Bill’s future progress, the right approach is to say, as I will in relation to other matters, that I hope the Bill’s promoters will discuss with officials in the relevant Departments how they might seek clarification and improvements. I am grateful to him for highlighting that matter.

Similarly, we have to ensure that there is fairness in relation to the provisions in clause 8 for pavement charges. I understand the argument behind the clause, but equally we must ensure that an undue burden is not placed upon small local shops. We need to ensure proportionality.

[Simon Hughes]

May I reinforce that point clearly? The danger is shown in the service charges for people who have bought their property from the local authority, which we all know about. They end up being far higher than anybody ever envisaged, even though they are technically “reasonable” in law. The ability to deal with what is called “street furniture”—tables and chairs—is important, but within limits it should be permitted wherever possible. We need to ensure that local authorities do not give themselves powers that prevent cafés and restaurants from allowing people to sit outside, which is often much healthier than sitting inside.

[Robert Neill]

I have enjoyed sitting outside the occasional premises myself in the past, and the hon. Gentleman is right. It is entirely a question of getting the right balance, and I hope that we can do that with some good will as the Bill makes progress.

[Mr Chope]

Will my hon. Friend give way?

[Robert Neill]

I will on this occasion, although I might not be as generous as the Bill’s sponsor throughout the whole debate.

[Mr Chope]

I find that rather disappointing, because I do not seek to intervene unless I have a question.

The Minister says that he and Ministers from other Departments such as the Home Office will have to reflect on the contents of the Bill, but it has been around since 2007 and the coalition Government have been in office for many months. How will those deliberations reach a conclusion, and how will it be communicated to the promoters of the Bill and other people who are interested in the subject?

[Robert Neill]

I do not believe the Department for Communities and Local Government can be accused of having twiddled our thumbs unduly. In fact, a number of people would argue the contrary. Our officials are already in discussions with the promoters of the Bill, as are those of other Departments. Difficulties sometimes arise because a number of Departments have an interest in a Bill of this kind, and it is important to get it right, so I do not believe there can be any criticism of the current Government. It is in the nature of private Bills that they sometimes progress more slowly than other types of legislation. I do not intend to disappoint my hon. Friend gratuitously when he seeks to intervene, but equally I am sure that the House will want to make progress.

I wish to touch upon a matter where I understand the point that my hon. Friend and other Members have made. The Government have made a clear pledge to reverse the erosion of civil liberties and roll back the state’s power to intrude on citizens. That is an important principle and may be pertinent in considering some of the provisions on houses in multiple occupation in parts 4 and 5 of the Bill, which have been mentioned. It may help if I offer a little detail.

The Housing Act 2004 introduced a range of measures intended to improve the management standards and condition of privately rented accommodation such as HMOs. It provided local authorities with extensive tools and powers to take action when the condition or management of HMOs falls below required standards. It introduced mandatory licensing of larger, higher-risk HMOs and provided local authorities with the discretion to extend licensing to other categories of HMOs to address particular management problems in smaller properties. It also introduced management regulations for all HMOs, regardless of whether they are licensable, which local authorities can use to take action when they find management problems in specific properties.

HMO licensing works alongside the housing health and safety rating system, which was also introduced in 2004, under which local authorities can make a risk assessment of the likely impact of property condition on occupants of privately rented accommodation. When that happens and when a category 1 or 2 hazard is identified, local authorities have powers to impose improvements.

Of course, failure to comply with an improvement notice and a breach of the HMO management regulations are already criminal offences. Both the licensing and the housing health and safety rating system regimes provide local authorities with an extensive enforcement framework to take action in cases in which the condition and management of HMOs fall below required standards.

Therefore, with regard to part 5 of the Bill, the existing powers-of-entry provisions in the Housing Act 2004 provide local authorities with extensive powers to enter properties and to take immediate enforcement action in cases in which the condition and management of the property falls well below required standards. In such cases, local authorities are required to give a minimum of 24 hours’ notice to the owner and occupiers of a property prior to an inspection. However, in emergency cases—those that involve an imminent risk of serious harm to the health and safety of any occupier of a property or when it is suspected that an offence has been committed in relation to HMO licensing—local authorities may enter the property immediately without giving notice. The legislation also requires authorisation by a deputy chief officer to ensure that such powers are used in the appropriate circumstances, where the severity of the case warrants emergency action.

As I have said, the Government pledged to reverse the erosion of civil liberties and to roll back the ability of the state to intrude on citizens. Extending the powers of entry beyond those that exist would therefore, on the face of it, tend to undermine the purpose of the freedom Bill, which is delivering a key objective of the coalition Government. We have also made it clear that we do not propose to introduce new burdens on the private-rented sector. The Government therefore oppose parts 4 and 5 of the Bill. However, I recommend further consultation between the Bill’s proponents and my officials at the Department for Communities and Local Government to see whether improvements can be made that sit in harmony with the Government’s wider civil liberties ambitions.

[Mr Bone]

I am grateful to the Minister for the great attention he is giving to the detail of the Bill. Clearly, the Government have reservations about some aspects of it. Are they interested in a localism that derives from moving more general powers to local authorities to decide such matters, or will such private business continue to have to come through the House?

[Robert Neill]

As my hon. Friend knows, the Government are committed, through the localism and decentralisation Bill, to giving a wider range of general powers—for example, a power of general competence—but equally, it will sometimes be more appropriate and proportionate to give more specific flexibilities, such as those in the Bill. Both approaches can be part of the mix.

May I turn to the issue of entertainment involving nudity, which is addressed in clause 23? When the measure was considered in the House of Lords, the previous Government argued that it should be deleted. Clause 23 would amend the Licensing Act 2003 to allow local authorities greater powers to regulate lap-dancing clubs by allowing them to impose clauses on premises’ licences to prohibit entertainment involving nudity. That, I believe, is motivated by the concern that their powers under the 2003 Act are insufficient to allow them to prevent lap-dancing clubs operating within their area, or within certain parts of their area, or to regulate the nature of the entertainment provided within lap-dancing clubs.

When the measure was considered in the House of Lords, the previous Government sought its deletion because at the time, they were seeking the views of local authorities nationally. As a result of that consultation, they introduced legislation. Section 27 and schedule 3 to the Policing and Crime Act 2009 amended the Local Government (Miscellaneous Provisions) Act 1982 to allow local authorities the power to regulate lap-dancing clubs as sex establishments. This provides local authorities with much greater powers than those provided by the Licensing Act 2003, and those that would be provided by clause 23.

In opposition, we broadly supported the amendments to the Local Government (Miscellaneous Provisions) Act 1982 as they went through Parliament, and we remain supportive of those measures, As such, we believe that it would improve the Bill if clause 23 were deleted. It could complicate the licensing framework in London, and possibly undermine the new legislation in the Local Government (Miscellaneous Provisions) Act 1982. Given that since the London Local Authorities Bill was introduced Parliament has introduced national legislation to deal with the same issue that clause 23 seeks to address, it is no longer necessary and Home Office Ministers may well seek to have it removed. I hope that the sponsor of the Bill will reflect on that point as the Bill progresses.

[Simon Hughes]

I hope that that point will be accepted by the sponsors and that we end up with a regime that gives discretion on whether to allow nudity or partial nudity without taking too puritanical a view. However, often the problem is not that people are appearing in the nude, but that some of them were pressured into the job by being trafficked. That is the issue, not whether adults should be able to go and see what they want to see in licensed premises, which should clearly be permitted where possible.

[Robert Neill]

I understand and sympathise with the hon. Gentleman’s point, but he will recognise that that is a wider issue than the provisions of this Bill.

[Philip Davies]

Will the Minister give way?

[Robert Neill]

I must draw my remarks to a conclusion. I have been generous so far—

[Philip Davies]

Not to me.

[Robert Neill]

There is an argument about whether fairness includes desserts, but I will give way to my hon. Friend.

[Philip Davies]

The Minister has picked up a point made by my hon. Friend the Member for Wellingborough (Mr Bone). I agree with the point that he has just made about sex encounter establishments and that, in that regard, the legislation is unnecessary. Will he consider those aspects of the Bill that are worth while—and that would therefore be worth while for every local authority—and introduce legislation to cover the whole country, so that we do not have to do this piecemeal, authority by authority?

[Robert Neill]

I hear my hon. Friend’s point and I have already set out some of the aspects of the Bill that we think are advantageous and why we wish to see it make progress. I am not sure that my hon. Friend is in a very localist frame of mind, and we may therefore have to part company on the ultimate destination of the Bill.

I am grateful for the opportunity to speak. I hope that my observations are of help to the House and the promoters of the Bill, and I again reiterate my offer of consultation in those areas about which we have reservations. We are committed to giving local authorities more flexibility to reflect local needs and priorities and it would therefore be appropriate for the Bill to progress further. We will seek amendments in Committee to address the areas of concern that I have highlighted.

16:08

[John McDonnell (Hayes and Harlington) (Lab)]

I want to speak briefly on a point of constituency interest. I am especially concerned about the powers in regard to houses in multiple occupation, and I am grateful to the Minister for offering further consultation in that area. The existing situation is not working for my constituency. We have seen the growth of buy-to-let schemes into small and large HMOs, which have been the bane of my constituents’ lives, whether because of mismanagement in a particular street or the safety of people living in them.

I know that London local authorities have gone through an exhaustive process of consultation and come forward with the Bill. They have identified problems with the ability to identify the landlord of an HMO, or to achieve prompt entry into premises to inspect or take remedial action. I accept what the Minister has said about the powers in existing legislation, but they are clearly not working, especially in London. As the capital city, London has seen immense growth in HMOs, because of housing problems, so the situation in some constituencies has become nightmarish.

The previous Government introduced increased planning powers to try to deal with the matter, but in some ways the current Government have watered them down. I regret that, but the Bill gives the opportunity for more direct, prompt and forceful action to be taken to address some of the problems from which my constituents are suffering. I hope that the consultation will be timely and enable us to pass the legislation, in some form, after the Committee stage.

Finally, the sale of cars on streets has been a nightmare problem in my constituency. We have tried using traffic restrictions, but there are some streets with no traffic restrictions where the whole street has effectively been used as a garage for the sale of cars. We have taken action and resolved the problem where we have seen notices advertising cars for sale with telephone numbers on them. I congratulate my local authority on the work that it has done, but the problem has moved on. The use of the internet now means that those car salesmen can effectively bypass the existing law. I therefore welcome the conditions in this legislation. In a former life, I was responsible for the promotion and drafting of such Bills, but from my past practice, I have never known one to be in gestation for as long as this one. I hope that we can eventually implement it and that that will happen as soon as possible.

16:11

[Mr Christopher Chope (Christchurch) (Con)]

It is a great pleasure to participate in this debate. If some of us had not objected to the Bill going through on the nod on Second Reading, we would not be having this useful debate. We would not have heard my hon. Friend the Member for Finchley and Golders Green (Mike Freer explain why he thinks the Bill is a good one, nor would we have heard the Minister say what he thinks all the Bill’s shortcomings are. He suggested that clauses 11 to 22 inclusive should be deleted, because he does not support them, and that clause 23 is redundant. It is useful to get that on the record.

This has also been a useful debate because we have been able to welcome the hon. Member for Derby North (Chris Williamson), who made his maiden speech from the Opposition Front Bench. It must be approaching a record to be able to speak from the Front Bench so soon after being first elected. I congratulate him on that, and I listened with interest to some of the things that he said. I cannot accuse him of saying something inconsistent with what happened under the previous Government, which is one of the strengths of being a completely new Member with a shadow ministerial office.

I have a number of concerns about the Bill. Many of them centre around the principle of whether we need to regulate more and whether we need to do so proportionately, and the need to ensure that we listen to groups of people— sometimes quite small groups of people—who are potentially adversely affected or treated unfairly as a result of private Bills. That is why it is so important that such Bills should be considered carefully in Committee, as I am sure this Bill will be in Opposed Private Bill Committee. The Bill is already the subject of petitions against it, some of which I referred to in my interventions on my hon. Friend the Member for Finchley and Golders Green.

I shall begin by dealing with the concerns of the Society of London Theatre and the Theatrical Management Association.

[Mr Bone]

Will my hon. Friend clarify for the House that what we are doing today—deciding whether to give the Bill its Second Reading—is about the principle of the Bill? Also, is it not unusual to have so many different things in private business? I have spent hours considering private business, but it is normally about a specific, single thing for a specific area. This seems to be a very wide-ranging Bill.

[Mr Chope]

I agree with my hon. Friend that this is a very wide-ranging Bill. The fact that it is the 10th such Bill to emanate from London local authorities in a reasonably short space of time shows that London local authorities are pushing at what are reasonable bounds on the powers that they should be taking in legislation. They keep trying to extend those bounds, taking more powers for themselves; indeed, there are powers in the Bill that I think go too far. The consequence of what my hon. Friend has described so pertinently—the fact that the Bill contains a large number of contentious clauses—is that unless its promoters listen to reason and allow it to be amended, it will find it jolly difficult to make fast progress through the House. Even it were to sail through the Opposed Private Bill Committee, it would encounter the same kind of difficulties on Report that the pedlars Bills were up against during the last Parliament.

Significantly, my hon. Friend the Member for Finchley and Golders Green did not refer to the pedlary and street trading provisions in this Bill, but the Bill contains powers to seize commercial goods on the ground not of reasonable belief but of reasonable suspicion that an offence has been committed. We brought in the reasonable suspicion test, reluctantly, under anti-terrorism legislation. It is draconian in the extreme to seize people’s goods or interfere with their liberty on the ground of reasonable suspicion that they might have committed an offence. Because of the strength of that argument, amendments replacing the term “reasonable suspicion” with “reasonable belief” were accepted by the promoters of the Bournemouth Borough Council Act 2010 and the Manchester City Council Act 2010—two pedlars Bills that reached the end of their proceedings during the last Parliament. The fact that no such amendments have been offered by the promoters of this Bill represents a pretty bad prospect for the Bill, because it suggests a certain intransigence and resistance on the part of the promoters to listen to reason. It might also suggest that they want to give themselves extremely wide powers to seize goods. I believe that such powers go far beyond what is reasonable.

[Philip Davies]

As my hon. Friend knows from our debates on the pedlars Bills, I agree with him wholeheartedly on this matter. I believe, however, that this Bill is worse than those Bills. It deals not only with a suspicion that an offence has been committed, but with a suspicion that an offence might be about to take place. A person could be suspected of being about to commit an offence that might take place. Furthermore, in addition to property being confiscated on that basis, the Bill would also confer a power to confiscate the vehicle in which the property was carried. The idea that central Government are bad and local government is good is surely wrong; the problem in both cases relates to the word “government”. We should not allow any government, local or central, to have such draconian powers.

[Mr Chope]

I agree with my hon. Friend. I am sure that, when hon. Members start to look at the detail of these provisions, they will be as concerned as he and I are about their implications for civil liberties. I hope that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) will report back to his colleagues in the Home Office and the Ministry of Justice on our concerns about these fundamental issues of human rights and individual liberty.

[Philip Davies]

I am grateful to my hon. Friend for allowing me a second bite of the cherry. Does he agree that it is unacceptable for the Government to hide behind the idea of localism on these matters? They should not be allowed to say that local authorities are entitled to do anything they want to, simply on the basis that such decisions are being taken locally. Surely localism must come with some responsibilities.

[Mr Chope]

Absolutely; I hope that that is what the Government believe as well, even though my hon. Friend has expressed his concern that that might not be so. Time will tell.

“Localism” is a good term, but it was rejected by Front Benchers in relation to pedlars. I remember Front-Bench colleagues during the previous Parliament arguing that there was a strong case for having national legislation on pedlars, so that there could be consistency across all local authority areas. There is also an enormously strong case for saying that we need consistency in the application of the criminal law, and that people should not have their goods seized unless there is a reasonable belief that they have committed an offence.

May I briefly revert to the petition of the Society of London Theatre and the Theatrical Management Association, as I do not think that my hon. Friend the Member for Finchley and Golders Green really addressed the concerns set out in it? They are concerned that commercial theatre in London, which is not finding it easy in the present economic climate, is going to be burdened with additional charges as a result of clause 8. The petition submits that its members are already making their own arrangements for the cleaning of the pavement and so forth, and that the basis for the additional charge has not been made clear. The petition submits that the existing wording of section 115F of the Highways Act 1980 is sufficient in so far as it enables London borough councils to recover their reasonable expenses in connection with the granting of permission to put items on the pavement. I hope that the promoters will address that concern before the Bill makes further progress.

Let me move on to clauses 9 and 10, which deal with what is colloquially known as Scores on the Doors—a system intended to ensure that the people providing catering services at retail food outlets have to display their standing by putting up a notice in the window. A petition against this has been drawn up by the British Hospitality Association and another petition has come from the pubs organisation, the British Beer and Pub Association. Both those petitions highlight the fact that there should be a voluntary aspect to this scheme, but London councils are usurping the position of the Food Standards Agency, which has already said that it thinks these issues should be a matter for voluntarism.

My hon. Friend the Member for Finchley and Golders Green has said that he and his council have no faith in the Food Standards Agency. If he brings forward a Bill to abolish the Food Standards Agency, my hon. Friend the Member for Shipley (Philip Davies) and I will strongly support it. In fact, we put in a bid to become co-sponsors of such a Bill, but unless and until the Food Standards Agency is abolished, the reality is that it has the responsibilities given to it by Parliament. It ill behoves a group of councillors, however experienced they might be, to second-guess that organisation and say that it has no faith in it and is therefore going to try to duplicate its role and go further than it has gone.

[Chris Williamson]

Does the hon. Gentleman agree that it is appropriate for local authorities to seek to protect the public whom they represent? Does he not accept that the Scores on the Doors scheme has had the effect of driving up standards in pubs, clubs and restaurants that provide foodstuffs for the general public?

[Mr Chope]

The hon. Gentleman’s intervention is timely, as I was just going to refer to Scores on the Doors, which has been described as a national food hygiene rating scheme. I downloaded material on it from the internet earlier today, which made it clear that Scores on the Doors is a commercial organisation, describing itself as

“the No. 1 national food hygiene rating scheme”,

enabling official local authority hygiene ratings for food businesses to be found.

Scores on the Doors is the largest such scheme in the world, but it does not cover all local authorities. According to the internet site, there are 124 contributing councils, but interestingly not all the London councils are included in that number. It does not include the London borough of Wandsworth, which I had the privilege to lead some years ago. I am immediately alerted to the fact that even the Scores on the Doors scheme is not universally accepted by London boroughs, let alone by councils more widely across the country.

Someone wishing to search for one of the premises listed on the internet will find that there are 145,931 of them. That is the number of premises that will be affected by legislation second-guessing the Food Standards Agency and introducing a national requirement, subject to criminal penalties for non-compliance. I looked for a reference to a restaurant in my area, but to gain further access to the website I had to accept a general disclaimer. The disclaimer is quite interesting, because it shows that even Scores on the Doors is by no means a panacea:

“The information on the food premises listed here is held by us on behalf of our member local authorities. By accepting this disclaimer, you are submitting a request… to the relevant local authority for the disclosure of summary inspection reports under the Freedom of Information Act 2000.”

It also states:

“The information… has been gathered by authorised Environmental Health Officers”.

However, it goes on to say:

“The hygiene rating given to premises on this web site has been based on the latest Primary Inspection carried out and as such represents the situation as found by the officer on the day of that inspection. Therefore the score may not be representative of the overall, long-term food hygiene standards of the business and should not be relied upon as a guide to food safety or food quality.”

Yet the London boroughs are seeking not only to encourage but to require premises to put up signs which are meaningless. If they do not do so, they will be subject to penalties up to scale 3. If they deface the signs—perhaps by adding material from the internet, such as the extract that I have just read out—they may be subject to a penalty on scale 5.

The situation is ludicrous. I am sorry that my hon. Friend the Member for Finchley and Golders Green did not have a chance to go into more detail, because if he had done so even more people would be saying that the Bill goes far too far, and that it would be best to make a fresh start.

[Mr Bone]

In my constituency, many restaurants enter the scheme voluntarily, which is fine. However, the rating is a snapshot of a single day, and it can cause great concern to people who are given a bad rating one day and cannot get it altered the next day. It is quite proper for restaurants to have a right to opt into the scheme, but it seems wholly wrong to compel them to enter it.

[Mr Chope]

I entirely agree. The disclaimer states:

“Food premises may only be inspected every 6-36 months as specified in the Food Standards Agency Code of Practice.”

There is the potential for an enormous amount of damage to be caused to the reputation of commercial businesses that will have to stick on their doors something that is unrepresentative of the true position.

[Philip Davies]

I congratulate my hon. Friend on wiping the floor with this part of the Bill and illustrating so effectively what nonsense it is. The shadow Minister, the hon. Member for Derby North (Chris Williamson), said that the Scores on the Doors process had already raised standards. If the voluntary scheme is working well and raising standards, and if seeing the stars on display is so important to customers, will customers not instinctively prefer to visit only the restaurants that display their stars? If a restaurant or other food establishment chooses not to display its star rating, it will risk not receiving any custom from the people who consider the system so important.

[Mr Chope]

My hon. Friend makes his point perfectly. We in this House have the privilege of the opportunity to try to introduce some common sense into these measures before they become set in law. I hope this debate will enable that to happen, certainly in relation to clauses 8 and 9, against which petitions have, for good reason, been submitted. Depressingly, the petitions were presented in the other place as well, and they did not have any impact. Nobody seems to have been listening. I hope somebody will start to listen soon because we are talking about potential threats to the viability of lots of small businesses in the ever-important hospitality industry. There is the possibility of gross injustices arising from these provisions.

[Mr Greg Knight (East Yorkshire) (Con)]

If this Bill were to be enacted, how would the provisions of clause 9 apply to a vendor who has no window to his customers and no door, such as the owner of a hot dog cart?

[Mr Chope]

My right hon. Friend brings his legal expertise to bear on this issue and asks a very pertinent question. I am not in a position to answer it, but if the promoter of the Bill—or the promoter’s representative in this place today—wishes to intervene to do so, I will gladly give way. If the Bill has been as well prepared as one would hope after three years of gestation, one would expect that point to have been taken into account by its drafters—although perhaps we should not be so certain about that.

The hon. Member for Hayes and Harlington (John McDonnell) was enthusiastic about the only parts of the Bill that my hon. Friend the Minister said the Government were concerned about. That is an interesting cameo within this debate. I hope my hon. Friend will stick to his guns in pursuing his concerns about clauses 11 to 22 and will insist that clause 23 is removed as being absolutely redundant.

