House of Commons

Thursday 28th October 2010 Commons Chamber

Thursday 28 October 2010

The House met at half-past Ten o’clock

Prayers

Thursday 28th October 2010 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 28th October 2010 Commons Chamber

The Secretary of State was asked—

[Jessica Morden (Newport East) (Lab)]

1. What recent representations he has received on the method of payment of tolls on the Severn bridges; and if he will make a statement.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Department for Transport has recently received representations from the Wales Office about the method of payment on the Severn bridges. The Secretary of State has met the Deputy First Minister, and payment methods at the Severn crossings were discussed.

[Jessica Morden]

The facility enabling people to pay with credit and debit cards—for which I was grateful—was introduced in time for the Ryder cup, only to be whisked away again the minute the event was over. That has caused confusion. My constituents would like to pay by modern methods, which is fair enough. Can the Minister assure me that an end to the situation is in sight?

[Mrs Villiers]

I can. I know that a long-running campaign has been conducted by a number of Members.

As the hon. Lady says, the system was introduced for the Ryder cup. We considered it important to meet the deadline, given the significance of the event. The temporary scheme has been withdrawn for the moment, but is due to be back in operation on Friday next week. That gives us a chance to do some more work in order to make it more efficient, but there will be further work to make it more efficient still. We hope to introduce a system in the new year that will not require PINs. The temporary system does require them, and that causes delays and adds to congestion.

[Peter Aldous (Waveney) (Con)]

2. What steps he is taking to ensure the economic sustainability of the rail network.

[Iain Stewart (Milton Keynes South) (Con)]

5. What steps he is taking to ensure the economic sustainability of the rail network.

[Jake Berry (Rossendale and Darwen) (Con)]

10. What steps he is taking to ensure the economic sustainability of the rail network.

[Karl MᶜCartney (Lincoln) (Con)]

12. What steps he is taking to ensure the economic sustainability of the rail network.

[The Secretary of State for Transport (Mr Philip Hammond)]

Recent estimates by the Office of Rail Regulation suggest that the UK railway has costs up to 40% higher than comparable European railways. To secure a fair deal for passengers and taxpayers in the medium term, we must get the cost base of the railway under control. The Rail Value for Money study led by Sir Roy McNulty will report in the spring, and the Government will then respond to its recommendations.

We have recently completed a consultation on passenger rail franchising, and will publish our response in due course.

[Peter Aldous]

The East Suffolk line has a vital role to play in helping to bring jobs to the east Suffolk and Waveney area. Can the Minister confirm that that will be taken into account when investment decisions are made?

[Mr Hammond]

I think that my hon. Friend is referring to the so-called Beccles loop, a scheme currently being developed by Network Rail whose implementation is planned for December 2012. Network Rail is expecting a £1 million contribution from Suffolk county council. Subject to that, funds are available for the scheme, and it is expected to proceed on schedule.

[Iain Stewart]

I welcome the Government’s commitment to major rail infrastructure projects between our major cities, but does my right hon. Friend agree that the long-term sustainability of our rail network can be enhanced by smaller projects such as the completion of the east-west rail link between Bletchley and Oxford?

[Mr Hammond]

I entirely agree. When I surveyed the proposed route of the high-speed railway a few weeks ago, I had an opportunity to examine the alignment of the proposed link. We will shortly begin discussions about the programme of enhancements that the Government wish to secure for the next railway control period, which will begin in 2014-15, and I am sure that the project mentioned by my hon. Friend will be one of those that will be considered carefully.

[Jake Berry]

The Rossendale to Manchester rail link is vital to economic development in Rossendale. Will the Secretary of State agree to meet representatives of the East Lancashire heritage railway board to explore ways of upgrading this heritage line to a commuter link?

[Mr Hammond]

I agree that good transport links with Manchester are vital to the regeneration and economic success of my hon. Friend’s area. I know that the local authorities in the area, together with Greater Manchester passenger transport executive, have been working on a scheme, for which the local sustainable transport fund that we have announced—or, alternatively, the regional growth fund—may be a potential source of funds. However, I or one of my colleagues would be happy to meet my hon. Friend.

[Karl MᶜCartney]

With regard to the economic sustainability of the rail network, particularly in my constituency of Lincoln, does my right hon. Friend believe that it would be helpful and desirable for Network Rail to act more reasonably and wisely in its economic modelling, and to reconsider its proposal to close the level crossings in our city, including the one that dissects the high street, for over 40 minutes in every daylight hour, a proposal that will decimate my constituency’s economy and the wider economy of Lincolnshire?

[Mr Hammond]

I am grateful to my hon. Friend for that question. I am aware of the impact that the level crossing in Lincoln has on the life of the town. Indeed, I have a similar situation in my constituency. There is an issue about the way scarce and valuable time on level crossings is divided between the railway and the road user. That must be informed by some proper cost-benefit analysis. The good news is that some new barrier technology is under assessment, which might help us, through a technical solution, to reduce the amount of barrier-down time necessary.

[Miss Anne Begg (Aberdeen South) (Lab)]

If the railways are to be economically sustainable, passengers have to be able to get through the stations and on to the trains, and many disabled people still cannot access large numbers of stations and trains are still inaccessible. The Government have decided to abolish the Disabled Persons Transport Advisory Committee. What process will be put in place instead to ensure that the good work that has been done to improve access is not lost and that we do not go backwards?

[Mr Hammond]

I welcome the hon. Lady's question. The decision to abolish the DPTAC was taken because disability issues have been mainstreamed into the Department's assessment processes and disability factors are brought into the advanced planning of programmes at all stages. As she will know, there is a rolling programme of improving access at stations, which Network Rail is funded to deliver. That programme will continue through this control period and into the next.

[Alison McGovern (Wirral South) (Lab)]

I speak regularly to businesses in Wirral, which tell me that they benefit greatly from the improvements to the west coast main line driven forward by the previous Government, but they are extremely fearful of ticket prices going up by RPI plus 3%—excruciating rises at this fragile economic time. What can the Minister say in response to those concerns?

[Mr Hammond]

As I said in my opening remarks, we have a problem with the cost base of our railway and in the medium term there is no doubt that the challenge for us is to get that cost base under control, so that we can ease the pressure on passengers and at the same time ease the pressure on taxpayers. However, in the short term, the decision that had to be taken was simple: do we go ahead with investment in additional rail vehicles to ease overcrowding and improve the passenger experience or do we not? We have taken the decision that investing for the long term is the right answer for the United Kingdom economy.

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

It is good to be facing the right hon. Gentleman across the Dispatch Box for our first Transport questions. He again spent the last week all over the media, from “Newsnight” to “The Daily Politics”, pretending to be Chief Secretary to the Treasury, so I apologise to him for dragging him back to his day job. Why did he tell The Times that fares would rise by 10% over the spending review period when commuters are actually facing a hike in fares of 30% plus?

[Mr Hammond]

I welcome the hon. Lady to her place. Perhaps I cannot tell her and her sister apart and that is why I was responding to the shadow Chief Secretary earlier this week. She refers to a quote. On my arithmetic, RPI plus 3% for the last three years of the spending review period, with RPI plus 1% for next year equates to a 10% real-terms increase in the regulated average fare over the period of the spending review.

[Maria Eagle]

I have the quote in front of me. The right hon. Gentleman used a figure. He said this; it is in quotation marks, so he can tell me if he was wrongly quoted:

“If you are paying £1,000 for your season ticket now, it could cost you £1,100 at the end of the period”.

That is not saying that it is a real-terms increase of 10%. That is saying that it is an increase of 10% in total. His Government's own Office for Budget Responsibility predicts inflation of at least 3.2% from 2012. That will mean a rise of at least 6.2% a year, meaning that by 2014, fares will rise by over 30%. I would have expected better standards of arithmetic from someone who would rather be in the Treasury.

Let me try the right hon. Gentleman on another question. Why has he scrapped the cap on individual fares that we introduced? Does he understand that that will mean many fares rising by more than the 3% above inflation that he has allowed? Therefore, for the sake of hard-pressed rail users, who are already struggling thanks to other measures that the Government are taking, will he now abandon that stealth tax on commuters?

[Several hon. Members]

rose—

[Mr Speaker]

Order. This is the hon. Lady’s debut. In future, questions must be shorter.

[Mr Hammond]

I think Members will understand that what matters is the real-terms increase in fares, and that is what I was referring to.

The hon. Lady asked about the average fare cap. She talks as if in the past rail companies were restricted on individual fares. That is not the case. There was always a basket approach until this year—strangely enough, a general election year. For this year only, the previous Government announced that that system would be abolished and that companies would be limited on individual fares. We have gone back to the basket system because it provides the freedom to respond.

[Maria Eagle]

It’s a stealth tax.

[Mr Hammond]

It is not a stealth tax because companies are only allowed to increase regulated fares by a weighted average of 1% above RPI in the coming year across all the regulated fare pool.

[Kerry McCarthy (Bristol East) (Lab)]

3. What assessment he has made of the likely effects on local transport schemes of the implementation of the proposed reduction in funding for local government resource grants.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

The majority of transport resource funding will now be paid through formula grant. It is for local authorities to decide how that funding is spent according to their priorities. As the Secretary of State mentioned a few moments ago, I am also establishing a local sustainable transport fund to help local authorities support economic growth and reduce carbon emissions.

[Kerry McCarthy]

I thank the Minister for that answer. The Government’s growth strategy is based on wildly over-optimistic predictions for private sector job creation. How does the Minister think a 28% cut in local government transport funding, the end to ring-fencing across local government funding in general and putting on ice the bus rapid transit scheme will help a city like Bristol, which is plagued by congestion and a lack of transport infrastructure?

[Norman Baker]

I hardly know where to start with that question. The fact is that 300,000 jobs have been created in the private sector in the last three months. It does not help the economy if Members talk it down as the hon. Lady does. It is also not true that the bus rapid transit system in Bristol has been put on ice. The section from Ashton Vale to Temple Meads in Bristol city centre is in the development pool and the south Bristol link phases 1 and 2 are in the pre-qualification pool. I hope very much that Bristol city council will work on those schemes in conjunction with my Department.

[Mr Adrian Sanders (Torbay) (LD)]

Given this week’s disappointing news for south Devon of the Kingskerswell bypass being put into the pool rather than being approved after a 50-year campaign for it, might the local authority be able to reduce the cost of it by taking advantage of tax increment financing and regional growth funding? Will local councils be able to use them to help meet the costs of such important road schemes?

[Norman Baker]

I know that my hon. Friend is very keen on this scheme, and that he and other local Members have campaigned strongly in favour of it. We are certainly open to innovative ideas to find alternative funding, whether through the regional growth fund or the incremental system to which he referred, and I look forward to examining those options with his local county council.

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

In recent years a combination of local schemes and national action has resulted in a very significant reduction in the number of people killed or seriously injured on our roads. Has any assessment been made of the implications of the cut in local funding for the lives of people on our roads?

[Norman Baker]

The hon. Lady has considerable knowledge of transport issues as a result of her role on the Transport Committee, and I think she understands that what the Government are doing is freeing up local councils to spend their own money rather than determining the number of grant streams centrally. There have been 26 grant streams for transport funding for local authorities, but that will be reduced to four. That will enable local authorities to prioritise matters in their own areas, as they should do as democratically elected bodies.

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

The A160 scheme has enjoyed the support of local government in north Lincolnshire, but it has now been delayed until 2015. Will the Minister meet me and a cross-party delegation of local MPs to discuss this important scheme in more detail?

[Norman Baker]

It is my practice always to accede to requests for meetings from Members of Parliament, so I will ask my office to fix that up.

[Mr Stephen Hepburn (Jarrow) (Lab)]

4. What his policy is on the future of the bus service operators grant; and if he will make a statement.

[Alex Cunningham (Stockton North) (Lab)]

13. What assessment he has made of the likely effects on socially excluded groups of the proposed reduction in bus service operators grant.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

From 2012-13, the rate at which bus service operators grant is paid will be reduced by 20%. Our assessment is that this level of reduction will, overall, have a low impact on socially excluded groups. I spoke to the Confederation of Passenger Transport UK, which represents the bus industry, following the Chancellor’s announcement on 20 October. It was hopeful that, in general, this reduction could be absorbed without fares having to rise.

[Mr Hepburn]

That is absolute nonsense. The pensioners and the poor people of this country did not create the banking crisis, so why are the Government making them pay with cuts such as this, which will inevitably mean rises in fares and reductions in services?

[Norman Baker]

With respect to the hon. Gentleman, I do not think that he heard the answer I gave, which was that I have spoken to the Confederation of Passenger Transport UK, which represents the bus industry, and it was hopeful that the reduction in the bus service operators grant was marginal and could be absorbed without fares having to rise. I also draw to his attention the fact that the Government have protected the concessionary fares arrangements.

[Alex Cunningham]

My constituent, David Gordon, has told me that he values his bus service, which has improved considerably in recent years, very highly, but he is worried about its future. Many others depend on the buses to get to work or to search for work across Teesside and beyond. Can the Minister reassure Mr Gordon that bus services really will be protected and that those seeking work and other excluded groups will be able to follow the advice of the Secretary of State for Work and Pensions and get on a bus in their area to look for work?

[Norman Baker]

The hon. Gentleman will know that the Tees Valley bus network’s improvement scheme is going ahead. The Government have confirmed that only recently, so I hope he will welcome that particular suggestion. It is our intention to get more people on to buses, and we are working with local authorities and the bus industry to achieve that—for example, by the roll-out of smart ticketing. So, yes, his constituents will be able to get on a bus; in fact, there will be even more buses than previously.

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

How does the Minister propose that the local sustainable transport fund will fill the boots of resource grants, with the funding reduced now, especially in counties such as Leicestershire?

[Norman Baker]

The local sustainable transport fund is a fund of £560 million during the rest of this Parliament. By anybody’s standards, that is an enormous sum to spend on prioritising local transport, cycling, walking, bus services—if that is what local authorities want to do—bus lanes and other such traffic management matters. I would have hoped that the hon. Gentleman would welcome that commitment by the Government; it is an enormous sum for those particular objectives.

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

I thank the Department for responding so quickly to my named day questions, although I do not consider “I will answer this question shortly” to be much of a reply. On the bus service operators grant, the Minister has said:

“The benefits of that grant are clear: it ensures that the bus network remains as broad as possible, while keeping fares lower and bringing more people on to public transport, with the obvious benefits of reducing congestion…in our towns and cities.”—[Official Report, 29 June 2010; Vol. 512, c. 842.]

Given his swingeing 20% cut to the grant, why will he not now accept that fares are likely to go up, passenger numbers will decrease and congestion will worsen?

[Norman Baker]

First, the stories in the press throughout recent months have been suggesting that the bus service operators grant will be abolished, but they have clearly been completely off tack. Indeed, the cut to the grant has been less than the average for the Department, in recognition of the importance of bus services to local people. I come back to the point made by the Confederation of Passenger Transport UK, which, after all, represents the bus industry and so, with due respect, perhaps knows more about buses than the hon. Gentleman might do. It has said that, in general, the reduction can be absorbed without fares having to rise; that is the view of the industry.

[Mr Laurence Robertson (Tewkesbury) (Con)]

6. What plans he has for the future of the Swindon to Kemble rail line; and if he will make a statement.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Government recognise that redoubling the railway between Swindon and Kemble could generate important passenger benefits and improve resilience by providing a diversionary route for the Great Western main line to Wales. Unfortunately, the need to address the deficit means that we are not able to commit Government funding to this project at present, but it remains our aspiration to take it forward in the future.

[Mr Robertson]

I thank the Minister for that response, but my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) and I have been campaigning on this issue and on the issue of improving the A417/419 road. The absence of either of those schemes impedes travel between Gloucestershire and London, and that is detrimental to Gloucestershire’s economy. Will she revisit both those schemes as soon as possible?

[Mrs Villiers]

I am very much aware of the campaign that my hon. Friend has run, alongside my hon. Friend the Member for The Cotswolds and other local MPs, such as the hon. Member for Cheltenham (Martin Horwood). I have met a number of MPs to discuss this project and we recognise that it is a good scheme. Important work is being done through the Grip 4 study, which is due to conclude shortly. We hope that we will be able to fund this scheme, but at the moment the deficit—the significant crisis in the public finances—that we have inherited means that we cannot take forward all the good schemes that are on the table. There is no doubt, however, that this scheme will be a serious contender when we assess these schemes again in relation to the next railway control period.

[Tony Baldry (Banbury) (Con)]

7. If his Department will fund (a) tunnelling and culverting work and (b) other mitigation work arising from the construction of any future rail line as part of the High Speed 2 project.

[The Secretary of State for Transport (Mr Philip Hammond)]

The coalition Government take very seriously the potential impact of a high-speed rail line on line-side communities and property owners. HS2 Ltd’s current preferred route utilises a range of mitigation techniques, including tunnelling and culverting where appropriate, practical and economically justifiable.

[Tony Baldry]

On page 174 of the HS2 proposals, the report states:

“It is difficult to analyse exactly where the benefits of HS2 would accrue.”

HS2 is a project that will clearly be expensive in construction costs, mitigation costs and the costs of compensation. Will my right hon. Friend give an undertaking that next year’s consultation will include a consultation on the principle of HS2 and on whether the same amount or even less money spent on the existing rail infrastructure could produce similar or even better results?

[Mr Hammond]

I can assure my hon. Friend that the option of spending money on enhancing existing rail infrastructure to provide the capacity and the additional connectivity that a high-speed railway will provide has been examined in detail and has been found not to be a practical option. The consultation next year starts from the premise that the Government believe that a high-speed rail network will be in the United Kingdom’s interest, but it will consult on issues to do with the design of that network, the route and the details of the proposals for the London to Birmingham link.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State will be aware of the potentially very important role for Stratford International as a stop for through services from High Speed 1 to High Speed 2. Given the prospect of competitive services on the channel tunnel rail link and developments in east London, as well as the success of the O₂ dome and so on, does he agree that there is a growing economic imperative for international trains to stop at Stratford?

[Mr Hammond]

As the right hon. Gentleman knows, Eurostar services are operated by a commercial company that makes decisions on the basis of its commercial best interest. I think the answer that he should be looking for is more competition and more operators on the line. I am very pleased to hear that Deutsche Bahn intends to start operating services through the tunnel to London. The more operators there are, the more likely they are to seek additional niche markets and to provide additional station stops.

[John Mann (Bassetlaw) (Lab)]

8. What recent representations he has received on road safety at Elkesley, Nottinghamshire.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

The Highways Agency has recently received a number of representations on safety on the A1 at Elkesley in Nottinghamshire. These have been made by the local authority, Elkesley parish council and members of the public. In particular, these concerns were raised by local residents and parish councillors to the Highways Agency at Elkesley memorial hall in September.

[John Mann]

They have been raised for the last 30 years. There was an agreement going ahead before the election, from the previous Government, for the Elkesley bridge, which is a place where many people have died tragically at the most dangerous crossover on the A1. There was a major collision just this summer. Is this vital scheme, recognised as a priority by the Department for Transport, going to go ahead in this Parliament—yes or no?

[Norman Baker]

It is a little bit unfortunate to blame us for not having taken it forward in six months when the hon. Gentleman’s party had 13 years to take the road forward. I do not underestimate the importance of safety. The statistics that I have been given, in fact, suggest that there have been no fatal, one serious and nine slight personal injuries between January 2007 and December 2009. If there is further information, I shall certainly consider that.

As part of the programme to reduce the budget deficit, we are clearly looking at how we spend our money on minor schemes. The initial prioritisation process for all the minor schemes in the country will be undertaken over the next few weeks by the Highways Agency and an announcement will be made on whether the public inquiry for this improvement scheme will proceed.

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

9. What recent representations he has received on his Department’s proposed funding for highway infrastructure; and if he will make a statement.

[The Secretary of State for Transport (Mr Philip Hammond)]

We have received a number of representations from hon. Members and members of the public regarding investment in major road schemes since the spending review commenced in June. In terms of specific representations, we have received 25 from hon. Members and 73 from members of the public. In addition, I have held meetings with a number of key stakeholders during which the spending review was discussed.

[Miss McIntosh]

I am grateful to my right hon. Friend. Will he take a further representation from me here and now to review the cancellation of the A1 scheme from Leeming to Barton? It goes to the heart of the economy in the north of England, supporting my constituency and those of my right hon. and hon. Friends, and it is key to the economic growth of north Yorkshire. Will he reconsider the cancellation of that scheme?

[Mr Hammond]

As I said when I made my statement on Tuesday, we have sought to take some hard decisions, and some of the schemes that were being taken forward by the Highways Agency had no realistic prospect of being funded in this spending review period or the next one. In those circumstances, I have taken the view that it would be wrong to continue to spend money on development of a scheme which is unlikely to be built in the foreseeable future, and therefore the scheme had to be cancelled. I am sorry to have to disappoint my hon. Friend.

[Derek Twigg (Halton) (Lab)]

I am grateful to the Secretary of State and the Chancellor for their support for the Mersey Gateway. However, construction can start only if funding is in place and we know when that will be released. May I ask the right hon. Gentleman the same question that I asked him on Tuesday? Subject to agreement on funding in January, as per his report, can he tell us if construction will begin before 2015? In other words, will the money be released to allow construction to begin before 2015?

[Mr Hammond]

I can tell the hon. Gentleman that the money will be released for construction to begin before 2015. Of course, this is a local authority-led project, so the local authority will ultimately determine how quickly the project can proceed, but both the capital allocation sum that we have made available and the private finance initiative credits will be released for use before 2015.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

I know that many Members in the Chamber and drivers across the country are disappointed with the announcements that the Secretary of State made on Tuesday, but surely sending his Minister with responsibility for roads to Russia this week was a little steep. Is it not the case that for many of the yet unconfirmed schemes, local authorities are being asked to shoulder more of the burden at a time when they are facing a 28% cut in their funding? Does not the right hon. Gentleman feel a little like a car dealer who says to his customer, “You can drive away with any vehicle you choose,” before slashing the tyres of every single car in the showroom?

[Mr Hammond]

I suppose the simple answer is no. The hon. Gentleman might be interested that the Minister with responsibility for roads has gone to St Petersburg to join in an international conference on road safety. With reference to the local authority schemes in the development pool that I announced on Tuesday, what we have said is that local authorities need to look at ways of improving the benefit-to-cost ratios of the projects that they are promoting. In some cases, that will involve getting in third-party contributions, particularly developer contributions. Some authorities may wish to increase their own contributions. All authorities should be able to reduce cost.

[David Tredinnick (Bosworth) (Con)]

11. What proposals for improvements to the M1-M6 junction he is considering; and if he will make a statement.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I refer my hon. Friend to the oral statement made by the Secretary of State for Transport to the House on 26 October, and the supporting documentation. The preferred option for improving the junction is the proposal announced in February 2009 to provide free-flowing traffic links between the A14, the M1 and the M6.

[David Tredinnick]

Does my hon. Friend agree that that is one of the most dangerous junctions and one of the most important junctions on the motorway network? When does she expect the works there to be completed, and what other projects do the Government have to improve the M1 and M6 motorways?

[Mrs Villiers]

I agree that that is a very important junction on our strategic road network. That is one of the reasons why we have prioritised funding for the project at a time of intense pressure on the public finances because of the deficit that we inherited. I also agree that road safety is an important issue in this case. The Highways Agency is working hard to manage and mitigate the road safety impact of the current junction, but we believe that the scheme will provide additional long-term road safety benefits. The scheme is not likely to be able to be progressed before 2015, but we are working on a revised timetable, with a view to construction beginning some time after that period.

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

Another important junction that has congestion problems and very poor design is junction 13 on the M60 at my Worsley constituency, but instead of doing something about junction design and improving the safety and other aspects there, Ministers have pushed forward with a white elephant of a scheme to add another lane to the motorway at that point. I and my constituents have objected to that from the start. The additional lane will blight the lives of people who live near the motorway. Given that they cannot push ahead with the good schemes that Members have put forward this morning, I urge Ministers to cancel that stupid white elephant of a scheme, think again and use the scarce public resources where they are better utilised.

[Mrs Villiers]

I refer the hon. Lady to the statement that the Secretary of State made earlier this week on the difficult decisions that we have made to prioritise investment in the most significant traffic bottlenecks on our road network. However, she will be well aware that before all those projects proceed to completion, they must pass through the appropriate planning appraisal programme, and full consideration will be given to the local community’s views as part of that important process.

[Mr Speaker]

I call Matthew Offord.

[Mr Matthew Offord (Hendon) (Con)]

Question 17, Mr Speaker.

[Mr Speaker]

No, no. I apologise to the hon. Gentleman. I thought that he was seeking to come in on Question 11, which is where we were. I am afraid that we cannot go to Question 17.

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

14. What recent assessment he has made of the likely effects of the outcome of the spending review on projects to improve the accessibility of the transport network to disabled people.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

As part of fulfilling the Government’s commitment to promoting equality, my Department has undertaken a robust analysis of its spending proposals and an assessment of the likely effects on the accessibility of the transport network. This work included considering the equalities impacts of proposals on projects that would improve the accessibility of the transport network to disabled people.

[Luciana Berger]

What assurances can the Minister offer that the reductions in the transport expenditure budget outlined in the comprehensive spending review the other week will not impact on accessibility for disabled passengers?

[Norman Baker]

First, the Government have prioritised transport expenditure in recognition of the fact that it is very important in helping to grow the economy and in cutting carbon emissions.

Secondly, within that process, there are continuing programmes such as the access for all programme at railway stations, and we are considering how we deal with EU legislation and with other disability issues, which are a key part of my portfolio. I can assure the hon. Lady that the issue will not be lost. Indeed, she may want to know that next week I am meeting a number of groups, such as the Royal National Institute of Blind People, Scope, the Royal National Institute for Deaf People and so on to ensure that I am fully appraised of their views on the issue.

[Steve Rotheram (Liverpool, Walton) (Lab)]

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

[The Secretary of State for Transport (Mr Philip Hammond)]

Since I last answered Transport questions, I have agreed the Department’s settlement with the Treasury. The settlement that we have achieved shows the Government’s commitment to investment in infrastructure and in transport infrastructure, in particular. The announcements that have been made, and that will be made over the next few weeks, will support economic growth and job creation.

[Steve Rotheram]

I am sure that the Minister is aware of the historical importance of the River Mersey as the lifeblood of the city of Liverpool, the wider sub-region and beyond. Therefore, following the Prime Minister’s call for sustainable economic growth, will the Minister meet Merseyside MPs and the leader of the city council to re-examine the economic evidence for a turnaround facility on the banks of our world famous, UNESCO-recognised and iconic waterfront?

[Mr Hammond]

I think that the hon. Gentleman is talking about a cruise liner terminal and turnaround facility. Cruise liner ports are operated primarily by private sector companies. Public money has been invested in the facility on the Mersey, and that public money was invested on the explicit understanding that it would not be used for turnaround. If it were, issues of state aid and unfair advantage would be raised. I am happy to discuss the matter with the hon. Gentleman, but I hope that he understands that there are European Union competition and legal issues around the matter.

[Mr Peter Bone (Wellingborough) (Con)]

T5. I recently met the Consular Corps of London, which made it clear to me, in no uncertain terms, that there is a problem at our ports and airports with human trafficking, with people being admitted to this country on clearly forged passports. I wonder what the Secretary of State can say about that, and whether he can talk to the Home Office about it.

[Mr Hammond]

I am grateful to my hon. Friend. As he will know, inward border controls are primarily a matter for the UK Border Agency, and I shall make sure that his comments are drawn to the attention of my right hon. and hon. Friends in that Department.

[Chi Onwurah (Newcastle upon Tyne Central) (Lab)]

T2. Bus services are a vital part of Newcastle’s economic infrastructure, and, despite the huge cuts to bus subsidies and to local government grants, the Minister is “hopeful” that bus fares will not rise and that bus services will not be cut. Unfortunately, the people of Newcastle cannot get to work on the Minister’s hopes. If fares do rise or if services are cut, what will the Minister do?

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

I am afraid that the hon. Lady’s question contains a number of hypothetical assumptions that are not borne out by reality. It is not my hope, but the hope and the view expressed to me by the Confederation of Passenger Transport UK, which represents the main five bus operators, so I do not think that the terrible scenario she paints will come to fruition. People might also want to use the Tyne and Wear metro, in which the Government are investing £500 million over the next 11 years.

[Martin Horwood (Cheltenham) (LD)]

Although we are expecting rail fares to rise only by 10% over four years in real terms, will Ministers look into changing the basis for the cap calculation from the retail prices index to the consumer prices index—because, after all, what is fair for pensioners ought to be fair enough for profit-making rail companies?

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The decision on rail fares has been difficult, but we have had to make it as part of the tough decisions needed to tackle the deficit. Of course we will keep under review the way that the system works, and I am happy to meet the hon. Gentleman to discuss the issue.

[Chris Evans (Islwyn) (Lab/Co-op)]

T3. Constituents of mine travel on the Ebbw Valley rail line from Cardiff to Islwyn, but they cannot travel to Newport because there are major engineering works at the Gaer junction. Has the Minister had any discussions with the First Minister about providing money for those engineering works so that my constituents can travel to work from Islwyn to Newport?

[Mrs Villiers]

I have not discussed that specific issue with the Welsh Assembly Government, but I am happy to do so.

[Jo Swinson (East Dunbartonshire) (LD)]

East Dunbartonshire cycle co-operative does excellent work and has enthused hundreds of people into taking up cycling through a local cycle festival, maps, cycle clubs and even a Guinness world record attempt at the number of cycle bells that can be rung simultaneously. This shows what can be done with a group of committed volunteers and a bit of grant funding, but how can we ensure that cycling promotion is not just left to volunteer champions but is done more systematically wherever people live in the country?

[Norman Baker]

I am grateful to my hon. Friend for that question. She will know that we value cycling; it was set out in the coalition agreement that it is a priority for us in the Transport Department. It has a major role to play in tackling the reduction of carbon emissions in the short term through behavioural change. We have guaranteed that Bikeability will carry on and, as I said earlier, there is a pot of money—£560 million—in the local sustainable transport fund, much of which I am sure will be directed towards activities related to cycling.

[Mark Hendrick (Preston) (Lab/Co-op)]

T4. The Chancellor announced with a fanfare in the comprehensive spending review the modernisation and electrification of a number of lines up and down the country. Can the Secretary of State tell us when the electrification work on the Preston to Blackpool line will commence and when it will be completed?

[Mr Hammond]

I cannot give the hon. Gentleman a precise date now, but I am happy to talk to Network Rail about where that particular project lies in its current programme and get back to him.

[Philip Davies (Shipley) (Con)]

The Wharfedale and Airedale lines are two of the most congested railway lines in the country, and additional carriages are essential to alleviate that congestion. I am well aware that funds are limited, but will the Secretary of State prioritise additional carriages on those two lines, as that is essential for economic activity in the area, which I know is the Government’s priority?

[Mr Hammond]

I said when I made my statement on Tuesday that a further announcement would shortly be made about rail investment. That announcement will include the provision of additional rail cars to relieve overcrowding. I am afraid that my hon. Friend will have to wait for a few more days until that statement is made.

[Ian Lavery (Wansbeck) (Lab)]

On the rail network and fare increases, is the Minister aware that the proposed formula increase outlined in the CSR—that is, RPI plus three—will mean a cumulative increase of approximately 33.5% by 2015? That means, on the Newcastle to London line, an increase up to £500 for first class and £350 for second class—

[Mr Speaker]

Order. May I remind Members, both Back Benchers and Front Benchers, because I think they have forgotten, that topical questions and answers are supposed to be shorter? I think the Minister has got the thrust of the question, although the hon. Gentleman is certainly not the only offender, by any means.

[Mr Hammond]

I can do no better than refer the hon. Gentleman to my earlier exchange with the Opposition Front-Bench spokesman.

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

May I ask the Minister for special consideration for communities in the south-east that had RPI plus three imposed on them by the previous Labour Government in 2006?

[Mrs Villiers]

I am well aware of the concerns of users of the Southeastern franchise who have been asked to pay RPI plus three over the past few years. That was linked to investment in rolling stock, and the rest of the country will move on to RPI plus three to even out the perceived inequality from the year after next.

[Lilian Greenwood (Nottingham South) (Lab)]

On Tuesday, the Secretary of State seemed to think me most ungrateful because I did not thank him for the tram extensions. I am sorry to disappoint him, but the people of Nottingham South sent me here to do things, not just to say thanks. Does he accept that the tram on its own will not solve the problems, particularly for freight traffic, caused by congestion on the A453? It really is vital that the widening scheme goes ahead.

[Mr Hammond]

I hear what the hon. Lady says. I repeat what I said on Tuesday: Nottingham has got a good deal out of the announcements that have been made over the past week or so. The A453 scheme remains in the development pool, which means that we will take it forward with further work. An announcement will be made during the course of 2011 on which of those schemes will be funded.

[Martin Vickers (Cleethorpes) (Con)]

I welcome the reply of the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker) to my hon. Friend the Member for Brigg and Goole (Andrew Percy) in connection with the delay to the A160 upgrade on the access road into Immingham docks. The Under-Secretary will be aware that the delay puts increasing pressure on the town of Immingham, and that the A18/A180 link road was given the amber light on Tuesday. Will he agree to meet me and the local authority to discuss how we can bring the work forward?

[Norman Baker]

I accept the hon. Gentleman’s legitimate point about that connection, and I am happy to meet him—perhaps it might be helpful if that happened at the same time as the other meeting that I agreed to earlier.

[Bill Esterson (Sefton Central) (Lab)]

In a letter to me, the Under-Secretary confirmed the good news about the Switch island to Thornton relief road, but he used the phrase “increased local contributions”. Can the Secretary of State tell me now what he expects those contributions to be?

[Mr Hammond]

I believe that the letter the hon. Gentleman refers to talks about the need for discussion to be held with local authorities on the cost of schemes and local contributions. As I said on Tuesday, when we are spending taxpayers’ money, we have an absolute duty to ensure that we have explored every opportunity to minimise the taxpayer contribution and the cost. That is what we will do, but he has approval for the scheme and it will go ahead. We will engage with his local authority to ensure that it is as efficient as possible.

The Minister for Women and Equalities was asked—

[Margaret Hodge (Barking) (Lab)]

1. What recent representations she has received on the likely effect on women victims of domestic violence of reductions in funding to Supporting People programmes.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

We have received no such representations. However, we have been meeting a number of organisations that provide support to women who are victims of domestic violence, and most recently my hon. Friend the Minister for Equalities met the chief executive of Refuge to discuss exactly that issue. I am pleased to be able to tell the right hon. Lady that following widespread consultation with the voluntary sector, the Government have committed to providing £6.5 billion to the Supporting People programme over the next four years.

[Margaret Hodge]

That is, of course, a real-terms cut in the supported housing programme. Women’s refuges also get their money through housing benefit and, at present, they are allowed to charge rates above the local housing cap, and therefore access more benefit than the cap would allow. Will that exemption continue, given the decisions that have been taken to impose that housing cap across all areas of the country?

[Mrs May]

I thank the right hon. Lady for her concern in relation to support for refuges. We will consult on welfare reform proposals more widely, and that issue can certainly be considered. In relation to the support that refuges provide for victims of domestic violence, I am pleased to tell her that this Government have been able to extend until the end of this financial year the pilot period of the sojourner project dealing with victims who have no recourse to public funds. That is another matter on which we are considering longer-term solutions to ensure that refuges can provide support for the women who need their services.

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

Will the Minister ensure that all domestic violence centres have access under one roof to welfare, housing and the criminal justice system so that the victim can access them at one single point as is the case at the Croydon family justice centre?

[Mrs May]

I am grateful to my hon. Friend for mentioning the very good model at the family justice centre in Croydon, which is based on an experience that was developed in New York. I was pleased to visit a centre in New York a couple of months ago and see the benefits there. The Croydon model is a very good one, but it will not necessarily fit all areas. In more rural communities, for example, a single point might not be the answer. Some very good work has been done by Cherwell district council on how to ensure that there is inter-agency working in rural areas where a single physical centre is not always the answer.

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

May I press the Minister on her answer to my right hon. Friend the Member for Barking (Margaret Hodge), as there is considerable concern about this issue? The Supporting People budget is being cut by 11% and the ring-fencing is being removed so that refuges and supported housing will have to take their chances among competing areas while local council budgets are being cut by more than 25%. The Minister has not explained what will happen to housing benefit support for those women who are going into refuges and who are badly in need of support and protection. I do not think her answer was sufficient, and I ask her to consider this further and provide the House with some reassurance. She will know that there is great concern that the spending review is already hitting women twice as hard as men. Will she stand up for women who may be affected by domestic violence and will she guarantee that there will be no reduction in help and support for women who badly need it?

[Mrs May]

I welcome the right hon. Lady to her position. She held the same position before the leadership elections within the Labour party, but I welcome her again now she has been reappointed. I am sure that we will have a number of interesting exchanges on this issue and I hope that we will work co-operatively on many areas of women’s issues and equality, as is right and appropriate.

The right hon. Lady asks about ring-fencing and the Supporting People funding, but the decision to remove that ring-fencing was first taken by the Labour Government because it has not been ring-fenced since 2009. On the question that the right hon. Member for Barking (Margaret Hodge) asked, a White Paper will be produced before the welfare reform Bill. It will be possible for people to make representations on specific issues such as the impact of housing benefit changes on refuges and for those representations to be taken into account.

[Mr Speaker]

The exchanges so far have been rather protracted. We need to do a bit better.

[Alison McGovern (Wirral South) (Lab)]

2. What discussions she has had with her EU counterparts on the co-ordination of member states’ action against human trafficking of women.

[The Minister for Equalities (Lynne Featherstone)]

Policy responsibility for human trafficking rests with my hon. Friend the Minister for Immigration. There have been no ministerial discussions with other EU member states on human trafficking. The UK plays an active role in combating this horrendous crime and will co-ordinate activities with our European partners where it is in the UK’s interests to do so.

[Alison McGovern]

Nothing undermines the dignity of women more than human trafficking and this modern-day slavery. Article 10 of the EU directive on trafficking requires all member states to provide necessary medical treatment to trafficking survivors. When will Britain set an example and sign the EU directive?

[Lynne Featherstone]

We have decided not to opt in to the European directive at the moment, but we are keeping a watching brief. When it is implemented, we might well decide to do so, but we are already doing most of the things required by the directive to a good standard and we do not want to be inhibited by introducing laws in this country. Several things that we do already would need transposing into legislation, but we do not need to make legislation to prove to the Commissioners what we are doing already.

[Mr Peter Bone (Wellingborough) (Con)]

May I urge the Minister not to opt in to the EU directive? I know that human trafficking is one of the Prime Minister’s priorities, but before we opt in we must consider whether we can do things better; I urge caution in this matter.

[Lynne Featherstone]

I thank my hon. Friend for his question. That is exactly the position that we have taken.

[Keith Vaz (Leicester East) (Lab)]

The question is about co-ordination. By which mechanism can the origin, transition and destination countries get together to deal with the problem of human trafficking?

[Lynne Featherstone]

We do that already without legislation. We have been very involved in Europe in terms of trafficking. Human trafficking is a key area under the Stockholm programme, which sets out the EU justice and home affairs priorities. We also helped to shape the draft EU trafficking directive and helped with the first Schengen evaluation on human trafficking. We are working closely with European colleagues. Quite frankly, it is better that we work in the countries of origin, as the right hon. Gentleman suggests, so that we stop trafficking at source by working with the Serious Organised Crime Agency, after which we should work at our borders and then in-country.

[David Mowat (Warrington South) (Con)]

3. What recent discussions she has had with the Secretary of State for Justice on the number of women given custodial sentences.

[The Minister for Equalities (Lynne Featherstone)]

The Government are committed to diverting women who do not pose a risk to the public from custody, and to tackling women’s offending. I met the Under-Secretary of State for Justice, my hon. Friend the Member for Reigate (Mr Blunt), who has responsibility for prisons and probation, on 28 July to discuss the community options available to the judiciary, and we agreed to work together on the issue. We noted that the women’s prison population has now reached a plateau. We are jointly supporting a holistic approach to diverting women from custody.

[David Mowat]

The Minister will be aware of the Corston report, which said that women who pose no threat to the public should not go to prison, owing principally to the attendant issues for children and the next generation, yet in the past decade, the number of women going to prison has increased by 100%, which is four times faster than the number of men going to prison. That cannot be right. What will we do to reverse that legacy?

[Lynne Featherstone]

The coalition is committed to diverting women away from crime and tackling women’s offending. We are taking a number of measures on alternatives to custody. There is a £10 million fund for women-only projects that is run by the voluntary sector and that supports community services. The bail accommodation support scheme means that we can support and mentor women on remand outside so that they do not have to go into the prison system. It is important that we move forward on this issue, because as my hon. Friend says, the knock-on consequences of short sentences for women are totally unacceptable and unproductive.

[Lorely Burt (Solihull) (LD)]

May I urge my hon. Friend to go a little further on the Corston report, which also recommends that we put women in small local centres to tackle the multiple problems that cause them to reoffend, so reducing the number of women in prison? The previous Labour Government said lots of warm words about the report, but did nothing. What will this Government do?

[Lynne Featherstone]

The Government broadly support all the Corston recommendations and have looked very closely at the recommendation to create another special sort of accommodation. However, we are committed to women not going to prison at all. We are looking at approved accommodation in the community where women can have a good balance between surveillance and support. The ambition is not to need the centres recommended in the Corston report, but keeping women out of prison is paramount.

[Karen Lumley (Redditch) (Con)]

4. What discussions she has had with the Secretary of State for Business, Innovation and Skills on the effectiveness of the women and work sector skills pathway initiative.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

That initiative is part of a broad range of action to improve equality in the workplace, an issue on which my hon. Friend the Minister for Equalities and I have had a number of discussions with colleagues in the Department for Business, Innovation and Skills. The forthcoming skills strategy will set out our approach to improving skills for everyone.

[Karen Lumley]

Will the Minister tell the House what the Government are doing to help women to get jobs in sectors in which they are currently under-represented?

[Mrs May]

We are taking a number of steps to ensure that we encourage women in areas in which they are not currently as highly represented, such as funding the UK Resource Centre for women in science, engineering and technology. The Government are, of course, committed to an additional 75,000 apprenticeship places by the end of the spending review period, and I am sure that we will do all we can to ensure that women take places in areas where they are not properly represented at the moment.

[Harriett Baldwin (West Worcestershire) (Con)]

5. What recent estimate the Government Equalities Office has made of the gender pay gap.

[The Secretary of State for the Home Department and Minister for Women and Equalities (Mrs Theresa May)]

In 2009, the gap between the median hourly earnings of men and women working full time was 12.2%. Including men and women working part time raises this figure to 22%. Those estimates are updated on an annual basis and the Office for National Statistics will provide estimates for 2010 in November. The Government are committed to promoting equal pay and taking a range of measures to end discrimination in the workplace.

[Harriett Baldwin]

I recently enjoyed watching the film “Made in Dagenham” and it struck me that it is now 40 years since the Equal Pay Act was enacted. Will the Secretary of State update us on what she plans to do to narrow the pay gap between men and women?

[Mrs May]

I had the opportunity of meeting four of the women who were campaigners in Dagenham, and they are as feisty today as they were 40 years ago. We need to address several issues when considering the gender pay gap. It is appalling that we still have such a gap 40 years later, but it is not simply about a legislative approach. Extending the right to request flexible working to all, introducing flexible parental leave and encouraging a wider range of choices in career options, especially for girls and young women, will all play their part in ending the gender pay gap.

[Miss Anne Begg (Aberdeen South) (Lab)]

I represent an area with the widest gender pay gap, where women earn only two thirds as much as men. I am especially concerned about the effects of the comprehensive spending review, including the number of women who will be made unemployed by the decisions taken and the cuts to housing benefit. What will the Government do about the gender income gap, not just the gender pay gap?

[Mrs May]

The hon. Lady raises the issue of the comprehensive spending review. Of course, we have had to introduce these measures as a result of decisions taken by the last Labour Government, which she supported, which have left this country in a parlous financial condition and meant that we have had to address this significant deficit. As a Government, we have been looking at equality impact assessments of the decisions in the spending review. It is interesting to note that when the Opposition spokeswoman on these matters was Chief Secretary to the Treasury, the then Labour Government did precisely zero equality impact assessments. They made no proper assessment of the equality impact of their decisions.

[Mr David Ruffley (Bury St Edmunds) (Con)]

6. When she plans to begin her proposed consultation on a new system for flexible parental leave.

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

7. When she plans to begin her proposed consultation on a new system for flexible parental leave.

[The Parliamentary Under-Secretary of State for Work and Pensions (Maria Miller)]

The Government are committed to encouraging shared parenting and making the workplace more family friendly. We will launch a consultation in due course on the design of a new system of flexible shared parental leave.

[Mr Ruffley]

There is a Brussels-inspired proposal to hike maternity pay to full pay for the first 20 weeks at a cost of £2.5 billion, according to the British Chambers of Commerce, which would be unaffordable for the British taxpayer and for small and medium-sized businesses. Given that we already have one of the best maternity rights regimes in Europe, will the Secretary of State tell Brussels where to get off and begin to repatriate employment and social legislation back to this place?

[Maria Miller]

I share my hon. Friend’s disappointment at the outcome of the first reading vote in the European Parliament. The measures that have been put forward are highly regressive and we do not support them. They would cost the UK at least £2.4 billion a year.

[Stephen Mosley]

It is desirable for fathers to be able to play a much larger role in the lives of their young children. However, the Government also need to take into account and support very small businesses, which may face pressures on their work force if key personnel have flexible time off. What discussions has the Minister had with the business community on the implementation of flexible parental leave?

[Maria Miller]

As my hon. Friend may be aware, one in seven working people now has a caring responsibility and the issue of balancing work and family life is of growing importance. The Government are committed to a strong culture of regulatory restraint so, in looking at the introduction of shared parental leave, we will consult fully with businesses, small, medium and large.

Business of the House

Thursday 28th October 2010 Commons Chamber

11:34

[Hilary Benn (Leeds Central) (Lab)]

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

[The Leader of the House of Commons (Sir George Young)]

The business for the week commencing 1 November will be as follows:

Monday 1 November—Remaining stages of the Parliamentary Voting System and Constituencies Bill (Day 1). In addition, my right hon. Friend the Prime Minister plans to make a statement on the European Council.

Tuesday 2 November—Remaining stages of the Parliamentary Voting System and Constituencies Bill (Day 2).

Wednesday 3 November—General debate on the report of the Bloody Sunday inquiry.

Thursday 4 November—General debate on the strategic defence and security review.

The provisional business for the week commencing 8 November will include:

Monday 8 November—Remaining stages of the Finance (No.2) Bill.

Tuesday 9 November—Opposition Day [5th Allotted Day]. There will be a debate on an Opposition motion. The subject is to be announced.

Wednesday 10 November—Consideration in Committee and remaining stages of the Equitable Life (Payments) Bill, followed by motion to approve a European document relating to economic policy co-ordination.

Thursday 11 November—General debate on policy on growth. The subject for this debate was nominated by the Backbench Business Committee.

Friday 12 November—Private Members’ Bills.

[Hilary Benn]

I thank the Leader of the House for his statement. Further to last week’s exchange about the Parliamentary Voting System and Constituencies Bill, and his letter to my hon. Friend the Member for Cardiff West (Kevin Brennan), the Government have published in draft a series of statutory instruments for Wales, Northern Ireland and Scotland. The one for Scotland is 205 pages long, and runs to 97 clauses and nine schedules, but Members will have no opportunity to debate or decide on the statutory instruments before the Report stage of the Bill begins next Monday.

The Government have just tabled 28 pages of amendments for Monday, some of which refer to the orders we have not yet had the chance to discuss, so, for the third time, may I ask the Leader of the House to explain to the House how this treatment of Members squares with what the Parliamentary Secretary, Cabinet Office, the hon. Member for Forest of Dean (Mr Harper), who is in charge of the Bill, said would happen? He gave us an assurance that

“on matters to do with elections this House should get to pronounce before the Bill goes to the other place…we will seek to achieve that.”—[Official Report, 18 October 2010; Vol. 516, c. 653.]

The Leader of the House has not achieved that, and the questions are: why and what will he do about it?

I turn to another matter on which there is considerable concern on both sides of the House. May we have a debate on the confusion surrounding the proposed changes to housing benefit? Yesterday, the Prime Minister could not explain why it is fair that someone who has been looking for a job for 12 months, but has not been able to find one, despite their best efforts, will have their housing benefit cut by 10%. Nor could he offer any advice to families who will be affected by this change and by the housing benefit cap. Instead, he simply said that the Government are not for turning.

Meanwhile, also yesterday, the Work and Pensions Secretary was said to be listening to MPs’ concerns. Well, there are plenty of concerns on the Government Benches and in City Hall. The hon. Member for Bermondsey and Old Southwark (Simon Hughes) has called the plan for a cap harsh. The hon. Member for Cities of London and Westminster (Mr Field) said that the proposals have ignored some of the huge logistical problems, and the Mayor of London has described them as draconian. Then, the Secretary of State for Communities and Local Government—the third of yesterday’s men, and the person who is actually responsible for housing—told listeners of the “World at One” that they did not need to worry because

“these new reforms don’t come in until 2013”.

In fact, the housing benefit cap will come into operation next April.

We have a Prime Minister who cannot justify the policy, a Communities and Local Government Secretary who does not understand the policy, and a Work and Pensions Secretary signalling that he might change the policy. In truth, the word “shambles” does not do justice to this mess, but it does make a compelling case for a debate, so may we have one?

As the Leader of the House has just announced, the Backbench Business Committee has chosen a debate on economic growth for 11 November. Will he persuade the Prime Minister to take part, so that he can try to explain how the loss of nearly 500,000 public sector jobs will help the economy to grow; how depriving universities of most of their funding for undergraduate teaching will enable the economy to compete; and how the absence of any central Government support for the new local enterprise partnerships will help them to make use of the regional growth fund? Is it any wonder that Richard Lambert of the CBI said this week:

“The Local Enterprise Partnerships have got off to a ropey start. So far, it has been a bit of a shambles”.

All in all, it has been a shambolic week for the Government.

Mercifully—and finally—there is one bright spot. Tomorrow, the House will for the second time extend a very warm welcome to the UK Youth Parliament, which will be debating in this Chamber. We have offered an annual invitation up until the next general election, but does the Leader of the House agree that the House should now make this a permanent fixture in the parliamentary calendar, so that every year henceforth we can celebrate the contribution that young parliamentarians make to the life of this country?

[Sir George Young]

I am grateful to the right hon. Gentleman for his questions. On the first issue, the undertaking given by my hon. Friend the Parliamentary Secretary has been honoured. On the territorial orders, the statutory instruments updating the rules for elections to the Scottish Parliament, the Northern Ireland Assembly and the National Assembly for Wales were tabled on 25 October. The orders were necessary to update the rules for elections, and they will be debated in the forthcoming weeks. The amendments to which the right hon. Gentleman refers were tabled as we said they would be, and they are required to deal with any consequential changes needed to reflect the new orders in time for debate. Everything we have done on the Parliamentary Voting System and Constituencies Bill has been to ensure that the House of Commons has the opportunity to debate the referendum rules, and that is what the Bill is about. We tabled the combination amendment a week before it was due to be debated in Committee and we laid the territorial orders in time to ensure that relevant amendments to the combination provisions could be covered on Report.

On housing benefit, we are trying to do what the right hon. Gentleman’s former Cabinet colleague, James Purnell. was also trying to do. This is what he said:

“The next issue to consider is housing benefit…so that people on benefits do not end up getting subsidies for rents that those who work could never afford.”—[Official Report, 10 December 2008; Vol. 485, c. 546.]

That is the thrust of our reforms to housing benefit. People who receive housing benefits should have the same choice on housing as people who are not in receipt of housing benefits. That is what is behind the reforms that we are proposing.

On the specific issues that the right hon. Gentleman raises, the housing benefit bill has almost doubled in 10 years, and is now some £20 billion. The caps to which he refers save some £55 million in the first year. That needs to be put in perspective. Of the 700,000 families in London who receive housing benefit, only 2.5% will potentially be affected by the cap.

The right hon. Gentleman will have heard my right hon. Friend the Housing Minister refer on the “Today” programme to £140 million of discretionary payments, available to those in receipt of housing benefit, at the hands of local authorities who need help to cope with the transition to a new regime. Against the background of the need to save public expenditure, the proposals we have introduced—some of which do not come into effect until 2013—are justified.

The right hon. Gentleman asks for a debate on housing benefit. There is a debate in Westminster Hall on the impact of the comprehensive spending review on the Department for Work and Pensions. The Select Committee on Work and Pensions is holding an inquiry into housing benefit, and Lord Freud will give evidence next Tuesday. I have announced an Opposition day the week after next, and it is perfectly open to the right hon. Gentleman to choose housing benefit as a subject in that debate. Indeed, it may come up in the main debate today.

The Office for Budget Responsibility says that unemployment will fall next year and every year after that. Employment is forecast to increase by about 1.4 million over the next five years.

I welcome the arrival of the members of the Youth Parliament in this Chamber tomorrow, and you will welcome them formally, Mr Speaker. I have no objection at all to the Youth Parliament becoming an annual event, but that will require the approval of the House of Commons.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Many right hon. and hon. Members are seeking to catch my eye. We have important business to follow, including heavily subscribed business, so brevity from Back Benchers and Front Benchers alike is essential.

[Pauline Latham (Mid Derbyshire) (Con)]

The Leader of the House may be aware that two large businesses in my constituency are closing or making people redundant. I wrote to the Secretary of State for Business, Innovation and Skills some time ago, and he promised he would try to fit in a visit to my constituency. Could the Leader of the House give me any advice on how I can impress upon the Secretary of State the urgency of such a visit?

[Sir George Young]

I understand my hon. Friend’s concern about the loss of jobs in her constituency. She will know that my right hon. Friend the Secretary of State for Business, Innovation and Skills will shortly make a statement. If she stays in her place, she may have an opportunity to put her question directly to him.

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

On 20 October, the Prime Minister, responding to my question, said that

“house building was lower in every year of the last Government than it was under the previous Conservative Government.”—[Official Report, 20 October 2010; Vol. 516, c. 946.]

That is simply not true. After checking with the Library, I wrote to the Prime Minister on 21 October, providing detailed statistical evidence to demonstrate the error, inviting him to put the record straight. The Leader of the House will be aware that the ministerial code of conduct, the most recent version of which was issued in May this year by the Prime Minister, says that

“it is of paramount importance that Ministers give accurate and truthful information to Parliament, correcting any inadvertent error at the earliest opportunity”.

I regret to tell the House that the Prime Minister has failed to correct the error to date and, indeed, despite a reminder, has not even responded to my letter. Will the Leader of the House draw the Prime Minister’s attention to this matter and remind him of his obligation to abide by the terms of his own code of conduct?

[Sir George Young]

I will pass the right hon. Gentleman’s comments to my right hon. Friend the Prime Minister. I am sure he will get a response to his letter, but I have to say that the last Government’s housing record was appalling. House building is at its lowest peacetime level since 1924; waiting lists for social housing have almost doubled; and the average number of affordable housing units built or purchased slumped by more than a third under Labour, compared with under the last Conservative Government.

[Duncan Hames (Chippenham) (LD)]

I am grateful to the Leader of the House for advance notice of Monday’s ministerial statement on the European Council. Although such ministerial statements are welcome, they have a disruptive effect on the agenda for the day’s business, so could we be given greater notice of such statements, including in the “Future Business” section of the Order Paper? That would help to give Members a little bit more time to prepare to participate in the debates.

[Sir George Young]

I understand the hon. Gentleman’s point. When we know statements are happening, we are giving advance notice of them more frequently than has been the case in the past. Inevitably, statements will do some injury to the remaining business of the day, but wherever possible we have given advance notice of ministerial statements to the House, as we have today.

[Natascha Engel (North East Derbyshire) (Lab)]

I welcome the Leader of the House’s statement that he supports the annual sitting of the UK Youth Parliament in this Chamber as a permanent fixture, but will he have a look at ensuring that whatever subject the UK Youth Parliament decides at its annual sitting to prioritise for its campaigns finds some traction in this Parliament as well? I am thinking of the issue of votes at 16 last year, which was never debated in this Chamber. Will the right hon. Gentleman look at finding time to debate in this Chamber whatever the Youth Parliament chooses as its campaign priority tomorrow?

[Sir George Young]

With the greatest respect to the hon. Lady, the solution lies, as she knows, in her own hands, as she is the Chairman of the Backbench Business Committee, which can find time for such topical debates. I very much enjoyed attending her salon on Monday—an interesting new procedure, opening up the House’s agenda to all hon. Members. I also welcome her presence tomorrow, when she will conclude the debate and my hon. Friend the Deputy Leader of the House will represent the Government. I am sure that the event will be an astounding success.

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

Today, as on every other day, thousands of severely disabled people and their carers will suffer the unenviable choice of deciding whether to go out in the hope that there will be sufficient toilet facilities to ensure that they can keep their dignity or to stay at home—a choice that they should not face. May we have a debate to discuss how we can do more to ensure that those who want to go out can go out, however disabled they are?

[Sir George Young]

I am grateful to my hon. Friend. I am aware of the changing places programme, which has been successful in getting more toilet facilities for severely disabled people built in town centres, including, recently, in Crewe. I suggest that my hon. Friend seek an Adjournment debate so that this campaign can receive wider traction.

[Joan Walley (Stoke-on-Trent North) (Lab)]

On 7 July, the Secretary of State for Education told me that

“Stoke-on-Trent, as a local authority that has reached financial close, will see all the schools under Building Schools for the Future rebuilt or refurbished.”—[Official Report, 7 July 2010; Vol. 513, c. 490.]

Given the points of order in the House last Monday, and the media speculation that Building Schools for the Future might be affected by the pupil premium, will the Leader of the House arrange for an urgent debate on the funding for BSF, so that people in constituencies all across the country, including Stoke-on-Trent, can have some certainty about the multi-million pound programme for schools investment on which they are now negotiating?

[Sir George Young]

The pupil premium is not being funded out of the schools programme. It is being funded from elsewhere in the Department’s budget and from savings in other parts of Whitehall. There is £15 billion- worth of investment going into new schools’ capital. On the specific issue of Stoke, I will ask the Secretary of State for Education to write to the hon. Lady.

[Richard Fuller (Bedford) (Con)]

My right hon. Friend might be aware of the recent announcement by the National Endowment for Science, Technology and the Arts on establishing the big society finance fund, which will stimulate new ways in which social enterprises can raise capital to support their initiatives in local communities. With local councils up and down the country now facing cuts in much-needed and much-valued local services, will my right hon. Friend consider holding a debate on how we can increase capital and funding for social enterprises?

[Sir George Young]

I agree with my hon. Friend on the importance of social enterprises having access to funding in order to take forward their initiatives. He will know, for example, of a new initiative on the prisoner discharge programme, which I hope will yield results. I entirely support his attempts to have a debate, either in Westminster Hall or through the Backbench Business Committee or in an Adjournment debate. The big society very much encourages the sort of social enterprises to which he refers.

[Sir Gerald Kaufman (Manchester, Gorton) (Lab)]

Has the right hon. Gentleman seen early-day motion 910?

[That this House expresses deep concern about the failure of Adactus Housing Association of Manchester to reply to repeated correspondence, dating back to early July 2010, from the right hon. Member for Manchester, Gorton with regard to a constituency case; and reminds Adactus that those seeking to defend social housing at this present crucial time are handicapped if social housing associations fail in their duty of accountability.]

It refers to the failure, after four months, of the Adactus housing association in Manchester to reply to me about the concerns of a constituent of mine. Will he ask the Secretary of State for Communities and Local Government to clarify what remedy is available to tenants of social housing, so that they can get the accountability to which they have a right?

[Sir George Young]

I apologise for any discourtesy to the right hon. Gentleman on behalf of the housing association. He is entitled to a reply on behalf of his constituent, and I will raise this matter with the Secretary of State. I think I am right in saying that there is an ombudsman who can deal with complaints from social housing tenants.

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

May I congratulate my right hon. Friend on publishing a very useful card showing the dates of the sitting days of this Parliament, as well as the recess dates, for many months ahead? I congratulate him on this tremendous innovation. It gives me great satisfaction that this has been introduced not by some manic young moderniser but by a true Conservative who was educated at Eton and Oxford.

[Sir George Young]

rose—

[Mr Speaker]

Order. That question was extremely amusing, but it suffered from the disadvantage of having made no request whatever for a statement or a debate. There will therefore be no reply to it.

[Mrs Madeleine Moon (Bridgend) (Lab)]

As we are approaching Halloween, may I please ask the Leader of the House to send out a plea on behalf of women such as Sally Joseph, one of my constituents and a member of the Women’s Food and Farming Union, about the use of Chinese lanterns? These lanterns are marketed as being eco-friendly and biodegradable, but they contain wire frames and bamboo, which can be dangerous to livestock if they land on farmland. Can we please urgently ask our constituents not to use them?

[Sir George Young]

rose—

[Mr Speaker]

Order. The hon. Lady should ask for a debate or a statement.

[Sir George Young]

I support the hon. Lady’s request for a debate or a statement on Chinese lanterns, which I know from farmers in my own constituency can do real damage to livestock. I also understand that alternative components can be used in these lanterns and I will raise with the Secretary of State for Environment, Food and Rural Affairs the question of whether they could be promoted as an alternative to the ones that cause the damage.

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

From this Saturday, 30 October, to the following Saturday, 6 November, it will be British pub week. This will be a great opportunity to celebrate the British pub, and I urge all hon. Members to join the all-party save the pub group and to visit a pub in their constituency. I include you in that invitation, Mr. Speaker. From memory, I think I still owe you a pint. May I ask the Leader of the House whether we can have a debate on the future of the pub, and a statement from the Government on when they are going to establish a cross-departmental strategy on the future of this important cultural and social institution?