[Philip Davies]

The Society of London Theatre and the Theatrical Management Association are worried that clause 23 will have a big impact on their theatres. Occasionally, there is some nudity or semi-nudity in a production and this measure may well have a negative impact on such shows. Will my hon. Friend acknowledge that concern as well?

[Mr Chope]

Absolutely. My hon. Friend the Minister said the legislation that had been introduced nationally since the Bill was first produced covers the national picture. I am sure it takes properly into account the concerns that have been expressed, and to which my hon. Friend has referred.

I want to refer back to an earlier part of the Bill. Clause 7 deals with access to public lavatories. I have the privilege of representing a constituency with one of the highest proportions of elderly people in the country, and we in Christchurch are proud to have been the winner of the loo of the year awards on many occasions. Ours is a prudent council, and it has now reached the stage where the councillor and the officers responsible for winning those accolades do not attend the awards ceremony because they cannot afford the cost of the travel, but they are grateful recipients of the awards.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am sure that the hon. Gentleman is going to flush out the subject a little more, but we are dealing with a London Bill, rather than toilets in his constituency. I know that there is a connection, but I would like to try to keep it a little tighter if we can.

[Mr Chope]

Absolutely, Mr Deputy Speaker. The great joy for people in Christchurch is that even when they reach a certain age they can travel. They travel outside their constituency to places such as London, and they expect that in London they will find facilities similar to those that they enjoy in Christchurch. Sometimes they are disappointed, and that is where the relevance of all this lies. As they have such high standards at home, they seek them elsewhere.

I am concerned that it would be a retrograde move to allow local authorities in London to reintroduce turnstiles. Not long ago, a short debate was held in the other place in which Baroness Greengross asked Baroness Andrews, who was then an Under-Secretary at the Department for Communities and Local Government, about extending the provisions of the Public Lavatories (Turnstiles) Act 1963 to railway premises. The answer was that it would not be desirable because a lot of railway premises were having their loos and the access to them modernised. However, it was implicit in the answer that the then Government did not believe that the law needed to be changed and that they thought it desirable that we should not need turnstiles in order to gain access to public toilet facilities. This is a particular issue for disabled people, because they find it most difficult, although others may wish to gain access to a public toilet as quickly as possible and they do not want to have their progress impeded. I do not think that we need to spell out the point at any greater length, Mr Deputy Speaker.

[Mr Greg Knight]

May I put it gently to my hon. Friend that he has the argument the wrong way round? Surely we should be applauding this measure, because if local authorities are allowed to introduce turnstiles and thereby charge people an exorbitant rate to use the lavatory, the people of London will have far more lavatories to use as more and more councils seek to tap into this revenue raising idea.

[Mr Chope]

I do not know whether my right hon. Friend had his tongue firmly in his cheek when he was making that observation, but I suspect that he did. If he did not, he is living on another planet. In the City of Westminster, for example, the council raises an enormous surplus in parking charges, many of which are paid by people who do not reside in the borough. The original idea was that those fees should be reinvested to improve public facilities in Westminster, but that has not happened in practice. The idea that if local authorities can impose more charges for access to public toilets, the quality and availability of those toilets will improve is pie in the sky.

[Philip Davies]

Does my hon. Friend accept that this could be argued the other way round? He says that turnstiles are not desirable, and that is a perfectly legitimate view. Even if someone would argue that they are legitimate, surely any local authority should be able to introduce them in their local toilets, not just London boroughs. Why would we just extend this privilege to London, and why would the Government not extend it to every local authority that so chooses to use it? I hope that he would accept that such an approach would be pure localism, as opposed to giving localism only to London.

[Mr Chope]

My hon. Friend makes another very good point. I am sure that if the coalition Government are short of new policies to enact they will think seriously about my hon. Friend’s suggestion. Before they do so, however, they might look at the document produced a couple of years ago by the Department for Communities and Local Government, which set out a strategic guide, spread over the best part of 100 pages, on “Improving Public Access to Better Quality Toilets”. Nowhere in that strategic guide was anything that suggested that the answer to all the problems was to reintroduce turnstiles, which were outlawed in an enlightened moment in 1963. They should probably remain outlawed and I do not think that the case for reintroducing them has been made.

I am also very concerned about the Bill’s provisions on pedlars and street trading, to which I have already referred—my hon. Friend the Member for Shipley engaged in a short exchange with me on that point. Those powers go far in excess of what is reasonable. I am sorry that my hon. Friend the Member for Finchley and Golders Green did not consider them when he introduced the Bill. In a sense, this is a warning shot, because a number of us have been jealous of the rights of small groups to be able to carry on their activities and not to find themselves subject to harassment by officialdom. The wide powers that are given under the Bill to Westminster city council and to Camden borough council are a licence for harassment. They give tremendous powers to local authorities to harass the people they wish to drive out of business because it does not suit their purposes and because they find it rather difficult to try to enforce the law as it stands nationally. They want to give themselves extra powers to impose penalties on the grounds of suspicion, and I think that that is wrong.

One is left asking whether anything in the Bill is worth saving, or whether it would be much better to put the promoters out of their misery and not give it a Second Reading. My hon. Friend the Minister thinks that we should give the promoters the benefit of the doubt. For my part, I think that they have had three years in which to try to get their tackle in order and they have manifestly failed so to do. They have not really come to terms with the change in the mood out there, which is very much against interference and regulation by local authorities, pettifogging bureaucracy, penalties, putting pressure on people and making it very difficult for them to argue against penalties, which makes them have to go along and pay another fine or penalty. The promoters misunderstand the mood and there is a great demand for some consistency in our criminal law across the whole country rather than having special regimes for licensing in the London area, as proposed in clause 23, or special regimes for penalties for street trading, as found in the clauses that promote powers for Westminster and Camden.

I obviously support my hon. Friend the Minister as regards the parts of the Bill to which he is opposed. There is so much wrong with the Bill that there is a danger that if we allow it a Second Reading, an enormous amount of our colleagues’ time will be taken up in the Opposed Private Bill Committee. If the promoters are as reluctant to compromise as they appear to have been in the other place, we will end up taking up a lot of time on the Floor of the House on Report and Third Reading. It might be better to put the promoters out of their misery at this stage and force them to go back to the drawing board and propose a fresh Bill that is more in tune with current thinking.

[Mr Knight]

I hear my hon. Friend’s argument, but all what he says could be put right in Committee. If he feels that the Bill is too pettifogging in some areas, amendments could be moved in Committee to improve it to such a state that only reasonable actions could be taken by local authorities to deal with what is a very real problem. The argument he is developing is not against the Bill per se but against its current drafting. Is it not then for us to amend it in Committee?

[Mr Chope]

My right hon. Friend makes a perfectly fair point, but he and I will in our time in this place have been confronted many times with Bills that we disliked so much that, although parts of them were not so bad, we felt obliged to vote against them on Second Reading to make a point. This Bill has not arrived here de novo, but has already been through the other place. We have to look on the past as a guide to the future unless we are otherwise advised. The Bill has not been subject to voluntary amendment by its promoters despite the petitions against it from the London theatres, the British Beer and Pub Association and others. If the promoters did not listen to those petitions in the other place, what guarantee is there that they will listen to petitions now? We have not heard anything from my hon. Friend the Member for Finchley and Golders Green to the effect that they will accept amendments. If, when he sums up the debate, he says that he feels, on behalf of the promoters, slightly chastened by the criticisms that have been made, and if he says that they will introduce amendments to meet some of those concerns, I might have a different attitude. Currently, however, I fear that there is so much wrong with the Bill that it does not deserve a Second Reading.

16:47

[Jacob Rees-Mogg (North East Somerset) (Con)]

The Bill is deeply disagreeable and it is remarkable that the House of Commons should spend so much time considering something that would take freedoms from law-abiding people in London, particularly in the City of Westminster.

What is the purpose of the Bill’s opening part? It is to give to borough officials powers that are normally reserved for policemen. One might go out of this House and some person employed by Westminster city council, with or without a peaked cap, might come up and say that he does not like what one is doing because one is selling a car over the internet or doing some other desperately evil activity. That employee will then levy a fine and will levy a second fine if the person does not tell him their name and address. I thought it was no right of anybody’s to demand the names and addresses of people going about their lawful business, but, under the Bill, someone who refuses to give it to some official from Westminster city council will commit an offence. I do not want to tell officials from Westminster city council my address—they could look it up on the electoral register, which would not take them very long. That is an initial intrusion on freedoms that we ought to value and that ought to be at the forefront of what the House does.

Having dealt with clauses 4 and 5, let me address clause 8, which is one of the meanest-minded measures we have seen recently. A few years ago, Westminster city council was all for a café culture: “Let’s have people putting chairs out on the pavement and have people drinking in the street”, it said. “Let’s have them pretending they are in Venice or Florence; in spite of the weather, they can think that the sun is shining because they are out on the street.” Now, having persuaded a few restaurants and cafés to put out some tables and chairs, the self-same council wants to say, “You’ve done what we asked and we are very pleased with this charming and delightful café culture”—otherwise known as binge drinking—“and because of that we want to charge you for it.” Does that seem a reasonable way for a council to behave, and is it proper for us as a Parliament to give it a special bit of law to make itself obnoxious to a free people?

My hon. Friend the Member for Christchurch (Mr Chope) has gone through the hygiene aspects, but I thought I was elected on a platform of deregulation. The Labour Government, for all their virtues, were great ones for regulating and for insisting that everything should be signed, sealed and delivered. Even in a church, there has to be a sign saying that people are not allowed to smoke to deter all those who used to go into a church just to roll a cigarette, light up and smoke away.

There are signs everywhere and the mass of bureaucracy is upon us. Now, the Conservative Government want to ensure that when someone wanders into a café for a small cup of coffee, tea or whatever his preference happens to be, there must be a sign saying the café is hygienic. Otherwise, he might be poisoned by whatever desperate thing it is that the café puts in its tea. Is this necessary? Is it proportionate? Is it a sensible use of the money of business to spend it on putting up signs when people who go into restaurants know that there are forms of regulation and whether the food is any good. If they do not like it, they can have an argument with the restaurateur, say that they are not paying and tell all their friends not to go there. The free market copes here much more adequately than increased regulation.

I am glad to say that the Minister is against all the stuff on housing. Those proposals concern me because they are broadly an attack on private property, which is one of the mainstays of our constitutional settlement. The rights of private property are that which underpins a free society—the right for people to own their own home or to let it out to somebody else—as opposed to what is in clause 21, whereby the self-same peaked-capped man who was fining me for refusing to tell him my name and address then barges into somebody’s house just to check that they are complying with regulations.

As I understood it, the aim of Her Majesty’s Government was to ensure that the right to enter houses applied only when a warrant had been issued—a warrant duly signed by a magistrate—so as to protect us from aggressive officialdom. On the one hand, there will be warrants; on the other, officials from particular and peculiar councils will barge in on people in their homes or in houses that have been let out, telling them what they may or may not do.

I shall finish by referring to the trading of cars on the internet. The absurdity here is palpable. Why can I not put a little sticker in my car, offering to sell it? If somebody wanders past and says, “That’s worth £100,” and I accept it, surely that is commerce at its most basic and simple level. Surely it is what gets people into the culture of trading and activity, and leads to the prosperity of a capitalist society.

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

Will the hon. Gentleman give way?

[Jacob Rees-Mogg]

It would be an honour.

[Tom Brake]

I thank the hon. Gentleman for giving way. Does he make a distinction between a single vehicle being sold on a street and seven, eight or 10 vehicles being sold, which often happens on Bishopsford road in my constituency?

[Jacob Rees-Mogg]

There are all sorts of rules and regulations on planning that affect how someone may trade as a business. I do not think that there is a feeling that that area is not covered. What is not covered is people doing small amounts of personal trading, but the whole approach is so unnecessarily draconian. Indeed, Draco would be rather embarrassed about the harshness of some of the measures being proposed on people doing little bits and pieces—selling a few Christmas cards on the side of the street, selling their car, running a restaurant without having to put up 27 stickers or wandering about without giving their name and address to every peaked-capped official who comes up to them and issues them with a fixed penalty notice.

Why are we even considering giving this Bill a Second Reading? It is against everything Conservatives stand for. It is against what a lot of Liberal Democrats stand for, and I think many socialists as well. We want a free and prosperous society. We do not want, through localism, to have local authorities barging into our lives at every opportunity. As I understand the forms of the House, the Bill will not be thrown out today. More’s the pity.

16:54

[Philip Davies (Shipley) (Con)]

I am rather nervous about contributing to the debate, following my hon. Friends the Members for Christchurch (Mr Chope) and for North East Somerset (Jacob Rees-Mogg), who expertly filleted the Bill in a way that I could not possibly do. I shall not spend a great deal of time adding to their comments, but I shall make a few brief points

My hon. Friend the Member for North East Somerset is right to say that the Bill is disagreeable, but I do not doubt the intentions of my hon. Friend the Member for Finchley and Golders Green (Mike Freer), who wishes to do what he sees as in the best interests of his local area and other parts of London. I hope he listened carefully to the points made by my hon. Friends the Members for Christchurch and for North East Somerset and that he will reflect on them at length. Both speeches made it abundantly clear why the Bill should be unacceptable to anybody with a Conservative philosophy. It strikes at the heart of the values that Conservatives should believe in.

I have no doubt that Opposition Members will think that many of the provisions are marvellous. The Bill represents the state running riot. It is a charter for bossy local authorities. That is what brought many of those on the Opposition Benches into politics in the first place. Surely, as Conservatives, we should protect the public from bossy local authorities and over-zealous bureaucrats. We have all seen in our own lives that the moment local authority staff put on their car park warden’s jacket, they think they have become something akin to Hitler, and take great pleasure in ordering everybody about and telling people what to do. We should be guarding against that, not expanding their powers and giving them a charter to go even further.

As my hon. Friend the Member for North East Somerset said, the first part of the Bill, which deals with penalty charges and gives local authority bureaucrats powers that we would normally reserve for the police, is deeply disturbing. We should not countenance such a proposal. We saw such freedoms undermined during the 13 years of the previous Government. The last thing we want under the new coalition Government, particularly a coalition that incorporates the word “liberal”, is to go further, giving the state more power over individuals to impinge on personal freedoms. As my hon. Friend the Member for North East Somerset so ably said, the right of officials to demand people’s names and addresses is something that we might have expected to see in the Soviet Union or Nazi Germany, not in a free country. I hope my hon. Friend the Member for Finchley and Golders Green will think about that again.

I agree with the points made by my hon. Friend the Member for North East Somerset about street furniture on the highway. Presumably local authorities will agree to let businesses have street furniture on the highway because they think it is a good thing for their local residents. If so, why do they not let those businesses get on with it? Why would they want to take money off businesses that are trying to provide a service that the local authority presumably thinks is a good one, which is why they gave them the permission in the first place?

One of my major problems with the Bill is that it is intended to damage small businesses. Such bureaucracy is meat and drink to large businesses. I used to work for a large multinational company. Although we may occasionally have been irritated by the volume of regulation and unnecessary bureaucracy, we could afford to employ teams of people to deal with it. We could afford to put up with the extra costs sometimes incurred. Many small businesses, which are struggling enough, especially in the current economic climate, do not have the financial capability to deal with the powers that the Bill would give local authorities.

The Bill reflects the mindset that running a small business is a licence to print money, that everybody who has a small business must have millions of pounds in the bank, that they are unscrupulously ripping off their customers in order to make an unhealthy profit, and that it is the duty of the local authority to get some of that nasty wealth off them. What sort of Conservative would want to promote a Bill with such an attitude behind it?

The only way businesses make money is by looking after their customers and giving them a good service. Anybody who does not do so does not have a business for very long. Businesses are some of the most acutely aware organisations when it comes to social responsibility and contributing to local communities. Local businesses often have a better record of making a positive contribution to their local community than do many local authorities, which are given power after power by such Bills. We should be deeply suspicious of attempts to give local authorities more powers to trample all over small businesses—the many people who are trying their best to earn a living and to put back into this country the entrepreneurial spirit that we have lost.

I cannot really add a great deal to the Scores on the Doors scheme, because my hon. Friend the Member for Christchurch made it abundantly clear that it is an absolutely ludicrous provision. When even the Scores on the Doors people themselves claim that their ratings cannot be relied on as a decent guide to the food hygiene of premises, why on earth should we make it mandatory for customers to see such information and for businesses to display something in which the people who promote it do not have confidence?

If the voluntary scheme works well, and that seems to be the consensus, why on earth would we want to make it statutory? Why not just allow the voluntary scheme to flourish? As I said in a brief intervention on my hon. Friend, if a star scheme is so important to customers, and if it is the be-all and end-all of the information that they want in order to judge a premises, any business that does not display it basically invites people to walk past and go somewhere else. The market will sort those things out. If the scheme is so important to customers, all premises will want to display it anyway. That is what the free market is about. Surely my hon. Friend the Member for Finchley and Golders Green understands the principle of the free market and how it works. He should want it to flourish, rather than having such little faith in it. That is what we have seen for the past 13 years, with a Labour Government and the mess that that got us into.

[Nick de Bois (Enfield North) (Con)]

Unfortunately, I do not know my hon. Friend’s constituency well, but in my constituency, where there is a tremendous number of takeaway shops and licensed restaurants, we have tried to encourage some responsible behaviour, because many customers have been leaving areas that one sometimes has to tread through with great care. The voluntary approach has not quite worked, so does my hon. Friend not accept that, where it has not worked so well, some legislation should be introduced to encourage a better neighbourhood and environment?

[Philip Davies]

No, I absolutely do not, because I do not want unnecessary regulation. My hon. Friend’s point of view is that the voluntary scheme has not worked, but his colleagues have not expressed that view. Even if it has not worked, however, I reiterate the point that if such information is so important to customers, they will presumably give their trade only to premises that already display it. If they do not like the fact that it is not displayed, they do not have to go to such places; they can go somewhere else. That is how the free market operates, and it is the free market that I believe in. I am sorry that my hon. Friend has such little faith in the free market and the principles upon which it works.

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

My hon. Friend makes a characteristically good case in support of his argument, and I join him in supporting—

[Mr Deputy Speaker Mr Lindsay Hoyle)]

Order. Some hon. Gentlemen have just come into the Chamber, but in fairness they ought to have been here for most of the debate. I am being quite lenient, but I really do think that we ought to think about that in future.

[Philip Davies]

Thank you, Mr Deputy Speaker. I will continue. I will have a chat outside with my hon. Friend; we can resolve our potential differences outside the Chamber.

[Stephen Pound (Ealing North) (Lab)]

“See you outside.”

[Philip Davies]

My hon. Friend is much bigger than I am, so I would not want to get into an argument with him.

I accept absolutely the points that my hon. Friend the Member for North East Somerset made about selling cars on the street and via the internet. I came into politics because I wanted to try to encourage people to be entrepreneurs, to believe in the free market, to sell their goods and to be buyers and sellers. I do not want the Government or local government sticking their noses into every aspect of people’s lives. If people want to sell a car and somebody wants to buy it, and they are both happy with the price, why not let them get on with it? Why do we need government, either local or central, interfering in every aspect of people’s lives? Surely we should try to encourage people to do things themselves, so that they do not have to go to big car dealerships. Why do we not just let them get on with it and stop interfering?

[Tom Brake]

I wonder whether the hon. Gentleman would be quite so keen on that free enterprise and all those cars for sale if they were repeatedly parked outside his front door.

[Philip Davies]

If somebody is legally able to park their vehicle on a particular part of the street, it does not matter to me whether it is my next-door neighbour’s car, a car somebody is selling, or an ice cream van. My suggested solution to the hon. Gentleman, to which he may not have given any consideration, is that if he does not think that cars should be parked in a particular location, his local authority should put down double yellow lines so that people are not allowed to park there. If people are allowed to park at a particular point, what on earth does it matter whether it is my next-door neighbour’s car or somebody else’s car with a small sticker saying, “For sale: £500”. It seems to make a big difference to the hon. Gentleman, but I cannot see why. I ask him to reflect on why he decides that he is a Liberal when he has such an illiberal approach towards people selling their property.

I wish to concentrate on the licensing aspects of the Bill. My hon. Friend the Minister made a perfectly good point about clause 23, which is wholly unnecessary. A couple of years ago, the Culture, Media and Sport Committee, on which I serve, undertook a report on the Licensing Act 2003. We took evidence about certain clubs, including lap-dancing clubs, and we made recommendations about how best they might be licensed. As my hon. Friend made clear, the previous Government, in the last throes of the last Parliament, created new legislation enabling lap-dancing clubs to be licensed as sex encounter establishments—something that people may or may not agree with. As he said, the job has been done. The last thing anybody needs is a London Local Authorities Bill to start trampling all over the licensing regime dealt with by the previous Government and which does much of what the Bill seeks to do. I seek confirmation from him that he will strike out clause 23, which even the biggest supporters of the Bill would concede is completely and utterly unnecessary.

My main point concerns the seizure of goods. I cannot emphasise enough how absolutely outrageous the Bill’s provisions are in this regard. The only fair way to do this is to quote a small section of the explanatory notes. I would be astonished if people who read it were not completely outraged by what is proposed. It says:

“Westminster City Council officers already have power to seize items used in unlawful street trading where the items are required for evidential purposes, or where the items are subject to forfeiture by the courts. On a street trading prosecution, if there is a conviction, the magistrates’ court can order the forfeiture of any goods seized in relation to the offence.”

So the provision is already in statute. It continues:

“Authorised officers cannot exercise their powers of seizure unless they suspect that a street trading offence has been committed.”

The London local authorities are complaining that they cannot exercise their powers of seizure unless they suspect that a street trading offence has been committed. That is not good enough for them: they want to be able to seize these goods even when they do not suspect that an offence has been committed. They say that Westminster city council officers already

“use the powers regularly in the West End”

to deal with

“unlawful sales of hotdogs and other hot food from portable stands.”

But they complain:

“City council officers are unable to seize hotdog trolleys until the vending begins.”

That is not good enough for the poor local authorities—they cannot seize these things until an offence has been committed and somebody actually trades. So they want, through the Bill, to

“enable City Council officers”—

pettifogging bureaucrats in the local authority with, no doubt, as my hon. Friend the Member for North East Somerset said, their peaked caps—

“to seize receptacles which are in a street and which the officers have reasonable cause to suspect are intended to be used in connection with a street trading offence.”

Can Members imagine where we would be if the police started arresting everybody who was walking down the street because they might go into the nearest shop and start shoplifting? We are giving such a power to council officers, which is totally unacceptable. Any hon. Member who supports a Bill that provides such powers should be ashamed of themselves if they believe that they support freedoms in this country.