[Sir George Young]

I commend my hon. Friend for his campaign for the British pub, which has been sustained over many years. I remember attending a meeting, which I think he had convened, during the last Parliament, at which there was an enormous number of Cabinet Ministers, demonstrating the importance of this subject. I am sure that Members need no encouragement to go to their local pub and celebrate British pub week in a traditional way. I will certainly pass on to appropriate colleagues his suggestion for a cross-departmental working party to ensure that this important British institution can flourish.

[Stewart Hosie (Dundee East) (SNP)]

May we have an urgent statement on the decision to increase the interest rate on loans from the Public Works Loan Board by 1%? This will cost public bodies such as local authorities an extra £1.3 billion over the next four years and has the potential to do a huge amount of damage to financial planning, capital investment and jobs. May we have a statement from a Treasury Minister on that specific matter?

[Sir George Young]

I understand the hon. Gentleman’s concern, but we must also consider the other side of the balance sheet—the revenue that comes in. We are shortly to debate the comprehensive spending review. I do not know whether he was planning to intervene, but I imagine that it would be appropriate to raise that matter in the debate and to press the Minister for an answer.

[Robert Halfon (Harlow) (Con)]

In my early-day motion 914, I note Lord Mandelson’s recent conversion to becoming a strong supporter of the big society.

[That this House welcomes Lord Mandelson's recent conversion to being a supporter of the Big Society, widely reported in the national press; further welcomes his comments that the Government's welfare and education reforms are ‘moving in the right direction'; is glad that Lord Mandelson has wholly rejected his earlier position of April 2010, when he said that the Big Society was ‘neither practical nor realistic'; congratulates him on his statement of October 2010 that ‘we will have to find more of our solutions from within the communities that make our society'; and therefore calls on the Government to thank Lord Mandelson for his support, and to welcome him into the Big Society tent.]

Does the Leader of the House not agree that it is now more urgent than ever to have a debate on the big society so that we can welcome more Opposition Members to the big society big tent?

[Sir George Young]

I am grateful to my hon. Friend for that question, and I have early-day motion 914 here in front of me. It is probably the only EDM with Lord Mandelson in its title. We welcome converts to the big society, and I welcome what my hon. Friend has been doing in that regard. If he can persuade more former Members of the House to subscribe to the big society, no one would be happier than me.

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

May I press the Leader of the House again on the urgent need for a debate on the Government’s plans for housing benefit? The Government simply do not appear to appreciate the misery, the poverty and the homelessness that the cuts will cause, not only to those who are seeking work but, because housing benefit is also an in-work benefit, to hard-working, low-income families and pensioners.

[Sir George Young]

Next Thursday, there will be a debate in Westminster Hall on the impact of the comprehensive spending review on the Department for Work and Pensions. That would be an entirely appropriate forum for the hon. Lady to share her concerns about the impact of the changes, and to get an adequate response from the Minister who will reply to the debate.

[Andrew Stephenson (Pendle) (Con)]

On Friday, I met John Bottomley, managing director of JKB Shopfitting in Nelson. Like a number of other manufacturing firms in Pendle, the firm is currently doing so well that it has outgrown its premises. Sadly, however, the local council and the chamber of commerce tell me that there are no grants available to help the firm to relocate within the borough; nor were there any such grants under the previous Government. As I know of several other firms in the area that are constrained by their old premises, may we have an urgent debate on what more the Government could do to help Pendle businesses to expand?

[Sir George Young]

My hon. Friend will have heard me announce a debate on the subject of growth, as the choice of the Backbench Business Committee, in the next fortnight, which will provide him with an opportunity to discuss this matter. The Government want to ensure that the financial sector can supply affordable credit to businesses such as the one he describes, and we would like to see more diverse sources of finance for small and medium-sized enterprises, including, where appropriate, access to equity finance.

[Mr Wayne David (Caerphilly) (Lab)]

The Prime Minister misled the House yesterday—[Hon. Members: “Oh!”]

[Mr Speaker]

Order.

[Mr David]

I am sure that it was inadvertent, as we all know. He said that Labour MEPs had voted in favour of an increase in the EU budget, but that is not the case. They voted against the increase. When the Prime Minister makes his statement to the House on Monday, perhaps he could correct the inadvertent mistake that he made.

[Sir George Young]

I refer the hon. Gentleman and the House to amendment 12 of the vote of 20 October, which clearly states the need to take into account the fiscal restraint being shown by member states, and calls for a freeze in the annual budget at 2010 levels. Conservatives and Liberal Democrats voted in favour; Labour voted against.

[Julian Smith (Skipton and Ripon) (Con)]

May we have a debate on the possibility of a freeze on new employment law for 2011 and the inclusion of that idea in the Government’s forthcoming growth White Paper, which would enable British business to focus solely on job creation, wealth and growth in 2011?

[Sir George Young]

I entirely agree with my hon. Friend. He will know of our policy of what we call “one in, one out”. In other words, if a new regulation is introduced, an existing one must go. I hope that that and other initiatives will reduce the amount of bureaucracy and red tape that small and medium-sized enterprises have to cope with.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Given the importance of woods and forests to biodiversity, tackling climate change and our quality of life, will the Leader of the House arrange an urgent debate on the Government’s shocking plans to sell off to private developers part of the Forestry Commission estate which includes some of our most ancient woodlands?

[Sir George Young]

The hon. Lady will have an opportunity to raise that with appropriate Ministers on 4 November. I should point out, however, that the Forestry Commission has been buying and selling woodland for some time. I do not think that the concept of more of it being in the private sector is entirely new.

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

The Leader of the House is aware of my concern about the cases of two of my constituents, Noreen Akhtar—whom I call the secret prisoner—and Andrew France, who have been bullied and threatened in an attempt to stop them talking to me. Having discussed the matter with colleagues, I find that the problem is more widespread than I initially thought. Would the Leader of the House consider arranging a statement or a debate on the issue, so that we can canvass and discover how widespread such instances are?

[Sir George Young]

I think that my hon. Friend is seeking to draw me into areas related to privilege which are very much above my pay grade, but you, Mr Speaker, will have heard what he has suggested. I have written to him in the last day or so, suggesting other ways in which he might pursue his concerns.

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

A response from the Government to a consultation on the use of body image scanners at airports is overdue. Will the Leader of the House urge his colleague the Secretary of State for Transport to publish a response as soon as possible, so that concerns about the appropriate balance between the protection of privacy and dignity on one hand and security on the other can be addressed?

[Sir George Young]

I understand the hon. Lady’s point. At its heart is the balance between security and dignity to which she has referred. Transport questions took place earlier today, so the opportunity may not occur again for three or four weeks, but in the meantime I will write to my right hon. Friend the Secretary of State for Transport and see whether he can shed some light on when the outcome of the consultation will be known.

[Tony Baldry (Banbury) (Con)]

May we have a debate on the timetabling of Bills? In the present Parliament, should it not be much more transparent? If the Government and the Opposition, through the usual channels, agree on periods for timetabling, should that not appear on the Order Paper as a matter of public record?

I am sure that the Government and the Opposition agreed on the amount of time to be allotted to the Committee and Report stages of the Parliamentary Voting System and Constituencies Bill, but the Opposition have spent more time drifting through the Division Lobbies than diligently debating the detail of the Bill on the Floor of the House, and have then complained—

[Mr Speaker]

Order. I am sure that what the hon. Gentleman is saying is learned, but I am afraid it is a disquisition. What I want is a one-sentence question to the Leader of the House.

[Tony Baldry]

My one-sentence question occurred at the beginning of my disquisition, Mr Speaker, and I am sure that the Leader of the House got the drift of it.

[Sir George Young]

My hon. Friend has raised an issue that is important to the House as a whole. In the 1997 Parliament, when I was shadow Leader of the House, occupying the position now occupied by the right hon. Member for Leeds Central (Hilary Benn), I put my name to timetable motions when we, as an Opposition, were satisfied they provided a sensible way of dealing with a Bill. That got rid of some of the problems identified by my hon. Friend. I hope that, given a new and, I am sure, reforming shadow Leader of the House, we can have sensible discussions about whether we can achieve consensus in relation to at least some Bills, so that we can make the best possible use of the time that is available for the House to deal with important Bills.

[Chris Bryant (Rhondda) (Lab)]

The Leader of the House is a tall man, but we should all look up to him even more if he were not to resort to sharp practice to get the Bill through next week. As was pointed out by my right hon. Friend the Member for Leeds Central (Hilary Benn), the Government have tabled 28 pages of amendments for debate on Monday, not a single one of which was called for during earlier debates on the Bill or by any Back Bencher. Many of those amendments refer directly to the Scottish Parliament (Elections etc.) Order 2010, which will not have been debated by Monday. Does that not constitute gross presumption of what the House may choose to do in the future, and does it not put the cart before the horse?

[Sir George Young]

The hon. Gentleman said that I was a tall man; I say to the hon. Gentleman that he is, at times, a verbose man.

We have provided five days for the Committee stage of the Parliamentary Voting System and Constituencies Bill, and two days for Report. I consider that to be a generous provision, and much of that time so far has been spent by the hon. Gentleman speaking at length from the Dispatch Box. [Interruption.] Moreover, some of the time was not used last week when the House rose early. The House has been given adequate notice of the issues on the Order Paper, and we shall have ample time next Monday and Tuesday to deal with the amendments that have been tabled. [Interruption.]

[Mr Speaker]

Order. The hon. Member for Rhondda (Chris Bryant) gives every indication that he is auditioning to become a football commentator, ensuring that we have the benefit of his narrative on every aspect of the proceedings. It is richly enjoyable, but not altogether necessary.

[Mr Peter Bone (Wellingborough) (Con)]

May I ask my mature, non-manic, well-educated right hon. Friend whether we can have a debate on the House of Commons calendar covering business until 2012? Although it is very useful, it seems to have omitted from the shaded areas the additional days that the Government have promised for private Members’ Bills.

[Sir George Young]

My hon. Friend is right. It does appear from the calendar that the House will not be sitting on any Friday after, I believe, June. He should, however, note the small print at the bottom of the calendar, which states:

“Please note that all dates are provisional”.

It is indeed the case that the House will sit on some Fridays beyond June 2011, and the calendar may well be updated at a later date to include extra Fridays. However, they will be within what I might call the “brown envelope” that appears on the calendar. We will not suggest that the House should sit on Fridays in the middle of recesses.

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

There is now plenty of evidence that children who come from homes in poverty fall behind their peers from the age of 22 months, and a huge body of evidence suggesting that early intervention is incredibly important to vulnerable children and children with special needs. May we have an urgent debate on the issue, given that it is now becoming clear that the pupil premium will not be paid to children under five?

[Sir George Young]

I am not sure that that is entirely the case. I hope that the hon. Lady will welcome the introduction of the pupil premium, which was designed precisely to target the problem that she has identified: the underachievement of children from poor households. I am sure that the next instalment of questions to the Secretary of State for Education will provide an opportunity for her to raise it, and I will seek to clarify the issue of the extension of the pupil premium to those below the age of five.

[Philip Davies (Shipley) (Con)]

In the light of the comment by the Lord Chief Justice that far too many violent and persistent offenders are getting away with a caution, may we have a statement from the Secretary of State for Justice—as a matter of some urgency—so that we can discover what the Government are doing to address those legitimate concerns, and ensure that those who should be sent to court and to prison are sent to court and to prison rather than getting away with a caution?

[Sir George Young]

As my hon. Friend will know, my right hon. Friend the Lord Chancellor is planning to issue a White Paper, or possibly a Green Paper, on sentencing policy. I hope that that will provide a framework for the debate on which my hon. Friend has just launched himself.

[Mr Andy Slaughter (Hammersmith) (Lab)]

The cumulative effect of the Government’s housing policies on security of tenure, near-market rents and capital expenditure, as well as housing benefit, is the greatest threat to social cohesion for a generation. I would not go as far as the Mayor of London and describe this as Kosovo-style social cleansing for fear of upsetting the Deputy Prime Minister, but may we have a debate—in the Chamber, not in Westminster Hall—on social cleansing and gerrymandering in our inner cities?

[Sir George Young]

It is important to use careful language in the debate about housing benefit, and the use of phrases and words such as “social cleansing” or “Kosovo” in that regard is not appropriate.

I do not think that it is going to happen. The hon. Gentleman will know that, in many parts of the country, private sector rents are set to hit the cap. It follows that, in many parts of the country, when the cap comes down, so will the rents. There are discretionary grants, to which I have referred, to help families in his constituency who have difficulty with the social reform. Despite what he says about Westminster Hall, it is an appropriate forum in which to debate these issues. The Opposition have an Opposition day in a fortnight’s time and they are entitled to debate housing benefits, if that is their priority.

[Kevin Brennan (Cardiff West) (Lab)]

May we have a debate on teaching George Orwell in our schools and particularly his essay “Politics and the English language”, so that pupils might be able to understand the double-speak of a Government who describe what is a real cut in school spending per pupil as a pupil premium?

[Sir George Young]

If the hon. Gentleman looks at the comprehensive spending review, he will see that there is a flat-cash settlement in terms of pupils, on top of which there is a pupil premium; that is in addition. He should look at what other Departments have had to do and at the plans that his own party had. Had it won the election, he would have found there were real cuts in that budget.

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

May I reinforce the calls for a debate on the housing benefit changes? This is a Government proposal and we should have a debate in this Chamber in Government time for the reasons given. What about a couple in their 50s living in a three-bedroom council property, the family home, which their children have now left? In future, because that couple will be deemed to be under-occupying that property, if they lose their job or go into short-time working, the rent will not be covered by housing benefit. They face the prospect of becoming homeless and will not be covered by the homelessness legislation. The proposal is unfair and unacceptable. We need a debate on it in this Chamber in Government time.

[Sir George Young]

As I said in response to the right hon. Member for Leeds Central, our policies are seeking to achieve the objectives of Mr Purnell, a former colleague of his, in ensuring that those who are on housing benefit are confronted with the same choices on housing as those who are not in receipt of that benefit. There will be an opportunity to debate the housing changes. Some of them need primary legislation and some need secondary legislation, so the Government will provide time to debate them as the opportunity presents itself.

[Valerie Vaz (Walsall South) (Lab)]

One of my constituents, Andy Brown, has been offered the seasonal flu vaccine but only in combination with the swine flu vaccine. The swine flu vaccine is causing Guillain-Barré syndrome. Can the Leader of the House make urgent representations to the Secretary of State for Health to instruct GPs to offer patients the choice of a separate vaccine?

[Sir George Young]

I will share the hon. Lady's concerns with my right hon. Friend the Secretary of State for Health and perhaps ask him to write to her before he takes the rather dramatic action that she has proposed of writing to every GP.

[Graham Jones (Hyndburn) (Lab)]

Will the Leader of the House ask the Secretary of State to make a statement on the Export Credits Guarantee Department strategy on supporting British exports? I have two companies in my constituency trying to export high-value products to Russia—Emerson and Renwick and Grahame and Brown. German Government grants are undercutting the loan value and it is impossible for us to export in those conditions so we do not have a level playing field. I hope that the Secretary of State can give a statement on the issue.

[Sir George Young]

I am entirely in favour of firms in the hon. Gentleman’s constituency winning export orders and providing jobs in his constituency. I will raise with the Secretary of State for Business, Innovation and Skills the issue of there perhaps being an unlevel playing field and ask him to write to the hon. Gentleman.

[Mrs Sharon Hodgson (Washington and Sunderland West) (Lab)]

May we have a debate on the disproportionate, negative effect that the Government’s policies are having on the lives of women and children, particularly the most vulnerable women and children? Can the Leader of the House explain how those policies are fair without blaming the previous Labour Government, because after all these are his Government's choices?

[Sir George Young]

We have just had questions to my right hon. Friend the Minister for Women and Equalities. I am not sure whether the hon. Lady was in the Chamber, but she would have had an opportunity to raise those issues with my right hon. Friend an hour ago.

[Albert Owen (Ynys Môn) (Lab)]

May we have an urgent debate on port infrastructure and the link to offshore wind development? This week the Department for Business, Innovation and Skills and the Department of Energy and Climate Change both announced that the £60 million set-aside for UK ports would go to England only, with the Barnett consequential going to Wales. That is a reserved matter for this Parliament. Surely Welsh and Scottish ports should have a level playing field in applying for that subsidy.

[Sir George Young]

Of course I understand the hon. Gentleman's concern and I will raise with the appropriate Minister the distribution of grants for assistance to ports within the UK.

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

A review of dangerous dogs legislation was initiated in March under the previous Government. The review concluded in June and, despite repeated requests from me and others at Business questions and in writing, the Government, four months later, have still to respond. Will the Leader of the House please urge the Secretary of State to update the House on the review of that legislation before, like John Paul Massey, who tragically died in my constituency last December, another child is savaged by a dangerous dog?

[Sir George Young]

The short answer is yes and I very much regret the incident that the hon. Lady has referred to. There are questions to the Home Office on 1 November, when she may have an opportunity to raise the matter.

[Bill Esterson (Sefton Central) (Lab)]

Will the Leader of the House ensure that Ministers give adequate notice of visits to Members’ constituencies? On Tuesday evening, I received an e-mail notifying me of a visit by the roads Minister, the Under-Secretary of State for Transport, the hon. Member for Hemel Hempstead (Mike Penning), on Wednesday morning, which gave me inadequate time to be there myself. Sefton council was notified of the visit on Monday morning, two days earlier. Will the Leader of the House investigate why the local authority was given notice 36 hours before I was?

[Sir George Young]

It is important that Ministers notify Members when they are visiting Members’ constituents and give them adequate notice. I will of course raise with my hon. Friend the Minister the incident that the hon. Gentleman has referred to and ask him to write to him.

[Mr Speaker]

I am grateful to colleagues for their co-operation.

Local Growth White Paper

Thursday 28th October 2010 Commons Chamber

12:16

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

This Government's economic ambition is to build a more balanced economy, driven by private sector growth. Today I am announcing the publication of the Government's local growth White Paper, which sets out what that means for locally driven growth, job creation and the Government's role in supporting that.

The previous Government's policy sought to close the gap between the greater south-east and the rest of England through centrally led, unaccountable development agencies whose boundaries often bore no relation to the real economic geography. Ten years, and £19 billion later, the economy is still as regionally unbalanced as before, if not more so.

It is clear that that policy failed. Our new approach to sub-national growth therefore focuses on three key themes. The first is shifting power to local communities and businesses. Local communities and businesses are in the best position to understand the opportunities and needs of their own economies. Therefore, the Secretary of State for Communities and Local Government and I have asked business and civic leaders to come together with other partners, such as universities and the social and voluntary sectors, to form local enterprise partnerships which reflect natural economic areas.

We received 62 proposals and I am pleased to say that today we are asking 24 partnerships to progress and set up their boards. The list of those partnerships is in annex A of the White Paper, which will be laid in the House today. Together, those 24 partnerships represent more than 60% of the economy of England outside London and cover almost all our major cities. Many of the remaining proposals are well developed and we will welcome further proposals when they are ready. We are undertaking separate discussions with the Mayor and London boroughs on local enterprise partnerships in London.

The White Paper sets out a diverse range of roles which LEPs could take on, such as working with Government to set out key investment priorities, including transport infrastructure and supporting or co-ordinating project delivery; co-ordinating proposals or bidding directly for the regional growth fund; supporting high-growth business, for example through bringing together and supporting consortiums to run new growth hubs; and making representations on the development of national planning policy and ensuring that business is involved in the development and consideration of strategic planning applications.

We will reinforce that at national level by transforming the national Business Link website and establishing a national contact centre. We will provide support to businesses with high growth potential through a network of growth hubs and bring together venture capital and loan funds at the national level. We will support key industry sectors and innovation at national level, including through a network of technology and innovation centres.

UK Trade & Investment will have responsibility for promoting the UK overseas and helping exporters. LEPs will want to help investors to find sites and provide other support such as planning, infrastructure and support for skills.

We are committed to an orderly transition from the regional development agencies to the new delivery arrangements, and we will aim to ensure that all staff are treated fairly. RDA assets and liabilities will be transferred to other bodies through a clear and transparent process that is aimed at ensuring the best possible outcomes for regions and is consistent with achieving value for the public purse. Assets will be transferred with associated liabilities wherever possible. We expect the RDAs to manage down existing financial commitments within the funding envelope agreed in the spending review.

The second key theme is focused intervention. Today we are launching the regional growth fund, which will achieve strong growth and create sustainable private sector jobs. The first bidding round is now open to bids from private bodies and public private partnerships, and first-round bids will be submitted by 21 January 2011.

Some £1.4 billion is being made available over the next three years to encourage private sector investment across England by providing support for projects with significant potential for private sector-led economic growth and sustainable employment. Support will be provided in particular for bids from those English communities that currently are dependent on the public sector to help them to make the transition to sustainable, private sector-led growth. The advisory panel, chaired by Lord Heseltine, will provide an independent strategic view to Ministers on how the fund should be deployed to achieve its objectives. As with all major business investments undertaken under industrial development legislation, interventions will be subject to advice from the Industrial Development Advisory Board. That will ensure the highest possible level of commercial challenge through the process. Final decisions will be made jointly by a ministerial group under the chairmanship of the Deputy Prime Minister. The White Paper sets all this out in detail.

Thirdly, there has to be confidence to invest. An efficient and effective planning system is crucial in enabling growth. My right hon. Friend the Secretary of State for Communities and Local Government will soon bring forward policy and legislation to deliver that. In them, the Government will introduce a new duty to co-operate on local authorities, statutory undertakers and infrastructure providers, to ensure that the right people and groups share information and work together to make the best possible decisions for their area.

We will reform the planning system so that it is driven by communities and introduce a presumption in favour of sustainable economic development. We will fundamentally reform and simplify planning policy and guidance, presenting to Parliament a simple national planning framework that will cover all forms of development. This framework will establish economic growth as a Government priority for planning, and will lift many of the complex bureaucratic burdens that have slowed down decision making. The review of framework will be carried out in parallel with the localism Bill.

The Government are also committed to introduce a framework of effective incentives through the local government finance system to help to drive economic and housing growth at the local level. The Government’s new homes bonus will be the cornerstone of the new framework for incentivising growth in housing supply, creating a simple, transparent and permanent incentive that will be more effective than the failed top-down regional targets.

We have also looked at the incentives for business growth and decided that more can be done to give a strong and predictable incentive. We have considered ways of enabling councils to retain locally raised business rates. That means many local councils will be set free from dependency on central funding and it will represent a radical departure from the way in which the existing local government finance system operates. In considering this option, the Government are clear that businesses should not be subject to locally imposed increases in the burden of taxation that they do not support. We have already made it clear that businesses would have the right to hold a binding vote on any local authority proposals to introduce a local supplement on business rates. That is a principle to which we remain firmly committed. Equally, we will ensure that all councils have adequate resources to meet the needs of their local community. Rewarding growth is also about fairness in the local government finance system. Local business rate retention will be considered within the local government resource review, which the Government intend to launch in January after a period of consultation on the proposals in the White Paper.

To support renewable energy, we will be introducing a renewable energy bonus, which will mean that local authorities can keep the business rates from renewable energy projects. Finally, we will bring forward proposals for tax increment financing to allow local authorities to borrow against future increases in business rate revenues to pay for upfront infrastructure and development costs.

The measures set out in the White Paper complement the other measures the Government are taking to support growth and job creation through infrastructure investment; support for education and skills; improvements in competition; and support for research and innovation. This needs to be joined up with locally led action to improve the environment for business, and we are today putting in place the tools for this to happen.

[Mr John Denham (Southampton, Itchen) (Lab)]

I thank the Secretary of State for his statement, and of course I look forward to reading the White Paper when it is made available to the House.

Growth and jobs are of critical importance to every family and every region of the country. They are the best way to cut the deficit and the best way to offer hope to young people. The coalition Government will slash 500,000 public jobs and put 500,000 private sector workers out of work through their reckless cuts, but they claim they will create 2.5 million new private sector jobs over the next four years. There is no sign today that they can live up to that claim.

I do not suppose that the Business Secretary has ever used hair-restoring lotion, but if he had he would have discovered that just because it says “Promotes Growth” on the bottle it does not mean that growth will happen. It is very much the same with his Department and this White Paper. He calls it the Department for growth, but the comprehensive spending review led to its funding being cut by more than that of almost any other Department. Is it not true that just when growth is most important and business needs to be able to invest with certainty and confidence, this statement confirms deep cuts in growth funding, a shambles of local development organisations that will last for years, broken promises to the English regions, a planning system that will not work and delays in key investments?

This statement cuts the resources for regional development by at least two thirds. RDAs will receive about £1.4 billion this year, but the regional growth fund will have £1.4 billion over three years. Will the Business Secretary admit that the tiny regional growth fund will now have to pay for many activities that RDAs did not have to fund? The Minister for Housing and Local Government says it must pay for housing renewal. The Transport Secretary says it must pay for transport. It will invite national applications as well as those from local and regional schemes. Will the Business Secretary confirm that he expects the money to run out after one round of bids?

The Chancellor of the Exchequer once accused Lord Mandelson of writing cheques before the election, but what happened when the coalition set out to cancel them? They found that the investments made by Labour ensured that Nissan would develop electric vehicles, Ford would produce new engines and Vauxhall would maintain car production, and enabled Airbus to design and develop the A350, secured the next generation of offshore wind blades and supported the video games industry and start-up biotech companies. I am pleased Labour’s investments finally went ahead, but is not the truth that the coalition has now completely hamstrung itself in respect of making such investments in the future?

The regional growth fund is a pathetic fig leaf to cover absence of any growth strategy. It is not regional—all the decisions will be taken by two semi-retired politicians in London—and it is not much of a growth fund. As Sir Ian Wrigglesworth, deputy chair of the growth fund, said:

“One billion pounds over two years is not a lot of money and the amount you can do with it is limited.”

Will the Business Secretary admit that the Government’s reckless cuts mean that growth will be underfunded? Will he admit that if the coalition had adopted the responsible and measured approach to deficit reduction set out by the shadow Chancellor, public spending would have been cut by £30 billion less, allowing us to focus on growth?

Support for growth is not just about the level of public spending; it is about creating business confidence and certainty. What happened to the Business Secretary’s promise to the Yorkshire Post:

“What we have said is where RDAs are doing a good job and where the partners recognise they are doing a good job, they can continue in a similar form to what they have at the moment”?

Where is the evidence that business wants what he has announced today? Is not the director general of the CBI right to say that local economic partnerships

“have got off to a pretty ropy start. So far it’s been a bit of a shambles”?

Is not the Institute of Directors right to say that if local economic partnerships do not have money

“they’ll be little more than a toothless talking shop”?

Will the Business Secretary confirm that the local economic partnerships will have no start-up funding, no core funding, no guaranteed access to the regional growth fund, no new legal powers and no promises of money—for example, from the Department for Work and Pensions—to replace the future jobs fund? Will he confirm press reports that key areas such as the south-west and Lancashire will be left without a local economic partnership? Will he confirm that of places such as Hull, which is 11th in the deprivation index, Blackpool, which is 12th, Blackburn, which is 14th, and Burnley, which is 24th, none will have even a feeble local economic partnership, which other areas will enjoy? Will he confirm that RDA redundancy payments will cost nearly £500 million? Will he confirm that for the next two years, when growth is crucial, most businesses will have no coherent local development agency to talk to about key investments, key infrastructure decisions and major planning decisions? Is it not true that Wales and Scotland will enjoy coherent and focused business support and England will not?

The world outside cares little about the petty power battles between the Business Secretary and the Communities Secretary, but they, together, owed it to business and to the country to provide certainty, clarity, confidence and coherence for the future, and between them they have failed. Will the Business Secretary confirm that in so many other areas the coalition is failing to produce the conditions for growth? There is no plan for growth. How will cutting hundreds of thousands of training opportunities for adults help employers with the skills they need? What has happened to Labour’s plans to transfer responsibility for skills to employer-led organisations? At a time when every other OECD country apart from Romania is increasing higher education funding, how will cutting such funding produce the graduates we need?

More than 70 councils have started to withdraw or delay planning applications since regional strategies were scrapped. How does that give the construction industry the certainty it needs? The scheme for retaining business rates seems to build on Labour’s business rate supplement, but how much does the Business Secretary expect it to raise? Will it compensate for the 30% cut in local government funding? Does he believe that all councils will benefit equally, or will those facing the greatest challenges get less money from his new policy? Why are green industries laying off workers because of uncertainty about renewable energy policy? When the Government announced eight nuclear power stations, why did they not make the loan to Sheffield Forgemasters which would have made sure that specialist steel was made in Britain, not in Korea or Japan? The Government have turned off the tap on the drivers of growth and jobs. There is no plan for growth. They have given up on growth.

[Vince Cable]

Many of the specific questions about policy, the role of the local enterprise partnerships, the numbers, those that have been approved and the process of approval are dealt with in the White Paper, which is available at the Vote Office.

The whole premise of the right hon. Gentleman’s central arguments is that Government performance is measured by how much money is put in, not by what we get out of it. I will come to the performance of the regional development agencies in a moment. He repeats the argument, which he has done on several occasions, of how much money we should be spending on higher education, further education and regional development, and I have thrown the same question back at him in all our exchanges. We know that the outgoing Government were planning to cut the budget of this Department by 20 to 25%, but he has never explained where the money was going to come from. Was it from HE, FE, regional development or science? We have never had an answer and until we have one we cannot engage in a serious debate on priorities.

The RDAs were the focus of much of the right hon. Gentleman’s response. As I say, the issue is not how much the Government spend, but what they get out of it. The RDAs absorbed £19 billion over a decade, but what did they achieve? Their objective was to achieve a narrowing of the gap in growth between the north and the west midlands, on the one hand, and the south-east, on the other. If one studies the figures, one finds that in fact a widening divergence took place during the decade. The role of the RDAs in stemming that process was utterly ineffective. As the right hon. Gentleman said, the RDAs did, of course, have teeth, but they also had an enormous appetite and they consumed an enormous amount of resource with very little output. What the LEPs will have is the word “partnership”; the partnership will be between local communities and business, and this will be instead of the top-down Government-dictated approach to development.

The right hon. Gentleman asked about planning and the planning system. Let me review some of the legacy. The level of approvals for office, retail and industrial development, in a decade of relatively high growth, actually declined, while the rate of refusals increased. We have a system where every year £750 million is spent on consultancy fees and legal fees by people trying to get through the planning process. It is no wonder that very little happens. The system of planning guidance and advice that we inherited involves 7,000 pages of Government documentation; it is almost as complicated as the tax system that we inherited and it is equally dysfunctional.

The right hon. Gentleman mentioned, in passing, the key issue of housing, which is crucial not only to our population, but to local development on the ground. What is remarkable is that even in the highest boom year of 2008, fewer houses were built in Britain than at the depths of the recession of the early 1990s. In 2009, there were 118,000 housing completions, which can be set against an estimated growth in the number of households of 250,000. The system of planning and the support that the previous Government put in place failed utterly in this central task of development.

My final point is that we inherited a system of local government finance and decision making that was the most centralised in Europe. The only country in Europe that has a higher percentage of central Government funding for local government is Malta. We believe that the previous Government wanted to organise fact-finding missions to Malta to find out how they could improve by having that extra bit of centralised decision making. Our Government are trying to move to more decentralised decision making, based on local communities and a genuine partnership with business, and that is what will produce local growth.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A great many hon. and right hon. Members are seeking to catch my eye, but time is limited and we have a heavily subscribed debate to follow, so brevity from Back Benchers and Front Benchers alike is essential. Moreover, I should remind hon. and right hon. Members that they should not expect to be called unless they were in the Chamber at the beginning of the delivery of the Secretary of State’s statement.

[Margot James (Stourbridge) (Con)]

I congratulate my right hon. Friend the Secretary of State on bringing the private sector into the driving seat of the economic renewal that is very much required locally. The sector will be in partnership for the first time with local authorities, so that private business will have a seat at the table discussing infrastructure and planning matters at last. He has mentioned—indeed, we now have the White Paper—the 24 LEPs that he has approved. Will he say a little about the next steps for future LEP approvals? May I also commend my area’s LEP, the Black Country LEP, for which local business leaders have great enthusiasm?

[Vince Cable]

In terms of private sector participation, the LEPs will have boards that are split 50:50 between business and the local communities and will be chaired by business representatives. They will be driven by business, which has a direct interest in ensuring that growth takes place. It will be a change from a begging-bowl relationship to a partnership; that is the essence of this approach. The Black Country LEP is not on the first list. The assessment made was that there was not a sufficient business input into the proposal, but we hope it will proceed very quickly.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I endorse the comment made by my fellow black country MP, the hon. Member for Stourbridge (Margot James), about the quality of the black country LEP bid, and I hope that it will be favourably considered in future. May I focus for a moment on the Secretary of State’s comment about particularly welcoming bids from areas that are highly dependent on public sector employment? Such areas are often dependent on public sector employment because of the weakness of the private sector. Given that the public sector is under extreme financial pressures, can he explain how such areas will be able to put together the expertise, and have the people, time and resources, to make a bid to the regional growth fund that would be capable of balancing or rebalancing their regional economy?

[Vince Cable]

In terms of the process for dealing with the LEPs, we had what my colleagues call a traffic light system. Very good, imaginative proposals with a strong business input that meet the needs of economic geography were put through to the first group. Quite a lot of the proposals were yellow rather than green, and they are being processed. I hope that soon we will have a list. Some had no ambition and no private sector input, and we have simply told them that they need to think again.

It is easy, I think, to fall lazily into stereotypes about growth in areas dominated by public sector employment. I recently looked at the figures produced by my Department on the rate of growth of new company formation in different towns and cities in Britain. The best performance in the UK was in Sunderland, followed by Rotherham. They are not archetypal south-east of England growth areas. There is a lot of entrepreneurial potential across this country, and we want to encourage and develop it.

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

Why have Ministers not yet agreed a local economic partnership to cover Northumberland and Tyneside? Will whatever body is created have access to the assets that have been built up for the purposes of redevelopment and the income stream that those assets can give for continuing redevelopment work?

[Vince Cable]

As far as the north-east—in particular the Northumberland and Tyneside area—is concerned, we were disappointed that we got a very fragmented set of proposals. What has been agreed is that Teesside will go ahead; it is in the first list. Those behind four other LEP proposals that cover almost the whole region have now agreed to work together on a north-east basis. We think that that has great promise. We said that it needed a small additional amount of work and then it would get the go-ahead, and the kind of structure that my right hon. Friend wants will proceed.

As far as the assets are concerned, my Department has set up a working group that will help to manage the RDA asset disposal issue. As I said, we will try to manage this in a careful way, with assets and liabilities together. Some will be transferred, where appropriate, to local communities, councils or the LEP, but the criterion will be getting good value for money for the taxpayer. After all, this is taxpayers’ money and that is our primary requirement. There will not be gifts to local communities, but, in terms of maintaining the coherence and integrity of those developments, we will endeavour to keep them together.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I suggest very short questions and quick answers? That would be very helpful.

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

What the Secretary of State has announced today is very wrong. One NorthEast did a good job for the north-east of England. How can he justify some form of new localism when he is centralising every major decision in his Department and has been completely unable to answer the question of what will happen with residual assets and residual liabilities? Will he be far more specific on that point than he has been in answer to the right hon. Member for Berwick-upon-Tweed (Sir Alan Beith)?

[Vince Cable]

The process is necessarily complex and we are trying to balance a series of considerations—making order and keeping continuity, as well as getting value for money—and the White Paper explains that. As far as the north-east is concerned, I am disappointed that, faced with the challenge, there was a fragmented response. We are hoping to come to a satisfactory conclusion that will have a north-eastern group together with one for Teesside.

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

I want warmly to congratulate the team of Ministers on the presentation of these very positive proposals. I am confident that they will promote growth and help Cornwall realise its economic potential. Will the Secretary of State reassure businesses in my constituency, especially those involved in the port of Falmouth master plan, that financial support from the regional growth fund will be targeted at enabling new jobs in private enterprise?

[Vince Cable]

Yes, it is designed to do exactly that. I can confirm that Cornwall and Isles of Scilly is one of the LEPs that is going ahead in the first wave.

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

Given that the £80 million loan to Sheffield Forgemasters was all about providing strategic investment to the advanced manufacturing sector to promote private sector growth, may I take it from the Secretary of State’s statement about focused intervention that his early disastrous decision to cancel the loan will be reversed, or will he continue to dig his heels in in the hope that the issue will go away? I can assure him that it will not.

[Vince Cable]

We have discussed this extensively in the House and in the Select Committee, and we have explained that the situation we were confronted with was that that project was not affordable. If new projects come up from there or elsewhere, they can be considered by the regional growth fund on their merits.

[Mr Don Foster (Bath) (LD)]

May I thank the Secretary of State for allowing the west of England LEP to go ahead and advise him to educate the shadow Secretary of State on what those initials stand for? On the issue of the creative industries, does he agree that the creative industries could be one of the key drivers for growth in this country? Will he therefore assure us that the transformation of Business Link and the planned technology and innovation centres will be specifically directed to help them?

[Vince Cable]

My colleague is absolutely right that the contribution of the creative industries sector has been consistently ignored in the past. In terms of employment and value-added, it has at least as much growth as the financial services sector. I propose to work with my colleague in the Department for Culture, Media and Sport to bring the industry together to see what we can do to overcome the obstacles to its growth.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

Given that the Secretary of State was too frit to face concerned students today, I guess we should be grateful that he has had the courage to come to the House at all. Given that he is here, can he explain to an area such as mine, which has greater levels of deprivation and is further away from the natural engines of growth in the economy, how exactly he will guarantee that businesses will get the support they need, given the enormous and significant cuts in funding and the fact that there is no certainty at all in the current arrangements?

[Vince Cable]

I think I answered that in my statement. In areas that really matter to business, such as the availability of trained manpower, there will be, as the hon. Gentleman will remember from the outcome of the comprehensive spending review, an increased number of apprenticeships and increased commitment to innovation centres, for example. Those are the things that really matter.

[Richard Fuller (Bedford) (Con)]

My right hon. Friend will be aware of the enthusiasm in Bedfordshire for the proposed south-east midlands local enterprise partnership and the hard work of the Liberal Democrat mayor of Bedford for that initiative. Does my right hon. Friend agree that the response to the cry of “No funding” from Opposition Members is that the real cry here is, “No more central diktat on local growth and local funding”?

[Vince Cable]

My hon. Friend makes exactly the right point. This was a good example of cross-party working and it is about decentralisation and local decision making, rather than centrally driven decisions.

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

Will the Secretary of State explain how these arrangements could replace the vital work done by the Northwest Regional Development Agency in setting up the Daresbury science and innovation campus, which is now a national centre of scientific excellence, supporting biomedical centres across the north-west, including in Liverpool, and making Liverpool’s year as European capital of culture the tremendous success it was?

[Vince Cable]

I would certainly be interested in finding out more about the science and innovation centre. It might well prove to be a key component of the innovation centre programme that we want to roll out across the country and would probably receive rather more support from that than it has to date. We clearly need to do this in a planned and orderly way, and I look forward to hearing more about it.

[Duncan Hames (Chippenham) (LD)]

Businesses and business groups are more interested in the work and agenda of local enterprise partnerships than they are in their constitutions. Does my right hon. Friend share my concern that bids to establish the partnerships might as a result more closely reflect local political rivalries than the reality of business and labour market geographies?

[Vince Cable]

That was one of the dangers to which we were alerted. For example, when bids were simply a vehicle for local councils that wanted to create a local talking shop without proper involvement from business, they did not proceed. The bids that have been approved are businesslike, focused and well organised, and they will succeed.

[Rosie Cooper (West Lancashire) (Lab)]

The north-west feels that it was badly misled by the Government on the future of the Northwest Regional Development Agency. As we have not had sight of the Secretary of State’s decisions today on the successful 24 LEPs, will he tell us the status of the multiple bids made by Lancashire? What observations might he wish to offer Lancashire if they are not, as I suspect, one of the successful 24?

[Vince Cable]

Several of the best bids came from the north-west, including Greater Manchester and Liverpool city region. There is a problem with Lancashire as there are overlapping bids, fiercely competitive and different, and we are in the process of evaluating which are strongest on the criteria that we have set.

[Brandon Lewis (Great Yarmouth) (Con)]

I congratulate the Department. I know that businesses in Norfolk that have been working to put together an LEP bid are excited, despite what the shadow Secretary of State said, about the opportunities offered by an LEP. I know they will be disappointed to be part of the gap and not to have been approved at present. Can the Secretary of State please give advice to colleagues in Norfolk and in Suffolk about what they can do to put a successful bid together?

[Vince Cable]

The hon. Gentleman is right. Norfolk is not on the first list. We are hoping it will be successful. The advice that I would offer is for the different councils to work together collaboratively, to involve the local business community more actively than it has been, and to be ambitious in their aims.

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

Advantage West Midlands was the most successful regional development agency, generating £8.14 in the private sector for every £1 of public money invested. Does the Secretary of State share the clear concern expressed by the business community in the west midlands that the combination of, on the one hand, LEPs with no resource, one third of the funding previously available to them, and facing a land grab by the Treasury, and on the other hand, no strategic structure to promote and protect the vital automotive industry in the west midlands, will hit hard the midlands region, which faces 100,000 job losses as a result of last week’s spending review?

[Vince Cable]

I do not share the hon. Gentleman’s concern, because several of the strongest bids were from the west midlands, as he knows—Birmingham, Solihull, Coventry and Warwickshire, among others. The strategic oversight and the help that we need to give to the automobile industry—he is right to continue to emphasise that and to pursue me about it—will be pursued through the Automotive Council, which is one of our most successful sectoral bodies.

[Pauline Latham (Mid Derbyshire) (Con)]

In his letter to me of 10 September, the Secretary of State said that he would bear in mind a visit to Mid Derbyshire, where I have two companies that are losing all their jobs or greatly reducing them, and one great success story, a hosiery company called Pretty Polly and Aristoc. Will he come and explain to them the measures that he is putting in place, which I welcome and which I am sure they will welcome, so that he can tell them first-hand what we as a Government are doing?

[Vince Cable]

My colleague has been assiduous in pursuing me about that, and she is right to do so. That is what good constituency MPs do. There is an LEP for Derby and Derbyshire. It is one of the strongest, and I am happy to meet her to talk about the future or her specific concerns locally.

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

At present, £1.9 billion of England’s European regional development fund pot is still there to be spent, but in order to be drawn down, ERDF cash must be matched by other public or private sector funding, which was co-ordinated through the RDAs. I have been looking through the Minister’s booklet today and there is no clarification of the new structure. It states:

“The new delivery structure will be announced at Budget 2011.”

As the coalition has placed a freeze on RDA spending beyond March 2011, including match funding, can the Minister please clarify how we are to draw down crucial ERDF funds for places such as Teesside?

[Vince Cable]

The hon. Gentleman is right: we need to take maximum advantage of the regional funding available from the European Union. RDAs have a residual role in that, but the process of collating our bids and making sure that we get maximum value will be led by my right hon. Friend the Secretary of State for Communities and Local Government.

[Andrew Stephenson (Pendle) (Con)]

Businesses in Pendle and I are keen that the Pennine Lancashire bid, for which we have recently submitted additional information, will be approved soon. Will the Secretary of State reassure me that the remaining decisions on LEPs will be taken speedily?

[Vince Cable]

Yes, I can give that assurance. My colleague in the other place, Lord Greaves, has been bending my ear on that proposal, and it seems a good one, but we need to rationalise it.

[Valerie Vaz (Walsall South) (Lab)]

Will the Secretary of State state his intentions for the highly skilled and independent Planning Inspectorate?

[Vince Cable]

The development of the planning system and what that means for policy and operationally will be set out by my right hon. Friend the Secretary of State for Communities and Local Government. He is bringing forward very soon proposals on planning reform, and I am sure he will address that issue.

[Jeremy Lefroy (Stafford) (Con)]

I welcome the statement by my right hon. Friend and also the fact that the LEP for Stoke and Staffordshire has been approved. Given the importance of manufacturing in both my constituency, Stafford, and Staffordshire and Stoke-on-Trent as a whole, can he give us some news on the Manufacturing Advisory Service?

[Vince Cable]

The Manufacturing Advisory Service provides one of the best industrial support activities, and we intend to continue it and continue to fund it. With reference to the hon. Gentleman’s area, I recently met representatives from several parties on the future of Stoke and the ceramics industry. Although it is a small industry, we want to continue to give support wherever we can.

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

Advantage West Midlands invested significantly in the i54 business site on the edge of my constituency and is maintaining and creating jobs for the local area. Will the Business Secretary reassure me that in the absence of Advantage West Midlands and a regional growth strategy, this significant asset will continue to be maintained by the Government or the local authority to ensure that it continues to bring vital jobs to the area?

[Vince Cable]

That is another question along the lines of the original question from my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith) about the management of RDA assets. They will be managed carefully and, where it is appropriate and sensible, they will be passed over to local organisations, but in a way that realises value for money.

[Anne Marie Morris (Newton Abbot) (Con)]

I warmly welcome the proposals set out this morning. I am delighted. They will make a real difference in the long term in the south-west. However, looking at the approved list, I am sad that the south-west is rather bereft of LEPs, and Devon, which I represent, is not on it. Will the Secretary of State meet me to talk about the Devon proposals so that we can see what can be put right?

[Vince Cable]

I am sure that I or the Ministers of State in both Departments would be happy to talk about that, but the key problem, as I understand it, is that there was a dispute between several local authorities, which were not able to get their act together. They must take responsibility for that, but we want to help them through the process.

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

Despite all the coalition’s talk of localism, I am concerned to learn today that assets currently owned by RDAs are not guaranteed to remain in local ownership. Will the Secretary of State confirm that none of the assets currently owned by the RDA, such as the Wavertree technology park in my constituency, will not be sold off by his Department?

[Vince Cable]

I cannot give guarantees on the treatment of specific assets. As I said, they will be managed carefully and in a way that produces value for money for the taxpayer, who originally invested in them. That will be done in a way that reinforces local development.

[Bob Blackman (Harrow East) (Con)]

The announcements made this morning will be warmly welcomed by all progressive local authorities across the country. In keeping with the incentives to build houses for people to live in, will my right hon. Friend elucidate further the incentives that will be given to local authorities to encourage the growth of private sector businesses in their areas?

[Vince Cable]

It is revealing, in a way, that half an hour into questions that is the first question we have had about the key development, which is creating incentives for local authorities to grow. Those did not exist before. We have the new homes bonus. We are talking about the repatriation of business rates and a series of incentives that local authorities will in future have to grow and develop, which currently do not exist.

[Mr Ben Bradshaw (Exeter) (Lab)]

Is not the CBI right to describe the whole process as a shambles? That is certainly what it has been in the south-west, which has fallen back into the worst parochialism and petty rivalry that bedevilled the system before RDAs. Why does not the Secretary of State think again before it is too late and he does untold damage to the economy of the south-west?

[Vince Cable]

My Department has been talking to the CBI, which is pleased with the outcome, as it made clear. On petty parochialism, that is a strange way for the right hon. Gentleman to describe his own local community. We have tried to ensure that the process is driven from the bottom up and is not centrally imposed. Good local authorities, working with local businesses, are producing very creative, positive ways forward. What is wrong with that?

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

I welcome the Secretary of State’s statement, particularly the emphasis on private sector jobs and skills. Can he be more specific about the time scale and process for the Black Country LEP, given the importance of private sector jobs and skills development to the black country?

[Vince Cable]

As I think I told one of the hon. Gentleman’s colleagues earlier, there was a problem with the black country submission, which did not have a sufficiently substantial business input. We hope that those problems will be resolved within weeks rather than months, and it is important that they are, because the deadline for the first bidding round in the regional growth fund is in January, so the relevant bodies will need to progress quickly if they are to participate.

[Helen Goodman (Bishop Auckland) (Lab)]

The Secretary of State has railed against centralisation this lunchtime, but the truth is that we in the north-east had a consensus on the value of our RDA. Only this morning, James Ramsbotham, the head of the North East chamber of commerce, complained about the pulling back of inward investment to Victoria street. When will the Secretary of State think again?

[Vince Cable]

I thought that there was a consensus in the north-east, but it manifested itself in a whole series of fragmented bids, and that is rather sad. Fortunately, the situation has been retrieved. Council leaders are now working and talking together, and they have produced a much better proposal, which I think will succeed. On foreign investment, it is absolutely absurd for regional development agencies throughout the country to have separate, competing ambassadors in overseas countries. Such work really has to be done much more sensibly, and the LEPs will have a role in helping foreign investors once they have committed themselves to a particular location.

[Julian Smith (Skipton and Ripon) (Con)]

Will my right hon. Friend pay tribute to Barry Dodd and those behind the Yorkshire Enterprise Partnership, a community interest company that will work with LEPs in Yorkshire to promote inward investment and to co-ordinate opportunities throughout the county? Is that not a great example of bottom-up, rather than top-down?

[Vince Cable]

It is, and it also addresses the issue that Opposition Members have raised: the assumption that only if the Government provide a large budget can such organisations function. A community enterprise partnership of the kind that the hon. Gentleman describes is exactly the way to make LEPs operational and effective.

[Grahame M. Morris (Easington) (Lab)]

Business Link, which is located on the Spectrum industrial park in my constituency, recently announced 150 job losses as a result of in-year cuts to the budget of One NorthEast. Given the announcement that we have just heard, will the Business Secretary clarify where the national Business Link contact centre is going to be based?

[Vince Cable]

Obviously I regret any redundancies that result from either that decision or others. Clearly, none of us relishes that prospect, but Business Link was widely criticised by the businesses for which it was designed. It was not an effective system, nor was it cost-effective for the taxpayer, so the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk), is developing a new model, based essentially on website advice, but more generally, and he will unveil it shortly.

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

May I welcome today’s announcement of a Cheshire and Warrington LEP and the proposals in the White Paper for a new duty to co-operate on planning matters? Will that new duty apply across national boundaries? I represent the city of Chester, which has a Welsh border within half a mile of the city centre, and it is crucial not only that west Cheshire and Chester have a duty to co-operate with Wrexham and Flintshire in north Wales, but that Wrexham and Flintshire have a duty to co-operate with Chester.

[Vince Cable]

The answer is yes. We have to respect devolved powers in Wales, but the simple answer is yes: there will be an obligation to co-operate.

[Nic Dakin (Scunthorpe) (Lab)]

How will areas such as the Humber, which has not been awarded an LEP, gain access to regional growth funds and other funds, such as the European regional development fund?

[Vince Cable]

They will gain access if they are able to bring forward quickly a proposal that meets the key requirements. There was a strong division of opinion, of which the hon. Gentleman will be well aware, about whether the activity should centre on Hull or on the wider Humber region. There were arguments for both, but the relevant bodies really do have to come to a decision quickly if they are to participate in this bidding round.

[Iain Stewart (Milton Keynes South) (Con)]

I warmly welcome the go-ahead for the south-east midlands LEP. Does my right hon. Friend agree that it makes much more sense for an area such as Milton Keynes, which sits at the junction of three regions, to be grouped with its natural economic partners, rather than with an artificial area such as south-east England?

[Vince Cable]

The hon. Gentleman highlights briefly and eloquently why the RDA structure just did not work. As I recall, it was designed during the war to allow for the division of aerodromes; it had absolutely nothing to do with simple economic geography. The structure that he describes is a vast improvement.

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

I have real concerns about the Secretary of State’s over-simplistic comments on housing and planning. It might surprise him to hear, however, that by page 8 of his statement I found something with which I might be able to agree. He said that local business rate retention will be considered, but will he confirm that that involves the consideration not merely of local authorities being able to keep marginal increases in business rates, but of the complete localisation of business rates, so that once again local authorities are able to control the majority of their resources? If he is prepared to confirm that, and subject to how it is done, he might find some cross-party support on that particular issue.

[Vince Cable]

I am glad that I have, because that is indeed exactly what we are considering, albeit with appropriate protections for business.

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

I regret, but perhaps more importantly I suspect that the Secretary of State will come to regret, the abolition of the regional development agencies. I note from his statement, however, that further discussions will take place between the Mayor of London and the London boroughs. Will the right hon. Gentleman take into account in those further discussions the sub-regional business hubs throughout London, and the growth corridors between London and areas outside London? In my area, the M11 is such a corridor. Will he take all those factors into account before making a decision?

[Vince Cable]

Yes, we will. In fact, one of the most imaginative and interesting LEPs is what we call the coast-to-capital LEP, uniting the south coast towns with southern London. That is exactly the kind of geographically based, common-sense approach that we want to encourage. It will link London with those parts outside the capital with which it has a natural economic affinity.

[Richard Burden (Birmingham, Northfield) (Lab)]

In his opening remarks, the Secretary of State said that the thing that local enterprise partnerships will have is partnership. May I press him a little more on whether they will actually have any money to chase such things as the regional growth fund? Will any money be allocated for running costs, or will the money for LEPs come from children’s services, emptying the bins and other local authority spending on front-line services?

[Vince Cable]

The Government are not providing the LEPs with a budget, but that is not to say that the partners, which include local authorities and businesses, cannot contribute to something that is in their self-interest.

[Austin Mitchell (Great Grimsby) (Lab)]

The Secretary of State’s words about localism will ring rather hollow on Humberside, where we have just had to face the postponement of improvements to the A160 in order to ease the bottlenecks building up around Immingham, Britain’s busiest port. Will he follow up on what he said to my hon. Friend the Member for Scunthorpe (Nic Dakin) about the Humberside economic partnership? Business and the chamber of commerce want a pan-Humber economic partnership, but the local authorities do not seem able to agree. Which side is the Secretary of State going to be on?

[Vince Cable]

We will look at the quality of the proposals. An LEP is going forward for Lincolnshire, and it is a pity that the partnership did not include the unitary authorities to which the hon. Gentleman refers, but it is really for communities to get their act together. Those that have will succeed; those that do not will fall behind.

Points of Order

Thursday 28th October 2010 Commons Chamber

13:07

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

On a point of order, Mr Deputy Speaker. During a debate on housing in Westminster Hall yesterday morning, I used language that, on reflection, was clearly inappropriate and not parliamentary. I seek to withdraw those words and to apologise to you, to the House and to the right hon. and hon. Members concerned in that debate.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I thank the hon. Member for withdrawing his comments. He has corrected the record.

[Caroline Flint (Don Valley) (Lab)]

On a point of order, Mr Deputy Speaker. I welcome the apology from the Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell), but will you seek an apology from the Minister for Housing and Local Government, the right hon. Member for Welwyn Hatfield (Grant Shapps)? In Communities and Local Government questions last week, the right hon. Gentleman said that between 1997 and 2010 there was a net gain of 14,000 new affordable homes. Figures published by the Department for Communities and Local Government this morning show that, actually, the Labour Government built more than 500,000 new homes during that time. In 2009-10, 56,000 new homes were built in the teeth of the recession. He should come to the House and apologise.

[Mr Deputy Speaker]

The right hon. Lady has put her view on the record. A mechanism exists for corrections, and these can be made. Ministers are responsible for the content of their statements and answers.

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

On a point of order, Mr Deputy Speaker. Yesterday the Speaker made a statement in respect of the process for early-day motions when the Table Office is unhappy with them. I have been operating in accordance with that process on two EDMs, one relating to Andrew France, the other to Noreen Akhtar, since the start of September, and I requested that they be sent to the Speaker on 12 October, which I believe has now been done. Can the process be reviewed from the point of view of establishing a timetable? In certain situations, such as that of Noreen Akhtar, the timetable is quite important, because she is continually maltreated by Birmingham city council, which refuses to give any information about her case.

[Mr Deputy Speaker]

I thank the hon. Gentleman for that point of order. I will draw it to the attention of the Speaker.

[Lilian Greenwood (Nottingham South) (Lab)]

On a point of order, Mr Deputy Speaker. Was it in order for the Secretary of State for Transport to claim in the Chamber this morning that the A453 widening scheme is in the development pool for decision in 2011 when that is simply not true?

[Mr Deputy Speaker]

I will certainly bring that to the attention of the Speaker. You have got it on the record.

[Mr Ben Bradshaw (Exeter) (Lab)]

On a point of order, Mr Deputy Speaker. In his statement, the Business Secretary said that the many questions that hon. Members had would be answered in the White Paper, but that document was not in the Vote Office when he stood up to make his statement and when most Members were already in the House. May I ask that when the Government make statements on White Papers in future, they ensure that Members of this House have the document before the Secretary of State stands up?

[Mr Deputy Speaker]

I believe that what the right hon. Gentleman says is true, but the document is now available to Members.

Comprehensive Spending Review

Thursday 28th October 2010 Commons Chamber

13:11

[The Chief Secretary to the Treasury (Danny Alexander)]

I beg to move,

That this House has considered the matter of the Comprehensive Spending Review.

It is eight days since my right hon. Friend the Chancellor set out the conclusions of the Government’s spending review—this coalition’s plan to bring the country back from the brink. We had to act to tackle the deficit: it was the only option to secure our country’s future. It is the only option to build a strong platform for future growth and prosperity, and we will see it through.

In charting the course for the next four years, we have made choices. We have chosen to invest in growth, jobs and the future of the economy. We have chosen to protect the most vulnerable and extend the ladder of opportunity. We have chosen to cut the costs of central Government to free up the front line. These are our priorities—growth, fairness, reform. They are the right priorities.

[Several hon. Members]

rose—

[Danny Alexander]

I am going to get to end of this section, and I will give way then.

These are some of the most difficult decisions that any modern Government have had to make, with every number on every page representing someone’s job or a service someone relies on. They are decisions that I know will affect everyone. So today I will set out why we had to act, the principles guiding our choices, and why fairness is at the heart of this spending review.

[Several hon. Members]

rose—

[Danny Alexander]

There is an important debate to be had. The Opposition have a chance to contribute to this discussion, but the price of being taken seriously is a credible and detailed plan. They need to recognise that we cannot go on in the way that they did; they need to say which cuts they support and which they oppose, and what they would do instead. Without that, it is opposition for opposition’s sake, and the country will not take them seriously.

[Several hon. Members]

rose—

[Danny Alexander]

So today’s debate also offers a challenge for Labour Members. I will be listening carefully to what they have to say, and I hope that the British public will receive a long-overdue apology for the mess that one party caused and which two parties have come together to clean up.

[Fiona Mactaggart (Slough) (Lab)]

I thank the right hon. Gentleman for giving way—at last. He says that in order to be taken seriously, we need a plan. In order for him to be taken seriously, he needs to be truthful with people. I do not understand how he can claim that fairness is a principle of this comprehensive spending review when women have been hit twice as hard as men.

[Danny Alexander]

I do not accept that analysis, and I will come to that point later. The hon. Lady should be aware that her party’s plans were for £44 billion-worth of cuts, which would have had an impact on people too. Many of the things that we have done, such as uprating the state pension in line with earnings and protecting the national health service, which her party would not have done, support women.

[Toby Perkins (Chesterfield) (Lab)]

The right hon. Gentleman is perpetuating the myth that there is no alternative, but he just said that the previous Government had a strategy in place for paying off the deficit, so there is an alternative. An alternative was also put forward in 1945. He can take whichever direction he likes, but he cannot keep claiming that the decisions he is making are the only alternative, because others have been put forward.

[Danny Alexander]

No alternatives have been put forward by the hon. Gentleman’s Front Benchers; perhaps he wants to talk to them about that.

[Mr John Redwood (Wokingham) (Con)]

The figures assume 8% inflation over the period, but if, in the first couple of years, we have a complete pay freeze in the public sector and we buy things more cheaply, as is the plan, does not that mean that cash rises can translate into real rises in the programmes that are going up in cash terms?

[Danny Alexander]

The right hon. Gentleman is certainly right to say that at the end of the spending review public spending will be higher in cash terms than it is at the moment. In real terms, it will go back to the level of about 2008-09, and in terms of a share of gross domestic product to about the level of 2006-07. People need to be realistic about the scale of what is being proposed. The big gainer from the huge deficit that Labour left us with was the department of debt interest, and unfortunately it is the cost of debt interest that we have to meet.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

Will the Chief Secretary give way?

[Danny Alexander]

I will give way one more time, and then move on.

[Mr Bailey]

The right hon. Gentleman has put great emphasis on the debt that he inherited and the need for the Opposition to be responsible. Given that the greater part of that debt was incurred in bailing out the banks and supporting manufacturing industry, could he be responsible and tell us what he would have cut in that position?

[Danny Alexander]

We have set out in detail what we would cut—that is the whole point of the spending review.

[Several hon. Members]

rose—

[Danny Alexander]

I am going to press on; I will give way again in a moment.

The House and the British people will never forget the financial position of this country when we came into office, with £1 borrowed for every £4 spent—the largest deficit in our peacetime history. Debt interest payments alone stood at £43 billion a year—that is £120 million a day.

[Ian Austin (Dudley North) (Lab)]

rose—

[Gordon Banks (Ochil and South Perthshire) (Lab)]

rose—

[Danny Alexander]

I will press on, and give way in a moment.

Thanks to Labour’s profligacy, there really was no money left. The country knew it, our business leaders knew it, and, as we discovered, the Labour Chief Secretary knew it too. By May, the alarm bells were ringing—the danger was real. Whether one wants an expansive social policy, a smaller state, or more or less public spending, it must be underpinned by proper control of the public finances. If that control is lost, the policies that have been built, whatever they are, will inevitably crumble.

[Stewart Hosie (Dundee East) (SNP)]

The Chief Secretary said that to be taken seriously one needs to have a credible and detailed plan. He then went on to say that the Government have laid out their plans in detail, so perhaps he can give us some of that detail. Which Revenue offices will shut? Where will the Department for Work and Pensions closures be? Among the 35,000 Ministry of Defence civilians, where will the jobs be lost? Will he give us the detail in the same way as when the spending plans in the 2004 and 2007 CSRs were announced?