[Mr Bone]

I have to make my mind up whether to support the Bill if there is a Division. Is my hon. Friend suggesting that we should vote against it?

[Philip Davies]

I certainly am. I would urge any right-minded person, particularly with a conservative philosophy, to do so, because nothing in it supports such a philosophy.

It gets worse than local authorities wanting the power to seize things they have reasonable cause to suspect are intended for some kind of offence. Let us imagine that I am walking down the streets of Westminster trying to take home a hot-dog trolley that I had just bought. What would I do if a local council bureaucrat came along and said, “Hold on, you might use that to sell hot-dogs illegally, so I’m going to take it off you”? Is that really the type of country we want to live in, and are we happy to pass such legislation? Not only would local authorities be able to seize the hot-dog trolley that I had bought legitimately and was transporting home, but they would be able to seize any vehicle used to transport it where they found it in the street. Are we going to give council officers that power? We must be stark raving mad even to think about giving the Bill a Second Reading.

The Minister and the shadow Minister say casually, “Oh, well, of course there are some deficiencies in the Bill, but let’s just iron them out in Committee.” On that basis we may as well not bother with the Second Reading of any Bill. If we are saying, “We all know the Bill’s a load of drivel, but we’ll pass it now so we look as if we’re being supportive and then fillet it in Committee”, we might as well just let every Bill go into Committee and see what we can do from there on.

The point of Second Readings is that Members may not like certain legislation in principle. I do not like this Bill or the philosophy behind it, which is anti-small business and anti-freedom, and I do not like the draconian powers that some council officers seem to think are theirs by right—not in the country that I want to live in.

[Mike Freer]

claimed to move the closure (Standing Order No. 36).

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I am not going to take the closure motion at this point. I have another speaker on my list, and I think it only right that he is called to speak.

17:13

[Mr Peter Bone (Wellingborough) (Con)]

I congratulate my hon. Friend the Member for Finchley and Golders Green (Mike Freer) on the admirable way in which he moved Second Reading. I found it very helpful.

I am pleased to follow my hon. Friend the Member for Shipley (Philip Davies), who has certainly enticed me to vote against Second Reading. Many people see this whole process as a waste of time, and I think the business managers would like the Bill to go through straight away. However, we have an important role to play in examining and scrutinising private business. When I came into the House after being a local councillor, I did not expect to be worrying about turnstiles in public lavatories—I thought I had left all that behind. However, we do spend hours scrutinising private Bills, even though only a few Members come to the House to do so. That is what we are here to do, and it is definitely not a waste of time.

In deciding how to vote, we must ask whether a local borough or council has a particular need that is different from the needs of the rest of the country. If it can prove that it does, I am inclined to support it. What concerns me is the tens of thousands of pounds of council tax payers’ money that local authorities spend bringing Bills such as this to the House.

[Mr Greg Knight]

In fairness to the Bill’s promoters, is it not the case that the Bill originated when we had a Government who revelled in red tape, and that the Bill has reached this House when we now have a new Government who are committed to slashing red tape?

[Mr Bone]

I am grateful to my right hon. Friend, but I was just about to discuss that dilemma. However, I shall quickly digress, because what concerned me most was that the Minister had so many reservations. I have never heard a Minister at the Dispatch Box with so many reservations about private business, but the shadow Minister, whom I welcome to the Dispatch Box and who did exceptionally well today, welcomed every measure with great glee. As a Conservative, the principle of that position worries me.

However, to return to why we are here today, we must decide whether there is merit in the Bill proceeding and whether there are only one or two measures that need to be addressed in Committee. On Second Reading, every Member of the House can come to the Chamber, but in Committee only a few will examine the Bill. The advantage is that if the House flags up issues on Second Reading, members of the Committee can take them into account.

I was slightly encouraged by the Minister, who is a most excellent Minister, because he ruled out certain things, but I have a dilemma to do with localism. I like the idea of local boroughs and local councils making their own decisions, but there must be an overall cap on that. I am looking forward to what the Government do on localism. The more we allow councils to do, the less necessary it will be to consider Bills such as this in the House.

I am still undecided. Perhaps the Bill’s sponsor will have a few words to say and perhaps he will persuade me that because there are many good things in the Bill, I should let it go through. However, I am of the view that I will oppose it.

Question put, That the Bill be now read a Second time.

17:17

Division 74

Ayes: 293

---

Conservative: 227
Liberal Democrat: 47
Labour: 17
Democratic Unionist Party: 2

Noes: 21

---

Conservative: 17
Democratic Unionist Party: 2
Liberal Democrat: 1

Bill read a Second time and committed.

Draft EU Budget 2011

Wednesday 13th October 2010 Commons Chamber

[Relevant document: European Union document No. SEC(2010)473: Statement of Estimates of the European Commission for the financial year 2011 (Preparation of the 2011 Draft Budget).]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

The Speaker has selected amendments (b) and (a), to be debated together.

17:32

[The Economic Secretary to the Treasury (Justine Greening)]

I beg to move,

That this House takes note of European Union Document No. SEC(2010) 473, Statement of Estimates of the European Commission for the financial year 2011; and supports the Government’s efforts to maintain the 2011 EU budget at the cash levels equivalent to the 2010 budget, while ensuring better value for money in EU expenditure.

I very much welcome the fact that this debate is taking place in this Chamber for the first time in several years. The debate demonstrates the importance that the House attaches to scrutiny of the EU budget, to the UK’s contribution to it, and to the value for money of EU expenditure.

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

I am grateful to the Minister for giving way. She says that this debate demonstrates the importance that the Government attach to giving the House a say. Can she tell us whether a vote on the matter, either way, would make the slightest bit of difference?

[Justine Greening]

The hon. Lady is assuming that those Members who have tabled amendments will press them to a vote. Perhaps she is prejudging the outcome of the debate. We welcome the debate because, tomorrow, I shall be in Brussels pressing our case in respect of the European Union budget, and it is vital that we are able to say that we have scrutinised the document thoroughly in our European Parliament.

In regard to the European Union, matters such as the single market, enlargement and environmental standards have seen real progress, but the EU budget does not have pride of place among the EU’s achievements. I will not hide from the House the Government’s frustration that some of our partners—and those in EU institutions—do not seem to understand how bizarre it is, when national budgets are under such extraordinary pressure, that the EU should be immune from that. So here in the UK, the week before a very tough spending review, it is only right that we should subject the EU’s budget for 2011 to the same level of scrutiny as our own national accounts.

As I said to the hon. Member for Birmingham, Edgbaston (Ms Stuart), I will be in Brussels tomorrow, holding discussions with Commissioner Semeta, the Belgian presidency and MEPs on this very subject, pressing them to take the close, objective, pragmatic and responsible look at the EU budget that is long overdue, just as we are doing in the House today. I will, of course, come later to the previous Government’s giveaway of the rebate, which is one of the main reasons why we will see our contributions rising over coming years, but let me begin by summarising this Government’s approach to the Commission’s EU budget proposals.

At the beginning of the debate, let me also clarify our response to the amendments: I absolutely agree with the sentiments of both. Amendment (a) was tabled by my hon. Friend the Member for Stone (Mr Cash) and I would like to take this opportunity to pay tribute to the time, effort and work he has put into scrutinising not just the EU budget but a whole range of areas in which the EU has become involved. His persistence has certainly paid dividends in ensuring that this matter has maintained the prominence in the UK Parliament that it absolutely deserves.

[Kelvin Hopkins (Luton North) (Lab)]

I agree with much of what the hon. Lady has said, particularly about the splendid work done by the Chairman of the European Scrutiny Committee, of which I am also a member. The Government now have the power to do something about the budget. Having complained about it for so long—I agree with those sentiments—is it not time for the Government to say no to the European Union on these matters?

[Justine Greening]

In fact, we are doing just that. I will come on to more detail about what we are doing now and what we plan to do, clarifying the arguments that we are putting to the European Commission.

Let me be clear that the Government will support the amendment tabled by my hon. Friend the Member for Stone. We very much welcome the pressure applied to the European Parliament to reject the proposed rise. We will do our bit as Ministers and as a Government to put pressure on that Parliament, and particularly on our MEPs, to reject any proposed rise. When the shadow Minister, the hon. Member for Bristol East (Kerry McCarthy) makes her speech following mine, I very much hope that she will confirm that the Opposition will press their MEPs to oppose any rises in the EU budget. Perhaps my hon. Friend the Member for Stone will want to press her further on that.

Amendment (b) was tabled by my hon. Friend the Member for Clacton (Mr Carswell) who, despite spending less time in this House than my hon. Friend the Member for Stone, has also clearly established his role as one of those MPs who scrutinises all EU matters carefully in a way that adds quality to our debates. I want to make it clear to him that we absolutely agree with the sentiments behind his amendment. We want to see the 2011 budget cut. The problem with the amendment is that if we withdrew our money from the EU, under its terms that would be illegal. We cannot support an amendment that would make our action illegal, so we will have to reject it, but I can tell my hon. Friend that if he had worded the provision slightly differently, we might well have been able to support both amendments. It is with regret that we have to reject his amendment, despite agreeing with its sentiments.

Let us talk about our concerns over the EU budget. It is not just the size of the draft EU budget but its effectiveness that is an important matter of concern.

[Mr Andrew Tyrie (Chichester) (Con)]

Many aspects of the EU budget are, of course, deeply pernicious. Does the Minister agree that a particular shocker is the fact that the original budget had written into its baseline a 4.4% increase in administration costs alone? It would be utterly appalling if we found increases in administration budgets taking place at a time when economies are having to be found right across Europe. What proposals do the Government have to get that increase down substantially? Will we be able to make a saving and secure a reduction in administration budgets as a result of the negotiations?

[Justine Greening]

My hon. Friend is absolutely right that it is shocking and untenable for the EU to propose a 4.4% rise in heading 5 administration at a time when countries across the EU are struggling with extremely difficult and challenging fiscal deficit reduction plans. We have already voted against that rise and we will continue to take the opportunity to vote against it. More than that, I will explain what we are doing to ensure that the next time we have the chance to vote against it in Council, rather than have a minority of countries with us that is just short of a blocking minority, we can actually achieve a majority and make a difference.

If we look at the size of the EU budget, we see that there is a marked disparity between the Commission’s proposed budget increase and the substantial reductions in public spending that countries across the EU are having to make. The Governments of, among others, France, Germany, Greece, Spain and Romania, as well as our own, have all announced sizeable austerity measures¸ and the EU as a whole has taken unprecedented action to secure economic stability. Yet the Commission has proposed that the EU budget should increase by nearly 6% in 2011. The Commission’s draft budget explains that the proposed increase is driven primarily by pre-planned rises in the financial framework, and by large spending programmes such as the research framework programme. As we have heard, however, it is impossible to ignore other elements, such as the startling 4.4% increase in the cost of running the EU institutions themselves.

I think all Members are aware that, arguably, the level of the EU annual budget is to some extent already determined by the overall financial framework, but the Government firmly believe that 2011 cannot be a “business as usual” year for the EU budget. That is simply no longer tenable. As a result of the global financial crisis, Governments across the EU have had to reassess their spending plans, and the EU budget should not be immune to the same pressures. My right hon. Friend the Chancellor of the Exchequer has been very clear about that. We are committed to securing a cut in the 2011 budget. Indeed, at a meeting of EU Finance Ministers on 18 May, my right hon. Friend the Chancellor proposed a freeze in the budget at 2010 levels. He said:

“I put to Ecofin that there should be a cash freeze in the budget. It is not acceptable to have an increase in the budget.”

That was in marked contrast to the previous Government’s approach, which saw year-on-year rises effectively unchallenged, and, most damagingly, saw Britain lose part of our valuable rebate—a rebate that had been won by a Conservative Government. This is not strictly within the scope of today’s debate, but as we turn our attention later to the next financial framework, we will do so with our UK contribution rising purely as a result of the previous Government’s catastrophic decision to give away part of our rebate. That amounts to a £2 billion a year hit for taxpayers—£10 billion over the course of a Parliament—and for what? A reform of the common agricultural policy that has simply never taken place.

[Kelvin Hopkins]

I am sure that it is of interest to the House that the amount to which the Minister has referred is twice the amount that the Government propose to save by cutting child benefit.

[Justine Greening]

That is the sort of argument that I have been presenting to other European countries, including the French Minister who was in London a few weeks ago. As the hon. Gentleman says, it is simply untenable for the EU budget to remain unchallenged when across Europe we are making incredibly difficult decisions on our national budgets. The way in which the hon. Gentleman phrased his argument is exactly the same as the way in which I have been pitching ours to our European partners. We are hopeful that, over time, there will continue to be a growing sense among them that we do indeed need to start challenging the European budget that is currently proposed.

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

My hon. Friend is presenting a powerful argument to encourage us to support her. Does she accept that all the Members who have put their names to the amendments, however they vote tonight, are helping her and her colleagues in Europe by demonstrating the strength of feeling and the anger that exist throughout the House?

[Justine Greening]

My hon. Friend is absolutely right. That is one of the reasons why I welcome tonight’s debate. I believe that it underlines the concern that we feel, not just as a Government but as a Parliament. The value that we can gain from the debate is our ability to show that we are united as a Parliament in standing up to the rise in 2011, and in wanting to see it cut.

The Chancellor, Ministers and officials have been working with member states, the Commission and the European Parliament to make our case. As members of the European Scrutiny Committee will know, at a time of fiscal consolidation the EU simply cannot afford to budget for more than it can realistically spend. Therefore, we have also maintained a firm focus on realistic implementation rates, because implementation of the EU budget has long been a cause of concern with a combined surplus and underspend in 2009 of almost €5 billion.

As I have said, the Government will focus not only on the size of the EU budget. We also want to focus on its priorities for spending, because it is clear that certain areas of the EU budget simply do not offer the best possible value for money that we should be able to expect. The common agricultural policy, citizenship spending in some areas and spending on the EU’s own administration are foremost among them. There is also, of course, the perennial question of why the EU is based in both Brussels and Strasbourg. Critically, we want an EU budget that prioritises economic growth and recovery across the EU and worldwide, just as we are doing with our fiscal consolidation measures here in the UK. We want a budget that is focused on prioritising poverty reduction, promoting stability and addressing the challenges of climate change. The Government will therefore work to ensure that funding for activities is focused on areas that offer the best value for money and that offer the best deal for the British taxpayer.

[Mr John Redwood (Wokingham) (Con)]

Why does the Foreign Secretary seem to favour increasing expenditure on the common External Action Service so that we have duplicated embassies, with those at EU level undercutting our own and charging us double?

[Justine Greening]

I have no doubt that other Members will refer to that in their contributions. As my right hon. Friend will be aware, we did not support the setting up of the European External Action Service, but as it is now in place our aim is to ensure that it does not duplicate in the way that he says, and that instead it has a role that has some value. We have been concerned about the increased budget because when the EEAS was set up, a key aspect of the conditions was that there would be fiscal neutrality and that is already being challenged. That is one reason why we have been pressing for that to be explicitly put into the terms of the EEAS remit. We have been successful in that, and we are pressing Cathy Ashton to make 10% savings immediately. Discussions on this are continuing in the EU right now. My right hon. Friend is absolutely right, therefore.

To make a broader point on the EU budget, it is vital that decisions taken on budgeting are stuck to. There is an underlying problem that I talked about in respect of implementation: in too many projects there is a gap between what has been budgeted for and what ends up being spent. It is quite a basic financial management problem, but it needs to be addressed.

Turning to the background to today’s debate and what has happened so far, in August the Council adopted its first reading position on the Commission’s draft budget. We should bear in mind that this draft budget proposed an increase of 6% in the 2011 budget. That first reading position saw the Council reduce the budget level proposed by the Commission by €788 million in commitment appropriations and by just over €3.5 billion in payment appropriations. However, although the Council reduced the payment levels in the Commission’s proposal, the reductions would still have meant an increase of almost 3% in EU budget spending from 2010 to 2011. Also, although the Council’s position was to reduce spend in the administration budget by more than €160 million and to cut the total budget for the EU’s regulatory agencies by almost €12 million, even that would have left a rise in administration of 2.5%.

I should remind the House that when we had the opportunity in the European Parliament to vote against the rise in the Parliament’s 2010 budget, we took it. Although the Council had battened down the rise proposed by the Commission, the Government could not accept the proposed level of budget increase and we therefore voted against the Council’s first reading. In fact, six other member states joined us: our Nordic partners—Finland, Sweden and Denmark; and the great brewing nations of Austria, the Netherlands and the Czech Republic. The Council’s position was, however, adopted by a qualified majority, although I just remind the House that we were very close to achieving a blocking minority on that vote; we were just three votes away from doing so—we got 29 votes when we needed 32. That is why we have been working so hard with our European partners to put our case, because we want, at the minimum, to be in a position to have a blocking minority. We really want to aim for a majority, and that is what we are working towards.

I know that, as we have just heard, the European Scrutiny Committee is considering the Council’s first reading position and the Commission’s first amending letter. However, I thought it would be helpful for Members taking part in this debate to be given an outline of that developing position. I referred to this briefly in response to my right hon. Friend the Member for Wokingham (Mr Redwood), but I can say that more than 90% of the 2011 budget for the EEAS is transferred from the existing budgets of the Commission and Council. As he points out, an additional €34.5 million is requested to fund new staff posts and other start-up costs.

Overall, the proposal includes the following: first, the establishment plan of more than 1,600 posts—this includes 100 newly created in 2010, and 18 requested for 2011, carrying a remuneration cost of just under €19 million; secondly, just over 2,000 other staff, 70 of whom are newly recruited this year, costing an extra €2.5 million in 2011; thirdly, other staff-related spending, of which less than €2 million would be additional; and, fourthly, spending on buildings and other operational spending amounting to just over €157 million, less than €4 million of which would be additional.

The amending letter stated that cost-efficiency, budget neutrality and efficient management should guide the EEAS, and, as I said, it set a target of 10% efficiency savings in headquarters. Although the Government acknowledge that some additional funding is required in the EEAS’s first full year, it is essential that the EEAS demonstrates not only value for money, but budget discipline in its funding bids and a firm commitment to substantial cost efficiencies. It is vital that the aim of budget neutrality is respected, so we are pushing for immediate cost savings and stressing the importance of achieving cost efficiencies, including in decisions over the EEAS’s premises.

We have also pushed, thus far successfully, for the Council to state on the record that the term “budget neutrality” for the EEAS applies solely to the context of the EU budget. We pressed for that so that we can counter unhelpful suggestions from the Commission in the future that additional spending at EU level could be offset by savings in member states’ diplomatic services. Such suggestions are completely unacceptable to the UK.

[Mr James Clappison (Hertsmere) (Con)]

I am extremely heartened by the proposition that my hon. Friend has put before the House this evening on this matter, but will she examine this very carefully indeed? I know that the EEAS was opposed by Conservative Members and is the legacy of those on the Labour Benches. As she would say, we are where we are, but on this point of budget neutrality will she make it her business to look carefully at any further proposals to increase expenditure on the EEAS? Budget neutrality has already been breached by the European Commission and it is likely that further attempts will be made to breach it in future.

[Justine Greening]

I assure my hon. Friend that we are looking across the piece to challenge rises in all areas of the EU budget, including the EEAS. As he points out, only months ago we were given an assurance that there would be fiscal neutrality and that has already been broken. We are challenging that and I believe we are doing so successfully. I assure him that we are making our case very strongly within the EU to challenge those sorts of spends when they are bad value for money and when the money is spent in an unplanned way that has not been agreed and was not passed in the original proposal that was signed up to. As he points out, that proposal was signed up to by the Labour party when it was in government.

So, let me wrap up. Although the annual budget negotiations are not the usual forum to achieve major budget reform, we have still set out our stance. We will be looking for a cash freeze in 2011 and, in this time of austerity, Europe needs to be looking to make the same efficiency savings that we are making in the UK.

I know that the House is interested in this topic, so I shall touch on it briefly. The European Parliament’s Budgets Committee has voted on this budget and the European Parliament in plenary will be voting next week on the European Parliament’s position on the 2011 budget. We have done our best to ensure that our Government’s position on the 2011 budget has well and truly got through to MEPs. We sent a lobbying note to the UK MEPs in September clearly setting out our position.

[Ms Gisela Stuart]

Would the Minister care to comment on press reports that the European Parliament said that it would make concessions on its budgetary demands only in exchange for concessions by member states on direct resources financing?

[Justine Greening]

I cannot confirm those reports, but I can tell the hon. Lady that the European Parliament is now considering in detail its response to the European Union 2011 budget. It might well decide to take a position that has a broader perspective than purely the size of the European budget and the split of that budget across the headings. As she will be aware, if there is no agreement, the conciliation process will take place, and of course I cannot prejudge how the European Parliament will approach that and whether it will seek a broader negotiation process than just that on the budget. She is right to flag up the fact that the Parliament might choose to do that, which is why it is all the more important that Ministers and the Chancellor are out making our case with the European Parliament and MEPs as to why we believe that saying no to the totally unacceptable 6% rise is absolutely vital for all MEPs. I hope that the Opposition will play their role with their MEPs in ensuring that the European Parliament takes the right position on the European Union budget. I have spoken with James Elles, an MEP who is on the Budgets Committee. As I have said, I will be in Brussels tomorrow to reiterate our position.

We anticipate that the long-overdue budget review paper from the Commission will be published in the next 10 days. We then expect the Commission to present proposals for the next seven-year framework for the EU budget in the first half of next year. I can assure hon. Members that the Government will strongly defend the UK’s national interests in the forthcoming EU budget negotiations. We are clear about what matters to the UK. We will defend the UK’s abatement, which is fully justified owing to distortions in EU spending, and we want the EU budget to be smaller, so that our domestic efforts to cut the deficit are not undermined by growth in EU commitments.

[Mr Christopher Chope (Christchurch) (Con)]

What my hon. Friend is saying in her feisty way is very encouraging. Will she assure us that if the European budget proposal is for something other than a reduction, the Government will veto it?

[Justine Greening]

The process clearly does not end there. It will go to conciliation and there will be further negotiation within the Council. We are aiming to have a majority in the Council standing against the European Parliament’s proposal for a higher budget.

[Mr Chope]

I think that my hon. Friend misunderstood my question. I was referring to the next seven-year budget, where we have a veto. I was asking whether we will be exercising that veto if we do not get our way in having the budget reduced.