[Danny Alexander]

There is a great deal of detail in the spending review document, as the hon. Gentleman knows because he has had a chance to study it, and of course Departments will set out more detail in due course. He would have a bit more credibility on the subject of controlling the public finances if his colleagues in the European Parliament had not just voted for the 6% rise in the European Union budgets.

[Ian Swales (Redcar) (LD)]

Is the Chief Secretary aware that the 2007 CSR called for £35 billion in cuts, and that in July 2010 the National Audit Office could find only £6 billion that had been achieved? Does he agree that the failure of the last spending review makes this one much more difficult?

[Danny Alexander]

My hon. Friend makes a very important point. The NAO has indeed criticised the effectiveness of the previous Government’s so-called efficiency programme. Many of those criticisms are well founded, and we will proceed on a very different basis. To give an example, the single indicator that they set out for local authorities to report on their own efficiencies had 66 pages of guidance for them to follow, thereby creating a huge industry in local authorities just to meet the reporting requirements.

[Ms Angela Eagle (Wallasey) (Lab)]

The right hon. Gentleman has been talking about detail, and there is one detail that I am interested in. There was a leak from the Ministry of Justice demonstrating that it has set aside £230 million to pay for the redundancies that it has announced in its front-line staff. Can he tell the House, because he must have this figure, how much he has set aside to pay the redundancy bills for the job cuts that he has announced?

[Danny Alexander]

I welcome the hon. Lady to her place. I think that it is the first time we have had an exchange over the Dispatch Box, and I congratulate her on her appointment. Departments will set out their work force plans in due course. They are working on those things, and there are many things that they can do to avoid excessive redundancies. [Interruption.] I am not going to go into individual departmental figures.

[Ms Eagle]

rose—

[Danny Alexander]

I am not going to give way again. These figures will be for Departments to set out.

[Several hon. Members]

rose—

[Danny Alexander]

I am going to press on and make some progress. I will take further interventions later, but I answered the point that the shadow Chief Secretary made.

Rising interest rates choke the finances of those who borrow, and rising inflation bites on those on fixed incomes. It was the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) who once observed:

“Public finances must be sustainable over the long term. If they are not, the poor…will suffer most.”—[Official Report, 2 July 1997; Vol. 297, c. 303-304.]

For once, I agree with Gordon. Those who say that there is a choice between fiscal discipline and supporting growth could not be further from the truth. The choice is between a sound platform to support growth and a lack of control that would undermine it. In reality, it is no choice at all.

[Gordon Banks]

rose—

[Ms Angela Eagle]

rose—

[Danny Alexander]

I am going to press on with this section of my speech, and then I will give way in a moment.

In June’s emergency Budget, we set out the road map to recovery and took the country out of the danger zone. The independent Office for Budget Responsibility examined our plans in June and forecast the economy growing and unemployment falling in every year. It also assessed that we were on course to eliminate the structural current deficit and see debt fall by the end of this Parliament, one year ahead of our mandate. The recovery will be choppy, but we are confident that our plan will see us through.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the Chief Secretary accept that he is introducing a benefit system based on punishment? Does he agree that anyone out of work for more than a year will now lose 10% of their housing benefit? That is punishment. What advice would he give to my constituent in Brighton who has gone for 465 jobs over the past 10 months without success?

[Danny Alexander]

I do not accept that. We have to control the welfare bill, which has risen dramatically over the past few years. I will come to that later in my speech.

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

It is inevitable, of course, that individual Departments will have to set out the costs of redundancies, and it is right that they should do so in due course. However, will my right hon. Friend set out how much extra interest the Government would have to pay, and therefore how much more public spending would have to be cut in future, if we did not start to make such economies now?

[Danny Alexander]

My hon. Friend asks a very good question. Over the course of the spending review period, our plans will save £5 billion in debt interest, which the Labour party was very happy to pay.

[Ms Angela Eagle]

rose—

[Danny Alexander]

I will give way one more time, then I will press on.

[Ms Eagle]

I thank the right hon. Gentleman. We know that he will know the answer to this question. He has set out a plan that will lead directly to 490,000 people losing their jobs in the public sector. We know that the Ministry of Justice has already made an allowance of £230 million to cover the cost of redundancies. He must have a figure for the rest of Whitehall put together, and he should now give it to us.

[Danny Alexander]

The hon. Lady is the shadow Chief Secretary, and we read in a memo directed to the Leader of the Opposition that the Opposition had a plan for £44 billion of cuts, but she has not set out a single piece of detail on that. As I said, Departments will set out their work force plans in due course.

The previous Government’s plan was not a serious plan to deal with the deficit and support growth. It was not a fair approach. It would have led to more, not fewer, cuts in the end, because of higher debt and higher interest payments—more interest on the debt, and more interest on the interest. Compared with the plans that we inherited, we will save £5 billion in debt interest payments over the course of this Parliament.

The emergency Budget set out our plan to balance the books, and now we have shown how we will find £81 billion of savings by 2014-15. Let me put that in some context. Even at the end of that period, public spending as a share of gross domestic product will be 41%.

[Several hon. Members]

rose—

[Danny Alexander]

I will give way at the end of this section of my speech.

That 41% figure is about the same level as in 2006-07, and the same level in real terms as in 2008. It is higher than in any year of Tony Blair’s Government. Perhaps that is why he supports our strategy. That is not to say that cuts will be easy—of course they will not—but it nails the myth that we are an ideological Government, hell-bent on shrinking the state out of recognition.

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

In 2007-08, the UK debt stood at 36.5% of GDP. In 1997, at the end of the last Tory Government, it was 42%. Does that fact not expose as meaningless spin the Government’s line on the record of the Labour Government?

[Danny Alexander]

I think that that is a classic statement of deficit denial. The hon. Lady has to recognise that we are spending £150 billion more than we raise in tax—the largest budget deficit in the European Union and the largest in our country’s history.

[Angela Smith]

Will the Chief Secretary give way?

[Danny Alexander]

I will not.

We also have the largest budget deficit in the G20. Those are the facts that the hon. Lady should understand.

[Angela Smith]

Will the Chief Secretary give way?

[Danny Alexander]

I will not give way again, I am going to press on.

The Chancellor’s statement set out the level of departmental spending for the next four years. I will not repeat every decision now, but of course I am happy to take interventions. [Hon. Members: “You’re not!”] I have taken a great deal of interventions, and I will take a few more later. Instead, I want to focus on our priorities: growth, fairness and reform.

[Gordon Banks]

rose—

[Danny Alexander]

I give way to the hon. Gentleman.

[Gordon Banks]

I am very grateful to the Chief Secretary for finally seeing me up at the back here. One of the words that he mentioned was growth. How can we have growth when 1 million people are being put on the dole?

[Danny Alexander]

How could I miss the hon. Gentleman? I will explain the answer to his question as I make progress in my speech. He will just have to listen carefully.

Our priorities—growth, fairness and reform—guide every choice that we make. We are a pro-growth Government, focusing our capital resources on key infrastructure projects in transport and green energy.

[David Wright (Telford) (Lab)]

rose—

[Mrs Madeleine Moon (Bridgend) (Lab)]

rose—

[Danny Alexander]

I will not give way at the moment.

We are a Government with fairness at our core, and a reforming Government who leave no stone unturned in the search for waste, while devolving power and funding away from Whitehall. In answer to the hon. Member for Ochil and South Perthshire (Gordon Banks), I will address our priorities in turn, and the first is growth.

It is growth that will deliver additional jobs in the economy across England, Scotland, Wales and Northern Ireland. I have said that our plan as a whole will deliver macro-economic stability, which is crucial to restore growth and increase confidence to invest. We are not standing on the sidelines waiting for growth to happen. We have prioritised spending on the areas that can deliver the best return to growth. Over the spending review period, capital spending will be slightly higher than the previous Government planned, with significant investment in transport capital across the country and more cash being spent on transport over the next four years than in the past four. We will maintain in cash terms resource spending on science, and a new green investment bank will lead the way in the economy of the future. Today we published our local growth White Paper, which includes a regional growth fund of £1.4 billion over three years and announces new local enterprise partnerships. Those actions and many others are major parts of our strategy to secure and support sustainable economic growth.

[John Woodcock (Barrow and Furness) (Lab/Co-op)]

The right hon. Gentleman’s speech so far has shown that he is sticking to the outlandish predictions of growth levels that he has made, and of unemployment falling year on year as a result. Will he reassure the House and the country that if they prove wrong, he will change course, and quickly?

[Danny Alexander]

Outlandish predictions by politicians were the prerogative of the previous Government. We have established an independent Office for Budget Responsibility to make forecasts. We do not make the forecasts, and I am merely quoting what the OBR had to say.

[Sajid Javid (Bromsgrove) (Con)]

Does my right hon. Friend agree that the biggest risk to our economy is the record deficit of 10% of GDP, the highest in the G20? Had we not taken action, that would have posed a big risk and we would have lost more than 490,000 jobs. Opposition Members should think about the jobs that we would have lost had the Government not taken decisive action.

[Danny Alexander]

I agree wholeheartedly with my hon. Friend. If we had not tackled the deficit, the poor in this country would have suffered most.

[Helen Goodman (Bishop Auckland) (Lab)]

Will the Chief Secretary give way?

[Danny Alexander]

I will give way to the hon. Lady, and then I will press on.

[Helen Goodman]

I am grateful. The Chief Secretary has pointed to the forecasts made by the OBR. He will know that between 1994 and 2008, the private sector created 100,000 jobs a year. In that period, growth was 2.8%. The OBR projects growth of 2.4%. How, then, is it possible that 1 million jobs can be created in the forthcoming period?

[Danny Alexander]

In fact the OBR forecast more private sector jobs than the hon. Lady suggests. She will know that in the past two quarters several hundred thousand jobs have been created in the private sector. I will explain later in my speech the measures that we are taking to support the private sector.

[Mrs Moon]

Will the Chief Secretary give way?

[Danny Alexander]

Not for a moment. I am going to press on with my speech. I know that many hon. Members wish to contribute, and the Back-Bench time limit is already at six minutes, so I will make some progress, if I may.

Our second priority is fairness, and let me say what I think that means. Fairness means that across the entire deficit reduction plan, those with the broadest shoulders should bear the greatest share of the burden.

[Several hon. Members]

rose—

[Danny Alexander]

Fairness means that even in tough times, we focus our resources on extending the ladder of opportunity through early years provision and schools, and it means that we look carefully at whether we are doing right by those who receive welfare and the working families whose taxes pay for it. Those are our tests and we have met them in full. First, we have published distributional analyses that clearly demonstrate that those on the highest incomes will contribute more towards the consolidation. [Interruption.] That is not just in cash terms, but—

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The right hon. Gentleman is giving way, but will hon. Members please take their seats when he does not?

[Danny Alexander]

Thank you, Mr Deputy Speaker.

As I was saying, we have published distributional analyses that clearly demonstrate that those on the highest incomes will contribute more towards the consolidation, not just in cash terms but as a proportion of their income and consumption of public services.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

I am grateful to the Chief Secretary for giving way. So far, he seems bereft of answers to any of the questions put to him. Does he agree with the Institute for Fiscal Studies’ analysis that the June Budget and last week’s spending review can be fair only if the Government include all the measures that I introduced in my Budget prior to the election?

[Danny Alexander]

I think that the phrase “no answers” applies to Opposition Front Benchers on dealing with the deficit.

The measures included in our analyses include measures for which we will introduce legislation, such as the measures on national insurance. Those measures are part of our plan and it is perfectly appropriate that they should be included.

[Several hon. Members]

rose—

[Danny Alexander]

I am going to press on and answer this point. I shall give way in a moment.

The right hon. Gentleman talked about our analyses counting measures proposed but not yet introduced by the previous Government. I have to tell him that the measures are as much a part of our plan as any others we have introduced. We took the decision to proceed with them. However, I am glad to say that some of the measures proposed by the previous Government did not make it into our final analysis. We rejected the jobs tax—[Interruption.] They do not like it! We rejected cuts to the overall NHS budget and we rejected the idea of burdening future generations with debt. They were wrong and they were stopped.

Our progressive approach also places responsibility on the banks to make their fair contribution. We will continue to press banks to do more and to bring forward reforms to improve our financial system. That is why we introduced the bank levy. The previous Government stalled on that, saying that we would need international agreement first, but we went ahead with it. As the banks need to follow the spirit and not just the letter of the law, we have engaged in a concerted effort to get the leading banks to sign up to the code of practice on taxation by the end of November. We must ensure that everyone, no matter how rich, pays the taxes they owe. That is why we have agreed a new £900 million package for HMRC. That investment will fund a clampdown, bringing in £7 billion a year by the end of the Parliament.

[Richard Burden (Birmingham, Northfield) (Lab)]

On banks and fairness, will the Minister confirm that families with children are being asked to contribute twice as much to deficit reduction as the banks? How is that fair?

[Danny Alexander]

No, I will not confirm that. We have made many spending choices to invest additional resources in families with children—a pupil premium in the schools system and an entitlement to 15 hours of free nursery care for two-year-olds in addition to the 15-hour entitlement for three and four-year-olds that we introduced.

Our clampdown on tax avoidance will bring in £7 billion a year by the end of the Parliament, because there is no place for tax cheats in our society—neither is there a place for people who cheat the benefit system. My right hon. Friend the Secretary of State for Work and Pensions has introduced new plans to tackle benefit fraud.

[Several hon. Members]

rose—

[Danny Alexander]

I shall get to the end of this section on welfare before giving way, so hon. Members should stop troubling themselves.

On welfare—

[Several hon. Members]

rose—

[Danny Alexander]

I shall give way at the end of the section on welfare because I know it is of interest to many hon. Members, but let me explain our position.

The welfare budget accounts for nearly £1 in every £3 spent by the Government. The cost of the welfare system has increased by 45% in the past decade. In some cases, those increases were necessary—it is right that the Government should help those who need it most—but in many cases the previous Administration’s over-complicated bureaucracy trapped people in a system in which it does not pay to work. Worse still, many were simply dumped on benefits by previous Administrations and left there. That is not fair on them or the taxpayer. No one can deny that reform is essential, but the question is how the right balance should be struck.

Our approach is to move to a universal credit system over the course of two Parliaments to do away with the complexity of the current system so that it always pays to work. We will introduce a new work programme to provide personalised support to those who need the greatest help with getting back into employment, with private and third-sector providers being paid for the additional benefit savings they secure. We will fund significant above-indexation increases for the child tax credit to ensure that the spending review has no measurable impact on child poverty over the next two years. Through the welfare reforms in the spending review, we will find £7 billion of net savings on top of those identified in the Budget. Some £2.5 billion comes from removing child benefit from households with a higher-rate taxpayer. That is the largest welfare measure in the spending review and the most progressive, but it is the one that the Opposition have most vocally opposed.

[Ms Angela Eagle]

I thank the right hon. Gentleman for giving way on that point. There are press reports out on the wires that a source in Her Majesty’s Treasury is saying that the child benefit cut is “unenforceable” and will be dropped. The press report says that it is

“panic stations in the Treasury.”

Is that true?

[Danny Alexander]

I think it is panic stations on the Opposition Front Bench if they do not have a single answer to a single question about the action that they would take to reduce the deficit. The story that the measure is unenforceable is nonsense; it will be introduced as planned. The savings were signed off by the Office for Budget Responsibility, which considered the compliance risk involved as well. Higher-rate taxpayers are of course required to disclose all relevant information.

[Ian Austin]

The Minister’s whole plan is based on two things: achieving, first, the biggest rate of export since 1974 and, secondly, a rise in business investment that has been matched only once in our history. Achieving both those things in the same year would be unprecedented, but the Government want to achieve both every year for three years on the trot. I know that the Chancellor and the Prime Minister do not live in the same world as the rest of us, but where did they dream that up—fantasy island?

[Danny Alexander]

I had planned to give way a few more times, but that intervention took so long that there will not be time to take any more for a while. The spending review is based on one simple principle: cleaning up the mess left behind by the Government of whom the hon. Gentleman was part.

We are making other welfare reforms too. We will cap household welfare payments at the average earnings of working households and we will reform housing benefit so that support better reflects the housing choices that working families have to make. That must be right. The welfare system should provide an effective safety net, but it should not pay workless families far more than most working families earn. That is where benefit traps and dependency start. Our reforms mark an historic shift from dependency to independence. Our measures are tough but fair.

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

Does the Minister accept that housing benefit is also an in-work benefit? The Government have presented very little evidence that out-of-work families who receive housing benefit live in significantly better conditions than any working family.

[Danny Alexander]

The cap that we propose, which will be debated in due course, is nearly £21,000-worth a year of housing benefit. That is more than equivalent to what most working families have to spend on their housing costs.

[Matthew Hancock (West Suffolk) (Con)]

Does the Minister think it fair that his, my and other constituents should pay so that some people can live in houses costing £500, £600 or more a week?

[Danny Alexander]

No, I do not think it is fair.

[Clive Efford (Eltham) (Lab)]

I have one simple question: will the Minister confirm that the majority of people on housing benefit are in work?

[Danny Alexander]

Yes; many people on housing benefit are in work. The point of our reform is to say that the fairness should be between people on out-of-work housing benefit gaining the maximum amount, which we will cap at £400 a week, so that that amount is equivalent to what people in work could receive in housing benefit.

[Several hon. Members]

rose—

[Danny Alexander]

I want to press on, so I shall not give way.

Our third principle is reform, which manifests itself in three ways. The first is bearing down on back-office costs. Each main Government Department has found at least 33% in administrative savings: we will share services, cut down on waste and abolish quangos. The second is a massive devolution of power from the centre, reflecting our commitment to freedom and responsibility. Apart from schools and public health, we will end the ring-fencing of all Government grants to local authorities from April next year. We will reduce 90 separate core revenue grants to councils to fewer than 10. Under the previous Administration, the comparable number of grants increased by more than 500%. Our new tax increment financing borrowing powers will allow councils to fund key projects, and we have today announced that we will consider options to enable local authorities to retain locally raised business rates. We are putting the local and government back into local government.

Finally, reform means recognising that the old ways of doing things simply were not working, even in times of plenty.

[Several hon. Members]

rose—

[Danny Alexander]

I will give way to the hon. Member for Birmingham, Erdington (Jack Dromey), then I will press on.

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

The House has waited in vain for a straight answer to a straight question. I know the right hon. Gentleman would like to take credit for the sun shining, and indeed for the imprint on the Turin shroud, but will he give a straight answer to the straight question asked by my right hon. Friend the Member for Edinburgh South (Mr Darling), the former Chancellor of the Exchequer? Is it true or untrue that the growth in the first three quarters of 2010 is a direct result of the measures taken by the previous Government to build Britain out of recession?

[Danny Alexander]

The last quarter of growth—Opposition Members were hoping that things would be worse than they are, which is a pretty poor foundation for any sort of economic policy—took place since the Budget. [Interruption.] Of course the previous Chancellor deserves credit for that much of his work in office—[Interruption.]

[Mr Deputy Speaker]

Order. A lot of Members want to speak in this debate, and this disorderliness is doing us no good.

[Helen Jones (Warrington North) (Lab)]

On a point of order, Mr Deputy Speaker. Is it in order for the Chief Secretary to accuse Opposition Members without any evidence whatever of wishing for lower growth to put people out of work? That is what the Government are doing, not the Opposition.

[Mr Deputy Speaker]

That is not a point of order, as the hon. Lady knows.

[Danny Alexander]

Finally, reform means recognising that the old ways of doing things were not working.

[Several hon. Members]

rose—

[Danny Alexander]

No, I will not give way.

The old ways of doing things were not working even in times of plenty, so we will revamp the failing system of social housing. The number of socially rented properties fell under the previous Government in total, with an increasing proportion of workless households finding themselves trapped in dependency. The terms of existing tenants and their rent levels remain unchanged under our proposals. Some new tenants will be offered intermediate rents nearer to market rent.

[Several hon. Members]

rose—

[Danny Alexander]

I am not going to give way because many hon. Members wish to speak.

Together with capital investment, those measures will create a more flexible and responsive model, enabling the Government to deliver up to 150,000 new affordable homes over the next four years.

[Several hon. Members]

rose—

[Danny Alexander]

No, I am not going to give way.

There will be reform, too, in the justice system. A prison population that is rising out of control is not right, let alone affordable. The guilty must be punished, but rehabilitation must be the priority.

There are major reforms in other policy areas. Across all that we do, reform is the keystone to delivering better for less.

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

I thank the Government for their work in rescuing savers in the Presbyterian Mutual Society in Northern Ireland; they are very grateful. The Government have built on the work of the previous one, but they have brought a solution to fruition. However, may I remind the Minister of the agreement—the settlement—that was made at the time of devolution for Northern Ireland? Will he look at that again to ensure that the challenges unique to Northern Ireland are faced with confidence?

[Danny Alexander]

I am grateful for the right hon. Gentleman’s intervention—my hon. Friend the Financial Secretary, who did a great deal of work on that issue, will have heard his compliments. I believe that we will introduce a growth paper on Northern Ireland soon, and the right hon. Gentleman’s points on that are very important. I know that questions have been asked, for example, on capital spending between June 2005 and 2018. We believe that we are on track to meet those commitments, which were made some years ago.

[Several hon. Members]

rose—

[Danny Alexander]

I am not going to give way.

The spending review will have an impact on the public sector workforce. I should like to say that the ideas, effort and commitment shown by the public sector workforce are essential to helping people to get the best from the services they provide, and we should thank them. The reforms that we are making will make the public services a more rewarding place to work—more power, more trust, more independence—but there will be an impact on employment. The best estimate remains that of the Office for Budget Responsibility, to which hon. Members have referred, which forecast in June a reduction of 490,000 employees over the next four years.

Natural turnover will play a big part, but individual employers will make their own decisions on redundancies. Each such decision will be difficult, which we recognise, so we have introduced pay restraint to protect jobs. We will monitor plans closely to try to avoid localised hotspots, and deploy our regional growth fund to support such areas.

[Several hon. Members]

rose—

[Danny Alexander]

I will give way to the hon. Member for Warrington North (Helen Jones).

[Helen Jones]

The Chief Secretary is proposing to make many public sector workers redundant. Given that, why is it considered fair for others to have money in tax avoidance trusts based overseas? Considering the strategies he is introducing, will he give a commitment that no Minister in the Government has or will have money based in overseas trusts designed to avoid paying their fair share of British tax?

[Danny Alexander]

If the hon. Lady was listening to me earlier, she would know that we have announced significant additional investment for HMRC to tackle tax avoidance and tax evasion. Of course, every Minister should comply with tax law.

[Several hon. Members]

rose—

[Danny Alexander]

I will give way to the hon. Gentleman sitting next to the hon. Member for Warrington North.

[Huw Irranca-Davies (Ogmore) (Lab)]

Does the right hon. Gentleman accept that the localised hotspots he mentioned, where the cumulative impact of his measures will take the most drastic and tragic effect, include Wales, the north-east and other areas that either rely heavily on public sector workers as a proportion of the work force or where the benefits reforms will have a significant impact? Does he also accept that he will be judged in 12 or 36 months or five years of this Parliament on whether the north-east, Wales and elsewhere are disproportionately and tragically affected by the cumulative impact of the measures he is ramming through?

[Danny Alexander]

Of course I accept that people will judge the Government’s performance on the basis the hon. Gentleman suggests. I fully understand that, which is why I am spelling out the measures we are taking to ensure that those areas that are most affected are supported through the regional growth fund. His point is important and serious, but I observe only that the previous Government created the mess of the Budget deficit. We have to clean up the problems facing our economy. The worst thing possible for Wales or other parts of the country would be to leave the deficit untackled, which would lead to lower growth, higher interest rates and less employment.

[Huw Irranca-Davies]

rose—

[Danny Alexander]

I will not give way again to the hon. Gentleman; I shall press on.

Also in June, the OBR forecast total jobs in the economy over the next four years, which Opposition Members seem to have missed. It implies 1.6 million additional private sector jobs over the period. We will do all that we can to help those leaving the public sector to take advantage of those opportunities, and we must remember at all times that the gravest threat to jobs in our economy would be a failure to deal with the deficit. Deficit denial is the single biggest danger to employment in this country today.

Throughout the review, I have been clear on one thing: our decisions need to improve life chances. Fairness is not just the net sum of cash transfers. That is important, but there is more. Fairness is about opportunity and the chance for a better future, especially for the next generation. We know about the attainment gap between children from different backgrounds, which starts at an early age.

In these difficult times, perhaps no one would have noticed had we quietly turned a blind eye, but fairness demands more, so we have chosen to invest. That is why we have introduced a new pledge for 15 hours’ child care for disadvantaged two-year-olds, matching the 15-hour commitment for all three and four-year-olds that was previously introduced by this coalition Government. Cash spending on Sure Start services will be maintained, with a renewed focus on life chances. Although this has meant a greater challenge for other Departments, I am proud that the schools budget will not only match but outstrip inflation in each of the next four years. When we factor in reduced pressure from pay restraint and back-office savings, that amounts to a very significant boost to the classroom. A new £2.5 billion pupil premium will target additional resources on those with the most to gain.

We will be relentless in our focus on social mobility, and in extending the ladder of opportunity. Fairness runs through the heart of this spending review.

[Keith Vaz (Leicester East) (Lab)]

We all accept that those are very difficult decisions. However, the chairman of the Police Federation has suggested that 40,000 police service jobs will be lost because of cuts to the Home Office budget. Does the right hon. Gentleman accept that if that happens, crime will rise?

[Danny Alexander]

I do not accept that analysis. Of course, it will be for individual police forces in due course to make their own decisions—[Interruption]—but given the potential for police forces to become more efficient, we think that there is no reason why those savings should have any impact at all on the presence of police on the front line in communities.

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

On the policy to give two-year-olds 15 hours of education based on free school meal eligibility, what mechanism will be used and how much will it cost to ensure that that happens, given that there is no information about two-year-olds receiving free school meals? I have asked Ministers that question twice, but I still have not had an answer.

[Danny Alexander]

That is a very good question. I imagine that the hon. Gentleman intended to preface his question by saying that he welcomed the commitment to additional nursery education for the poorest two-year-olds. There are many mechanisms available, for example within the Sure Start system, that can target those pupils, and the Secretary of State for Education will no doubt make announcements in due course.

[Several hon. Members]

rose—

[Danny Alexander]

I now intend to finish my speech with no further interruptions.

I am often asked about a plan B. Plan A is to deal with the deficit so that we can support growth and invest in fairness. But we all know that the recovery will be choppy, so plan B is to deal with the deficit so that we can support growth and invest in fairness. But we know that the road will be difficult, so plan C is to deal with the deficit so that we can support growth and invest in fairness. Nothing is more important to our future prosperity.

One party made this mess. Two parties are working together to clear it up. We will hold firm. Where we have faced tough choices we have asked, “What are the fair choices? What are the choices that support growth? How can we achieve more with less?” We have made the right choices for the right reasons. We have given our answers: now let us hear the Opposition’s.

13:51

[Ms Angela Eagle (Wallasey) (Lab)]

Last week’s comprehensive spending review statement has taken a huge and risky gamble with the jobs and future prosperity of millions of people in this country. This wholly unnecessary risk has been taken because this Conservative-led Government is in ideological thrall to the discredited economic mantra that shrinking the state is always the right answer. They do not state it as provocatively as Mrs Thatcher once did in the 1980s, but they believe it just as firmly. The Orange Book Liberal Democrats, led by the Deputy Prime Minister with the Chief Secretary in tow, believe it too.

Of course, the deficit has to be brought down—[Hon. Members: “Ah!”] We said that before the election and we set out a plan to do so. We also said it at the election and we have said it since. The difference between us is how the deficit is brought down. My right hon. Friend the shadow Chancellor has made it clear that we favour a different balance between spending cuts and tax rises that brings the deficit down but also protects the recovery and boosts growth. None of us should forget the backdrop to this spending review, which is families up and down the country worried about their jobs and homes. That is why the cheers and mass waving of Order Papers on the Government Benches as the Chancellor announced the largest job cuts for generations demonstrate just how out of touch they are. At that very moment at the end of his speech, the masks slipped and we saw what really motivates them. As these cuts begin to bite, the British public will not forget.

[Mr Redwood]

Given that between 250,000 and 500,000 people leave the public service every year voluntarily, for retirement or other reasons, will the hon. Lady now withdraw her statement that half a million people will lose their jobs under this Government? It can be done by natural wastage.

[Ms Eagle]

That is not my statement: it is a statement by the Office for Budget Responsibility. It is also the figure that was revealed accidentally the day before the Chancellor’s statement by the Chief Secretary when he was filmed in the back of his car with open documents. It is not my figure. The right hon. Member for Wokingham (Mr Redwood) should remember that the Ministry of Justice is already planning 14,000 redundancies, as we know from a leak, and has set aside—

[Matthew Hancock]

Will the hon. Lady give way?

[Ms Eagle]

No, I shall finish answering the question. The hon. Gentleman can sit down and be patient, and we will see whether I give way to him a little later.

The Ministry of Justice is already planning cuts of 14,000 in front-line staffing. It has also set aside £230 million to pay for the costs of those redundancies. I asked the Chief Secretary what the figure was for the rest of Whitehall. He will know what that figure is, because he will have signed it off. Twice I asked him for that figure, and twice he avoided the question. It does him no credit if, knowing what that figure is, he comes to this House for a debate on the comprehensive spending review but avoids the question of the costs to the public purse of the redundancies that will be directly caused by the statement made by the Chancellor last week. He knows that figure and he should stand up now and give it to the House. Silence is sometimes far more revealing than an answer.

[Ian Swales]

The hon. Lady referred to the number of job losses mentioned in the comprehensive spending review. Can she tell us how many job losses were involved in her alternative plans?

[Ms Eagle]

The key point about our approach to the difficulties in the world economy was that we spent and invested money to keep people in work. We know that the cost of every 100,000 people on the dole is half a billion pounds. The difference between us and the Government is that we were keeping people in work whereas they are taking people out of work. We know from PricewaterhouseCoopers that half a million jobs in the private sector that are directly connected to public sector contracts will also be lost as a result of the Chancellor’s statement last week.

[Angela Smith]

Is it not the case that the stimulus put into the economy by the Labour Government saved more than 200,000 jobs?

[Ms Eagle]

Yes, according to the OBR. We saw the undisguised glee of Members opposite as they celebrated the hardship and misery that the Chancellor proposes to inflict on so many people in our society. These are not just numbers; they are police constables, care workers, teaching assistants and dinner ladies. In the private sector, they work in small businesses which rely on public sector contracts at a time when order books are empty. All those people are being asked by this Conservative-led Government to shoulder the burden of a crisis made in the banks and the dealing rooms.

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

Will we hear anything concrete from the Opposition today about their alternative proposals?

[Ms Eagle]

Well, the hon. Gentleman could take a look at the March Budget, which was presented to the House before the general election, and the Red Book that was published subsequently. We went into the election with far more detail about what we would do had we been re-elected than either party opposite, and at least we did not flip-flop immediately afterwards so that we could get into government.