[Justine Greening]

I will not pre-empt where we will be for the financial framework, but my hon. Friend is right to point out that this debate is incredibly important because it sets out the context for that next financial framework—

[Mr Speaker]

Order. I understand that the Minister is looking backwards in the direction of her hon. Friend who intervened, but perhaps she could look towards the House.

[Justine Greening]

So, my hon. Friend is right to raise that issue.

In conclusion—

[Kelvin Hopkins]

Will the hon. Lady give way?

[Justine Greening]

No, I think I need to wrap up.

We are absolutely committed to pressing for the EU budget to be smaller. We will not have rises in the EU budget undermining our attempts and our desire to tackle our fiscal deficit. We will challenge the 2011 budget, which does just that.

I welcome the support of this House in sending a common view to Europe. I hope that we will be able to do that later tonight and I look forward to seeing whether we get support from the main Opposition party on this matter, too.

[Mr Philip Hollobone (Kettering) (Con)]

On a point of order, Mr Speaker. My hon. Friend the Minister said that the amendment in the name of my hon. Friend the Member for Clacton (Mr Carswell) would commit the Government to an illegal act. Am I right in saying that any amendment accepted by the House for debate is in order and that it would be quite improper for any amendment to commit Her Majesty’s Government to anything illegal? Were not the Minister’s remarks a matter of debate rather than a statement of fact?

[Mr Speaker]

I am very grateful to the hon. Member for Kettering (Mr Hollobone) for his point of order. Certainly, from my reading of amendment (b), I am not aware of any exhortation to illegality. The hon. Gentleman will understand, and the House will appreciate, that it is not for me to become enmeshed in an argument between hon. Members as to the merits or demerits of a particular amendment. What I can say to the hon. Gentleman, whose concern for propriety is unsurpassed in any part of the House, is quite simply that the amendment is not improper. If it were improper, I would not have selected it; it is perfectly proper. On the subject of propriety, therefore, he and others need have no cause whatever for concern. I hope that is helpful to the House.

18:01

[Kerry McCarthy (Bristol East) (Lab)]

The Minister certainly talks very tough talk about the current EU budget negotiations, but I have several questions about how she intends to turn that talk into action. She has given a very clear exposition of the negotiations to date—the Commission originally proposed an increase of getting on for 6% in the payment appropriations; the Council then discussed reducing those appropriations; and the UK failed, at that meeting, to persuade a significant number of member states to accept the EU’s position that there should be substantial cuts. We are now at a halfway house, which means that there will still be an increase in the budget. I understand that the EU Parliament will vote next week, on 20 October, on whether to reinstate all the budget lines. Why does the Minister think that the UK Government failed in that way at the meeting and why, when the Chancellor went to ECOFIN in May to propose a cash freeze, was he unable to win a consensus?

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

The hon. Lady talks about failure. Will she remind the House how many times in the 13 years of the previous Labour Government Ministers raised one question about the fact that the European Commission’s accounts were not being signed off by the European Court of Auditors?

[Kerry McCarthy]

That is completely irrelevant to the subject that we are debating. The matter has been discussed in the House on many occasions and has been raised by many of the hon. Gentleman’s colleagues. I understand that, as a new Member, he was not in the House then, but it has been discussed many times.

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

Will the hon. Lady give way?

[Kerry McCarthy]

No; I want to make a little progress. I have not started saying what I intended to say.

I am slightly confused by the Minister’s stance on the motion and the amendments. The motion states that the Government support

“efforts to maintain the 2011 EU budget at cash levels equivalent to the 2010 budget”—

in other words, a freeze. The hon. Member for Stone (Mr Cash) argues that there should be no increase in the EU’s budget, which is pretty much the same position. Although the Minister implied through everything she said that she wants the budget to be smaller, that is not what the motion states. Will she clarify whether the Government are arguing for a freeze, or whether they support the 34 Back Benchers who have signed amendment (b) calling for cuts in the budget? Will she also clarify what she meant when she said that it would be illegal to support amendment (b)? I would be very happy for her to intervene on me to explain the element of illegality. If there were not that illegality, would she call for cuts? If so, why does not the Government’s motion say that there should be cuts?

[Justine Greening]

On the legalities, we are part of the EU—I am sure that some hon. Members wish that we were not, but we are—and we are under a treaty obligation to make payments. If we were to stop making payments, we would breach our treaty obligations, which we are not able to do under law. If we went down that route, presumably any other European country could do anything it liked against any particular treaty obligation it thought inappropriate, which would not be conducive to good diplomatic relationships or to progressing the case that we want to make for a cut in the 2011 budget. I hope that that has clarified matters for the hon. Lady. Perhaps I can press her to confirm whether Labour MEPs will support our Government’s policy stance for a cash freeze in the 2011 budget.

[Kerry McCarthy]

I am here to put the questions to the Minister and to find out what her stance is. She is trying to placate Conservative Back Benchers, who are clearly unhappy about the lack of progress being made by the Government. It is tough talk, but it is all talk and there is no action. When she goes to Brussels tomorrow, what will she see as success in those negotiations? What is she aiming for?

[Robert Halfon (Harlow) (Con)]

Does the hon. Lady’s party support a cash cut in the EU budget?

[Kerry McCarthy]

Again, we are not here to answer questions. We are here to put the questions and to get—[Interruption.] The Minister should accept that the Conservatives are now in government. She cannot just do what she did in opposition and talk tough—

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

Will the hon. Lady give way?

[Kerry McCarthy]

I want to make progress. The Minister cannot just talk tough on European issues and pander to people who want to take us out of the EU. She is here to make progress in negotiations and to fight Britain’s corner. I have asked her what she would see as success in doing that.

On the specifics, we are here to debate whether, when EU member states and regions are all engaged in belt tightening, the EU itself should engage in a similar exercise. The Minister has said that sizeable austerity measures are being implemented across the EU. Does that not in itself prove that this economic situation is a global phenomenon that affects all EU member states and not, as the Government say every time Ministers get to their feet in the Chamber, the result of profligate public spending by the previous Government?

[Mr Redwood]

Will the hon. Lady tell us whether she now thinks it regrettable that the previous Government gave away our rebate and got no reform at all of the common agricultural policy, which is why this is such a big budget?

[Kerry McCarthy]

The CAP represented 71% of the EU budget, but it is now down to 40%, so that is significant progress, although I agree that there is more work to be done on that front. I shall come to that.

[Henry Smith (Crawley) (Con)]

If this truly is a global circumstance, how come, apart from the Republic of Ireland, this country has the largest deficit of any in the EU and the largest of any in the G20?

[Kerry McCarthy]

That is obviously partly related to the fact that the UK has probably the largest financial centre globally—it is certainly far and away the largest financial services sector in the EU. There is a more significant impact on the UK economy, London being as it is, as opposed to other countries.

To return to my speech, I shall not take any more interventions for a while. Labour Members believe, as we have always done, that the EU should always scrutinise its expenditure carefully and closely in cutting waste. We want to ensure that the budget is spent wisely and well, and that there is demonstrable added value for the member states and regions as a result of such expenditure.

We welcome the fact that the EU Parliament has chosen, for the first time, not to go above the ceiling set out in the budget at a time when member states face economic hardship. That demonstrates that the Parliament has at least gone some way to appreciating the challenges, but the issue today is whether we should go further. The Government, despite all their talk and bluster, seem to be singularly failing in their aim of putting a lid on what the EU Parliament wants to spend.

Labour Members fully support the principle that the EU budget needs to play its part in an era of fiscal consolidation, and we do not think it right that there should be significant real increases next year, but we should avoid throwing the baby out with the bathwater. The EU has key roles to play, and it was noticeable in the Minister’s speech that she made only passing reference to the good things that come out of working with our European partners. In particular, it is important that the EU continues to foster growth and recovery, which is the priority for us here in Britain. As Europe is our largest export partner, growth in Europe is an essential precondition for our recovery.

We welcome the stated key objectives for the draft 2011 budget, which are to support the EU economy and recovery from the economic and financial crisis, and to help EU citizens by reinforcing economic growth and employment opportunities. It is somewhat ironic that as the European Parliament debates and votes on the draft budget on Wednesday 20 October, when it will focus on the admirable and important objectives of supporting recovery and growth, we in the UK Parliament will hear a statement on the comprehensive spending review from the Chancellor, who clearly rejects an active role for the Government in securing such objectives and believes that cuts, cuts and cuts alone are the way forward.

[Ms Gisela Stuart]

Will my hon. Friend take on board two observations? On an earlier intervention about the Commission’s budget not having been signed off for the past 10 years, is she aware that neither has that of the Department for Work and Pensions? On a much more practical point, if the great ambition is to make us economically successful, will my hon. Friend reflect on the Lisbon agenda, which was supposed to make us the most competitive and technologically advanced economy in 2010 and has singularly failed to do so? Why does she have so much faith in the 2011 aspirations?

[Kerry McCarthy]

There was also the 2010 strategy. In the flagship initiatives set out in the documents before us today, there are some good programmes that we should support, to the extent that they have demonstrable outcomes and that they make a difference, rather than being fine words that do not achieve what they set out to do.

Let me go briefly through the headings in the budget. The Minister was unspecific. She spoke generally in favour of a cash freeze, but did not specify in which areas. [Interruption.] Perhaps the hon. Member for Devizes (Claire Perry) will refrain from heckling me quite so much. She is a near neighbour of mine, and we get to talk rather a lot on the television cameras outside the Chamber. It is extremely distracting, and she will get a chance to contribute later if she wishes. That is fair.

Under sub-heading 1a in the budget, on competitiveness for growth and employment, we support funding that encourages the effective operation of the single market, including addressing transport challenges, such as the greening of transport systems, and promoting sustainable, low-carbon economic recovery and growth. It is important to continue to support innovation and research and development on, for example, the environment, clean energy, energy efficiency and promoting a knowledge-based economy. Europe has a key role to play in that.

On structural and cohesion funding, which is included under sub-heading 1b, much of that spending is key to EU enlargement. Sensible steps to ensure that that money is well spent, which we agree should be taken, should not be allowed to slip into undermining the important principle that enlargement is in the UK’s long-term interest.

[Andrew Percy]

I hope that the shadow Minister will be gentle with me—I am a new Member, after all. We keep going back to the same point, which is that for all the good that she says the European Union does—she has highlighted several areas of spending—we still do not know whether that money has been spent, because the accounts are never signed off.

[Kerry McCarthy]

I will not repeat the point about the hon. Gentleman not being in the Chamber on many occasions when we have had similar debates. As with any public spending, it is important that there is some measure of outcomes, so that we can be sure that there are demonstrable changes and that objectives will be achieved as a result of the spending programmes. We are committed to that. To use the argument about the accounts not being signed off to dismiss everything good that the EU has done and all the initiatives on which we are working with our European partners is tantamount to throwing the baby out with the bathwater, as I said earlier. The argument is used as a red herring by those who are against the entire European project.

[Guy Opperman (Hexham) (Con)]

The hon. Lady has referred to many good things about the European budget. Is she, in her shadow ministerial role, able to identify anything that she would cut?

[Kerry McCarthy]

I shall come on to that point, if the hon. Gentleman will bear with me.

We support some of the structural and cohesion funding, but we agree with the Government that budget levels should be realistic and reflect absorption capacity. In certain areas throughout the EU budget, planned spending levels are indefensible, and, in response to the question that was just asked, we believe that spending under heading 2 on the preservation and management of natural resources should not be a priority in the current economic climate. We do not support that scale of spending on agricultural intervention, and we will support the Government’s close scrutiny of it.

We very much welcome, however, the Government’s statement that there should be an increased emphasis on development objectives, including on reaching the millennium development goals in poorer countries, and we believe that adequate funding is necessary to achieve those aims.

Finally, we also support the Government in pushing for reductions in the administration budget.

[Mr Peter Bone (Wellingborough) (Con)]

Will the hon. Lady give way?

[Kerry McCarthy]

No. I am coming to a conclusion, and the hon. Gentleman will have his chance to speak in a moment. Where efficiency savings can be found, they should be found, and there are significant savings to be made in that area. I can see that many Members want to speak, so I do not intend to delay the House any longer. I look forward to hearing the rest of the debate.

18:14

[Mr William Cash (Stone) (Con)]

We heard a very interesting and comprehensive analysis from the Minister, and I intend to press my amendment (a) to a vote. I agree very much with the sentiments that lie behind the amendment tabled by my hon. Friend the Member for Clacton (Mr Carswell). I wish only that, before tabling it, he had had a word with me about its wording, because I suspect that we would then have been able to arrive at an agreement. For some reason that completely escapes me, however, he decided to go ahead with his wording.

I went ahead with my amendment, because I have to recognise that the Government are about to engage in some incredibly important negotiations. They have to achieve a blocking minority, which I shall explain in a moment. That is not just a technical question, but a question of whether the Government can, first, get enough people to vote on the conciliation agreement, assuming that we reach such a point, and then achieve a blocking minority so that the Commission has to propose a new budget. That is what we are fighting for.

[Mr Denis MacShane (Rotherham) (Lab)]

Does the hon. Gentleman agree that to secure such leverage in the conciliation process, it is not helpful if the main Government party is in alliance with those whom the Deputy Prime Minister calls nutters, homophobes and anti-Semites from extreme fringe parties in east Europe, and not in the same family as Mrs Merkel, Mr Sarkozy and other centre-right leaders?

[Mr Cash]

rose—

[Mr Speaker]

Order. May I gently say, with reference to the right hon. Gentleman’s intervention, and as an encouragement and a cautionary note to the hon. Member for Stone (Mr Cash), that I know the hon. Gentleman’s response will very much focus on matters relating to the European budget?

[Mr Cash]

It will, indeed. I shall make no response to that absurd intervention.

We must achieve our objectives, which are not only to prevent any increase in the budget, but to reduce it. I say that to my hon. Friends as one who, I think, can undoubtedly claim to have fought these battles relentlessly, persistently and consistently for the best part of 25 years—and, if I may say so, with some degree of success in establishing the parameters within which we are now able to address the European issue. In a moment I shall mention what happened at the European Scrutiny Committee this afternoon, merely to illustrate the progress that we have already made in the few weeks that I have had the honour of being the Committee’s Chairman. The whole process has to be conducted in an effective and orderly manner. Otherwise, it plays into the hands of those such as the right hon. Member for Rotherham (Mr MacShane), who want to pretend that somehow there is no justification for our adopting the position that we need to adopt. Tortuous and tedious as it is, the most important thing is to get it right. We have to get the blocking minority if we want to move from wanting to stop the increase to achieving the reduction that follows from it. Let us be responsible about this.

I do not have the slightest objection to the sentiments that lie behind the other amendment. It bothers me, however, that we have two amendments that appear to compete with one another, but in fact convey the same ideas, yet one is orderly while the other is disorderly. I leave it at that; it is for my hon. Friends to judge.

[Mr Geoffrey Cox (Torridge and West Devon) (Con)]

Does my hon. Friend accept that Mr Speaker has already said that the amendment in the name of my hon. Friend the Member for Clacton (Mr Carswell) is in order; that there is nothing inherently unlawful about it; that there is no reason, based on either law or principle, why Members of this House should not vote for it; and that it is therefore perfectly in order?

[Mr Cash]

When I say that the amendment is disorderly, I mean that it would, in my judgment, make it more difficult for us to achieve our objectives. I was not referring to it as being disorderly within the framework of the procedures of the House. I make that distinction very clear.

Our net contribution to the European Union is rising from £6.4 billion this year to £8.3 billion in 2011-12 and £10.3 billion in 2015, and our gross contribution is rising from £14 billion to £19 billion. The Budgets Committee is placing a demand on member states to open negotiations on new own resources; the hon. Member for Birmingham, Edgbaston (Ms Stuart) says that that is a

“full part of the overall agreement on the 2011 budget”.

It is reported in the Financial Times that MEPs are even considering an amendment to

“open the way to establish a European tax, making the institutions less reliant on contributions from national governments.”

On top of the budget, the European Parliament is shortly expected to vote on proposals to extend maternity rights to 20 weeks at full pay, which will cost the British Government an extra £2.5 billion a year.

It will be well understood in the House that I am gravely concerned about the developments in this direction. I merely want to be sure that the Government, as well as being able to negotiate this particular, rather difficult round, are able to get stuck into reducing not only the budget itself but the functions that lead to that budget, because the two run together—it is like Parkinson’s law.

[Mr Bone]

My hon. Friend is making a powerful speech on something about which he knows more than anybody else in the House. His amendment would freeze the budget, while the other amendment calls for a reduction. That may be difficult to achieve, but would it not be helpful, rather than a hindrance to the Minister, as she flies off tomorrow, to know that a certain number of Members want a cut?

[Mr Cash]

That has to be a judgment for Members in deciding which way they will vote on these amendments. In my view, because of the complexity of this problem and the uncertainties about whether we will be able to achieve a blocking minority in the Council of Ministers—I shall explain the procedure in a minute—we must do nothing that would play into the hands of the Eurofanatics in some of the other member states who want to go down the same route as the European Parliament by endorsing this increase and increasing the budget resources, which is what they are intent on doing in the wake of the Lisbon treaty. That is the problem. It is a matter of judgment, but it is also one of analysis, which is why I take the position that I do.

I may say that I had no discussions whatever with the Government on this issue. I simply tabled my amendment last night because it struck me that in the light of the discussions in the European Parliament—and not in light of the amendment tabled by my hon. Friend the Member for Clacton, which I had not seen—the European Parliament was being thoroughly irresponsible, or at any rate the Budgets Committee was. We have yet to discover whether the European Parliament will persist in the same view.

On top of the proposal for the European budget, there is one to extend maternity rights. It is now clear that it is intended to have a £3 billion increase in the European budget for that reason. The 27 member states will be snubbed if the European Parliament votes in line with the European Commission’s proposal. Recent increases do not include the already agreed, and grossly extravagant, €1 billion increase in the European budget for 2010, which was caused largely by the Lisbon treaty.

On the subject of austerity and responsible measures, according to Government figures the collective budget deficit of the EU’s 27 member states will reach the staggering sum of €868 billion this year, which is more than 7% of the bloc’s gross domestic product. That, of course, is because the European financial crisis is real. One need only look at the countries otherwise known as PIGS—Portugal, Italy, Greece and Spain—not to mention France, which must be included in a lot of the analysis, to see the real implications of that for the individual lives of voters in this country. The governing economic and financial framework established by the EU must be not only revised but radically curtailed.

The budget increase also relates to the extensive bureaucracy that we are having to pay for, such as the European External Action Service, as my right hon. Friend the Member for Wokingham (Mr Redwood) rightly pointed out. Members, including me, raised the gravest objections to the proposals for that body that were made a few weeks ago.

While Westminster and Whitehall, and the country at large, are quite rightly being asked to make savings, what is happening in Brussels? The European Parliament adopted a resolution on 18 May proposing a budget of €1.707 billion, which is a 5.5% increase on the amended 2010 budget and represents 20.28% of the EU’s administration budget.

[Kwasi Kwarteng (Spelthorne) (Con)]

Many Conservative Members would broadly agree with my hon. Friend’s sentiments; I do not believe there is much division among us on the matter. What practical steps does he think Her Majesty’s Government can take to stop the grotesque expansion in the budget?

[Mr Cash]

The budget is part and parcel of the issue of parliamentary sovereignty, which I shall come on to in a moment. If we are to act properly and responsibly in our own Parliament, we shall have to deal with this Parliament’s relationship with the EU as a whole. If we get that right, we can proceed in an orderly manner to the questions that we must ask in the political environment that we now experience. That will ensure that we are not subject to further increases in European functions or to the assertions of the European Court and other European institutions on the sovereignty of this House.

[Robert Halfon]

Although I accept what my hon. Friend says, does he not agree that by the time all that has been done, the budget increase will have gone through?

[Mr Cash]

With great respect to my hon. Friend, with whom I have had many useful discussions on this matter over the years, I do not agree for the reason that I have already given. It all depends on whether, as a result of the forthcoming negotiations, we achieve a blocking minority in the vote on the conciliation agreement. That agreement has not yet been mentioned, but regrettably it is integral to the procedures that we now face.

I fear that there might be a slight misunderstanding, because I suspect that all Members on the Government side of the House—or even all those in the Chamber—and many people in the Conservative party and the country at large, would agree with both amendments. The distinction I am drawing between them is simply that in the real world we must address such matters in a certain fashion. I do not want to advance my amendment simply because it is mine. It will not do any good if we go too far in merely expressing a sentiment with which everyone agrees, if the consequence of doing so is a counter-productive result. That is why I am taking the position outlined in amendment (a). I urge my hon. Friends—not for my sake, but simply for the sake of ensuring that we get things right—to support it.

[Mark Tami (Alyn and Deeside) (Lab)]

The hon. Gentleman is part of a coalition Government—or at least part of a coalition. What discussions has he had with his Lib Dem colleagues on the grand plan that he is setting out to skewer the EU budget?

[Mr Cash]

As a matter of fact, it is pretty obvious that I am not a member of the coalition Government, so let us dispense with that idea straight away. In my votes over the past few weeks, I have probably demonstrated that I have certain reservations about the situation, but I am not going further down that path now.

If the European Parliament is allowed to get away with this, it will add fuel to fire of the riots and demonstrations that are already sweeping many cities in different countries throughout Europe. Those countries face problems of immigration, economic stress and high unemployment, and wilfully to attempt to increase the EU budget when the whole thing needs to be rejected is, to my mind, irresponsible. If the EU Parliament persists, it cannot be regarded as a serious and responsible Parliament. That is my concern.

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

rose—

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

rose—

[Mr Cash]

I will give way to my predecessor on the European Scrutiny Committee.

[Michael Connarty]

I am grateful to my ESC colleague, who is now Chair of the Committee. I do not disagree with his facts and many of his criticisms are fundamental to the approach of the European Commission compared with that of the UK Government and this Parliament, particularly on the proposal for a tax. However, on trying to achieve a blocking minority, would it not be better in fact to support the Government’s proposal than to take an absolutist approach such as the one he proposes in amendment (a) and, quite frankly, the one that is proposed in amendment (b)?

[Mr Cash]

Mine is not an absolutist position in the sense in which the hon. Gentleman puts it. My amendment (a) says that an increase is simply not justifiable. What is justifiable could also be described as what is fair and right. I have just described what I suspect will happen throughout Europe if people continue to increase the budget irrespective not only of our spending review, but of the crisis in Greece and of the situations in other member states, including very high levels of unemployment, the rise of nationalism that goes with that, and the populism that will emerge from those who want to agitate and create trouble. We want a stable Europe and a stable United Kingdom, which is precisely why I take the view that we need to act responsibly and ensure that the UK Government have every opportunity to achieve their objectives. I assure the House that nobody can accuse me of being in any way reluctant to speak my mind on matters relating to the EU, and I am sure that no one would presume to do so.

[Mr Dodds]

I commend the hon. Gentleman for his long years of campaigning on this issue and his work as Chairman of the ESC. Given the provocative behaviour of the European Parliament and its attitude to a budget increase, which he outlined, should this House not put down an equally strong marker by strengthening the Minister’s negotiating hand and saying, “Far from increasing or freezing the budget, we want a reduction”?

[Mr Cash]

I do not want to enter into an unnecessary altercation about this with my hon. Friend the Member for Clacton, but if the wording had been put to me, I would have included the words “and if the European Parliament and its committee persist in the behaviour that they are now engaged in, we would have to call for a reduction in the budget.” It would be on that basis, not on the basis of requiring the Government to respond when they are in the process of negotiations. Perhaps the distinction comes at that point, although I agree with my hon. Friend’s sentiments.

[Mr MacShane]

Will the hon. Gentleman give way?

[Mr Cash]

No, I have heard enough from the right hon. Gentleman. All he does is repeat his old mantras—[Interruption.] I do not accept that: I simply need to get to the next point that I wish to make about the procedure that is to be followed.

It is clear in the light of the current state of affairs that the Government should adopt my amendment and reject the increase. The European Parliament, in the current austerity conditions, is wilfully affecting the economies of the 27 member states, and of the United Kingdom in particular. My European Scrutiny Committee has today agreed to have a full inquiry reaffirming the sovereignty of the United Kingdom Parliament in relation to the assertions of the European Court of Justice on such matters. The Government have agreed to the Committee’s demand for pre-legislative scrutiny, and I am happy to announce that the Minister for Europe will give evidence in public on these critical matters—and that will have an impact on the issues that we are discussing in this debate—as will other experts on the compatibility of Britain’s membership of the European Union with the doctrine of parliamentary sovereignty in the light of the European Union’s own assertions that the parliamentary sovereignty of this Parliament has been overtaken.

The Government have announced that they will introduce a clause to address the question of parliamentary sovereignty, but our Committee will examine the implications of this in the light of the declaration of primacy of European law by the European Court of Justice and as contained in the Lisbon treaty. All these matters require the closest analysis for the sake of our democracy and the electors of the United Kingdom on questions relating to taxation, spending, the European budget, our contributions and all the functions of the European Union. We have an absolute requirement to get this right and we will have a full examination of the issue of parliamentary sovereignty, including the subject matter of this debate.

[Mr Philip Hollobone (Kettering) (Con)]

Does my hon. Friend believe that it would have been helpful if the Minister for Europe had been in his place for this debate?

[Mr Cash]

It is always helpful when the Minister for Europe is present, and I endorse my hon. Friend’s view. However, the Economic Secretary has set out the Government’s view and their determination to get the negotiations right. They will have to succeed in that aim, because there is a huge amount at stake.

The Commission submitted its draft budget to the Council of Ministers and the European Parliament, but the Council rejected the Commission’s proposals by qualified majority vote. The proposals then passed to the European Parliament. In the next few days, it is expected that the European Parliament will adopt the amendments to increase the budget and forward the amended draft to the Council of Ministers and the Commission. The European Parliament and the Council will then convene a conciliation committee to seek to resolve their differences, if any. It is essential that the Government negotiate a blocking minority of 91 within the Council of Ministers to stop the increase at that point. The decisions will be taken by a majority of 14 out of 27 MEPs on that conciliation committee, together with a majority of the 27 member states on the Council of Ministers. That is why it is vital that the Government have the strongest possible mandate to negotiate a blocking minority to determine whether there is agreement in the conciliation committee on the joint text—as I am sure is the intention. If both the MEPs and the Council of Ministers, through their respective procedures, reject the joint text, or if one rejects it and the other fails to take a decision—this point is crucial, and that is why this is such a delicate matter—the European Commission is bound to propose and submit a new budget that will deal with the problem properly.

That is why I take the position that I do in my amendment. I am in no way detracting from the sentiments expressed by my hon. Friend the Member for Clacton. I absolutely endorse those objectives; indeed, I have advocated them repeatedly—relentlessly—over the past 20 years. However, there comes a moment in the tide of man, as they say, when it is essential to get the responsible procedures working in an orderly manner. I do not in any way want to find the Government’s position compromised by a vote that could take place this evening, the effect of which would be to put the Government position into reverse.

We are at a crucial moment. I very much respect my hon. Friend’s objectives, but in this context it is important to get things right. On this occasion, I would strongly urge my hon. Friends to accept my amendment and allow the Government to proceed on that basis, rather than on the basis of something based on a hypothesis.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. As hon. Members will see, there is a great deal of interest in today’s debate. Some 10 Members have indicated that they wish to speak, and as this is a time-limited debate I will ask each of them to consider how long they will speak for, so as to ensure that every Member who wants to make a contribution can do so before the time elapses.

16:15

[Kelvin Hopkins (Luton North) (Lab)]

It is a great pleasure to speak in this important debate, although I will not detain hon. Members for long. First, I commend the Chair of the European Scrutiny Committee for what he said. It is interesting to see him as a restraining voice in Euroscepticism. What he said is common sense. The Government have to go to Brussels or Strasbourg—or wherever they meet—with, one would hope, the united backing of the House or, if not, at least the united backing of those on the Government Benches. I will certainly be supporting the hon. Gentleman’s amendment; indeed, I will support both amendments if they are put to a vote.

I have been a member of European Standing Committees for some 13 years. Over those years I have debated European budgets countless times, yet in all that time none of them has been approved by the European Court of Auditors. We just seem to nod through the fact that a budget costing the countries of Europe billions every year is not approved by auditors. We just accept it. One cannot imagine the British Government doing that—not having their Budget approved by auditors—every year.

There has been a significant increase in our net contribution, and that will continue. Attention was drawn to the problem yesterday—very well, I thought—by the hon. Member for Bury St Edmunds (Mr Ruffley) in Treasury questions. Indeed, I have spoken many times about the Blair deal—the deal made that December night a few years ago when, apparently without consulting very many people, he arbitrarily gave away a significant proportion of our rebate. The Economist—not a supporter of left-wing Eurosceptics such as myself—said that no deal would have been better than that deal, and it was right. I shall therefore be supporting the amendments.

The budget is fundamentally flawed and has been so since its inception. Throughout that time, the core of the problem has been the common agricultural policy. I have called many times for the common agricultural policy to be abandoned and for agriculture policy to be returned to member states. Member states have different agricultural industries, and each of us would choose what to subsidise and how to subsidise it. Our own agricultural sector needs some subsidies, particularly in certain areas—an example would be Welsh hill farmers—to preserve our rural heritage and industries; it is sometimes necessary for them to be sustained by subsidy. The way the CAP operates is nonsense, however. We have changed it over time, but it has not been properly dealt with.

Another problem is that the net redistributive effect of the budget acts in an arbitrary way, in that some relatively rich countries are net recipients, whereas some relatively poor ones are, unjustly, net contributors. We have a smaller agricultural sector than many other countries, and we have, unfairly, been a net contributor. I would not agree with Mrs Thatcher on many things, but I thought it was right that she negotiated a rebate. [Hon. Members: “Hear, hear!”]

I shall differ from Conservative Members now, however, by saying that I should like a socialist approach to Europe, whereby the redistributive effects of the budget are balanced in such a way that the poorest countries are net recipients and the richest are net contributors, in proportion to their relative living standards and the success of their economies. As one of the richer countries, we would no doubt be a net contributor, but such a system would be rational and fair. The budget as it stands is neither rational nor fair.

We ought to return to the Blair agreement. If we are to negotiate a more sensible budget with our European colleagues, we should start to look at contributions again. If our own contributions had been negotiated in sterling cash terms, rather than euro cash terms, we might not have suffered so much as a result of depreciation. We are paying more because we necessarily depreciated our currency, although I am glad that we kept our own currency and that we are able to flex it according to our own needs.

Other countries have suffered terribly through being unable to do that—Ireland is a case in point. In real terms, it is part of the sterling economy, not the euro economy, and it has suffered as a result of our depreciation, because it has been unable to depreciate its currency. I have told Irish colleagues whom I have met through the European Scrutiny Committee that the logical thing for them to do would be to recreate the punt and devalue against the euro to come into line with sterling. That would be very beneficial for the Irish, and I hope that they will consider doing it at some point. It would be fairer for us if contributions were measured as a proportion of gross domestic product, because they would not be subject to change as a result of depreciation.

I have spoken many times on the European budget, and I believe that it is nonsense. I am waiting for common sense to appear on the horizon, but it has not done so yet. I hope that, if we have to have net fiscal transfers in the future, they will be considerably smaller because there will not be a CAP. I also hope that they will be related to the relative prosperity of the member states, so that the poorer nations benefit and the richer ones contribute.

[Michael Connarty]

I respect my hon. Friend’s logic, even though I do not support his conclusions on the European Union. He has a background as a trade union negotiator, and I cannot understand why he thinks we should tell the Government that they cannot have a negotiating position and that they must adopt the position that they are given. Surely they need to be able to negotiate what they are looking for—namely the cash equivalent—regardless of how it is balanced within the budget. They will be negotiating with 27 other countries, along with the Council and the Parliament. Is not my hon. Friend’s instinct as a trade unionist to give the negotiators the flexibility to come out with a deal, rather than to given them strict instructions on what they must come out with at the end of the negotiations?

[Kelvin Hopkins]

I thank my hon. Friend for his intervention, but I believe that all negotiators need to have something in their back pocket—something to argue with. If the Government go into the negotiations saying, “My members will not tolerate an agreement unless it is satisfactory”, that will give them some strength. I hope this House will provide that kind of support to negotiators. I would much prefer to be on the Government than the Opposition side, but I hope that the Government will stand up and do the right thing.

Finally, the Minister spoke about standing up for British interests, but that sort of nationalistic approach does not go far enough. What we need is an arrangement that will secure the support of other member states. We have to persuade them that we need a more rational and sensible approach to the budget that is also fair to all concerned—and, indeed, considerably smaller in view of the need to abolish the CAP. If we can get others on our side, we might start to make progress, but if we argue simply in nationalistic terms, I do not think we will.

That said, Britain has a strong negotiating position. If we were in a position to push hard, we would know that the EU needs our membership more than we need to be a member of it. We have a massive trade deficit with the rest of the EU, which gives us a strong negotiating position. If we were challenged by other strong states, they would know that their economies would suffer if we were no longer part of the EU. If we had trade barriers between member states, they would suffer much more than we would. The point has been made many times.

I have some figures with me. Our trade deficit with the rest of the EU in July—the last month for which figures are available—was £3.9 billion. That is for one month, so we need to multiply that by 12 to get an idea of the annual figure. That amount was an increase on the £3.2 billion of the previous month. The EU needs Britain, so let us try to make an EU that is looser, more democratic and leaves greater powers to member states. Let us have an EU that has not a nonsensical budget, but one that is fair and beneficial to all concerned.

18:52

[Mr Douglas Carswell (Clacton) (Con)]

I am grateful to my hon. Friend the Member for Stone (Mr Cash), who has done as much as any Member to encourage this House over many years to consider its duties in a wider European context. He is the best kind of Committee Chairman—one who never forgets that the role of his Committee is to hold the Executive to account, regardless of which party is in government. I thank him.

All hon. Members face spending cuts in their constituencies—cuts that none of us wanted and cuts made all the more painful by the economic downturn. With the exceptions of health care and overseas aid, every Government Department is looking for budget reductions of between 25% and 40%. At the same time, however, our net contributions to the EU are rising by 60% over the next two years—from £6.4 billion this year to £8.3 billion in 2011-12 and to £10.3 billion in 2015.

Our gross contributions, of course, are higher still. Currently £13.3 billion, they are scheduled to rise to £19 billion. Although it is true that some of that money is spent in the United Kingdom, it is by no means always spent on projects that we ourselves would have chosen to spend it on. In any case, normal practice in politics is to measure what people actually pay rather than to deduct the notional cost of services they receive in return. Would any Member argue that the basic rate of income tax is not 20p in the pound but zero, on the grounds that the entire sum is given back in the form of roads, schools, hospitals and so forth?

The sum of £19 billion is, of course, colossal—enough to give the entire country a 50% rebate on council tax in perpetuity or to pay off our Olympic debt in a single year. The scope of amendment (b), however, is not nearly so ambitious. It would not strike out the entire EU budget—it is not about that—and it would not even strike out the increase in the year-on-year EU budget. All this modest proposal is designed to do is to reject the additional sum that the European Commission demanded over and above the increases already built into the 2011 budget.

At a time when every one of the 27 member state Governments are struggling to find savings, the EU must show some willingness if not to reduce its budget, at the very least to be satisfied by the increases we have already given it. Why has the EU come back on 15 September and asked for more resources? The Commission has been admirably frank that the additional funds are earmarked for three institutions: the European External Action Service, Europol, and the three supervisory agencies that will regulate financial services. I remind Members that the European External Action Service is the EU’s diplomatic corps. It already has about 20 times the budget of our Foreign and Commonwealth Office. Europol is the EU’s police agency, and the three new supervisory agencies have been widely denounced as likely to drive revenue away from the City of London to non-EU financial centres.

In other words, we are being asked for this extra money to fund three projects that are not in the interests of this country to start with. How much is the bill? To be precise, the EU has awarded itself a €3.6 billion budget increase this year, and Britain’s share of that increase—not its share of the budget—is £380 million. The bail-outs and the financial stimuli around the world have, of course, recalibrated our sense of monetary value, but even by today’s standards we are talking about significant sums. Given this morning’s headlines about the pressure on public sector jobs, it might be helpful to calculate how that £380 million could be translated into Government spending. It would pay for 6,022 NHS doctors, 12,666 NHS nurses, 14,600 police constables, or 22,332 Army privates.

The purpose of the legislature is to control the Executive. In the last analysis, that is why we are all here. The additional work that we do in scrutinising laws, taking up cases for our constituents and participating in debates is valuable, but essentially supplementary. When we strip it down, we see that Parliament exists to ensure that the Government do not spend our money wrong-headedly. That has been the elementary function of our predecessors since the Tudors, if not the Plantagenets.

[Mrs Main]

I will support the amendment, because I could not look the people of St Albans in the eye if I asked them to make economies and explain why cuts are necessary, and then voted for a measure that would mean the EU’s sucking out more and more of our money. I do not think other Members could explain that to their constituents either.

[Mr Carswell]

I am grateful to my hon. Friend, and to the other 32 hon. Members—many of whom are present—who supported the amendment. The £380 million increase comes at a time when there will be costly cuts in my hon. Friend’s constituency and in others—cuts that none of us wants to see—and when it is surely wrong to reduce spending on public services in order to increase the money that we give to EU institutions.

[Mr Dodds]

The hon. Gentleman said that some of the increase would fund the External Action Service. Does he recall that when the service was debated in the House, it was promised that it would be budget-neutral? That was bad enough—there should have been a decrease—but can the hon. Gentleman explain why we are now being asked to finance an increase in its funding?

[Mr Carswell]

I cannot. I wish that I could, and I should have liked to hear an answer from the Minister. I am perplexed and puzzled about why we are now being asked for an additional increase in funding for a measure that we were told was budget-neutral.

The issue before us is indeed one of supply. It is a question of whether we think that our constituents’ money is being well and wisely spent. Do Members believe that, in our current financial circumstances, we should find more resources to pay for, among other things, high commissioners’ entertainment allowances and additional staff for Members of the European Parliament? Is that really the best possible use for this money? Is it better to spend it on that than on the 13,000 nurses whose jobs we might otherwise save, or on 22,000 servicemen? I do not think it necessary to be either Eurosceptic or fiscally conservative to believe that there are better ways to allocate our finite resources. When all the Governments in Europe are cutting their budgets, it cannot be right for the EU bureaucracy to be expanding.

If we do not think that this is the best use we can make of our constituents’ tax contributions, our duty is clear: we should support the amendment and reject the increase. Our predecessors fought a long and bloody civil war to establish that only this House might raise revenue for central Government through taxation. We are the inheritors of a sublime tradition, but also of a heavy duty. It is not for any outside agency, either our own Ministers or overseas Commissioners, to tell us how to dispose of this nation’s resources. We shall make that decision guided by our consciences, and in the interests of those for whom we speak.

I respectfully seek to press the amendment to a vote. Others have signed it, and I hope that they will speak in its support tonight.

19:00

[Mr Denis MacShane (Rotherham) (Lab)]

I rise to cast a protective arm over the Economic Secretary as she confronts the massed ranks of well-argued opposition from those on the Benches behind her. The hon. Member for Stone (Mr Cash) gave a masterclass on why the amendment of the hon. Member for Clacton (Mr Carswell) should not be pressed to a Division, but we will see what happens.

This debate is part of a long process of changing our relationship with our partners in Europe, and I do not know where it may end. The hon. Member for Clacton emotionally talked about the nursing jobs that could be saved and the extra soldiers who would not need to be relieved of their duties, but the problem here is not the fault of the European Union. Rather, it is a consequence of a set of decisions that the Conservative and Liberal Democrat coalition has taken. It is seeking to reduce the deficit over four years, much as if I could abolish my mortgage deficit over that period. I wish I could do that—by starving my children, perhaps, or cutting back on other spending. That is the Government’s decision. It is nothing to do with Europe itself. At the end of the day it must never be forgotten that the EU budget represents just 1% of Europe’s gross national product.

[Mr Redwood]

rose—

[Mr MacShane]

That proportion is less than when the right hon. Gentleman was a member of the previous Conservative Government.

[Mr Redwood]

Given that the EU is urging all member states to cut their budgets in order to cut their deficits, why does it not show the way by giving a lead in cutting its own?

[Mr MacShane]

I have absolutely no objection to that point. The right hon. Gentleman is right. If he wants to advance that argument, however, he does not have to persuade me, and the hon. Member for Clacton does not have to persuade the fellow signatories to his amendment. We have to link up with others, in the right hon. Gentleman’s case with fellow conservatives and centre-right politicians across the rest of Europe.

The hon. Member for Stone brushed aside my earlier intervention, but the plain fact is that a fortnight tomorrow the leaders of Europe—the vast majority of European Governments including those of Mr Reinfeldt, who has just been confirmed in Sweden, and the new conservative-liberal coalition being formed in the Netherlands—[Interruption.] I am so sorry for the disturbance caused by my mobile phone ringing. I shall make a donation to any charity you wish, Madam Deputy Speaker. Those leaders in Europe will sit down to dinner and discuss precisely the points raised here tonight, but there will be a Banquo at that feast: the British Prime Minister.

I am not going to tell the Prime Minister what to do. He did not quite win the election, but he has settled in well as Prime Minister. He has to decide whether his collegial dining comrades at European feasts where decisions are taken should include rather interesting gentlemen from Latvia, Poland and elsewhere. I can quote the Deputy Prime Minister’s description if it helps, but I think most Members have it in their mind.

The other point that we have to consider is that 20 years ago the EU was largely financed by what is called own resources, such as VAT and duty. I know tax is anonymous but some taxes are less in the payer’s face than others. There has been a massive change in the past 20 years in that the EU budget now comes from direct Government contributions. Therefore these arguments are now deeply sensitive in all nations. People in the poorer—perhaps the east European—countries ask why they are signing a big cheque for the British rebate. I am prepared to defend it, but we would be in a much stronger position if more Members were networking across the continent, making the points they are making today and finding allies and friends of weight and seriousness. Frankly, the Conservatives are not doing that at present. I try to make that point more in terms of political science; at this time in the evening, there is no point in seeking controversy.

This is the first of a serious set of debates, and the Government will have to decide. My estimate is that the Economic Secretary to the Treasury, is speaking just as if there had been no change of Government. The European policy of the coalition is no whit different from that of the previous Government in its broad approach to European issues. That may change, but the Conservative party will have to decide whether it wants to confront the deep national interests of this country that have never opted for protectionism or isolationism, no matter how seductively those positions have been put—they have certainly been put that way tonight.

19:05

[Mr James Clappison (Hertsmere) (Con)]

I congratulate the Economic Secretary to the Treasury on an excellent and most competent speech. I listened to her and to the right hon. Member for Rotherham (Mr MacShane), so may I say to him that the last thing she needs is his protective arm around her? He could do worse than to put his arm around himself, because the end of his speech contradicted its beginning. At the end he told us that now, more than ever, our contribution to the European Union budget comes from general Government expenditure. Therefore, if our contribution increases, we have to increase taxation, cut expenditure or run up a bigger deficit, at a time when we are trying to reduce the one we have. He would do well to reflect on that.

I noted that in all the advice the right hon. Gentleman and the Opposition Front-Bench spokesperson, the hon. Member for Bristol East (Kerry McCarthy), gave us, neither of them told us—we will be watching this—how they would advise MEPs to vote when this matter comes before the European Parliament once again, under its procedures. Will MEPs vote in favour of the Council to keep the budget down or are they going to vote in favour of the Commission and for more spending on the European Union? The hon. Member for Bristol East may not want to answer the question tonight, but her MEPs will have to vote or abstain in the European Parliament. They will be watched as to how they vote and we will remind them of the effects that this measure would have in this country.

I was a member of the European Scrutiny Committee and I wholeheartedly supported recommending this document for debate, because it is precisely the sort of thing that this House ought to debate. Something caught my eye in the figures that the Economic Secretary put before the House: the European Commission was seeking in its budget this year an increase of 5.8% or £7 billion in payment appropriations—at this of all times. That comes after increases in the past three years of 3.9%, 1.6% and 2.3%. That raised a question in my mind: how on earth at a time like this, when this country and other member states are facing such stringency in their public expenditure and are seeking to reduce their deficits, could the European Commission have the instinct to seek an increase in its spending? A cynical mind might say that the European Commission made proposals to increase spending on such a scale thinking that they might be trimmed back and that it was aiming for what it would get when those were trimmed back.

Be that as it may, the Economic Secretary is doing exactly the right thing, exercising her powers and this country’s influence to the utmost. I would like those powers to be greater, but they are what they are and they are being used to restrain the European budget, to seek alliances with other member states and to seek to bring about the reductions that she has talked about. It is in this country’s interest that she should do that, and I am sure that all hon. Members on the Government Benches wish her good luck in her endeavours.