These are not just numbers; they are the people being asked by this Conservative-led Government to shoulder the burden of a crisis that was made in the banks. It is not those who caused the crisis who will now suffer as a result of the Chancellor’s reckless gamble with jobs and growth. It is the 490,000 ordinary men and women serving in the public sector whose jobs will go, and it is the 500,000 jobs in the private sector that PricewaterhouseCoopers has calculated will also be lost as a direct result of the spending review. Redundancies on the scale now threatened are not inevitable, but are the result of the Government’s choice to cut further and faster.

[Richard Harrington (Watford) (Con)]

Does the hon. Lady agree that it is a basic principle that spending money we do not have does not create long-term jobs? It creates nothing but debt, which has to be paid back. That is what the Government are doing now. That is what we need to do.

[Ms Eagle]

Perhaps the hon. Gentleman will agree that in an advanced economy with a social security system, if there is a recession, deficits will rise. That is why the deficit rose. What he suggests, if taken to its logical extreme, means that he would not be in favour of paying unemployment benefit to those made unemployed. They tried that in the 1930s and it did not work.

[Kwasi Kwarteng (Spelthorne) (Con)]

What does the hon. Lady think was the reason behind our deficit being worse than that of every other country in the G20?

[Ms Eagle]

We entered the crisis with the second-lowest deficit in the G7. We were affected by the credit crunch because we have a very large financial services sector, which is why both sides in the House are talking about how we can rebalance our economy. We are too exposed to the kind of risks that crystallised when the credit crunch struck. [Interruption.] The Chancellor, from a sedentary position, asks whose fault that was. If we are going to be sensible and have a proper, nuanced, balanced and grown-up debate on this issue, all of us—as members of political parties that are, or have been, in government and in charge of running the country over the past few years—need to take our fair share of responsibility for how the banking sector came to dominate too much. Both sides of the House have to learn those lessons. I hope that we all will.

[Stephen Lloyd (Eastbourne) (LD)]

Does the hon. Lady agree that it has been down to this Government to introduce the bank levy of £2.5 billion, and that the Labour party, when in government, failed to do so? Why did they fail to do so?

[Ms Eagle]

We introduced the bonus tax, which the Conservative party opposed and which raised £3.5 billion. We have said that we need to consider how to ensure that the banks shoulder their fair share of the burden in ensuring that the deficit is reduced in a sensible way.

[Mrs Moon]

Does my hon. Friend agree that it is depressing to see the huge ranks of men opposite talking about cuts that will affect—[Interruption.] Yet again, there are very few Conservative women. The one or two ladies opposite waving and shaking their papers at me do not help. The majority of Conservative Members, as always, are men, but the majority of people to be affected by the cuts will be women. It is women who will lose their child benefit and the tax credits that help them get into work, and it is women, largely, who work in the public sector and rely on its excellent flexible working conditions. Is it women who will find it harder to get into work, thanks to the Government’s policies?

[Ms Eagle]

I do not suppose it is their fault they are men. I can blame them for some things, but not that. My hon. Friend makes a perfectly fair point though. It is clear that 65% of those who work in public services are women, that 75% of those who work in local government are women and that there are even higher levels working in the health service and social care. Clearly, they are on the front line, and the Government have a legal duty, which it is not clear that they have fulfilled, to take reasonable account of that fact.

[Dr Sarah Wollaston (Totnes) (Con)]

Has the hon. Lady met people trapped on benefits, many of whom, incidentally, are women? The failure to address the perverse incentives operating in our benefits system was utterly spineless and ignored the real misery affecting those who live trapped in our benefits system.

[Ms Eagle]

The hon. Lady’s intervention was extremely helpful. Of course I have. We have all done a great deal of work on social security reform, and I hope she will be the first to acknowledge some of the progress we made, particularly in helping lone parents into work. Tax credits and all the support we gave on child care were among the measures that were crucial in ensuring that we managed to increase significantly the number of lone parents in work when we were in office. I hope she will be the first to recognise our success in those areas. She should take a close look at the increasing rates of marginal tax that came about because of some of the changes, particularly for lone parents, and the savings made in tax credits, and she should also have a word with her party’s Front-Bench team about their priorities for cuts, given that they are taking away benefits that particularly help women go out to work.

In softening up the country for this age of austerity, Ministers have been anxious to establish some myths, the first of which is that the deficit was a Labour spending choice. We heard a lot of that today from the Chief Secretary to the Treasury. The second myth is that the cuts announced are unavoidable. We need to start with some facts. When the credit crunch struck in 2008, Britain had the second-lowest debt in the G7. We had low interest rates, low inflation and low unemployment. There is nothing reckless about that. Now, however, the Conservative party and the Liberal Democrats are trying to rewrite history.

[Matthew Hancock]

Will the hon. Lady give way?

[Ms Eagle]

No.

Public spending did not cause this deficit—the global financial crisis caused it. A large deficit is what we get when the largest financial crisis since the war hits. When companies’ profits are hit, tax revenues fall.

[Matthew Hancock]

Will the hon. Lady give way?

[Ms Eagle]

I said no.

When families have to work shorter hours, they pay less tax. We took a conscious decision to spend money to keep people in their jobs and homes, and I am proud that we did that. As a result of our action, unemployment was half what it had been in previous recessions and repossession levels were also half what they were in the Tory recession of the 1990s. Some of this help has been cut away in the CSR and, as a result, it is more likely that more people will lose their homes, as unemployment and the cuts begin to bite.

[Sajid Javid]

The hon. Lady is fond of saying, “Let’s have a grown-up, sensible debate”, so it would be useful if she followed her own rules. Why is she refusing to give way to my hon. Friend the Member for West Suffolk (Matthew Hancock)?

[Ms Eagle]

There we see it—the old boys’ network writ large. They stick together, don’t they?

[Matthew Hancock]

rose—

[Ms Eagle]

Go on then.

[Hon. Members]

Hooray!

[Matthew Hancock]

I am very grateful to the hon. Lady for plucking up the courage to give way. She said that Britain went into the crisis with the second lowest deficit in the world, but she has now revised that to point out that, actually, it was the second lowest debt in the world. Does not the fact that she and her colleagues muddle up the debt and the deficit show just why we are in this mess?

[Ms Eagle]

Whatever happened to old-fashioned courtesy? The hon. Gentleman should ask himself why I do not want to give way to him when he is so generous and lovely to me when I do.

Money spent on infrastructure investment kept the construction sector going. As we saw from the GDP figures on Wednesday, that is still having a positive effect. The deficit was unavoidable. It was vital to support people and businesses through tough times, but let us be clear about Labour’s spending before the crisis hit. Far from being too high, it was, as the Prime Minister said—I am quoting him directly—“really quite tough”, while the Chancellor was urging us to spend more.

The second myth is that the scale of the cuts is unavoidable. As my right hon. Friend the shadow Chancellor has pointed out, Government propaganda has got it precisely the wrong way round. The fact is that the deficit was unavoidable; it is the June Budget and the Chancellor’s spending review that are a political choice. They are not only avoidable, they are downright dangerous. That is why there was no mention of these supposedly unavoidable cuts in the manifestos of either of the parties now in government when they went to the country. That is why they have no mandate for the cuts policy that they have embarked on since the general election.

Since the election, we have seen the contortions of the Deputy Prime Minister, along with his accomplice in what we now have to call the “quad”, to justify his volte-face. First he told us that he took a call from the Governor of the Bank of England as he stepped into the ministerial Jag, but the Governor begged to differ. Then the Deputy Prime Minister said that Britain was about to become Greece. That is about as close to a myth as you can get, Mr Deputy Speaker. The Government have made their choice, and we on the Opposition Benches will hold them responsible for the social and economic consequences of those choices.

[Mr Chuka Umunna (Streatham) (Lab)]

Has my hon. Friend noticed the tendency of those on the Government Benches, and in particular the Chief Secretary and the Chancellor, when referring to the history of the economy this year, to say that we were on the brink of bankruptcy as a country? Did she, like me, notice Lord Turnbull’s appearance before the Treasury Committee this morning, when he clearly said that this country was not on the brink of bankruptcy and that there was no risk of a sovereign debt crisis?

[Ms Eagle]

It is quite extraordinary that we have a Chancellor who is prepared to make such alarmist statements from the Treasury. He does it for political, not economic, reasons, and it is a disgrace that he continues to do it.

Julian Smith (Skipton and Ripon) (Con): Will the hon. Lady take this opportunity to pay tribute to British business, which has created hundreds of thousands of jobs since this Government started taking the tough decisions that she flunked?

[Ms Eagle]

I am certainly more than happy to pay tribute to British business, but I do not connect the first part of the hon. Gentleman’s question with the second.

Last week two more myths were added to the Chancellor’s own special edition of Grimm’s fairy tales. He now claims that the measures in the spending review are fair, and even that the scale of the cuts would have been greater under Labour. Let us start with fairness. Last Wednesday, the Chancellor told us that fairness was

“one of the guiding principles of this spending review”.—[Official Report, 20 October 2010; Vol. 516, c. 955.]

Not for the first time, this spin lasted barely 24 hours, before the Institute for Fiscal Studies comprehensively rejected it, proving that, far from the poorest being protected, it is the poorest who will bear the brunt of the cuts. It is families with children who will pay the most. We should not be surprised at that, because the Institute for Fiscal Studies was scathing of the Treasury’s analysis of who loses what.

[Stephen Gilbert (St Austell and Newquay) (LD)]

How is it fair that in the time that the hon. Lady has been on her feet at the Dispatch Box, we as a country have spent almost £2 million servicing the interest on the debt that has been created? That is £5 million an hour and £120 million a day. What plans do the Opposition have to bring that under control?

[Ms Eagle]

I have talked about the importance of getting the deficit down, but the hon. Gentleman is falling for the idea that the coalition have perpetrated that it is somehow not viable to have a bill that needs to be paid. People who have mortgages have to pay them off over time, and they have to pay interest on them. However, it is not sensible for anyone to deal with their mortgage by paying it off so early that they cannot afford to feed their kids in the meantime.

[Mr David Ruffley (Bury St Edmunds) (Con)]

Will the hon. Lady give way?

[Ms Eagle]

I am very happy to give way to the hon. Gentleman; it is great to see him back in the House.

[Mr Ruffley]

I am most grateful to the hon. Lady, although I am afraid that I will not be lovely and fluffy, or whatever it was she said she wished my hon. Friend the Member for West Suffolk (Matthew Hancock) was. Is she aware that on 18 October, 35 leading businessmen wrote a joint letter stating that delay would cost this country an extra £100 billion alone in the course of this Parliament? Are they all wrong?

[Ms Eagle]

I would not expect the hon. Gentleman to be fluffy—that is not a word that I would ever have associated with him—but it is still good to see him back, and I genuinely welcome his return.

It needs to be pointed out that that letter was organised by Lord Wolfson in the House of Lords, via Conservative central office. It is also interesting to note that some of the signatories of the letter have some kind of vested interest. First, quite a few are Conservatives. Secondly, BT, for example, has cut 20,000 jobs in the past year, which is not exactly helping us to replace public sector jobs with private sector jobs. Others are responsible for outsourcing and stand to make direct gains from the shrinking of the state. The hon. Gentleman can believe that guff if he wants; we do not.

The IFS has been scathing about the Treasury’s analysis on the fairness front, and on who loses what. It has noted that the Treasury analysis conveniently stops in 2012-13, thereby excluding £12 billion of the announced savings—by which I mean cuts to social security. For those who remain in any doubt, let me quote directly from the IFS:

“The tax and benefit changes are regressive rather than progressive across most of the income distribution.”

The Government’s immediate response to that report by the IFS was to try to shoot the messenger. The Deputy Prime Minister launched into an attack on the IFS that bordered on the hysterical. He described its analysis as “distorted” and “complete nonsense”. He neglected to mention the fact that before the election he had regularly lauded the IFS when the results of its analysis suited him. On 29 April, as he preened himself during the leaders’ debate, he told us that he was

“really delighted at the Institute of Fiscal Studies”

for its view of Liberal Democrat proposals. Now that he is in government, he does not seem to like the IFS for pointing out an inconvenient truth.

A flip-flop here, a U-turn there—it is all in a day’s work for the Liberal Democrats as they shoehorn themselves into their new and ill-fitting Tory ideology. It is now abundantly clear that, for the Deputy Prime Minister, the slight awkwardness of signing up to one of the most unfair decisions for generations will not get in his way, even if he occasionally has to struggle with his conscience on “Desert Island Discs”. I know that he has argued for a different, more convenient definition of fairness, but let me tell him that there are some things that are not fair, however we define them.

[Mr David Anderson (Blaydon) (Lab)]

I thank my hon. Friend for the sterling work she is doing here today. We have discussed the fact that this is not about fairness, and that women and children will be hit by these measures. Does she recognise this quote from Richard Hawkes, the chief executive of Scope? He says:

“Despite the continuing rhetoric that spending cuts will be fair, the Chancellor’s announcements today are anything but. This will hit disabled people and their families particularly hard.”

Does she believe him, or does she believe Gideon?

[Ms Eagle]

I think we know who to believe. There is a great deal of real worry out there about the effects of the draconian cuts in public expenditure that have been announced in the spending review.

I will tell the Deputy Prime Minister and anyone else on the Government Benches what they cannot hide about fairness. There is nothing fair about cutting 10% from housing benefit for those who are out of work for more than 12 months when there are already five people chasing every job vacancy—and that is before the Government add another million to the dole queue. There is nothing fair about expecting children to play a bigger part than the banks in getting the deficit down. There is nothing fair about failing to carry out a legally required equality assessment that would have shown that the Budget had a disproportionate impact on women, who often do the lowest paid jobs in the public sector. When it comes to the cuts under this Government, it really is women and children first. Let us have no more of these ludicrous claims of fairness from the Government.

As for the idea that the Government are cutting less than we had planned to do, there is something distasteful in a Chancellor who is prepared to skew his spending decisions, cutting an extra £7 billion from the social security budget, just to get a cheap one-liner at the end of his speech. There is nothing so cynical as a Chancellor who begins his speech by claiming that Britain has been saved from the brink of bankruptcy by his savage cuts, only to conclude it by claiming that Labour would have cut even more. He knows that he cannot have it both ways, and he knows that he has cut £30 billion more from public expenditure than we planned to do. He knows that, in doing this, he has totally failed in his pledge to protect the most essential front-line services. It is now clear that his promises are unravelling, and that there will be a major impact on our schools, our hospitals and the police.

Schools up and down the country are facing cuts in funding, thanks to a budget settlement that takes no account of rising pupil numbers; and before the Liberal Democrats start getting excited about the pupil premium, I am sorry to have to tell them that the Education Secretary has now admitted that it is simply a con. In June, the Prime Minister pledged:

“We will take money from outside the education budget to ensure that the pupil premium is well funded”.—[Official Report, 2 June 2010; Vol. 510, c. 432.]

But at the weekend, the Education Secretary finally came clean and admitted:

“Some of it comes from within the Department for Education budget, yes.”

It is not new funding after all; it is just money being moved around within the Department to disguise budget cuts.

The IFS calculates that 60% of primary school pupils and 87% of secondary school pupils will see a real-terms funding cut to their schools as a result of the new funding formula. We knew that the Liberal Democrats supported recycling, but we did not realise that this was what they meant. We were also repeatedly told that health spending was to be protected, yet £1 billion has been raided from the NHS to make up for some of the shortfall caused by the huge cuts in local government spending. With this settlement, the Prime Minister’s promise of real-terms increases in health spending will not be met.

There has been no commitment to front-line policing either. The Police Federation tells us that as many as 20,000 police will be sacked. The thin blue line has become a casualty of the thick red pen. For schools, the NHS and the police, there will be no protection for front-line services.

[Tom Brake]

Will the hon. Lady give way?

[Ms Eagle]

No. I have given way to the hon. Gentleman before.

No priority is to be given to the services that we rely on, day to day. That is the choice that the Government have made. Let us have a serious debate about the differences between us, and let us have no more nonsense from the Government about the four myths on which their entire defence of the scale of their cuts is based. Let us hear no more nonsense about the deficit being the result of the decision of one party or the fault of spending on our public services, rather than the inevitable result of a global economic crisis and the greed and recklessness of the banks.

[Danny Alexander]

The right hon. Lady has said that she is opposed to the welfare cuts that we have proposed, opposed to the pupil premium, opposed to the savings in the Ministry of Justice and opposed to the savings in the Home Office. Can she name one single saving that she would propose to help to tackle the deficit?

[Ms Eagle]

I have not said that I am opposed to all the changes in the social security budget. My right hon. Friend the shadow Chancellor supported some of the changes in welfare spending. Indeed, it was we who developed them: the Government are putting our changes into effect. Let us hear no more of this nonsense about the scale of the Government’s cuts being unavoidable, rather than the result of a decision that they made on the balance between taxes and public spending cuts.

[Danny Alexander]

This really is quite a simple question. Can the hon. Lady name a single cut that she supports?

[Ms Eagle]

If the Chief Secretary had answered my questions, I might answer his. [Hon. Members: “Incredible!”] What I find incredible is the fact that the right hon. Gentleman has the figures for redundancies and the costs of redundancies across Whitehall in his books. We know what the Ministry of Justice figure is, but he knows what the overall figure is, and he refuses to give it to the House. That is a disgrace.

Let us hear no more nonsense about how the spending cuts that the Government have announced were, as a result of some magical accounting trick, less than those that we planned when we were in government. The truth is that this country faced the gravest of economic challenges. The truth is that our party, in government, rose to meet that challenge, and averted a catastrophe for our country by making tough decisions to protect jobs and homes in our economy. The truth is that whatever party was in government, it would now be making decisions to pay down the deficit. Any party, including ours, would be having to make tough decisions.

It is also true that there is a clear choice in relation to what to cut, and the balance between cuts and measures to bring in revenue. My right hon. Friend the shadow Chancellor has set out the different approach that we would be taking, which would protect not only front-line services but jobs, growth and the recovery. The Government, for ideological reasons alone, have used the deficit as a fig leaf for an assault on our public services of a kind that they had previously only dreamt of. They can talk of fairness as much as they like; they can spread myths as much as they like; but we are not fooled, and, more important, the British public will not be fooled either.

The spending review document sets out the Government’s choices. Those choices were freely made. What the Government have presented is their vision of a future for our country. What we have seen is not the big society but the blueprint for a smaller, meaner and nastier society, and we reject it.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Speeches are limited to six minutes, and a vast number of Members wish to speak. We need restraint on the part of all Members, and if they can cut their speeches to less than six minutes, we may get near to the end of the list.

14:28

[Mr Andrew Tyrie (Chichester) (Con)]

Six minutes is not a long time in which to respond to such high-octane exchanges. I do not intend to add to the highly partisan exchanges that we have just heard, but given that the Treasury Committee is currently undertaking an inquiry into the CSR—the largest that has ever been undertaken—I want to make a few observations about what is in the document. I shall see how far I can get.

I am not sure that everyone will like my first observation. Indeed, I am not sure that anyone will like it. But the truth is that beneath all the political noise there is quite a wide range of cross-party agreement about the need for sharp action to tackle the deficit. At least two thirds of the correction to the deficit, or perhaps more, would have taken place whoever had won the election. That is clear from table 1.1 of the Red Book.

My second observation is that there is also a substantial consensus about overall economic strategy in the United Kingdom. That is in complete contrast to the position in the 1980s, when there were rival economic strategies. There is a consensus not just on deficit reduction, but on the need in principle to reform welfare, the need to sort out the banking system and to bring more competitiveness to it, and the need for some industrial support for biosciences and for some energy production, for example.

The third observation is that these cuts are not unprecedentedly large, as Lord Turnbull, who gave evidence to us this morning, said. The plans to cut public expenditure in the period ahead will keep it broadly steady in real terms for five years. Spending was kept broadly steady in real terms between 1984 and 1990.

[Mr David Ruffley]

I wonder whether that is right, because I have looked at the numbers and it would be appear that, over the period of the CSR, we will see the share of national income accounted for by public spending fall by about 6%, to 41%. That is exactly the same fall as was achieved during the first, and the start of the second, Thatcher Administrations.

[Mr Tyrie]

Yes, and public expenditure will be back broadly speaking to the level under the last Labour Government prior to the financial crisis.

My fourth observation is that the major parties were right to conclude that large cuts in public spending were going to be necessary to stabilise the public finances. One way of looking at this, which Lord Turnbull alluded to this morning, is to work out how much tax has been forgone as a result of the output lost during the recession. If one does that calculation, one sees that, broadly speaking, around £80 billion of tax has been forgone. The total GDP loss is around £200 billion, of which about 40% would have flowed into tax. That suggests that cuts in spending of about £80 billion are probably required.

My fifth observation is that the scope for cuts is probably better now than it was in the 1980s. That retrenchment took place not, as this one is going to, after the longest period of continuous growth for a very long time in British history, but after the doleful years of the 1970s, when there was no growth at all, which made spending cuts difficult. In addition, absolute levels of income are much higher now than they were then, meaning that absolute levels of pain will also be reduced if these cuts are targeted effectively.

My sixth observation is that some, but certainly not all, of these cuts are the result of careful longer-term planning. For example, quite a lot of thought seems to have gone into welfare reform and education. This has been planned for some years and it probably draws on quite a lot of work that was already done in Whitehall for whoever won the election.

However, if I look at defence, I find it difficult to believe that much long-term planning has been done. It is extraordinary. We are going to build two aircraft carriers which for a decade will not carry any aircraft. I am reminded of an episode of “Yes Minister” in which Jim Hacker discovers that a hospital does not have any patients. In fact it is worse than “Yes Minister”, because Sir Humphrey pointed out in that episode, which I looked up, that some patients were about to be brought in. However, one of the carriers is even going to be mothballed. We would not start from here. I hope that the Public Accounts Committee will look vigorously at how the UK—and I see the Chairman nodding her head—came to sign those contracts for the carriers without any exit clauses. I also hope that we get to the bottom of whether there was scope for renegotiation of the contracts, which after all were taken out between a monopoly supplier and a monopoly demander. That should have created some scope for renegotiation.

My seventh observation is that some of the ring-fencing of public expenditure—we have quite a bit of ring-fencing—will be difficult to justify in the years ahead. I refer particularly to aid. To increase the aid budget by 37% in real terms while the justice budget is cut by a quarter in real terms takes quite a bit of justifying.

My final observation is very much a personal one: that the level of public expenditure matters irrespective of the deficit, and that it is too high. Even if there were no deficit, my own view is that having public expenditure as a proportion of GDP standing at 50% is not good for this country. It reduces choice and freedom for millions of individuals and it burdens enterprise with unacceptable levels of taxation. That is perhaps why for a large proportion of Labour’s period in office they held it at about 40%, and why the Government now intend to bring it back towards that level—the level at which Labour had it in 2008.

14:35

[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

I am very pleased to have an opportunity to contribute to this debate, as I believe that these economic issues will be the most important issues facing this Parliament. I want to talk in particular about the effects of the spending review on London and inner-city communities—the type of community that I have lived in all my life and sought to represent over the past two decades. I also want to talk specifically about the effects of the spending review on the private sector, as they are not sufficiently debated or understood, and on the public sector, and about the particular effects on housing and housing need in London, because I think the spending review and the mix of proposals on housing benefit and cutting expenditure on public sector housing will hit London harder than any other part of the country, with consequences that I do not think the Government have calculated.

It is not sufficiently understood that more than 1 million jobs in the private sector are directly dependent on public sector contracts with private sector organisations. That is the case in construction, for example, but there are also many jobs in social care and looking after young children that are basically delivered by private sector organisations. Also, when we make these cuts and people lose their jobs, demand will be taken out of the economy, so many retail and service companies in London will suffer. These cuts will have a ripple effect in the private sector in London. The Government and their supporters in the Lib Dem party may be laughing now, but they will be laughing on the other side of their faces when the effects on the private sector become clear.

The coalition Government talk about the public sector as if it is all about men in bowler hats who can easily be switched into meaningful jobs in sectors such as banking. In Hackney and the inner city generally the majority of public sector jobs are women’s jobs, however, and the majority of those women are heads of households, and far from doing peripheral or frippery jobs, they work in the heart of communities as teaching assistants or care assistants or in the voluntary sector, which will suffer because of the cuts in local government spending. These jobs are at the heart of communities. How hypocritical it is of the coalition Government to talk about the big society and then attack ordinary women working in the heart of their communities across a range of important occupations.

I have listened to what coalition Ministers have had to say, but having lived in and represented Hackney for more than 20 years, I can tell them that there are no private sector jobs for women in Hackney who will be made unemployed to step into. That is because of the structure of employment in Hackney and the inner city. Yes, we can count up the number of vacancies and the number of people who might be made unemployed, but there is a mismatch between the types of people that this coalition are going to fling into unemployment and the actual opportunities available to them, such as they are, in the City and the private sector in London generally.

We have to judge these matters on the basis not of political banter, to and fro and Punch and Judy, but of the effect on real people’s—real women’s—lives. The consequences for communities such as Hackney in the next financial year will be very serious indeed. The people in those communities will not have been impressed to see Ministers on the Treasury Bench laughing and congratulating themselves when the statement was read out. What were they congratulating themselves on—thousands of people losing their jobs and thousands more losing their homes?

That brings me on to housing. Members will be aware that since the 19th century one of the core activities of local government in London has been building housing—affordable, quality housing for rent. If hon. Members are not aware of that, I can take them to estates built in Hackney more than a century ago. Of course politicians then, even Tory politicians, recognised that decent housing was at the core of social stability and public health concerns. But what are we getting from this coalition? We are getting cuts in public sector housing expenditure, which, as I said, affect the traditional role of local government; cuts in people’s housing benefit after a year; and, above all, a cap in housing benefit.

I put it to the Government that the majority of people claiming housing benefit are not shiftless people, but working people and those looking after disabled people. These are not people who are simply unemployed. It has been argued that we have to cut housing benefit because, horror of horror, poor people are living alongside rich people in desirable areas of the city.

[Toby Perkins]

My hon. Friend is reflecting on the inequities of the changes to housing benefit. Does she agree that the Government’s focus on the cap is a red herring, because it is relevant to very few housing benefit recipients, and that the really important thing is the 10% cut that will hit housing benefit recipients in the second year?

[Ms Abbott]

I quite agree, and I am grateful to my hon. Friend for raising that issue. I have a sentence or so more to say about the cap. We have been told by the Prime Minister of the horror of poor people living alongside rich people in boroughs such as Islington and Westminster. Let me tell the Government that I can take them to the heart of the Prime Minister’s Notting Hill and show them poor but entirely respectable West Indian couples living alongside merchant bankers who have bought their houses for millions of pounds. London has always been a city where rich and poor live side by side; it has never had the perfumed stockades of the upper east side of New York or the kind of social segregation seen in American cities. This type of cleansing of poor people from what are deemed to be areas that are too good for them to live in is quite unconscionable. As my hon. Friends have said, this is not just about the cap on housing benefit, although that will also have a serious effect on ordinary people in London and may well see the end of some Lib Dem MPs now sitting on the Benches opposite us; it is also about the cuts in housing benefit after a year.

What I say to the House is that we can sit here this afternoon scoring points and doing the Punch and Judy stuff, but real people in our constituencies, whose circumstances are not understood by those on the Treasury Bench, will suffer as a result of this ill-thought-out, ill-paced and wholly ideological spending review. The credit crunch and the deficit have been the occasion of this spending review, not the reason for it.

14:43

[Mr John Redwood (Wokingham) (Con)]

At the end of the period, in 2014-15, the Government plan to spend £92 billion a year more, on current spending, on services than Labour did in its last year—that is a large 15% increase in the amount of cash. We need to ask ourselves why it is that every year public spending increases, yet the Government are proposing some extremely difficult or, in some cases, undesirable choices to be made in subsequent years to try to live within that rather big figure. I suggest to the Government that there are three areas that they could work on, and that their doing so would be in all our interests in this House, because if they could manage them better, they might not need to make so many of those difficult choices in the later years and would still be able to live within their totals and get the deficit down.

The first reason why there is a squeeze on some programmes that many Members do not want to see squeezed is the big rise in money allocated to pay for inflation; the plans assume quite a lot of public sector inflation over the five years. If the Government can do better at buying in goods and services—they are a very big purchaser and they say they are going to do so—they might reduce the average price of bought-in things. Instead of having positive inflation, they would have negative inflation on that part of the programme. If they can do a good deal with their employees, reassure them and get them to accept the kind of measures on pay that are being suggested—I believe that they are talking about a two-year pay freeze, for example—that will take a lot of extra inflation out of the system, because the biggest single item in these budgets is of course pay. Again, the more that we in the public sector can share the pain by moderate means, such as accepting pay restraint, the less we will have to take the difficult choices in later years that are built into the programme.

The next thing is staff numbers. A lot has been made so far in what passes for a debate in this House about having 490,000 fewer jobs in the public sector by the end of the period. These are not 490,000 redundancies. Given the large rate of resignations and retirements in the public sector to which the Chancellor has referred, I hope that most can be taken care of by eliminating posts after people have resigned or left.

[Helen Goodman]

I am most grateful to the right hon. Gentleman for giving way. Of course, in a very small-minded way, what he says is right. If those jobs are cut, where does he think that young people will get the new jobs that they need?

[Mr Redwood]

In the private sector, which is already generating tens of thousands of jobs every month. That is what we need to do. I am not saying that there should be a complete staff freeze. For example, if 480,000 a year are leaving, which was the Chancellor’s figure in the Budget, 250,000 people could be hired while still achieving half the reduction in the first year. I think that the Chancellor might have been a bit optimistic, but he referred to an 8% rate. If the percentage was half as great, the reduction could still be made in the first two years. There could be reductions of 250,000 without a single redundancy.

I urge my right hon. and hon. Friends not to pursue the redundancy route wherever possible. It is expensive, unpleasant and disruptive. I do not want to see lots of people retiring early from the administrative services on big pensions, and I do not want to see redundancy payments made with people coming back into the public sector at a later date, leaving us to wonder why all the cost and disruption has been incurred.

The next big area that puts pressure on the increased money is debt interest. I entirely agree with the Government, and with Opposition Members who knew this when they were in government, that we have to bring the deficit down before it kills the whole budget. If we allow the deficit to keep on rising, as the Opposition originally proposed, debt interest will take more and more of the increased spending and we will have to make unpleasant cuts to the things that matter. How can we reduce that debt interest burden more quickly? If we can get more cash into the public sector, starting today—we do not need to wait to start the programme next year, as is implied in the figures—we will reduce the increase in the debt day by day. If we sell more assets, we will not have to raise so much money in the debt markets, which will keep the debt down.

It is very good news that the Government’s programme has restored a lot of confidence in the markets, so that the rate at which they now have to borrow is now lower. That will obviously make a contribution to getting the debt interest rate programme down.

I have to say to the Government that I do not think that we can afford to give £80 billion to foreign countries over the CSR period. If we add the overseas aid programme to the European Union programme, the total is £80 billion over the period. I do not want to take any money away from the poorest countries or from humanitarian aid. Those are good things and I fully support the Government’s intention to carry on with them, but I do not think that there is any need to subsidise China, India or Russia—nuclear weapons powers with, in the case of China, $2.5 trillion in the bank. It is a bit odd to give China a grant when we then have to borrow the money from China to pay the grant to China. That cannot make any sense.