Reference has been made to the rebate, so I do not propose to dwell on that. However, because this country’s rebate has been abated in part—in 2005, somewhat inexplicably, when this country had a veto and could have prevented any such abatement—we must have to bear a higher proportion of any increase in European expenditure than would otherwise have been the case. As has been rightly said, that means that our net contribution to the European budget is set to rise progressively from £3 billion in 2008-09 up to £9.5 billion in 2014. That is a substantial increase, which is inexplicable. Historians will have an interesting time examining the motivations of those who took part in the relevant discussions in 2005, when the case for this country was put by the previous Prime Minister but one.

The thing that strikes me more than anything else as I peruse this document and the various budget headings is how little attempt seems to have been made to economise on the part of the European Union—and not only that, but how little attempt has been made to cut back on planned expenditure. It seems that the European Union is ploughing on as though nothing had changed in the world.

Talking of planned expenditure, one of the worst examples, I am afraid to say, is the European External Action Service. We were promised originally—I remember taking part in the debate with the right hon. Member for Belfast North (Mr Dodds)—that it would be budget-neutral and the rumour was that nobody in the European institutions believed that. Surprise, surprise, after we were told that it would be budget-neutral and given a solemn assurance to that effect by the European Commissioner, the European Commission started coming back for more increases in expenditure. So far, in the brief time that has elapsed since it started to put that organisation into place, it has already breached the principle of budget neutrality twice, with increasing amounts being sought—the most recent was an increase of £35 billion for an extra 190 posts.

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

Does my hon. Friend agree that in the current financial circumstances we should be talking not about budget increases or even budget neutrality but about reductions in the EU budget, as proposed in the excellent amendment (b)?

[Mr Clappison]

If there were a search for economies in the European budget, one of the best places to start would be the External Action Service. I have a suspicion that although some of its activities might be worth while, the prime motivating force behind the establishment of what is in effect a diplomatic service is the promotion of the European Union itself rather than the interests of member states or their citizens. I suspect that there might be scope for economies.

Let us be clear that what is being sought is planned increases in the External Action Service. Let us spell out the facts of what it will cost so far as it stands—as the Economic Secretary made clear. So far, the cost of the External Action Service, which is on the record under the so-called budget neutrality, is €400 billion. The diplomatic service has 3,700 employees and posts in about 130 nations in the world, many of which already have British diplomatic representation. Spending of that magnitude compares, I am afraid, with the search for economies that is being made in our Foreign Office, where savings of much smaller amounts of money are sought all the time in the face of the demands that have been made to try to economise. It would be sad to see the Union flag taken down in some countries in the world while the European flag was run up. I would regret that, as I think our Foreign Office does a good job in the world and represents the interests of our country. Its prime consideration is to represent this country and our citizens’ interests, rather than searching for exterior political objectives to do with the European Union.

This has been a very good debate. I commend the line that has been taken by the Economic Secretary. The facts are stark and anybody who reads these budget documents will be shocked that such increases are sought by the European Union at this of all times. It also prompts a question about the relationship between the European Union institutions, the Commission of the European Union, our constituents and the man on the street in every European state. What must be the attitude at a time when there is so much concern about the economy, when people are suffering and when cuts are being made if the European Union somehow feels that it is immune from those pressures and can go on increasing its expenditure?

[Kelvin Hopkins]

Let me reinforce that point. When referendums have been held in a number of countries, the people have voted against the European Union, in essence. That has happened in France and Holland, and in Sweden when they voted against having the euro. The hon. Gentleman is absolutely right.

[Mr Clappison]

I am grateful to the hon. Gentleman for that contribution. He has a very consistent record on this issue.

An increasing proportion of our laws, certainly as a result of the past 13 years, are being passed in the European Union, which searches constantly for new fields over which to exercise authority. It has made its way into home affairs and justice and it has huge ambitions regarding security and criminal justice. It also seeks to have an increasing influence over foreign affairs, with the establishment of a Foreign Minister and a diplomatic service. We know that it has all those great ambitions and we would do well to reflect, in the House, on what the increases in the budget say about the EU’s attitude toward individual citizens and its accountability to them.

19:15

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

I thank my hon. Friend the Economic Secretary for her comments. I shall raise a couple of issues because I should like a tiny bit of clarification on a couple of matters.

I welcome the shadow Minister to her role. Obviously, I am very new here, but what she probably does not know is that, alas, I have had to follow the European budget for 10 years as a Member of the European Parliament. In that time, I followed the abject failure of Labour Ministers who came to Brussels, gave away money and powers and did not care for this country. They did not bother to raise any questions when we were looking at the accounts and whether or not they were signed off. The hon. Lady might have forgotten the failure of a former Prime Minister who went and tried, when he was Chancellor, to get back money from structural funds but failed and then went quiet on the issue. I very much doubt that the hon. Lady has yet, in her new job, read the European budget line by line and page by page. Alas, I did that nine times out of 10: the 10th time, I found a fantastic new doorstop.

I am not going to talk about the budget in financial terms, as my hon. Friend for Harwich—[Hon. Members: “Clacton.”] I love these boundary reviews; they are so much fun. My hon. Friend the Member for Clacton (Mr Carswell) has outlined the costs. I want to press home the process behind all this. Having sat on the back benches of the European Parliament, watching all this go through, I have seen the process get to the stage that we are at now, when the European Parliament’s Budgets Committee adopted its wishlist for how much more money it could possibly spend, and I know what comes next. There will be a little knock-back from the Council at the meetings that the Economic Secretary is about to attend and then there will be the stage at which these matters will be decided by qualified majority voting, because that is how all this works.

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

Qualified majority voting is a term that might not be understood widely outside the House. Could we more simply describe it as other countries telling this country what to do?

[Chris Heaton-Harris]

I suppose so; I have heard it put in slightly more complicated terms. At the end of the qualified majority voting process, member states coalesce into different groups and it is quite remarkable that we have so many member states on our side at this time. That is something else that the Labour Government utterly failed to achieve on any occasion when it came to the budget. I think we are heading in the right direction.

I want the House to give our Economic Secretary the strong message that a number of us are simply reflecting the views of the people who elected us to this place. They see a lot of money being wasted and a lot of excess in the European Union and they know that we want to do something about it, but we need to negotiate from a very strong position. I know that the Economic Secretary is an unbelievably good negotiator. She speaks many languages when she goes abroad to talk to our European friends and those with whom we have to negotiate. I would like her to know that when she goes into those negotiations she can say, “This Government have taken a perfectly reasonable position. We are reasonable, but look at the Members of the House of Commons who are trying to represent their constituents—they are absolutely livid about the position the Government are taking just to get a half-decent cut, or maybe a standstill, in the European budget.” We are trying to give extra force to her argument—nothing more, nothing less.

I commend what we are doing in the European Parliament. My colleague James Elles, a Conservative Member of the European Parliament, has tabled many fantastic amendments, some of which might go through, because he is an able negotiator who knows the institutions very well, and some of which will not. However, we will still end up in the same position whereby, at the end of the process, the European Commission’s budget is bigger this year than it was last. That is unacceptable to the British public.

President Barroso recently gave a state of the Union address. I talk about that because I want to put into context where the argument sits now. We might be talking about the 2011 budget for the European Parliament, and I am trying to look forward to how we negotiate in the negotiations that are just opening up for the next financial framework. President Barroso put his cards on the table in his state of the Union address: not only does he want more money, but he wants to raise it in a completely different way. A former Minister for Europe talked about own resources; essentially, President Barroso would like to have a European tax. There is a debate for us to have on that.

Some people want a European tax because more member states are having debates such as the one in the Chamber today whereby their parliamentarians say, “You are spending a lot of money from direct taxation, not from the way you used to raise it.” My hon. Friend the Member for Hertsmere (Mr Clappison) referred to that and it is unacceptable in the current economic climate.

[Steve Baker (Wycombe) (Con)]

My hon. Friend adds a great deal to the Chamber with his wealth of experience. For those of us who are new to the EU institutions, will he explain how members of the British public may cast a vote to dismiss President Barroso?

[Chris Heaton-Harris]

That is a good question. I am not convinced that it is possible. There is only one way to get rid of any European Commissioner, and that is to get rid of the whole lot. That involves a process that an individual constituent— [Interruption.] No, I did not. I was way too young to be there.

[Mr Dodds]

May I suggest one way to address the particular issue of getting rid of some of those people? The British people should be allowed a referendum on the question of our relationship with Europe. Instead of having a referendum next May on the alternative vote system, which is not what people want to talk about, should we not have a referendum on this issue, which everybody is interested in?

[Chris Heaton-Harris]

The answer is yes.

I want to wind up by taking us back to the process that we are involved in. We are discussing the EU budget for 2011. Coming down the track is the EU budget for the next five or six years. If we do not make a stand now, we will be viewed as a pushover when we come to those negotiations next time round. We have done fantastic work. There has been no failure whatever by our Front-Bench team in already getting a bunch of countries to agree with what we are saying on the EU budget. I want the Economic Secretary to know that behind her she has so many friends wishing her to do well. We are just representing the British people in what they want as well.

19:23

[Tracey Crouch (Chatham and Aylesford) (Con)]

I want to begin my short contribution by stating firmly that I am not anti-European. Much to the horror of many of my colleagues, I am also not a member of the “Better Off Out” campaign. I hasten to add, before my hon. Friends have a heart attack, that I am also not an overt pro-European. I simply recognise that our membership of the EU needs to work in our national interest and provide value for the British taxpayer.

In my constituency and across the country, our membership of the EU vexes people. Typically, they are resentful of its bureaucracy, centralised structure and perceived unaccountability. They cannot understand why so much of our country’s decision-making process has been shifted to Brussels, when it should be here. With that in mind, I welcome the Foreign Secretary’s recent announcement that a sovereignty Bill would be introduced, allowing authority to remain in our Parliament.

On the topic of today’s debate, the draft EU budget will rightly be subject to close scrutiny. At a time when our country and Europe as a whole are enduring one of the harshest economic climates for a generation, the European Commission has proposed a 5.8% increase in the draft EU budget, demanding an increase in net contributions of staggering amounts from its member states. The UK alone can expect to pay nearly £2 billion more in the coming year. How many schools, hospitals, doctors, teachers and nurses could £2 billion pay for? In the light of the scaling back of departmental budgets in this country most, if not all, will find it difficult to reconcile the two.

In order to put the draft budget and its proposed increase in context, we must be clear about what preceded it and our current spending commitments. It is widely accepted and entirely accurate that the previous Government mismanaged the negotiations of the previous EU budget in 2005, leaving us as a country contributing a significant amount of money with a poor rate of return. Our contributions exceed those of France by some 20%, despite our economy being only a fraction larger than that of France. Our rebate, so generously relinquished by the previous Government, is left greatly reduced. We still have a common agricultural policy commanding a significant portion of the EU budget, yet British farmers receive a disproportionately small amount of the overall funding.

To ask the British taxpayer to fund a further increase to an already over-inflated and questionable contribution would seem a clear affront. In addition, it poses an interesting and important question. At a time when we are asking British taxpayers to tighten their belts in the national interest and driving down costs where necessary, is it fair to ask for belts to be loosened again for an excessive EU budget? In my constituency, Chatham and Aylesford, with two of the most deprived wards in the UK, it will be painfully ironic to many that as necessary cuts and trimming of our public services are carried out in the coming months, we are locked into spending commitments elsewhere that are not always in the nation’s interest.

I share the Government’s drive to get value for taxpayer money in public services and across Whitehall after years of waste and inefficiency, which is why we must ask ourselves whether the EU is prepared to do the same. I admire the Government’s commitment to keeping their own administrative costs to a bare minimum, but in the original draft EU budget published in April I was horrified to see a proposed increase of nearly 4.5% in EU administrative costs alone. I hope this will be looked at throughout the review. It clearly highlights the mindset of those in Europe and raises serious questions about whether they share our Government’s commitment to achieving value for taxpayers’ money.

I welcome the Government’s stance in seeking to freeze cash payments to the EU and agree that this would be the most desirable outcome. The UK’s membership of the EU should be like any club transaction—you get what you pay for. That clearly was not the approach adopted by the previous Government, and once again the taxpayer has been left to foot the bill.

However, in the unprecedented economic climate that we have endured and are faced with, the EU is in the unique position to promote and contribute to the economic recovery. The EU’s mandate ought to be centred on filling a transnational role, tackling issues affecting Europe as a whole such as climate change and energy security, and naturally its budget should reflect that. It is regrettable that the new Parliament is restricted to voting on the basis of the previous Government’s ill-advised negotiations. Not only did the previous Government bankrupt this country, but through the EU budget their legacy lives on.

Our Government is not alone in opposing the rise in the EU budget. Denmark, Austria, the Czech Republic, Finland, Sweden and the Netherlands all share our concerns. I therefore urge the Government to seek to form a consensus with other member states who share our concern, throughout the review of the budget. With UK Departments and services under severe financial pressure, and constituents throughout the country facing unprecedented strains on the pound in their pocket, I cannot see how we can justify increasing our contribution to the EU when it, in return, refuses to make similar spending reductions.

19:30

[Priti Patel (Witham) (Con)]

It is a delight to speak in this debate as a new Member, particularly as the country was denied a vote on the Lisbon treaty and this is the first post-Lisbon budget.

When the Lisbon treaty was passed, we heard claim after claim that it would make the EU decision-making process more efficient and democratic. How can it have led to more efficiency, when the EU budget is due to increase by 5.8% in payment appropriations? Even the Opposition, with their astonishing record on spending and waste, would struggle to justify an annual increase in spending on that scale. I very much doubt that, in the current economic climate, any Department calling for such an increase in its budget would be given any consideration.

The Government’s position is to keep cash levels at the same rate as last year, but, at a time when most domestic Departments are looking to make efficiencies and cuts ranging from 25% to 40%, why is the EU not being pushed further? With a total budget exceeding €130 billion, it is not unreasonable for the Government and the Economic Secretary to the Treasury, in her negotiations, to pursue the Commission and other member states to make deeper cuts in order to bring down the cost of the EU and to protect the British taxpayer.

My constituents in Witham and the majority of the British public now understand that the Government are dealing with spending, and that spending must come down. As decisions affecting my constituents are taken, however, they will be furious to see that, although they cannot have their new school buildings or road improvements for now, more and more of their hard-earned money is being handed over to Europe.

Having gone through the draft budget, which is a significant document, I note that there are some significant and questionable increases in spending, which the Economic Secretary should seek to reverse in her negotiations. There is an extraordinary document entitled, “Administrative expenditure of the institutions”. Linked to the budget, it is an alarming read, and figures for each institution, line by line, give a shocking insight into bureaucratic waste in the EU.

Those figures include an 85% increase in “Entertainment and representation expenses”; a 440% increase in

“Miscellaneous expenditure on the organisation of Euromed Parliamentary Assembly meetings”;

a 43% increase to €19.6 million on

“Expenditure on publication, information and participation in public events”;

a 23.6% increase in

“Contributions to European political parties”;

a 24.7% increase in

“Contributions to European political foundations”;

and, on top of that, as we have already heard, the

“Provisional appropriation for the 18 additional Members of the European Parliament”,

which under the Lisbon Treaty will cost €9.4 million.

I have previously questioned the Europe Minister, who is not here today, on that matter, but, while this Parliament reduces its numbers and cuts its costs, subsidies and expenses, surely the Economic Secretary should make the same point about Europe when she comes to negotiate with her European counterparts.

Only last month, another example of EU waste was brought to my attention. Promoted by the East of England Development Agency and the East of England European Partnership, the document entitled, “Europe for Citizens”, opens with an extraordinary and, one could argue, helpful statement, proclaiming:

“Europe for Citizens is a funding programme that basically provides a large number of small grants.”

I find that statement astonishing. In spite of the economic difficulties that face this country and, in fact, other European states, a pot of money amounting to €215 million is available for “High visibility events”, “Town twinning”,

“Structural support for think tanks”,

and

“Support for projects initiated by civil society organisations.”

Trimming those budgets and other activities would save the British taxpayer quite a lot of money and even bring some long overdue financial management to the EU.

Next month, as we have heard, we will have the spectacle of the European Court of Auditors finding, no doubt, even more irregularities in the EU budget for yet another year running. In any well-respected democracy, no organisation spending money on that scale would be able to get away with the auditors not signing off its books, or with the level of previous errors, which most Government Members attribute to the previous Government’s maladministration. I urge the Economic Secretary to ask for stringent guarantees that money spent by the EU will be spent not only efficiently but robustly and effectively, and that the auditors are doing their job properly, because there are so many instances of waste and unaccountability. British taxpayers are not sufficiently up in arms about that issue.

Instead of acknowledging the deficiencies in its budgets and its incompetent financial management, the EU lives in denial, pursuing a policy of blatant spin and propaganda, and attacking any organisation that dares to question how taxpayers’ money is being spent. On its website, there is a whole section devoted to so-called “EU budget myths”, and a “myth-buster guide” has been published. The EU goes as far as to state that we should

“not confuse errors with fraud”

and that there are

“too many errors, usually made by the end users of EU funding.”

This budget and the forthcoming negotiations clearly provide an opportunity to challenge the EU in its way of working.

[Nick de Bois (Enfield North) (Con)]

Does my hon. Friend agree that when the Economic Secretary engages in these negotiations, which I have no doubt that she is more than qualified to lead given what she said earlier, it would be to her advantage if we supported amendment (b), because going in and asking for a reduction in the budget instead of just the status quo would help our case?

[Priti Patel]

I totally agree with that.

The situation is without a doubt unsustainable. Particularly given the EU’s previous track record as regards misappropriation of funds and lack of transparency, current funding levels cannot continue. EU officials need to understand that the British public cannot be treated like fools. We can clearly see through the spin, the propaganda, and the abuses of taxpayers’ money for endless self-serving vanity projects that are not in our democratic, economic or national interest. Just as sunshine has proved to be the best disinfectant on issues such as MPs’ expenses, it is about time that some sunlight was shone on to the EU budget.

[Nick de Bois]

Give them IPSA.

[Priti Patel]

They are welcome to IPSA, as well.

It is an appropriate coincidence that we are discussing the EU budget on the very same day that Baroness Thatcher celebrates her 85th birthday. What better way to celebrate the Iron Lady’s birthday than for the Economic Secretary to go to Europe tomorrow, stand up and really fight our corner, and say those immortal words, “No, no, no”, giving an ultimatum to her European counterparts and the Commission bureaucrats as they press for larger sums of money to be spent and attack our rebate?

I wish the Economic Secretary well in those fundamental discussions and negotiations. Our country has paid a high price on previous occasions, and our sovereignty has been undermined. We have Europe meddling in our affairs, taking billions of pounds from the hard-pressed British taxpayer. I urge her to put Britain’s interests, and the interests of the British taxpayer, first.

19:38

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

I rise to support a reduction in the EU budget. As some Members may be aware, I have advocated that any such cut would more than meet the costs of providing a second aircraft carrier for the Royal Navy.

Who would have thought that less than six months after the election we would be having a debate where a Conservative-led Government would be denounced by many of their Back Benchers for being soft on Europe? I was surprised to hear my right hon. Friend the Member for Rotherham (Mr MacShane) say—I think that he is correct—that, as far as he can tell, there has been almost complete continuity of policy from the previous Government to this Government in terms of their relationship with the EU. I have noticed that many commentators are similarly remarking that there seems to have been very little change in policy towards the EU. I hope that that is simply a question of settling in, and that when the Government find their feet they will be much more prepared to stand up for British interests.

There is another possibility. Yesterday, we heard that the alternative vote referendum was being brought forward simply as a concession to the Liberal Democrats—the Liberal tail wagging the Conservative dog. I hope that the Government’s softness on the European Union is not another case of the Liberals having received undue concessions from the Conservatives. I point out to Conservative Members that it is not possible to buy Liberal Democrats—they can only be rented for short periods, and one can never rely on their remaining rented. If the Conservatives are counting on the Liberal Democrats to support them all the way, they are likely to be sadly mistaken.

Unless I am very much mistaken, it is noticeable that there are no Liberal Democrats here at the moment, unless Members who are sitting on the second Bench back have joined them.

[Mr Dennis Skinner (Bolsover) (Lab)]

They’re all in Europe.

[Mr Davidson]

Are they all in it together? Yet again, I suspect that the Liberals are leaving the Conservatives to do the dirty work for them and put the budget through. I imagine that if the Conservatives carry on their course of action and we have an AV voting system next time around, the UK Independence party will do far better in the first ballot than it might have done in the past. I find it a great cause for regret that the Conservatives seem to have gone soft on Europe in such a short period.

[Mr Bone]

I normally agree entirely with the hon. Gentleman, but will he cast his mind back to the previous Parliament? When did a Minister talk the way our Minister has spoken tonight, and when were the Government Benches as full for a European debate as they are tonight?

[Mr Davidson]

That is a very fair point. Not many times were the Benches behind a Minister full of Members denouncing the Government for being too soft on Europe. There were a number of us doing so, but not nearly as many as there are tonight. I am grateful to the hon. Gentleman for making that point.

Some of my colleagues who spoke earlier touched on the iniquities of the EU budget. As someone who was a member of the Public Accounts Committee for a number of years, I am in complete sympathy with everything that has been said about how the auditors have qualified the accounts. The whole matter is a complete and utter disgrace. The audited accounts only tell part of the story, of course, because they do not cover the fact that EU income and the income of individual countries is enormously depressed by the extent of fraud, underpayment, under-collection of VAT and so on, which is reflected in the EU budget. [Interruption.] Can I have a lack of heckling from my hon. Friends in front of me, who support most of my arguments?

The EU budget is about not only the net and gross amounts of money flowing back and forward, but how that money is spent. Were it given by the EU to the British Government to spend, we would not be spending it in the way that we are. We have created a dependency culture among farmers. I know a number of farmers—admittedly not many of them are in my constituency—who concede that what they mostly farm now are subsidies. The whole pattern of their growing and activity is determined by the subsidies that are available from the EU, irrespective of the agricultural, financial or economic rationale. That is not rational or right, and such decisions ought to be repatriated to this country as quickly as possibly.

The hon. Member for Hertsmere (Mr Clappison) asked what the actions of Labour MEPs were likely to be, but I think that there is little doubt. We should remember that virtually all Labour MEPs were selected under the new Labour system of allowing only those in favour of ever-closer union to progress. I can remember when a number of Scotland Labour MEPs were Eurosceptic, but when the new system of proportional representation was introduced, Labour put them all out. Ever since, only those in favour of ever-closer union have come forward. I would be astonished if any Labour MEP does anything against those interests and the interests of the greater growth and development of the EU.

[Mr Desmond Swayne (New Forest West) (Con)]

I acknowledge the hon. Gentleman’s honourable record on this matter, but will he acknowledge that the description that he just gave admirably suits the Quisling-in-chief now occupying the position of Opposition Front-Bench spokesman, who always urged the previous Labour Government on from the Back Benches?

[Madam Deputy Speaker]

Order. I think the hon. Gentleman’s language—“Quisling-in-chief”—was a little strong, and I am sure that he would like to rephrase his view of that individual, even on an intervention.

[Mr Swayne]

I unreservedly withdraw the remark.

[Mr Davidson]

Now that the hon. Gentleman has withdrawn his remark, I shall not respond to it.

The point about the External Action Service has already been made, but I was astonished at the time of its creation that so many otherwise sensible people believed that it would result in no net growth in expenditure. Of course it was going to, and it was always intended that it would do so. It is interesting that those who wish to be deceived are deceived, including by promises from the European Union to moderate or reduce expenditure. That is simply a fig leaf. Those who accept such promises choose to do so, and then pretend to be astonished when it turns out that the situation is different. The idea that the Lisbon treaty is not the constitution is simply laughable, and only those who wish to be deceived by that twisting of words are so deceived.

[Mr Cash]

Does the hon. Gentleman agree that the root of the problem is not only the EU budget, but EU functions, which were greatly increased by the Lisbon treaty? The ESC agreed this afternoon that we will examine fully the question of parliamentary sovereignty as against European functions. Does he also agree that a precondition of reducing EU functions is asserting UK sovereignty, and requiring the judiciary to give effect to Westminster legislation and to override European legislation as and when necessary?

[Mr Davidson]

I accept that. It is enormously helpful that the ESC, of which the hon. Gentleman is Chair, will pursue that course of action. I only hope that the Committee does not take too long.

[Mr Cash]

Three months.

[Mr Davidson]

That is very welcome indeed. Pursuing that sooner rather than later is welcome.

The point about the External Action Service is not only that it costs more money, but that it is invidious. The desire of the EU is that it should be a state and that the EAS should be an embassy. I note that the EU has just taken over enormous premises in central London. Those will be nothing other than a centre for pro-EU propaganda and an attempt to intervene directly in British politics and British political affairs in a way that we would not tolerate from any country—I almost said “any other country.” We would not allow the Austrians, the Australians, the Canadians or anybody else to have a propaganda outfit in this country that spent enormous amounts to intervene directly in British politics, yet we are prepared to allow the EU to do so. In my view, its wings ought to be clipped.

The hon. Member for Daventry (Chris Heaton-Harris), who I believe has left the Chamber, commented on the extent to which we reflect our constituents’ anxiety about EU spending. I think that he was wrong, because we do not accurately reflect those. The balance of this debate is clearly in favour of constraints on EU spending, and that reflects the balance of opinion among the public, but I fear that the vote will not reflect that because vast numbers of Conservative MPs will be driven like sheep into the Lobby to support the Government and oppose any proposal to restrict the expenditure of the EU.

I hope that we will be able to return to the discussion of a referendum. It is correct for Conservative Members to point to the Labour Government’s failure to honour their commitment to a referendum on the constitution, but I point to the Conservatives’ failure to do the same. Given that next year Europe intends to re-examine its budget and the common agricultural policy, we should start by saying that that major revision should be put to the British people in a referendum, to determine whether they are prepared to accept the new financial arrangement, which will represent—I hope—a considerable break with what has happened in the past. Of course, it may not break with the past, but it would strengthen the Government’s hand enormously if we made it clear that they were prepared to take any new financial settlement with Europe, achieved after a long period of debate, to the country for resolution.

In the meantime, I support the proposals that urge a reduction in the EU’s expenditure, and I hope that we will not discover that a majority of Conservative Members oppose those proposals.

19:51

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

It is a delight to follow the hon. Member for Glasgow South West (Mr Davidson) and I agree with much of what he had to say. I have no intention of criticising the Economic Secretary tonight. Indeed, I support the new Government’s position on the European budget and it is much more robust than was the previous Government’s. In fact, I pay tribute to the Economic Secretary’s contribution to the debate, which contrasted starkly with what we heard from Ministers in the previous Government. There is no suggestion that any one part of the coalition is directing another. It is especially unfair to suggest that the Liberal Democrats are not here for the long run. I fully understand that a Lib Dem is not just for Christmas—if you’re lucky, there will be some left over.

I also thank the shadow Minister for her remarks. She did a great deal of good for the argument made by those of us who believe that the European Union and its budgetary processes have gone too far. In fact, by confirming that the Opposition have no policy on the issue of the European Union, she has made our job much easier. The Opposition’s position is very strange. They complain about spending cuts across the country, but they fail to say what they think about the European budget. Do they think that their constituents should be deprived of spending commitments in this country for the sake of an increase in the EU budget? That is a bizarre and strange position, but it is one that I do not have to defend to my constituents.

I urge the Economic Secretary to ignore the advice of the right hon. Member for Rotherham (Mr MacShane), who suggested that we should engage in some sort of trail of dinner parties—presumably paid for by EU taxpayers’ money—as, he said, the previous Government did. Where did that get us? It lost us our rebate and saw the previous Government committing to increasing the EU budget even further. We need no lectures from the Opposition on how to address this process.

I am a committed Eurosceptic. My antipathy to our membership of the European Union is widely known, and I made it very clear to my constituents at the election that I would seek a different relationship between this country and the European Union. However, that is not the debate we are having tonight. We are talking about whether we should approve sending more of my constituents’ hard-earned cash to Brussels to be spent elsewhere. I am not happy to support that position, and I will certainly not support it.

What are we being asked to pay for? We are being asked to pay for a 2.5% increase in the administration costs of the European Union, at the very time when we are telling councils and Government agencies across the country that they have to reduce their administration costs. How can I square that circle to my constituents? We are being asked to approve a 5% increase in contributions to the pension budget. At the same time, I am telling my constituents that their public sector pensions will be linked to the consumer prices index, rather than the retail prices index. We are also proposing to spend an extra 4.15% on the EU schools budget, at the very moment when we will be asking schools in this country—including, possibly, the one at which I taught just a few months ago—to spend less.

We are also asking Government Members and taxpayers to approve more money for the European External Action Service. I am pleased to say that when we had the debate on the European External Action Service, I was one of the Members in the No Lobby. As was mentioned earlier this evening, we were assured that the programme would be cost-neutral, but we now know that we will spend an awful lot more taxpayers’ money on a body to represent my constituents overseas for which they did not vote.

I do not need to talk about what the extra money going on this budget increase could be spent on. We have heard about the 12,000 extra nurses or the 14,000 police constables on which it could be spent. I am not certainly going to go back to my constituents and tell them that I have voted to spend money that could have been spent on front-line NHS nurses, teacher support in schools or our brave servicemen.

We have heard a great deal today about the previous Government and what they gave up. It is an absolute disgrace that they gave up our rebate, for absolutely no reform. For the past 30-odd years, we have repeatedly been told, “Well, we’ll accept this little budget increase in Europe in return for some reform.” We have always been told that some reform is coming down the line, but it never comes, because the European Union is institutionally incapable of reform. There can be no doubt about that at all.

[Mrs Main]

There is no incentive.

[Andrew Percy]

Indeed, as my hon. Friend says, there is no incentive for any sort of reform.

Those who support the budget increase have made great play of the fact that the amount spent on the common agricultural policy has reduced. It has indeed reduced: it is down to about 42%. However, even without the fraud and mismanagement that we all know about, the OECD has warned that the real cost of the CAP is £125 billion a year, so we could go a great deal further. The hon. Member for Glasgow South West mentioned the fact that we are now in the strange situation whereby farmers are effectively farming subsidies. However, I have talked to many of the farmers in my constituency, and I have to say, “If only they were.” Instead, we are asking them to manage environmental schemes, and at the very time when we are becoming more and more reliant on imported food.

I mentioned in an intervention on the shadow Minister that we cannot get away from the fact that the EU budget has not been signed off for some 15 years, and there is no doubt that it will not be signed off again, as my hon. Friend the Member for Daventry (Chris Heaton-Harris) said. Like other right hon. and hon. Members who are present, I am expected to go to my constituents and tell them that we would like to take more of their money to put into an institution that cannot guarantee that the money will be spent where it says it will be spent. I am not prepared to do that on behalf of the good people of Brigg and Goole who sent me here and whom it is my privilege to serve.

There is a broader issue, about the relationship between this country and the European Union, which touches on people’s engagement with and perception of the European Union, which was mentioned in earlier speeches. I note that Open Europe, which is a very sound pressure group, conducted a poll that found that 54% of people agreed with the statement that the Government should drop the Lisbon treaty and not try to ratify it. That 54%, as was proved in other polls, was ignored; the previous Government forced the Lisbon treaty through and broke an election promise. Some 65% of people believe that the European Union is out of touch with normal people, but sadly it is normal people’s hard-earned cash that is used to fund the EU, while 88% could not name their MEP. I wish that I did not know the names of some of my MEPs. Turnout for European parliamentary elections was at its highest in 2004, an abysmal 38.5% when I was up for election as a councillor, and it is a pretty poor pass when councillors such as me are used to drag up the European election turnout.

There is a general view in this country that the political elite is out of touch with the British public on the issue of Europe. My concern is that, if we approve yet more cash for the wasteful institution that is the EU, the gap between what the public expect and the position of the political elite will widen yet further. That would not be healthy.

[Andrea Leadsom (South Northamptonshire) (Con)]

Many people at the last general election who cared a great deal about Europe and were furious about it felt that voting Conservative was the way to ensure that something would be done about the massive amount of waste and bureaucracy in Europe. We owe it to them to achieve that.

[Andrew Percy]

I could not agree more with my hon. Friend. As I said earlier, what we heard from the Economic Secretary to the Treasury today was incredibly refreshing, and I am heartened that she is going to fly off to Brussels tomorrow and bang the table on behalf of British taxpayers. The British people expect someone to stand up for them in Europe, and I have no doubt that the Economic Secretary will do so.

[Robert Halfon]

My hon. Friend is making an excellent speech. Does he agree that this should be a question not of freezing the amount of money that we give to the European Union, but of reducing it substantially? If we are cutting departmental budgets here rather than freezing them, we should also be reducing the EU budget. That is what taxpayers want.

[Andrew Percy]

My hon. Friend hits the nail on the head. It has come to a strange pass when I have to explain to my constituents why a number of their play parks, costing some £5,000 to £10,000 each, can no longer be afforded because we have run out of money—as we know we have, because Labour has admitted it—only to have to tell them that we need to find £435 million more to send to projects overseas. I fully accept that some of that money will come back here, but a large chunk of it will not. We would not expect our constituents to invest in a bank that offered that kind of a deal.

I support the strong stance that the Economic Secretary set out earlier, and I hope that there will be significant movement on this issue in the coming months and years. However, we are being asked tonight whether we are prepared to ask our constituents, at a time when we are making massive cuts and asking them to make savings, to foot the bill for much more money for Europe. That is not something that I am prepared to do to the voters of Brigg and Goole.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I want to inform the House that I intend to give those on the Front Benches time to make a brief response to the debate, and I shall do that at 8.22 pm. There are still a number of Members who wish to speak, so I ask them to do the maths and to help their colleagues out if they can, please.

20:03

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

Over the past few months, we have spent a lot of our time debating one aspect or another of the financial crisis in which the country finds itself. Britain has a huge deficit, and the British public have collectively built up a mountain of personal debt. All in all, we are in a real mess. The Government have set out a series of measures to reduce the national debt, and I know that many individuals—including people in my constituency—are trying hard to cut down their indebtedness. These are tough times for us all, and we are not alone. Many other countries around the world, including many in Europe, are facing huge financial challenges and struggling to balance their books without pushing their national economies into another recession.

In this era of uncertainty and austerity, what does that organisation of probity and good governance, the European Commission, do? It proposes to increase the EU budget next year by 5.8%, which in real money represents an increase of £6,102 million. What planet do European Commissioners live on? They live on the planet of self-indulgence. They live in a cushioned climate of privilege in which the Brussels gravy train does not stop long enough for them to see what is happening in the real world.

To be fair to our own British Government, at least they recognise the stupidity of the European Commission. As the Economic Secretary wrote in a briefing note and confirmed this evening, the Government are very concerned about the proposed increase in appropriations of 5.8%. They might be very concerned, but I would be absolutely livid. I give at least one out of three cheers to the Treasury for that statement but, sadly, I cannot bring myself to give it any more cheers. My hon. Friend let herself down in addressing the EU problem by proposing that the EU budget remains at cash levels equivalent to the 2010 budget. That is also why I cannot support amendment (a). I bet all those Ministers tasked with making a 20% cut in their departmental budgets are a bit narked. I am sure that in the present economic climate, they would be delighted to be given a zero growth budget.

Like many other right hon. and hon. Members, I have been inundated with letters and e-mails complaining about the proposed cuts in benefits, increases in tuition fees and changes to public service pensions. There is a great deal of disquiet out there and representing a constituency that has some of the most deprived areas in the south-east within its boundaries, I share some of that disquiet, but I am happy to go into bat on behalf of the coalition Government and to argue the case for those cuts. I believe that in their heart of hearts, most people in my constituency understand that we have no choice but to push through those cuts if we are to reduce the mountain of debt we inherited from the previous Government.

In common with my hon. Friend the Member for St Albans (Mrs Main), however, I would not be able to look my friends and neighbours in the eye if we drove through a programme of painful cuts in our public services, while at the same time bunging the EU billions of pounds to waste on grandiose schemes such as the European External Action Service and the European Institute of Gender Equality in Vilnius, Lithuania, for which, incidentally, the UK is being asked to cough up £800,000.

Next year, the European Commission proposes to spend £7 billion on administration. By my calculation, the UK’s contribution to those administration costs will be about £1 billion. If Government Departments and public bodies in this country are being asked to cut their administration costs, it is surely right to expect the European Commission to do the same.

[Charlie Elphicke (Dover) (Con)]

Does my hon. Friend note with concern that where the UK has a 15% increase in public spending over five years, the European Union wants to increase its spending by 60%?

[Gordon Henderson]

I am aware of those figures and I think that they are scandalous.

My hon. Friend the Economic Secretary has said that the British Government will press the EU to deliver greater value for money, and I am sure that she and the Government will do so, but does anyone here really believe that our friends across the English channel in the European Commission will actually listen to them? When the draft budget is eventually presented to the European Parliament for debate later this year, do Treasury Ministers really think that anyone other than a small group of British MEPs will take a blind bit of notice of their view? I think not.

I would personally like to see the Government unilaterally reduce the UK’s contribution to the EU budget for 2011 by the average percentage cut imposed on Whitehall Departments. If the European Commission and the European Parliament do not like it and kick up a fuss, we should immediately hold a referendum on Britain’s continued membership and let the British people decide our future once and for all. Perhaps we could hold it on the same day as the referendum on the alternative vote.

I support amendment (b), and I urge Members in all parts of the House to do the same.

20:10

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

I think it worth repeating plainly from the outset—not least in response to some of the observations made by the hon. Member for Glasgow South West (Mr Davidson)—that the last Government failed hopelessly to stand up for the British national interest in Brussels. They failed to secure the overhaul of the common agricultural policy that Tony Blair promised, and they failed to defend Britain’s rebate, as a result of which we now pay an extra £2 billion to Brussels each year. As we have already heard, they also broke their promise to the people to give them a say on their own future through a referendum on the Lisbon treaty. The present Government have done more to fight Britain’s corner in Europe in the last six months than Labour managed in 13 years, proposing a referendum lock, retaining Parliament’s right to review the UK budget before the Commission, and defending the rebate.

With that in mind, I welcome the Government’s pledge to work to control the growth of the EU budget and to deliver better value for money for the British taxpayer. That is imperative as we act to reduce the largest budget deficit in the G20, inherited from the last Government. I also welcome the fact that the Commission’s proposed increase for 2011 has been halved, from 5.8% to 2.9%. That is a start.

The case for a more robust and rigorous approach to these negotiations is now overwhelming. It cannot be right for the European Commission to bid for a rise of almost 6% in its budget when so many member states, including Britain, are having to rein in excessive public spending. Let us take just one example. Why is the EU budget on justice and security going up when the UK faces cuts in spending on police and prisons at home? That is even less defensible when we consider the Commission’s detailed plans for the money.

First, there is the enormous waste involved. We have already heard about the EU’s administrative budget, which is set to rise year on year by between 4.4% and 5.5%. Can the Minister reassure us that the Government will continue to resist strenuously an increase in the amount of British taxpayers’ money that is forked out on this bloated bureaucracy? Secondly, there are the special interests—what the Americans call pork-barrel spending. Is it really necessary to spend €104 million on

“increasing the circulation of European audiovisual works inside and outside the European Union”?

Is it really necessary to spend €24 million on bee-keeping, and to spend half a million euros on “aid for silkworms”? Speaking of which, what possible justification is there for Lord Mandelson to continue to pocket £8,600 per month, via the Commission, for a golden goodbye as we freeze public sector pay at home?

As the Business Secretary told MEPs last month,

“no one can understand why the European budget is not being subjected to the same discipline”

as national budgets. Nothing is more likely to erode further the confidence of the British public in a Brussels clique that is woefully out of touch.

As we make cuts at home, the UK taxpayer will contribute £7.7 billion to the EU budget this year, and by the end of the current Parliament that figure is expected to rise to £9.5 billion. As its own budget defies economic gravity, the Commission, unabashed, presses for greater control of national budgets. Will the Minister reassure the House that she will reverse those skewed priorities, and will fight both to rein in excessive EU spending and to safeguard national scrutiny of our own budgetary process?

Above all, this budget demonstrates, line by line, how important it is for Britain to retain its rebate. As of December 2009, the rebate has saved the British taxpayer £65 billion since 1984. Can the Minister give us a categorical guarantee that we will never repeat the supine sell-out of 2005?

Having listened carefully to the debate, I cannot help feeling that the most compelling arguments remain those advanced by the Government when they joined Denmark, Austria, the Czech Republic, Finland, the Netherlands and Sweden in voting against this wretched budget in August.

20:15

[Charlie Elphicke (Dover) (Con)]

I will be as brief as possible. I just wanted to note the following numbers. The total managed expenditure in the United Kingdom Budget will be £697 billion in 2010-11 rising to £700 billion in 2011-12. That is an increase of just 0.5%, whereas the European Union is really gunning for it with a 5.8% increase and, as we have heard, administration costs will rise by 4.4%.

It is worth noting what the Commission has to say about the administration costs. It says it has made particular efforts to limit its administrative expenditure and that rise is partially due to the higher than expected salary increases in 2009. So we in the UK are implementing austerity and limiting the pay rises for our public sector workers while the EU just carries on serenely as though nothing has happened. An increase of €380 million is entirely unacceptable.

We have heard about the total number of doctors, nurses and others who will be affected in the current circumstances, but let us look at the constituency numbers: nine doctors per constituency, 19 nurses, 23 policemen and 34 troops. That is the scale of the situation we are facing. The EU budget is therefore a ferocious and astonishing waste of money. It is entirely unacceptable that over a five-year period we in the UK are having a 10% rise in spending, but there will be a 60% rise for the EU. What do we as a nation get for that? Do we get any value at all?

Finally, I want to congratulate the Economic Secretary on making the strongest and most impassioned case on Europe from the Dispatch Box that any of us has seen in the past 20 years, setting out that the Government will take the EU to task and bang the table and make the points that need to be made. I hope I speak for the whole House when I say that in negotiating on this matter she has our strongest and best wishes. All Members on the Government Benches certainly want her to get the best deal for Britain.

20:17

[Mr John Redwood (Wokingham) (Con)]

Conservative Members clearly have a very simple message for the Minister: we wish her well and we wish her to be strong and fierce in argument and debate, because we think she should be more ambitious. It is not enough just to freeze this budget; this budget has to be brought down. If there is any budget of all the budgets we look at in this difficult time about which we can say, “We can get away with cutting that,” it is this budget. I suspect many Opposition Members would agree with that, were they honest about it. We are talking about a budget of €143 billion or £120 billion, which is more than we spend on the national health service. A big chunk of that budget is down to us, and we get nothing like the value out of it that we get from the NHS.

I therefore hope the Minister will look to the following very important precedent. The last time we had a good battling female Minister who stood up for Britain she was armed only with a handbag, yet with that one piece of equipment she came back with the biggest rebate we ever got: the rebate the Labour party stupidly gave away, and the rebate we need back. That rebate would give us twice as much money as the amount the Government are hoping to save from the cut in child benefit. We know the Minister has the right equipment. She assures me that she has an excellent handbag, so we wish her every success in putting that argument.

The argument to the Greeks, Italians and Portuguese must be that they are having to make far worse cuts than any that are suggested for the European budget. We can cut collectively in a much more sensible way than the damaging domestic cuts they are having to put to their electors. The French have already had riots on the streets over their domestic cuts. I am sure they will agree with our Minister that there are some easy pickings to be had by removing items from this European budget. I therefore also hope the Minister will point out that because this is a levy on all the member states and all the member states are borrowing too much money, every penny and cent of that €143 billion is going to be borrowed. The taxpayers will not just have to pay once, therefore; they will also have to pay all the interest on that and be ready to repay the debt.

Is this really the kind of thing we want to be borrowing money for? Of course it is not. So Godspeed to you Minister: put the case, and win over all those other Governments. They will surely agree with us that it is better to cut the European budget than to cut important domestic programmes.

[Mr Bone]

rose—

[Madam Deputy Speaker]

I call Peter Bone and ask him to be brief.

20:19

[Mr Peter Bone (Wellingborough) (Con)]

I shall be brief. It is difficult to follow my right hon. Friend the Member for Wokingham (Mr Redwood), but I just wanted to say what a change it is to be in the House discussing a European issue when all on the Government side are united. New Back Bencher after new Back Bencher has said to the Minister, “We support what you say; go a little bit further.” We have heard the Minister accept an amendment tabled by my hon. Friend the Member for Stone (Mr Cash). I say to the hon. Member for Glasgow South West (Mr Davidson) that he has tabled a lot of amendments but I cannot remember his Government ever accepting any of them. The Minister was also kind enough to say that had amendment (b) been worded slightly differently, she would have accepted that too.

The coalition Government are united, but I want to give a little help to the Minister by suggesting that if amendment (b) is passed, or if many Members vote for it, that will help her in the negotiation tomorrow. Just peeking over, I can see that she has got a very large handbag, so I ask her to use it tomorrow.