I believe that the Government are now going to remove the aid to the richer and more successful countries. Cannot we pocket that for a couple of years and then become more generous when we have the deficit under control? May we please get the European amounts down? They are the most unforgivable ones; poor people in Britain are paying tax to offer grants to rich countries in Europe, and that is not acceptable in the current conditions.

The more that these pressures—the grants abroad, debt interest, costs, inflation and staff numbers—can be abated, the more we will have money available to do better things with the growing programmes. It is good news that nine of the Departments have level or rising cash throughout the period, but it is bad news that one or two other Departments will find that the shoe pinches a lot. That is why I think that we need to make more rapid progress in controlling costs and staff numbers, particularly in administration, and in dealing with the debt interest programmes, so that we have a bit more free to ease those areas that will be very tight in future years.

I do not for one moment believe the figures from 2013 to 2015 anyway, because I think that they will be subject to subsequent revision because of the pressure of events. As inflation changes, we will need to revise them. As the state of the economy changes, we will need to revise them one way or the other. Let us hope it will outperform and we will have a bit more scope.

As an election draws near, politicians tend to want to spend more, so we should discount the 2013-15 figures and concentrate on what is happening now. Will the Government please bring forward as many of the reductions as possible to this year, and not wait until next year? The more we save now, the less we borrow and the more the pressure is reduced on subsequent years’ programmes.

14:50

[Malcolm Wicks (Croydon North) (Lab)]

I shall focus specifically on child benefit, and start by sincerely congratulating the coalition Government. In 1945 the coalition Government, which involved Liberals, Conservatives and Labour, introduced family allowances—a coalition Government who got something right. It was in the mid to late 1970s that child tax allowances were amalgamated with the family allowance scheme to form child benefit.

Unfortunately, there is now a need to restate the case for family support and for child benefit. I want to explain why it is such an important scheme to maintain as a universal scheme. First, there is the societal interest in bringing up our children. No one spoke more clearly about that than Eleanor Rathbone when in 1940 she said that

“children are not simply a private luxury. They are an asset to the community, and the community can no longer afford to leave the provision for their welfare solely to the accident of individual income.”

That was Eleanor Rathbone, the heroine of family support, back in 1940.

A second reason for child benefit is what we might call horizontal equity. The welfare state is not simply about poverty. In terms of child benefit, it is about the fact that whatever people’s income level, if they have children, they are taking on financial responsibilities over and above those who are childless or the single. Horizontal equity is important, as we are finding out now.

Thirdly, there is the sheer cost of bringing up a child. No longer is a child someone who becomes independent at 14, 15 or 16, when they leave school and get a job. Once upon a time children might have been an economic asset on the land. Today our children, with higher and further education, are dependent on their families for longer and longer.

People have had a go at estimating the costs of a child. The most recent estimate that I have seen is from the Liverpool Victoria Friendly Society, which said that the costs of a child could be as high as £200,000. We can add on to that other indirect costs when the mother, staying at home, loses her place on the career ladder, loses salary, loses income and loses pension rights. Our children are very expensive, as many of us who are parents know. It may be that for these economic reasons, the birth rate in societies such as the UK is below replacement level. These are significant issues.

The fourth reason is extremely important. The family allowance—now child benefit—was essentially an income for mothers. That is what Eleanor Rathbone was arguing for. Despite modern times, and despite the rise of the dual worker family and the rise of women’s rights, my guess would be that it is still mothers in most of our families who are responsible for juggling family budgets at different income levels. It is mums who make the judgment about whether the clothes and the shoes can be afforded, how to fund the school trips and the treats for children—[Interruption.] That obviously struck a chord with someone. If my hon. Friend the Member for Bishop Auckland (Helen Goodman) could also laugh at any jokes I make, that would be helpful.

The income for mothers is particularly important for mothers who, often pejoratively, are referred to as the stay-at-home mums—those who make the judgment that for the first few years, they want to look after their own children. Choice is so important. I think that in future we will see more parents wanting to spend time with their children, especially when they are young. That is why the family allowance and the child benefit have been so important, and that is why, following the modern coalition Government’s announcement, we have seen so much concern from those mothers in so-called higher income families about the loss of their income. That is very important.

A fifth reason is that child benefit, alongside other benefits, is part of the universalist spine that is so crucial to a modern welfare state. Alongside free education, a free national health service, pensions and national insurance benefits, child benefit is universalism, and I believe that universalism is a major force for cohesion in our society. It is a “We’re all in this together” social policy, which we start to erode with perilous implications. Child benefit is simple, easily understood and easily administered.

[Mr Umunna]

Will my right hon. Friend give way?

[Malcolm Wicks]

I am happy to give way to my constituency neighbour in Streatham.

[Mr Umunna]

Will my right hon. Friend also acknowledge that one of the good things about child benefit is that its take-up is so high? Take-up is one of the problems that we have with many benefits that are paid out.

[Malcolm Wicks]

I agree, of course, because child benefit is easily understood, simple and a universal benefit. I am very happy to agree with my parliamentary neighbour.

Child benefit is now being undermined, which is why it is so important to restate the basics in favour of family benefits. We are seeing something that will attack the very principle of women’s entitlement. It will essentially punish mothers if their husbands earn above the higher tax threshold; the mums will suffer because of the father’s income. As an aside, let us not assume that in the 21st century income is shared by all families; there are still families where the father keeps more than he gives to the mother and the children. That is not just about poverty, either; it happens at other income levels, too.

The measure is also a snub to those mothers who, as I said earlier, choose to stay at home to look after their own children. We need more choices—about whether people go to work and use child care or stay at home to look after their own children. What message are we sending out to those mothers who want to care for their children in that way?

The measure also introduces, as we know, the unfairness between the dual-earner family on £80,000, who keep the child benefit, and the family with one earner above the threshold, who lose it. The measure is a recipe for complexity, and it will disincentivise those who are just below the tax threshold to earn more money in the future.

This is a measure that needs to be rethought. It undermines family support, and it undermines our children. So much for the party of the family.

14:57

[Stephen Williams (Bristol West) (LD)]

I begin by reminding the House of the background against which we debate this comprehensive spending review. We were borrowing £1 for every £4 that we spent, and that simply could not go on, whatever Government of whatever combination of parties had taken office after the general election in May.

There were more than 20 public meetings in Bristol West during the election, and at every single one I made it clear to my potential constituents that, if my party took part in a coalition after the election, as seemed likely from the polls at the time, we would have to make difficult decisions and would not shirk from doing so.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Did the hon. Gentleman make it clear at those same meetings what he was going to do on tuition fees after the election? Did he make it clear that the pledge that he was signing was not the worth the paper it was written on?

[Stephen Williams]

I thank the hon. Gentleman for his point. Yes, I certainly did address many student audiences during the election in Bristol West, and I made it quite clear that in an ideal world, and in ideal financial circumstances, the Liberal Democrats would have wished to abolish tuition fees from the outset. Financial circumstances did not allow us to do so, however, and that is why we had a phased plan. I spoke at the launch of the National Union of Students pledge on working with the Government for a fairer system of student finance, and I am still working with the Government and the NUS to produce such a fair system. If the Government come forward with a fair system, I will support them; if they do not, I will not.

We know that Labour planned to make billions of pounds’ worth of cuts whatever happened after the election; it has been confirmed in many memoirs. But Labour Members have since been in deficit denial. They have been in denial about the need to tackle the deficit itself, and, as today’s debate has shown, they have not been able to give us a single Government measure that they would support, or to put forward an alternative themselves. The coalition Government are taking the necessary steps to restore order and stability to our public finances. That will restore confidence among British businesses and confidence among countries abroad that Britain is serious about tackling its desperate situation. Confidence and low interest rates are the bedrock for ensuring that our businesses can grow.

[Mr Umunna]

Will the hon. Gentleman acknowledge that there is not a difference in views on the need to deal with the deficit per se but that the issue is rather the speed and the depth with which we do that? Labour Members think that we need to go for a different time scale of deficit reduction as compared with his party—or at least his party post-May of this year. Will he at least acknowledge that there is a view on deficit reduction among Labour Members, but that it may not be the same as his party’s?

[Stephen Williams]

The hon. Gentleman is a thoughtful man who now sits on the Treasury Committee. Perhaps he thinks that this is a serious issue that needs to be tackled, but many of his hon. Friends seem to be in deficit denial. We have not heard thus far in the debate—although there are many hours to go—a single idea from the Opposition on how they would tackle the deficit, whether it is over four years or five years, which is a point of debate.

[Mary Macleod (Brentford and Isleworth) (Con)]

Will the hon. Gentleman give way?

[Stephen Williams]

I am running out of time, so I will not be able to.

The Chief Secretary announced that the comprehensive spending review was designed to achieve three things. The first of those was growth, and today’s statement by the Business Secretary certainly builds on that. I welcome the £1.4 billion for the regional growth fund and the local enterprise partnerships that have been set up to replace the regional development agencies. In Bristol, the South West Regional Development Agency will not be missed, and I look forward to working with our local enterprise partnership for Bristol and the west of England. I welcome the fact that the science budget has been protected in cash terms, and the fact that £250 million extra is being put into apprenticeships—something that I spoke about repeatedly in the last Parliament, when I led for my party on these issues.

I also welcome the moves towards a low-carbon economy to ensure that we have stable and sustainable growth in future, with the green investment bank and the first investment in carbon capture and storage, which the previous Government pulled out of.

I welcome, too, the transport schemes that have been announced so far this week, but I look forward to confirmation next week, when we have the announcements on rail, that the electrification of the great western main line from Paddington to Bristol and to south Wales should go ahead in order to support growth and stability in Swindon, Bristol, the west of England and south Wales.

The second theme of the CSR is reform to the welfare system, which is absolutely essential. The need for that was recognised by the last Labour Government, but now Lord Freud is a Minister in the coalition Government and Lord Hutton is advising the coalition Government on how to achieve what the previous Government recognised but failed to tackle. It is a key principle that work should always pay: it should be clear to everybody that if one is in work one should be better off. However, the welfare system is a social contract between all of us, and, in addition, taxpayers must think it is fair for them to pay for it.

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

Will the hon. Gentleman give way?

[Stephen Williams]

Once more, and then I will run out of time.

[Glenda Jackson]

In the light of what the hon. Gentleman just told the House, does he support the cuts in housing benefit?

[Stephen Williams]

The cuts in housing benefit are an example of difficult decisions that have been made. However, I have to say to the hon. Lady—we represent similar constituencies, mine in Bristol and hers in central London—that £400 a week in housing benefit is not a miserly amount for someone to fund their accommodation.

[Glenda Jackson]

Will the hon. Gentleman give way?

[Stephen Williams]

Not again. I do not think that the coalition Government will be making people homeless on the scale that the hyperbole coming from the Opposition Benches suggests.

The third theme of the CSR is the need for fairness. In the last Parliament, I spoke many times about the importance of achieving social mobility. We know from the studies of those born in 1958 and those born in 1970 that social mobility has stagnated. There are many complicated reasons for that, not all of which can be laid at the door of the previous Government. I am sure that their intentions were good in many circumstances, but sadly after 13 years social mobility was still stuck and Britain was still the second least socially mobile country in the world after the United States. That is why I particularly welcome the fairness premium of £7.2 billion over the comprehensive spending review period that was confirmed in the review, and the £2.5 billion pupil premium, which is from additional funding from outside schools’ budgets and is being introduced to help the poorest children from around our country. I grew up being entitled to free school meals and know what it is like to make the journey from poverty to a career through work and effort. Many children need support from their schoolteachers and mentoring from other people to bring about that transformation. I am a liberal interventionist and make no apology for that. It is important that that support continues through to further and higher education, so I welcome the £150 million higher education scholarship as a basis of support for young people who access higher education for the first time.

This Government inherited a desperate situation. We have the worst deficit of all the major economies in the world, at 11% of our national income. It is not entirely the fault of the banks. The structural deficit was high before the bank bail-out and continued to increase after it, and the Labour Government spent recklessly in their last days. The current Government are acting to reduce the deficit, introduce reform, encourage growth and, most importantly, encourage fairness in our society and achieve it through social mobility.

15:06

[Lilian Greenwood (Nottingham South) (Lab)]

I was particularly keen to speak in today’s debate because, the day after the Chancellor delivered his statement in the Chamber, his draconian cuts greeted with cheering and waving from the Government Benches, the Prime Minister and Deputy Prime Minister headed off to a primary school in my constituency. I am not quite sure why they were there, and it seemed as though they did not know why either, but of course the kids at Welbeck primary greeted them with great delight. Prince Charles came up to the Meadows recently, so people are getting used to visitors from London.

[Gordon Banks]

Could the Prime Minister and Deputy Prime Minister possibly have been at the school in my hon. Friend’s constituency getting some arithmetic lessons?

[Lilian Greenwood]

If only. I thank my hon. Friend.

What did I hear in the media coverage of the visit? I heard about the Prime Minister’s amazement that he had found a lad who liked broccoli. I did not hear the Prime Minister or Deputy Prime Minister telling the kids about the huge gamble that the Government are taking with their future. They are performing a huge economic experiment. They have a theory that if we cut public spending, lose 490,000 public sector jobs and, as PricewaterhouseCoopers tells us, lose another 500,000 private sector jobs that depend on the public sector, the rest of the private sector will somehow fill the gap. They do not seem to hear the warnings of economists who disagree. Listening to Ministers last week, one would have thought that the PricewaterhouseCoopers figures had about the same credence as Mystic Meg. The Government do not want to hear about the effect of their cuts, because they want to make them.

[Nia Griffith (Llanelli) (Lab)]

Has my hon. Friend found any evidence that the coalition Government have thought out how confidence will be created to stimulate the public sector, given that millions of people across the country are worrying that their household might be one of the million that will be hit by a job cut, and fearing that cuts to housing benefit will mean that they are left with very few pennies to spare after their mortgage payments or rent?

[Lilian Greenwood]

I thank my hon. Friend for that interjection. In fact, the latest figures for both consumer and business confidence are going through the floor.

Never mind the extra 1 million who will be out of work, the extra £700 million that we will have to spend on jobseeker’s allowance or the loss of tax revenues; the Government’s attitude is, “Cut deep and keep your fingers crossed.” But did the Prime Minister say that when he was in Nottingham? Did he tell those children about his gamble? Of course not, just like he did not tell them that their families, many of whom are in the poorest 10%, would be hit harder than anyone else. He did not mention that for all the talk of fairness, families with children will have to pay more than twice as much as the banks towards reducing the deficit. He did not mention that although his friend the Chancellor talked about continuing the decent homes programme, the funds have actually been cut.

[Richard Graham (Gloucester) (Con)]

I am sure that the hon. Lady and all hon. Members present agree that future jobs are vital. Will she therefore join me in welcoming last quarter’s figures, which show the greatest increase in new jobs for more than 20 years?

[Lilian Greenwood]

I am absolutely delighted that new jobs are being created. My concern is that when the cuts start to feed through that will no longer be the case.

Although some of the children whom the Prime Minister and Deputy Prime Minister were talking to will have had improvements to their homes—new windows and doors to make them secure, or new boilers or better insulation to make them warm—their classmates will not all get the same opportunity. The Prime Minister did not tell them what will be happening to some of the schools that they will go to when they leave Welbeck primary, or to the schools that their brothers and sisters might go to. The projects to rebuild Trinity and Fernwood secondary schools in my constituency have been scrapped altogether. As for the projects to rebuild Nethergate, Farnborough and Bluecoat, a few months ago, the Secretary of State for Education said that they were unaffected, but they are now being told that there is a cut of 40% in the funding available. I am sure that if the Prime Minister had asked the kids at Welbeck they could have told him that “unaffected” means not affected. Sadly, that is another broken promise and it is not fair.

Finally, let us nail the myth that this is all Labour’s fault. When he spoke in the Chamber last week, the Chancellor did not mention the word “recession” once. We have just come through the biggest economic crisis in generations—a global recession. If he does not understand why the deficit is high how can he possibly understand how to fix it? The deficit went up because we had a huge fall in output and tax receipts plummeted. Spending went up so that we could protect people’s homes and jobs, protect businesses and prevent the recession from becoming a depression. Labour took the right decisions and the Conservatives would have made the wrong choice every time. They are gambling with people’s jobs and homes and they have no plan for growth.

[Mel Stride (Central Devon) (Con)]

If the previous Government took the right decisions, why were we the first of the G7 countries into recession, the longest in it and the last out?

[Lilian Greenwood]

We suffered most during the recession because we had a high reliance on financial services. It was because our tax receipts were hit so badly that we needed to take action to protect people’s jobs and homes. The Conservatives would have done nothing and they have no plan for growth. I am afraid that the next time the Prime Minister and the Deputy Prime Minister come to Nottingham, they might not get such a warm welcome.

15:12

[Bob Russell (Colchester) (LD)]

The reading comes from “Proverbs”, chapter 31, verses 8 and 9:

“Speak up for those who cannot speak for themselves;

oppose any that go to law against them;

speak out and pronounce just sentence

and give judgement for the wretched and the poor.”

I am grateful to Lexden Methodist church in my constituency for its notices for the week of Sunday 24 October and the thought for the week—political concerns. I mention that because of the deafening silence from the Church in the broader sense on issues of social concern, housing benefit and the housing crisis. There are enough bishops at the other end who could speak out on such issues, but I am still waiting for the Church—archbishops, bishops and cardinals, the whole lot—to speak. I am grateful to Lexden Methodist church for allowing me to put that on the record and I welcome the concept of fairness.

I am not one who says that all private is good and all public bad, or vice versa. It is important to keep a mixture of the two.

[Mr Slaughter]

I do not disagree with the hon. Gentleman, but I think he is being slightly unfair to the clergy. My local vicar has written asking me to join a campaign to get the Chancellor to pay his fair share of taxes following last week’s “Dispatches” programme.

[Bob Russell]

I am grateful to the hon. Gentleman for that point, but I was talking about the major, national Church leaders. There are excellent clergy at local level. Indeed, St Margaret’s church in my constituency, which is in a relatively prosperous part of one of the world’s richest countries, has started a food parcel system for hard-up families. The fact that the Church at community level is doing such things speaks volumes, but our national Church leaders are not. I look forward to the Archbishop of Canterbury speaking up.

[Nic Dakin (Scunthorpe) (Lab)]

Archbishop Sentamu said only the other day:

“I am not an economist, and I am not a politician, but to cut investment to vital public services, and to withdraw investment from communities, is madness.”

Does the hon. Gentleman recognise that Archbishop Sentamu is sticking up for people in this country? Does he agree with those sentiments?

[Bob Russell]

I applaud the Archbishop of York for that sentiment and those words—and indeed many others. He and I have something in common: we have both done a freefall sky dive with the Red Devils.

Earlier this morning I met the vicar of Dibley. Actually, that is not quite true. I actually met the Rev. Paul Nicholson, who is chair of Zacchaeus 2000 Trust. Before he took that position, he was the priest in the village of Turville, where “The Vicar of Dibley” was filmed. He is very concerned, as indeed I hope we all are. He points out that contrary to the Daily Mail examples, accommodation for people on benefits is expensive because there is a shortage of affordable housing, owing to the absence of any coherent housing policy for the past 30 years.

The market has failed to provide affordable housing. Property speculators and landowners have grown wealthy, but the poorest tenants face the misery of eviction through no fault of their own. Eviction for rent arrears triggers homelessness, and councils must somehow address that. However, those of us who have a local government background will know that when eviction is brought about by rent arrears, the legal term “intentional homelessness” creeps in, which is a serious problem. Those who were present at Prime Minister’s questions yesterday will know that I asked him about it, and I have spoken on the matter in Westminster Hall debates.

I am grateful to Family Action, a charity that was founded in 1869 and that is now sponsored by Barclaycard. Its analysis of the welfare reforms, which is entitled “Pushed Towards Poverty: 21 welfare cuts for low-income working families”, adds to the anxiety of recent times, which can only get worse. Family Action supports vulnerable and disadvantaged families throughout England, including families in which parents experience mental health problems, learning difficulties, addiction or domestic violence. Critically, it works with families within their homes to improve the parenting, ensure that the children’s development milestones are met, and to help them to access work, training and volunteering. The impact of the changes in general—not just housing benefit cuts—could make it harder for many families to lift themselves out of poverty through work and, in some cases, families such as the ones with whom Family Action works risk finding that employment is no longer sustainable.

In debates such as this, it is worth quoting local examples. The one big benefit of the cancellation of the Building Schools for the Future programme is that a secondary school in my constituency that the Labour Government would have closed will not now be closed. However, alongside that, we need funding for Colchester academy, which opened last month. It was Sir Charles Lucas Arts college. The pupils have a new uniform and the school a new name, but they are still using the same dilapidated building. I therefore look to the coalition Government to deliver a new building.

Finally, I shall draw the House’s attention to the possible unintended consequences and knock-on effects of halting capital schemes. The Sure Start capital grant project at Kendall school in Colchester has already had £102,000 invested, but if the grant is not now forthcoming, all that money will have been wasted. That takes into account only the financial aspects, not the provision of places for pre-school children and so on. A local building company was all set to start work, planning permission has been granted and a chain reaction of education provision is on the verge of commencing for the benefit of the school and the local community, but it needs the Sure Start money.

I also wrote to the Secretary of State for Education on 23 September. I headed the letter “The Big Society—common-sense and avoiding an own goal”. It relates to St John’s church in Colchester where the erection of a new church hall is again dependent on the Sure Start money. If that project does not go ahead, £115,000- worth of preparatory work will be wasted and donations, bequests and fundraising work will all have been to no avail. I urge the Government to look at what is going on. These are capital investments that would generate jobs and provide benefits for the local community.

15:21

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

The headlines in the debate on the comprehensive spending review have concentrated mainly on justified concerns about cuts to family support, welfare and housing. However, in my contribution I wish to focus on some of the main questions about transport.

Transport is vital to most of what happens in this country. It is vital to economic development, to enabling people to get to work and to quality of life. It enables people to lead full lives and guards against social exclusion. I welcome the headlines in the settlement on transport, including the focus on some specific investments which is very welcome, but I wish to draw the House’s attention to some major issues that need much fuller investigation.

The first is that of fairness in investment and regeneration—with the accompanying jobs—across the country. At the moment, transport investment in London per head is three times higher than in other regions. It is unclear whether the proposals in the settlement will change that or simply exacerbate the difference. I welcome the announcement that Crossrail will go ahead. I know how important that is in London—and it has national implications—but there is an ominous silence about the go-ahead in a proper timescale for electrification of the Liverpool-Manchester-Preston-Blackpool line. I noted the strange answer from the Secretary of State for Transport this morning, which avoided the issue completely. We have had no clarity about electrification on the Great Western line or whether the northern hub will go ahead in the way envisaged. All those projects are important for economic regeneration and have implications for the release and provision of rolling stock across the north. We need much clearer and quicker answers to those questions.

Great concern has also been expressed about the dramatic fare increases in the settlement. The increase in train fares could see the fare from Manchester to London increase from just over £65 to £88—

[Kwasi Kwarteng]

Will the hon. Lady give way?

[Mrs Ellman]

I am sorry, but I have very little time and other hon. Members wish to speak.

Bus fares often do not get sufficient attention, but many lower-income people depend on buses to get to work and local amenities. But there will be a severe cut in bus services’ operators grant, which could mean higher bus fares and fewer bus services. The cut in that grant combined with cuts in revenue support to local authorities could mean that less money is available to enable buses to be provided where services are needed for social reasons rather than to make increased profits for the bus operating companies. We have had very little clarity about what that means.

Another important matter that has not been mentioned by Government Transport Ministers concerns the implications of a settlement on the critical issue of road safety. One of the unrecognised success stories of recent years has been the big reduction in the number of fatalities and serious injuries on our roads. Every single death and serious injury is a tragedy for the individuals and their families, but it is significant that, in the past year alone, there has been a 12% reduction in the number of people killed on our roads. The reason for that reduction is that local and central Government have combined in a number of measures to make our roads safer.

It is extremely disturbing, therefore, that we now have a cut in—an elimination of, in some cases—the specific grants to local authorities that enable them to go ahead with road safety schemes, together with a change in national direction and the abolition, I understand, and the complete axing of the previous Government’s effective public education campaign on road safety. That combination of Government and local action was very important in reducing the number of road casualties. Has any thought been given to how the cuts in this spending will affect the number of deaths on our roads? That is critical.

I am also extremely concerned about the difficulties facing strategic road schemes under the new arrangements. Such schemes matter because they bring jobs and economic benefits to local areas, but the projects currently decided on through the regional allocations now have nowhere to go and, from the Transport Secretary’s written statement today, it seems clear that he too has no answers. Local economic partnerships are no substitute for proper regional thinking that cuts across local authorities and provides vital economic lifelines—by giving access to ports, for example.

15:27

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

I commend Ministers on the spending review, because finally we have a Government who are prepared to address the big picture.

In the last four years of the previous Government, Britain dropped from third to 13th on the international rankings for economic competitiveness, partly because of rising global competition, but also because of the excessive inflation of the public sector. As a result, British productivity lags behind our major international competitors. According to EUROSTAT data, between 2000 and 2008, European Governments who spent 42% or less of GDP created 27% extra jobs. Governments who spent more than 42% had jobs growth of just 6%. In that period—before the banking crisis—Britain jumped from the high-jobs-growth camp to the low-jobs-growth camp. The amount of GDP consumed by the UK Government rose by 11% to 48%, and sure enough jobs growth was a paltry 5%. The evidence is plain: we cannot spend our way to economic growth.

There is nothing ideological about wanting to create jobs, and there is nothing socially fair about the welfare trap. I hear the calls every week from Opposition Members to soak the rich, but today the top 5% of earners in this country pay almost half the country’s income tax. If that is not a fair share, fine, but where would the Opposition raise taxes, and by how much? The real risk with their strategy is that the brightest talent will flee this country, if they believe that talent and graft are punished rather than rewarded. The brain drain does nothing for social fairness. The July Budget and this deficit plan have brought Britain back from the cusp of default.

Yesterday, we saw Standard & Poor’s triple A rating restored from negative to stable, and the task now is to drive economic growth and competitiveness. However, the spending review also addresses fairness at three levels. First, there is the snapshot of winners and losers that there will be in any budgetary process, and the matter of protecting the lowest-paid public sector employees from the pay freeze, the pupil premium and the triple lock on pensions. We must address the glaring unfairness in pay not only between the public and private sectors, but within the public sector. The best paramedic in this country can earn just one tenth of what the top NHS manager can earn. What does that say about our priorities? Some are bucking the trend. Sir Norman Bettison, the chief constable of West Yorkshire, described the idea that the public sector is competing with the private sector for talent as “costly and irresponsible nonsense”. He proposes to address public sector pay restraint incrementally, starting with the highest paid 25%. His proposal merits close consideration.

The second dimension of fairness in the CSR relates to the intergenerational allocation of resources. According to the National Institute of Economic and Social Research, a failure to tackle the deficit would leave each member of the next generation having to pay £200,000 extra in taxes just to enjoy the same level of public services that we and previous generations have enjoyed. What is fair about leaving our children with a tax bill of £200,000 each?

[Helen Goodman]

What is fair about those of us who had a free university education not paying extra tax while our children are to be burdened with extra debt?

[Mr Raab]

I thank the hon. Lady for her intervention, but the problem is that the university budget as it was configured under the previous Government was simply unsustainable. That is but one of the many examples of where they ducked the problem of reform and we have addressed it.

[Richard Graham]

Would my hon. Friend like to ask the House which party introduced charges on university education?

[Mr Raab]

I will resist the temptation, but I thank my hon. Friend for his question.

Finally, the comprehensive spending review promotes the economic growth that we need—growth driven by the private sector. That is what creates jobs and pays for public services. The July Budget restored confidence, cutting corporation tax and reversing the jobs tax. Employment was up by 178,000 in the last quarter. Economic growth in the last two quarters was the highest that it had been for 10 years. We must build on that—nothing can be taken for granted—and that is why I welcome the investment in infrastructure and science. I support the plan for tax breaks in national insurance for start-up companies in their first year. However, that measure will be confined to certain regions. Will Ministers say what assessment has been made of the net effect on tax revenue of extending that important measure across the country?

I know that time is short, and I want to allow others the time to have their say. It is right that every measure in the CSR should be robustly debated and scrutinised, but without an alternative, overarching deficit plan, criticism of those measures fails the test of credibility and relevance.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Before I call the next speaker, I am going to have to reduce the time to five minutes, and even then we are really struggling, so if hon. Members can ease up on the time that they use, that would be better.

15:32

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

I appreciate the opportunity to make a brief contribution, which I shall limit to my constituency, and to housing benefit in particular. Lewisham is a relatively poor borough, where wages are around £26,500 per annum on average and where the mean house price in sales last year was £240,000. In common with most London boroughs, we are an area of extreme housing stress, brought about primarily by population growth and the fragmentation of households. Changes in housing benefit will have a devastating effect on people who seek to be decently housed in Lewisham.

Ministers have sought to present their cuts and their new proposals in the light of a few absolutely extortionate rents. They have spoken continuously about the cap and the fact that people should not be able to claim benefits to live in what they deem to be luxury accommodation. That is not something that affects the majority of housing benefit claimants in this country. When he sums up, will the Minister, who is not paying attention—[Interruption] I am glad to see that he now is paying attention. Will he tell us what proportion of all housing benefit claimants in the UK are affected by the cap? In Lewisham, fewer than one in 1,000 people will be affected. Our people are not living in luxury, but let me tell him that this change will be a tragedy for the biggest families, living in the biggest properties—often in quite squalid conditions—and they will be evicted.

The fact is that a conservative estimate made by my local authority finds that 9,050 households are affected by the generality of changes that are proposed by this Government. I further tell the Minister, to nail another myth perpetrated by this Government, that 5,000 of those are people in work.

[Stephen Gilbert]

rose—

[Joan Ruddock]

I am advised not to allow interventions, as it will take up other Members’ time.

The loss for a one-bedroom property is about £11 a week; for a three-bedroom property, £34 a week; and for a four-bedroom property, £57 a week. People cannot make up this difference from their low wages—very low in Lewisham, as I have said—and they could not make it up if they were in receipt of benefit because of unemployment. There is no way these people can make it up, so they will be evicted. What will happen then? There are 17,000 people waiting for council housing in Lewisham; there are 50 families already in bed and breakfast; there are 1,000 households in temporary accommodation. There are no alternatives for the people I am concerned about. They will not be able to rent and they will not be able to find cheaper accommodation because of the huge pressure on housing—pressure that will come from richer boroughs that try to put people out of their own area and into areas like Lewisham.

The Government argue that rents will fall. They will not. We have so many young professionals who cannot purchase property because of the prices and because they cannot get loans—and they are taking up any slack. The Government argue that this is an incentive to work—a terrible insult to those who are unemployed. When Labour were in government, unemployment fell by 50% in my constituency. We halved unemployment and the fact is that it has risen only because of the recession. People want to work and people will work.