20:20

[Mr Wayne David (Caerphilly) (Lab)]

We have had a very interesting debate. Before it, I had thought there was a chance that perhaps the Conservative party had changed, and that it had learned the errors of its ways and said farewell to Eurosceptism. But no, Eurosceptism is alive and well in today’s Conservative party and, in fact, it would appear to have been given a new lease of life. In reality, many of the contributions made by Conservative Members today were speeches against not only the European Union budget per se, but the European Union as an entity.

I urge Conservative Members to continue to be frank, but I must ask where the Liberal Democrats were. Until recently, that party used to pride itself on being the most pro-European in Britain. Well, in this debate the Liberal Democrats have certainly withdrawn to the fringes, as we have seen them do this week generally. Apparently, no compromise is too much for them, no U-turn too sharp and no sell-out too great. What is true in domestic politics is equally true on Europe.

What about the Conservatives? Let me make it clear that an efficient and effective EU budget is important for Britain. The majority of our exports go to the rest of Europe and that is why the EU budget must act as a stimulus for growth. We need to reinforce the conditions for future growth and, as is said in the commentary on the draft budget, we must invest

“in research, development, and innovation, infrastructure and human capital”

because all of those

“are at the heart of economic modernisation”.

That is not to say, however, that we should not be hard-headed about what areas of EU expenditure should be reduced. It is right that there should be a freeze on EU staff recruitment in Brussels and that various benefits for current and retired EU officials should be reduced. There is a necessity to maintain budgetary discipline, and we must always ensure that there is value for money at a European level. Equally, we should be prepared to say that further savings should be made. Let Britain champion, for example, the ending of the ludicrous circus of the European Parliament travelling back and forth between Brussels and Strasbourg—the Government say a lot about it but have done absolutely nothing. Let us examine whether it is really necessary for the EU to promote culture and let us continually make the case for reducing subsidies to well-off farming interests.

Of course Labour Members support the Government’s aim of reducing the EU budget, but the reality is that the amended budget, agreed by the Council of Ministers in August, represents an increase of 2.9% compared with this year’s budget. We know that the UK Government, along with smaller Governments from across the EU, voted against the amended budget. But, we know that the Government lost the debate and the vote in the full European Council—so much for the Government's claim to be winning the arguments in Brussels.

Even though the Government initially mellowed their strident Eurosceptism, which the Conservative party displayed in opposition, their lame and half-hearted attempts to fight for British interests are falling far short of what is needed. The Conservatives’ decision to withdraw their MEPs from the mainstream European People’s party, along with their vacuous proposals for constitutional tinkering, debilitates Britain’s engagement in Europe.

What this country needs is a Government who fight hard for British interests, not through posturing but through purposeful co-operation around a positive agenda—an agenda that recognises that if Britain is to succeed in the modern world, it must be a Britain that is located firmly in the mainstream of international co-operation.

20:25

[Justine Greening]

With the leave of the House, in the short time available I want to respond to the debate. First, may I express my gratitude to the many Members of this House who have expressed their support for what our Government are trying to do in tackling the remorseless rise in the EU budget? Hon. Members have played an essential role in scrutinising the budget and I thank them for their participation.

In particular, I pay tribute to my hon. Friend the Member for Stone (Mr Cash), whose amendment we support, for his reasoned and impassioned comments on the challenging process to cut the Commission’s 2011 budget proposals. Our stance is that we want a cut—a real-terms cut—and as my hon. Friend’s amendment also points out, although we have challenged the budget at a Council level, we now need to put pressure on the European Parliament, too. His amendment does just that.

For the reasons that my hon. Friend set out, we cannot support amendment (b), tabled by my hon. Friend the Member for Clacton (Mr Carswell). We need to maximise the chance that we have as a Government of achieving our blocking minority, as my hon. Friend the Member for Stone so eloquently set out, and amendment (b) would not help me to achieve that objective for the Government. In fact, it would risk preventing me from doing so.

[Zac Goldsmith (Richmond Park) (Con)]

Will my hon. Friend give way?

[Justine Greening]

I must make some progress, because we have very little time left.

In the wake of the worst financial crisis in living memory, and with the events that subsequently unfolded, we have said today in this House that we believe—rightly—that there is no justification for an increase in the EU’s annual budget of nearly 6%. In fact, as we have heard, countries across Europe are taking steps to ensure fiscal consolidation, and there is a strong case for the EU to follow suit—I know that the House can tell that I am taking that case to Europe directly and making it to those countries. My right hon. Friend the Member for Wokingham (Mr Redwood) pointed out how they are taking difficult decisions, and I made that exact point in French to the French Finance Minister.

At a time when all our European neighbours are looking to rein in public expenditure, the EU should not be looking to carry on with business as usual. It cannot be a case of carrying on regardless. That is why we voted against the Council’s first reading, which went in the right direction but did not go far enough—a view seemingly shared by everybody in this House apart from those on the Opposition Front Bench. They let us down by losing part of the rebate in 2005 and now in 2010 they are letting us down again by failing to support our efforts as a Government and as a coalition of parties on behalf of the British taxpayer to get value for money.

My hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) asked how many MEPs will vote against this provision. I can reassure him that we are already talking to our partners in Europe and in our group—the European Conservatives and Reformists. I have spoken to my hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), my good friend, and he assures me that he spoke yesterday to the Whip in charge of that group and all that group will be voting against a rise in the European Parliament when it comes before them. I urge those on the Opposition Front Bench to join us in that and to confirm that their Socialist group will do that. If they want to help the British taxpayer, they can start lobbying their own group in the European Parliament in the way that we have already successfully done.

Finally, we have spoken a lot tonight about concerns over the effectiveness of the EU spend and how well it is accounted for. I share those concerns. In fact, the last Government never used their vote when they took a look at the European audit accounts. We plan to be ready to use our vote if we see accounts that fail to meet the standards that we think they should. If we see accounts that contain points made by the European auditors that we believe the Parliament is not taking on board, we will be ready to use our vote in future to challenge the Commission in a way that the last Government never were.

I want to thank Members again for their valuable contributions. It has been incredibly useful for me to have this debate, particularly on the day before I travel to Brussels to defend our national interests and to get the best possible deal for the taxpayer.

[Kerry McCarthy]

Will the Minister give way?

[Justine Greening]

Not unless the hon. Lady is about to say that Labour MEPs and their Socialist group will support us.

[Kerry McCarthy]

indicated dissent.

[Justine Greening]

Sorry.

This year, member states have been taking unprecedented action to restore sustainability to their national finances, making tough choices today to deliver a better future tomorrow. That is the case that I shall be making to my colleagues across Europe in the days and weeks ahead. In these times of austerity, there is no justification for ineffective, wasteful expenditure and there is a real need to scrutinise every euro of spending to ensure that it delivers what is promised. The Opposition might not want to play a role in challenging the unacceptable Commission budget rise, but the Government and we on the Government Benches will. I commend the motion to the House.

Amendment proposed: (b), leave out from ‘the financial year 2011’ to end and add

‘is concerned at the above-inflation increase being made to Britain’s EU budget contribution; believes that, at a time when the Government is poised to make reductions in public spending elsewhere, it is wrong to increase that contribution; and calls on the Government to reduce Britain’s EU budget contribution’. —(Mr. Carswell.)

Question put, That the amendment be made.

20:30

Division 75

Ayes: 42

---

Conservative: 35
Labour: 5
Democratic Unionist Party: 2

Noes: 252

---

Conservative: 204
Liberal Democrat: 46
Labour: 1

20:43

Proceedings interrupted (Order, 12 October).

The Deputy Speaker put the Questions necessary to dispose of the business to be concluded at that time.

Amendment made: (a), at end add

‘and calls on the Government to reject European Parliament proposals to increase the budget’.—[Mr Cash.]

Main Question, as amended, put and agreed to.

Resolved,

That this House takes note of European Union Document No. SEC(2010) 473, Statement of Estimates of the European Commission for the financial year 2011; and supports the Government’s efforts to maintain the 2011 EU budget at the cash levels equivalent to the 2010 budget, while ensuring better value for money in EU expenditure; and calls on the Government to reject European Parliament proposals to increase the budget.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May I ask Members to leave the Chamber, if that is what they wish to do, quietly and quickly so that the rest of the business of the House can continue?

Delegated Legislation (committees)

Motion made,

That the Town and Country Planning (General Permitted Development) (Amendment) (No. 2) (England) Order 2010 (S.I., 2010, No. 2134) and the Town and Country Planning (Compensation) (No. 3) (England) Regulations 2010 (S.I., 2010, No. 2135), be referred to a Delegated Legislation Committee.—(Stephen Crabb.)

petition

Wednesday 13th October 2010 Commons Chamber

20:44

[Phil Wilson (Sedgefield) (Lab)]

The petition states:

The Petition of residents of the Sedgefield constituency, and others,

Declares that the petitioners believe that the Government should implement the procurement of rolling stock through the Intercity Express programme, which would lead to Hitachi building a manufacturing site in Newton Aycliffe; and further declares that this would result in the creation of hundreds of direct jobs and thousands of jobs in the supply chain, of which the majority would be in manufacturing, giving a much needed boost to the North East economy and improving rail services nationwide.

The Petitioners therefore request that the House of Commons urges the Government to implement the procurement of rolling stock through the Intercity Express Programme.

And the Petitioners remain, etc. [P000863]

Degree Validation (University of London)

Wednesday 13th October 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Stephen Crabb.)

20:45

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

To my great surprise, I have just discovered the only joy of being on the Opposition Benches—the wrong side of the House—for an Adjournment debate: I can actually look at the Minister, rather than just seeing his back.

May I declare two interests? One is a formally declarable interest and the other a more personal one. The formally declarable one is that I am an unpaid member of the board of the university of London’s international academy. The other one is that I hold a law degree, which the university of London awarded under what in those days was referred to as the “external system”.

I must relieve the Minister’s anxiety, because despite this debate taking place a day after the Browne report and a week ahead of the comprehensive spending review, I am not asking for money. I thought that I would take away that worry, so that he might relax a little. I am genuinely trying to be helpful, because we need a higher education system that is open, diverse and accessible. Why did I request this debate, and what do I want the Minister to do? I want to put forward a few suggestions. If we all agree that we need to expand the number of people who benefit from quality higher education, we have to do a number of things, some of which Lord Browne pointed to yesterday.

First, and most importantly, we have to stop assuming that the only way in which one can acquire a degree is by being campus-based and studying for three years. Browne is quite clear that we need to move towards a more flexible system that responds to the needs of students and the economy. Secondly, on perhaps a more unpopular point in the current climate, we have debated what the top level of fees should be, but we should stop and consider what we get for those fees. The conclusion that higher fees are either good or bad is too simplistic, because the question is what do universities offer in exchange for the fees that they charge. Thirdly, an even more difficult point is that we have to move away from the belief that there is a magical solution, because at some stage or another someone, somewhere will have to pay for it all. The question is how we raise the money, because nothing comes for free nowadays.

We need to face up to the fact that, first, some degrees from some institutions are of a higher quality and standing than others; they are not all the same. Let us stop pretending that they are. Secondly, some degrees and qualifications offer a better prospect than others of future employment. Thirdly, some people—I suggest an increasing number—will require greater flexibility of access to higher education than traditional universities can offer.

As a result, I want the Minister to face up to some of the perversities that—quite unintentionally, I think—have arisen over the past few years. We have seen universities fined for taking on additional students and given disproportionately little support for part-time students. We will have to encourage institutions such as the university of London and the Open university to provide more high-quality degrees at an affordable price, and with the highest possible flexibility for students.

What is so special about the university of London? People may not be aware of it, but Charles Dickens—well ahead of Alastair Campbell—referred to it as the “people’s university”. Established in 1838, it was the first university in the United Kingdom to open its doors to women, and in 1858 it launched the external system. For more than 150 years, the university of London has offered students the opportunity to sit its exams without having to attend the university itself. Its alumni include seven Nobel prize winners, such as Nelson Mandela, who studied while imprisoned on Robben island and, more recently, Charles Kao, who received the Nobel prize for physics in 2009 for groundbreaking work carried out in the UK on the science of fibre-optic cable.

The strength and reputation of the university of London is based on the fact that irrespective of how a student acquires the knowledge and where they are based—that is very important—academic standards are not compromised. The present-day mission statement of the university of London’s international academy is still faithful to its 152-year history:

“To provide worldwide access to the internationally renowned academic programmes and awards of the University of London and its colleges.”

The enormous breadth of academic resources within the federal university of London enables a range of collaborations within the university to deliver the programmes. The basis of the collaboration between the colleges and the central university is that the academic expertise is located in colleges, whereas the central university undertakes administrative support for the students and other agencies here and abroad.

There is no comparable university offering flexible and worldwide access to degrees of such high international standing. There are currently some 45,500 students in 180 countries studying by distance and flexible learning, with another 6,000 in the UK. The university receives no teaching grant for its external students, and UK-based students are entirely self-funding. The university of London’s international academy may already be well adapted to the new realities to which Lord Browne’s report is pointing us.

Fees are identical across the 180 countries. For example, the largest individual set of programmes—those provided in collaboration with the London School of Economics—cost in the order of £3,500 for the entire degree. That includes materials, access to an online library, and all examination fees. Globally, some 70% of undergraduate students also pay fees to local third-party providers to obtain learning support, but the majority of UK-based students study on their own. If one compares that with an annual fee for a traditional English campus-based degree of £3,290, one can see that the university of London’s international programme offers remarkably good value for money for unsubsidised provision.

How does it work? Let me describe how I took my degree; this may explain why the Member for Birmingham, Edgbaston, who has Birmingham university on her patch, is making a pitch for London university. It was the early ’90s, I was in Worcestershire, and I had two small children. I wanted to go back to university to kick-start my brain, and I thought that a law degree would be a very good way of doing it. There was no way, financially or practically, that I could have done a campus-based degree, but I could take two years to do year 1, studying tort, contract law and the English legal system by attending lectures at Worcester college of technology, franchised from the university of Worcester. For year 2, studying land law, tort and trust law, I could find local lectures, but for European Union law I attended weekend courses in Cambridge. For year 3, I went down to London on a Friday night to attend lectures on contract law. Incidentally, an exceptionally good lecturer at the time was someone called Nick Bourne, who is now the Conservative leader in the Welsh Assembly Government. For private international law and jurisprudence, I was essentially on my own. That extraordinary mixing and picking of attending courses, doing things on my own and going to other places gave me the flexibility to acquire a degree within a four-year period, at a cost that I could handle, that no other system could have provided.

There were two highlights. One of those was winning the Convocation prize for land law, which meant that I was invited to Senate house and, for the first time, met other external law students. In those days, in the early ’90s, there were quite a number of police officers who would have joined the force without a degree but had to acquire one in order to get promotion. They were men in their early 30s, or even late 30s, who could not have achieved that in any other way. It was extraordinary that even though we were from the hard-nosed ’60s generation who thought that prizes were rather pathetic and we were not going to rise to them, we all had to agree that we had a remarkable sense of achievement. The degree ceremony at the Barbican centre was extraordinary, too, and I knew that my 2:1 would stand up to scrutiny from any other institution. There was a meritocracy of commitment and hard work, but the course was diverse, socially mobile and accessible. We should learn from that system.

London university’s infrastructure and global scope is also important. It has 550 examination centres worldwide and has local relationships with the British Council, national examination authorities and other organisations. That not only provides flexibility for its students in the UK but gives internationally mobile postgraduates access to its courses. For example, a large number of postgraduates are registered in programmes resulting from the collaborations with the School of Hygiene and Tropical Medicine and the School of Oriental and African Studies. Those students are often practitioners of international public health and/or international development who undertake part of their studies in the UK and part on assignment overseas.

I wish to say a brief word about the Open university. Like the university of London it cannot—nor should it—compete with campus-based universities. The latter provide a tremendous benefit and learning experience. As I said, Birmingham university is in my constituency and I know its importance. However, institutions such as the Open university, with its very good online teaching material, and the university of London add to the available learning provision. Distance learning is an important part of that. The Minister is quoted in the October edition of Prospect as saying that he has proposed that

“it should be easier for new colleges to set up as teaching institutions with degrees externally awarded by another body, such as the University of London—which is how higher education expanded from about 1850 to 1950. It’s a way of bringing in new providers and giving students greater choice.”

He is absolutely right, and I want to make it clear that London university is not about franchising, which offers opportunities but has inherent dangers. The key thing about the university is that assessment is undertaken by its college-based boards of examiners, to the same standards that are applied to its internal students. That is how it ensures and maintains quality.

I should like the Minister to examine what the university of London’s international programme has to offer, ensure that the vested interests of universities do not hamper the diversity of provision, and above all accept that what matters are academic standards, which can be upheld only if there are rigorous examination boards. It will be a success to me if, in five years’ time, London university has 50,000 students based in the UK, as it did in the 1950s, as well as its international students. Let us not reinvent the wheel, but let us examine what we already have, see what works and build on it.

20:58

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

I am grateful to the hon. Member for Birmingham, Edgbaston (Ms Stuart) for raising this important issue in the way that she did, because it is of great interest. She began by saying that although it was regrettable that she had to stand on the Opposition side of the House, at least she could look Ministers in the face. I agreed with so much of her speech that she would have been very welcome to deliver it from our side of the House and look at my bald head from behind. It was an excellent speech, and I fully endorse her analysis.

The hon. Lady is a knowledgeable speaker on universities and, as she described, earned her own bachelor of law degree through external study at the university of London.

As the hon. Lady will know, since becoming Minister for Universities and Science, I too have talked about the validation of degrees and external study as a way of realising a more diverse higher education sector. Such arrangements will enable us to enhance and reward good-quality teaching and allow students from all sorts of backgrounds to benefit from a university education, exactly as she eloquently described.

The hon. Lady kindly referred to my comments in Prospect. Of course, in a speech at Oxford Brookes in June, I first tried to set out the argument that the university of London external degree-awarding model could be an important way forward for our HE system. The coalition wants a sector that is open to any provider capable of delivering a high-quality learning experience to students, and one in which the many and varied demands of students are well catered for, and in which providers who are innovative and offer good value for money can thrive.

I should report to the House that the current situation is that any higher education institution with its own degree-awarding powers is free to establish partnership arrangements, including validation, with other institutions, which allows the latter to offer courses leading to the award of degrees. However, I fully understand that the hon. Lady set a rather more demanding test than simply franchising. She talked about people having the ability to sit external degrees and described a direct relationship, and I fully understand the significance of that.

When I have advocated the university of London external degree model, some have worried that it meant that existing degree-awarding powers would be removed from existing institutions, but that is absolutely not the intention. We also have no intention of micro-managing the exact way in which degrees are delivered. However, we want a sector that is open to a much wider range of delivery models, which certainly includes the kind of arrangements the hon. Lady described in the context of the university of London external degree.

We want to encourage degree-awarding institutions to expand their validation and other external examination arrangements with independent partners, including private providers and further education colleges. A course that is validated at a non-degree awarding institution should be subject to exactly the same quality assurance processes, and therefore be of the same quality and standard, as one taught at the awarding institution. Responsibility for the standards and the quality of all programmes and awards remains with the awarding body no matter the nature of the partnership arrangements. The Quality Assurance Agency ensures that by looking at how the awarding body manages its links with partners, which it does at home and abroad.

However, I take the hon. Lady’s point. She specifically wanted to focus on the university of London model. That university has a significant role in the history of the development of higher education in our country. For a century, the majority of English and Welsh universities offered university of London external degrees before they received charters to award degrees of their own. The universities of Wales, Liverpool, Bangor and Bristol—to name but a few—all began in that way. The process, therefore, of setting up a teaching institution that delivered external degrees from the university of London was fundamental to the expansion of higher education, but it retains genuine potential.

New institutions that are focused entirely on teaching could benefit from attaching themselves to established, well-respected university degrees and other qualifications. That is one means for them to build a teaching reputation of their own. That could include, for example, FE colleges looking to improve their HE range or wholly new entrants to the sector. Validation or other external degree arrangements could inspire confidence among applicants, as well as offering them greater choice and cheaper options. They could also help providers to gain traction among employers, who already support a range of externally validated qualifications such as HNDs, HNCs and BTECs, because they represent consistent, trusted standards.

I have already asked the QAA to look at any barriers or implicit assumptions within the quality regime that tie higher education to a model that requires institutions to award their own degrees. Similarly, degree awarding powers should not depend on directly delivering teaching. Any such assumptions should go. Another option is to deliver externally validated degrees online or through teaching centres, as the independent provider Kaplan has started to do. Kaplan is now offering 3,000 places across the country for students to study towards university of London external degrees.

London’s external system, recently rebranded as its international programme, is indeed one of the oldest and most successful distance learning delivery systems in the world. Today, there are registered teaching centres in 18 countries, including Bangladesh, Canada, Hong Kong, Jamaica, Switzerland, Thailand and of course the UK. The system offers more than 100 courses, all of which have been developed by the colleges of the university of London. Students are enrolled as university of London students and are graded to the same standard—the crucial point that the hon. Lady made—but they can access support from teaching centres independent of the university, as well as learning tools provided by the university. Graduates receive a degree certificate from the university of London, and a second certificate indicating the lead institution.

Like externally validated degrees, remote learning through the London international programme, or the excellent Open university courses, gives people more choice so that they can study at a place and a time that suits, often at home—and the hon. Lady gave some good personal examples of that. For new providers, collaboration with a world-class university can give them a foothold in the sector where a validation arrangement may not be practicable.

As well as the domestic challenge, to which the hon. Lady referred, delivery of British higher education qualifications overseas is a growth area, with the university of London and the Open university very much among the pioneers. More and more of our universities, in fact, are moving into what is known as transnational education, allowing them to teach a broader range of students and to work with more teaching providers than direct delivery alone would achieve. I am delighted that our universities are building their global profiles in that way.

The Government side of the House—indeed, on the evidence of this evening, both sides of the House—believes that external degrees and opportunities for new HE providers can be thoroughly debated in the wake of the Browne review and pursued as we get down to the business of supply-side reform. Both are promising ways of growing the sector cost-effectively during this period of austerity and of innovating while guaranteeing quality, because we would be applying proven methods.

After consultation, the Government intend to provide detailed proposals to which the sector can react. We will publish a higher education White Paper, leading—we hope—to a higher education Bill in autumn 2011. That will be an opportunity to consider the ideas that the hon. Lady and I have put forward in the past. It only remains for me to thank her once again for raising these important matters tonight.

Question put and agreed to.

21:08

House adjourned.