I am absolutely sickened when I hear the Government speak about fairness. There is nothing fair about these measures—nothing fair whatever—and they are going to hurt the most vulnerable most. They are absolutely sickening. They will not drive people into work; they will not lower the prices; there is nothing fair about the housing benefit changes and nothing more punitive. This is a catastrophe in the making—a catastrophe for my people in Lewisham, for London as a whole and for this great capital city. I remember when people slept in cardboard boxes on the South Bank. This Government are planning to bring back those conditions.

15:37

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

In the brief time available, I would like to direct my remarks to some of the changes announced this week as they relate specifically to my Thurrock constituency.

In building a programme of spending to go forward, the Chancellor has rightly recognised the importance of infrastructure investment for creating the right conditions for businesses to grow and for the UK to become a more competitive economy. However, there are a couple of constituency issues that I would like to put to him, and I want to ask him to think about whether, as we go forward, we are really serving my constituents well—in particular, the businesses within the constituency.

Paragraph 2.25 of the spending review states that

“subject to consultation… charges on the Dartford Crossing”

will be increased,

“alongside accelerating plans to improve traffic flow.”

At this stage, it is not clear what those plans are. Motorists who are regular users of the crossing will witness that it is operating way beyond capacity and has regular delays. Moreover, the congestion regularly spills out on to the road network in Thurrock, so my constituents are regularly faced with misery, caused by the congestion that is caused by users of an over-used crossing.

The local economy in Thurrock is uniquely dependent on logistics. We have a thriving port at Tilbury and we are now witnessing a massive inward investment on the part of DP World, which will generate upwards of 16,000 jobs once it is on stream. That will require a fully functioning road infrastructure network for those businesses to be the success that we want them to be in creating the jobs that we need. I urge the Chancellor, when considering where the proceeds of the tolls will be directed, to show some sympathy for making greater investment in the road infrastructure in Thurrock.

It is particularly regrettable that the Secretary of State had to announce yesterday that the proposed improvements at junction 30 had also been shelved. It is regrettable because DP World, which was investing in Thurrock, would also have made a private sector investment contribution to the road improvements. I hope that we will soon get more clarity on the road infrastructure improvements that we are going to get to increase capacity at the crossing.

Having said that, and although the increase in charges at the crossing are regrettable, I quite understand why the Chancellor finds himself in this position. At this stage, he is not able to turn down a nice little earner for the Government, given the mess that the public finances are in, thanks to the Labour Government.

I want to make another suggestion. When we are looking to see where we can get the most bang for our buck in public spending, we must remember that Thurrock is in Essex, and Essex is known for its entrepreneurial spirit, if for nothing else. Everyone recognises that the road improvements—at junction 30 in particular—are essential for creating the investment that could unlock 36,000 jobs in the area. It is my contention that, for every £1 invested in Essex, we will get more bang for the taxpayers’ buck. I hope that the Chancellor and the Secretary of State for Transport will bear this in mind when they consider their options for increasing spending in future.

15:41

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

When the comprehensive spending review was debated recently in the Northern Ireland Assembly, there was a general feeling that, against the budgetary framework outlined at the time when devolution was restored, we had been short-changed. Notwithstanding the protestations of the Secretary of State for Northern Ireland, we have been disappointed, to say the least. I note, however, the undertakings given today by the Chief Secretary to the Treasury that the Government will keep their commitments on track. The Members of Parliament for Northern Ireland will undoubtedly hold them to that.

During that debate in the Assembly, there was an air of financial realism. Perhaps for the first time in our recent history, it has become clear to everyone in Northern Ireland that we really are responsible for ourselves and for making the best use of the available resources. I hope that it might still be possible, however, to secure improvements around the edges of the published settlement, including guarantees on policing and security; access to end-year flexibility; latitude in how welfare reform is implemented in Northern Ireland, given its unique legacy; and more freedom to borrow. For this reason, I fully support the plans of the joint First Ministers in Northern Ireland to engage directly with the Prime Minister and the Chancellor.

The impact of the CSR settlement on Northern Ireland can be assessed in three parts. First, on current expenditure, we are facing a cut in real terms of 7% by the final year of the CSR. That is challenging, but it is not insurmountable. Secondly, in regard to capital expenditure—regardless of the smoke and mirrors put in place by the Chancellor, the Prime Minister and the Secretary of State for Northern Ireland—we have been left well short of our expectations. Thirdly, on capital investment, we faced a further downturn the other day with the suspension of the Northern Ireland aggregates levy credit scheme. I want to ask the Chancellor and his Treasury team to continue the negotiations with the European Commission to ensure that that is reinstated.

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

This is a very important issue, and I want to take this opportunity to reassure the hon. Lady that that is precisely what we are doing.

[Ms Ritchie]

I thank the hon. Lady for her response.

The most important thing to us in Northern Ireland is the annually managed expenditure, through which our benefits are paid. What makes this iniquitous is the fact that the money does not come out of the Northern Ireland block, but directly out of the pockets and purses of benefit recipients. In Northern Ireland, that represents up to £0.5 billion being taken from some of the poorest households. The Prime Minister claims that that is fair, but what is fair about snatching the mobility allowance that is payable to people in residential care? What about the changes to child benefit? What about the changes to housing benefit? Are they fair? On the face of it, those large-scale welfare cuts have little to do with the laudable desire to help people move from benefit dependency to the dignity and self-sufficiency of gainful employment. They represent an old-fashioned onslaught on the poor.

I am a former Minister for Social Development in Northern Ireland with responsibility for benefits. Along with my successor, I have engaged in continuing discussions with the Department for Work and Pensions about welfare reform issues and the respects in which welfare reform proposals are inappropriate for Northern Ireland. I believe that we have reached a point at which we may need to redesign the social security system in Northern Ireland to make it much fairer for all, and to give ourselves greater freedom and flexibility to do things differently. I believe that that can be done without the need for an increase in the net subsidy to Northern Ireland.

We are doing a lot of thinking about how we can secure more local control of Northern Ireland’s economic levers, and we expect a robust but fruitful dialogue with the Chancellor when the promised economic paper on Northern Ireland is circulated by the Government within the next few weeks. The Chancellor indicated in last week’s CSR statement that both he and the Secretary of State for Northern Ireland intended to engage with all Northern Ireland Members of Parliament. As one of those Members of Parliament, and as a Northern Ireland party leader, I look forward to that discussion. There is no doubt that we need to rebalance our economy, but one thing that we must not do is throw the baby out with the bathwater and remove people from the public sector, because that will throw asunder our whole jobs and investment scenario.

15:47

[Stephen Gilbert (St Austell and Newquay) (LD)]

Let me begin by reminding the House why the country is in its present position, and why the spending review has had to be so tough. We are in this position because the last Labour Government left the largest deficit in our peacetime history, and the largest structural deficit in Europe.

What does that mean? I will tell hon. Members what it means. This year, we will spend £43 billion on debt interest alone. That is £120 million every single day. For that money, we could build a new primary school every hour. We could triple the number of doctors in our hospitals. We could spend twice as much on education every year. I therefore do not see how it is tenable for Opposition Members to ignore the astronomical waste of money that those interest payments are leaving with us, and the unfairness of suggesting that we pass it to future generations.

Labour Members claim that they planned £48 billion of public spending cuts when they were still in government, but they forgot to tell us where those cuts would fall. Throughout the debate, I have been enlightened no further on what they would cut and how they would address the problem. I hope that, in the hours that remain, some Labour Members may come up with some ideas of their own.

The Government’s comprehensive spending review sets out £1 billion less of cuts in Government Departments. The remaining plan focuses on long overdue reform of a complex and byzantine welfare system that delivers unintended effects to people throughout the country—and, of course, tax rises. The important point, however, is that the spending review is also fair. The banking levy will raise £2.5 billion a year. The last Government did not do that, and they had 13 years in which to do it. Indeed, under the last Government bankers and lawyers often paid lower taxes than those who cleaned their offices. That is something else that was left to this Government to sort out.

[Mary Macleod]

Does my hon. Friend agree with the leaders of 35 of the biggest companies around, including Marks & Spencer, Microsoft, Diageo and Next? They say that they believe that

“Addressing the debt problem in a decisive way will improve business and consumer confidence”

and that

“The cost of delay…would result in almost £100 billion of additional national debt”.

[Stephen Gilbert]

I thank the hon. Lady for her intervention. Not only do I agree with those companies; I also agree with the CBI and the International Monetary Fund, which have commended these plans as the best way both to ensure growth and to deal with the deficit.

Let me be clear. The Opposition have every right to challenge and to resist the measures that the coalition Government are implementing. That is of course the Opposition’s job, but they need to come clean with the British public and tell this House and the public at large what their alternative is. They will not be taken seriously until we hear different ideas from them. Today so far we have heard special pleading on transport, child benefits, housing and myriad other topics, but we have not heard anything about the measures that they would put in place to address the significant problems that we face.

The spending review has had to be tough, and of course we and our constituents will feel it, but there are many positive policies that will help create a fairer, freer and more responsible country over the next few years. One crucial area is the fairness premium that was announced by my right hon. Friend the Deputy Prime Minister.

The fairness premium involves extending 15 hours per week of free education and care to all disadvantaged two-year-olds, and a £2.5 billion pupil premium, with extra money attached to the children who need it most. Like my hon. Friend the Member for Bristol West (Stephen Williams), who has left his place, when I was at school, I was eligible for free school meals, and I know what a difference extra money going to the pupils who need it most can make. The funding will not just benefit them. By driving up standards across our schools, it will benefit every child in every school. It could be used to cut class sizes, provide one-to-one tuition and catch-up classes, or used in any way the school sees fit, ensuring that every child gets the individual attention that they need and deserve.

As everyone in the House knows, performance at school is tightly linked to future outcomes. That is where fairness can start: the funding can make a difference in the early years. Giving this country’s poorest children the best possible start in life is the most effective way to lift them out of poverty and to help them to achieve their full potential. The fairness premium is therefore one of the most important policies of the spending review and I hope that it will be welcomed by Members on both sides of the House.

There is no doubt that the spending review is full of difficult decisions, but these are decisions that Labour Members shirked for the 13 years that they were in government. These are decisions that two parties coming together and acting in the national interest will be taking.

15:53

[Margaret Hodge (Barking) (Lab)]

Given the shortness of time, I will focus on my observations as Chair of the Public Accounts Committee, but I cannot let the moment pass without reflecting on constituency interests, particularly in relation to housing benefit. I share the views of my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock). The housing benefit policy will simply not even meet the Government’s intent. It will not cut housing rents in the private sector in London. If the Government wish to do that, I say to them: do not punish the tenants, cut the rent. The policy will not cut public spending, but it will increase homelessness in London and that will have its impact. It will not help people get into jobs. The very people who will be frozen out of London are those who come in to clean the House of Commons at 4 in the morning and who cannot come in from places such as Dover. We will have more people coming into Barking as a result of these reforms. The policy will inflame community relations in constituencies such as mine, which will simply provide more food for the extreme right, which will exploit such issues to vicious political ends.

I want to talk about issues that I have observed in the few months that I have been Chair of the Public Accounts Committee. Whatever the political intent, I am worried that the capacity of the Government machine to respond, to manage the process and to realise the intended savings is highly questionable. If the Government fail to deliver the vicious savings that they have planned, I fear that they will return for a series of further easy but highly damaging cuts to achieve the £81 billion target. Those cuts might include further slashing the benefit bill, on which the most vulnerable depend, or introducing charges into the NHS so that it ceases to be a service that is free at the point of need.

The record of the civil service in securing efficiency savings and value for money savings is poor. We recently reviewed the performance of Departments in delivering the value for money savings required in the 2007 comprehensive spending review. After two years only a third of the savings had been achieved, and of those reported only a third were sustainable value for money savings. The great tanker of Government was unable to deliver a budget imperative. I note that the Government expect to deliver a further £6 billion from savings in back-office costs, but I am sceptical about whether that will be achieved.

There is also a presumption that closures, mergers and job cuts achieve immediate savings, but in the real world these changes involve massive upfront costs. The Government’s promise that in abolishing the Audit Commission they would save £50 million started to unravel before the ink was even dry on the letter to the chairman of the Audit Commission announcing its abolition. We saw in yesterday’s papers that Barnet, Britain’s first “Easy Council”, was embarking on a programme of savings and was planning to save £3 million in the first year, yet not only is it not going to save that amount, but it is going to spend more on the programme of savings than it will save in the year itself.

Departments operate in silos and appear to have limited understanding of the extent to which cuts in one area impact on the budget of another. Let me give just one example. Her Majesty’s Revenue and Customs has planned to get tougher on fraud and theft, which we all welcome, and it expects to collect a further £7 billion in taxes, but the law officers are taking a 24% cut in their budget, so the Crown Prosecution Service is far less likely to be able to prosecute complex tax cases. If the Government do not consider the effects of the cuts on a whole-system basis, I have absolutely no doubt that my Committee will see Departments passing the buck among themselves for this failure.

If the Government are driven by ideology and do not intend to pursue their policies pragmatically, we will fail to deliver value for money and we will waste public money, forcing cuts elsewhere. In this respect, I offer the example of the pathways to work programme. We demonstrated in our report that private providers perform far less well in delivering jobs and cost more, and that Jobcentre Plus is much more effective, yet the Government, driven by ideology, are determined to privatise that programme.

My Committee will keep a close eye on whether the Government meet their own objectives and do actually deliver on fairness and efficiency in the cuts they make.

15:58

[Mel Stride (Central Devon) (Con)]

I have sat through most of this debate with a sense of growing incredulity at the collective amnesia and denial of Opposition Members who, quite simply, are unprepared to face up to the reality of the fiscal disaster they have bequeathed to us to attempt to clear up. Let me just remind them of some of the figures. [Interruption.] I am pleased to see that they find this so amusing: £270,000 per minute in debt interest, £120 million a day, £43 billion per year—which is more than we spend on education. That is a disgrace.

Let me put this in historical context. In 1976, when another Labour Chancellor, Denis Healey, went cap in hand to the International Monetary Fund because this country was busted, our deficit represented about 7% of GDP. Today, it stands at 11.4%. Our house is well and truly economically out of order. This will not only affect our children, who will have to pick up the strain in repaying the debt. It has also affected our standing in the world, because this country has the worst deficit in the G20. Our deficit is worse than that of many Latin American countries; Brazil has a nominal annual deficit, as of April 2010, of a little over 3%, compared with ours of 11.4%, so we are 300% behind Brazil. It has come to something when we have to look enviously at Latin America’s fiscal position.

Much has been said about how quickly the Government have determined to reduce the structural deficit over the lifetime of this Parliament, but many are on our side, including the OECD, the Bank of England and the Office for Budget Responsibility. Let us not forget that Labour’s plan and proposal, as far as there is one, is to halve our structural deficit over the period of the review. That would leave us with £100 billion in additional debt and an additional £5 billion in interest to pay on it. I see Labour Members sighing, but perhaps they could tell us what they are going to cut to find that extra £5 billion or what extra taxes they are going to raise to meet that requirement.

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

Does my hon. Friend agree that the International Monetary Fund’s statement was clear about the fact that what the Government are doing is right and proper, and will lead to growth in the long term?

[Mel Stride]

My hon. Friend is entirely correct, and there is no doubt that if the Government had not taken prompt action as we did in the emergency Budget in June, we would have been that close to a Greek-style economic meltdown.

[Alison McGovern (Wirral South) (Lab)]

Will the hon. Gentleman explain to the House how our debt was similar to that of Greece, given that the Debt Management Office in this country has been far better and we have far better terms? The question of whether the debt is sustainable is what leads to crises, not the amount of deficit, given the size of our economy.

[Mel Stride]

The answer to that is that we came that close because the credit rating agencies, such as Standard & Poor’s, came that close to downgrading our triple A status. The consequence would have been that the Government, in funding their debt through their bonds and gilts, would have had trouble getting those debt requirements away, interest rates would have risen, mortgages would have gone up through the roof and the businesses on which we are counting to pull us out of the malaise that we are in would have been crippled by higher interest rates. That is the basic economics that Labour Members fail to understand—

[Mr David Hanson (Delyn) (Lab)]

rose—

[Mel Stride]

I will not give way because I have limited time available. [Interruption.] In the great tradition of not giving way, I will not give way after taking two interventions. One very important point is that we must look to the private sector to create the jobs. It is true that the OBR has said that 490,000 jobs will be lost in the public sector, and there is no getting away from it. It is also true that PricewaterhouseCoopers has suggested that 500,000 jobs in the private sector might go as a consequence of the slimming down of the public sector. So we must look to growth from the private sector.

I am therefore very pleased that this Government have had such a firm and positive focus on private sector growth. We have removed national insurance for new business start-ups outside London and the south-east; we will bring corporation tax down, in steps, over the next four years from 28 to 24%; and we have cut red tape. We have also created the regional growth fund, which we heard about in the Business Secretary’s statement earlier today. It involves some £1.4 billion, much of which is to be channelled into the very areas of the country where the private sector is weakest and the public sector has been strongest, and I welcome that as positive action.

I also welcome the fact that the Government are listening to business in a way that their predecessors never did. The Conservative party is a party that understands business; we understand how difficult it is to create the wealth that is needed to supply the public services that all in this House want.

[Chris Williamson (Derby North) (Lab)]

Will the hon. Gentleman give way?

[Mel Stride]

I will not give way now, because I have very little time left.

I am also pleased that the OBR, an independent body, has stated that employment will grow in every year across this plan. I know that one swallow does not make a summer, but it is encouraging that in the last quarter—the one up to the end of September—growth was double that anticipated, at 0.8% as opposed to 0.4%. That is an encouraging sign. The Opposition should cheer at that. They should stand up for our country. They should feel good about the fact that we are improving where we are going and that we are beginning to make a difference—a difference that they never achieved.

I want to talk briefly about fairness, which is at the heart of the CSR. I want to challenge the IFS’s point that somehow the CSR is regressive. It is to an extent, if one considers taxation and benefits, but if one includes the use of public services, it is not regressive. It is a progressive move.

I welcome the fact that we are going to keep 50% as the higher rate of tax, with 800,000 people coming out of taxation altogether, and child benefit being means-tested. The £2.5 billion that will be saved is exactly the amount that will go into the pupil premium to help the poorest children in our land. Those are all aspects of fairness, and we cannot build a society based on social justice on a mountain of debt. I commend the review to the House.

16:05

[Stewart Hosie (Dundee East) (SNP)]

The one thing that I would say about the CSR is that—no matter how many times the Chancellor said it during his statement, no matter how many times the Chief Secretary said it today and no matter how loudly the hon. Member for Central Devon (Mel Stride) said it a moment ago—it was not fair. The cuts—£81 billion a year by 2014-15—and the tax rises were not unavoidable.

Every decision taken by the coalition was a political one, but it was the failure to understand the consequences of the decisions that astonished me. Nowhere was that more so than in the defence elements of the CSR and the strategic defence and security review that went along with it. The decision to cancel the Nimrod programme puts a huge threat over RAF Kinloss and a huge question mark over RAF Lossiemouth,

[Greg Hands (Chelsea and Fulham) (Con)]

What would happen under Scottish independence?

[Stewart Hosie]

The Parliamentary Private Secretary is chuntering away about Scottish independence. It is interesting, is it not? He normally wants to deprecate countries such as Ireland and Iceland, but they still sit above the UK in the world prosperity league. I shall give him a copy of The Scotsman to look at later, before he decides on another ill-judged sedentary intervention.

The bottom line is that those defence cuts threaten to add to the 10,000 military job losses under Labour and to the £5.6 billion military underspend in Scotland under Labour. Far more importantly, they would represent a 25% reduction in the entire military footprint in Scotland. If the cuts go ahead, they will represent a 25% hollowing out of the entire economy of Moray. When Conservative Ministers say that we are all in it together, it strikes me that that is not absolutely true and that it is not absolutely fair.

The CSR was not just about the Scottish block but about other UK spending decisions, yet somehow Scotland was portrayed as doing better than most UK Departments. That is nothing but spin. The House of Commons Library makes it clear that the Department of Health, the Department for International Development, the Department of Energy and Climate Change, the Department for Work and Pensions, the Ministry of Defence, the Cabinet Office, the Treasury, the Law Officers, the Northern Ireland Office, the Department for Culture, Media and Sport, the Foreign and Commonwealth Office, Her Majesty’s Revenue and Customs and the Wales Office all did better. A little more substance and a little less spin would not go amiss.

That is important because the cuts represent £1.3 billion in cash terms next year and, above all expectations, there will be an £800 million cut in capital expenditure. That directly threatens 12,000 Scottish jobs. It is dreadfully disappointing—the cuts were announced on the same day as the Scottish quarter 2 GDP figures, which showed Scottish growth up at 1.3%, above the 1.2% for the UK, and confirmed the decision to have direct capital investment to protect jobs during the recession. That makes it all the more ludicrous that the Government would seek cuts of such magnitude before recovery is secure.

[Rehman Chishti]

Did the hon. Gentleman respond to the Government’s spending challenge with his own ideas about where the savings should be made, with £44 billion as a starting point?

[Stewart Hosie]

What I did, possibly before the hon. Gentleman was a Member of the House, was to table amendments to previous legislation to set out a much more sensible framework for a proper programme of fiscal consolidation, based on the successful New Zealand model, rather than the flawed Canadian model that his party and the Liberal party are now following.

One of the things that I find extraordinary, which the Chief Secretary could not explain earlier, was the lack of detail in the Government’s plans. The Department for Transport is expected, among other things, to reduce its administrative costs by one third—£100 million a year. The Department for Business, Innovation and Skills is expected, among other things, to reduce its administrative costs by £400 million. In the Home Office, the UK Border Agency is expected to cut its support function costs by £500 million.

I am not necessarily saying that that cannot be done: what I am asking is how. Which offices will close, how many jobs will be lost, how many staff will be sacked, and where are they located? Of the 42,000 job losses in the military—the 25,000 civilian and the 17,000 uniformed —which ones are those, in which units, where are they currently based, and when will they go? Why would not or could not the Chief Secretary give us that information today? It gives the impression that the Government are making it up as they go along.

I am aware that time is short and I know that many other Members want to speak, so I have a specific question for Treasury Ministers. Page 50 of the comprehensive spending review makes it clear that

“interest rates on Public Works Loan Board (PWLB) loans have been increased to 1 per cent above UK government gilts.”

It goes on to add, unsurprisingly:

“The amount of self-financed capital expenditure is forecast to fall by 17 per cent over the four years.”

This will bring in to the Government, according to the table on page 12, £1.3 billion. That will be about £120 million from Scotland.

Will the Minister please confirm that there will be a requirement in Scotland for another £120 million of cuts, and £1.3 billion of cuts throughout the whole of the UK, in order to find the money to pay the extra £1.3 billion in interest charges because of the increase on Public Works Loan Board loans? I would be grateful for confirmation of that today.

16:12

[Richard Harrington (Watford) (Con)]

Like many hon. Members, I have listened all afternoon to the debate. If everyone examined the matter, they would know that the comprehensive spending review was necessary. The cuts amount to taking us back to 2007 expenditure levels. I will not repeat the arguments that we have heard this afternoon denying or not denying the effects.

[Mr Hanson]

rose—

[Richard Harrington]

Not at the moment.

I shall concentrate on two points that I do not believe have been mentioned. The first is the importance of how the cuts are implemented. My fear is that, for political reasons, some public bodies and some councils have every incentive to make the cuts go right to the bottom line. I remember how, in the years of the Conservative Government from 1979 onwards, Mrs Thatcher’s cuts, job reductions and so on were used politically by opposing parties.

[Kwasi Kwarteng]

I forget—how many general elections did Baroness Thatcher win? Will my hon. Friend remind the House?

[Richard Harrington]

Not enough.

The most important thing is that the cuts are made sensibly, and that the bloated management hierarchies of local government look at themselves and realise that this is a chance for much of the reduction in their field to come through management. Let me explain. In Hertfordshire county council—[Interruption.] Yes, Conservative, and proud to be Conservative.

In Hertfordshire county council the expected cuts, which have yet to be implemented, will be enhanced by the fact that £150 million of taxpayers’ money has been saved by sensible management changes that hardly affect the front line—£150 million—yet in my local council, Watford, a council with a turnover of £18 million, we have a chief executive who is paid roughly the same as the Prime Minister, a mayor who is paid exactly the same as Members of the House, and an entourage of management levels that defy belief compared to anything in private business life.

I was very pleased to hear what the Prime Minister said yesterday about growth being so important, but I remind Opposition Members that growth is achieved not by spending money that the Government do not have and never wonder how to repay, but by businesses, ranging from the smallest to the largest, having the confidence in the economy to decide to expand, to raise money through friends and family or the stock market, to borrow money from banks that are able to lend it to them and to use every resource that they have to employ extra people. I have every confidence in this Government, and it is most important that we reward people who create jobs. Those are the people who are at a premium, and those are the people who have been stifled in the past.

There has been lots of talk about the Government making banks lend more money, and I commend the new funds that have been discussed. The new equity scheme, which the banks are putting together to provide £1.5 billion of equity for business, is a very good idea, and some of the schemes that the previous Government started and this Government are reforming and expanding are of course commendable. However, the real point is that, unless the deficit is dealt with not just in this country but elsewhere, banks will have to keep on lending money to Governments. Government debt has stifled banks here and all over the world. In the US the argument used to be, “The deficit does not matter”, but it does, because banks start lending money to business in quantity when they have confidence in the future and do not have to lend to Governments. We should not forget that.

The greatest thing about the comprehensive spending review is that it deals with the problem on a one-off basis. It is not being shoved under the carpet, put off or held over until after a general election, and for that reason, above all others, the CSR is the most fundamental and best thing that the Government could have done. The problems need grasping. The world of delusion that we have lived in for the past few years—the world of expanding public expenditure, with managers appearing all over the place at a cost to the public purse that taxpayers cannot afford—is coming to an end, and I for one am delighted about that.

16:17

[Grahame M. Morris (Easington) (Lab)]

In the short time that is available to me, I shall deal with a couple of aspects of the CSR, particularly its impact on my own region, the north-east, and look at some of the issues of fairness, which Members on both sides have raised this afternoon.

The CSR has no credible strategy for growing our economy in order to pay down the debt. Indeed, it will make the poorest pay for the damage that those at the very top of the financial ladder inflicted on our economy. As we know, from the statements and Members’ contributions that we have heard, children and families will be asked to bear a greater burden than the cavalier bankers who caused the crash in the first place.

Research by IPPR North has shown that the economy in the north grew substantially during the period of the previous Labour Government. However, the impact of the global credit crisis and economic recession has, sadly, had a disproportionately greater effect in those same areas, including my own. Caterpillar, one of our flagship private sector companies, reduced its labour force during that period by almost 50%. I am pleased to say that there are signs of recovery in that regard, however, and I am doing everything I can to assist.

The view of the IPPR in considering the decisions on jobs, welfare, capital investment and public services made by the Government in the comprehensive spending review, and how they will impact on the north-south divide, is that

“things look set to become significantly worse”.

On the general outlook of the CSR strategy, it says that

“it lacks an equally rigorous and challenging strategy for economic growth”.

That is the truth of the coalition’s plan.

The acid test of whether the CSR works is, first, whether it is fair and, secondly, whether it will deliver economic growth. Labour Members, myself included, believe that the CSR does not provide a credible growth strategy—certainly not for my region, the north-east. The impact is compounded by a series of announcements, including the disbanding of our regional development agency, One North East, and the axing of the regional Minister; in my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown), we had an excellent advocate. For the life of me, I cannot see that much money is saved by doing away with a regional Minister—it seems to be a symbolic gesture not to have such a person arguing the case for my region from the Government Benches. We have also seen the axing of the Government office for the north-east—GONE has gone.

The north-east is more reliant on the public sector than other regions, and about 46% of working women work in public sector occupations—one of the highest percentages in any region of the UK. In fact, the proportion in my constituency is even higher. The job losses arising as a direct result of the CSR will unfairly target these women.

In the very short time that I have left, I want to focus on the effects of the CSR on social housing. The National Housing Federation has recognised that it is likely that some of the poorest and most vulnerable in society will be worst affected by the CSR, and those who access services from housing associations are likely to see their personal financial situation worsen considerably. Its figures show a 60% cut—or, in real terms, a 63% cut —in cash terms in comparison with the 2008-11 national affordable housing programme. Where will the Government find the money to plug the gap created by these cuts? They will raise the rents on the poorest in society to 80% of market value, and this will end up displacing thousands of families from our cities. The Chancellor uses the word “fairness”, but it is a concept that he does not seem to grasp.

The Chancellor has criticised Labour for not being straight with the public, and he often accused us of hiding the details of Budgets, but he will not be straight with the British people. His spending review will leave more people out of work, it will stop in its track the recovery of regions such as ours in the north, it will decimate key local services for the most vulnerable, and it will force those on low incomes out of our cities.

16:23

[Ian Swales (Redcar) (LD)]

I am a member of the Public Accounts Committee. Sadly, the Chair left the Chamber a few minutes ago, but we still have some other members here. It is the Committee’s task, usually twice a week, to listen to a saga of Government mismanagement and overspending: some of the cases that we hear about are quite breathtaking, running into billions of pounds. I could give lots of examples, but those who are interested should take a look at the National Audit Office reports. It is absolutely clear from those reports that there is massive potential to save money in the operation of government.

I would like specifically to talk about the report on the previous comprehensive spending review in 2007, which required sustainable value-for-money savings of £35 billion over three years, a period which ends next April. That illustrates the phoniness of saying that everything was fine before the credit crunch. The previous Government clearly knew that spending was getting out of hand, and a year before the credit crunch they looked for £35 billion of savings. It is interesting that that is nearly half of what is proposed in the current CSR.

So how is it going, judged against the 2007 review? Some £15 billion of savings have so far been identified, but when the National Audit Office examined the matter it said that 18% of that did not represent improvements in value for money, and it rejected 44% on the basis that the Departments did not have the cost and performance information to underwrite their claims, so only 38%—£6 billion—has actually been saved. It is clear that the current spending review has to be tougher because of the failure to deliver the previous spending review. As the report that we agreed just yesterday in the Public Accounts Committee states, if Departments had been successful in making real savings of 3%, fewer painful cuts would be necessary now.

[Mrs Jenny Chapman (Darlington) (Lab)]

I thank my colleague from the north-east for giving way. Does he have any idea how much it will cost the taxpayer to clear up the social consequences of the Government’s decisions in the north-east?

[Ian Swales]

Clearly the north-east has already suffered, and no doubt there will be more cuts there. The decisions about how much it will cost will come out in the overall review, and I do not have a specific figure, but I do know that the 2007 comprehensive spending review showed a litany of management failure. There were no baselines against which to measure, so we did not even know whether savings were being made. There was no radical thinking, with few of the savings representing major departures from current thinking. That was because the Labour Government did not allow input from civil servants, so it was a top-down exercise. They did not listen to the people who were actually doing the work, and I am sure the current Government will do better than that. There was no proper reporting framework to review progress and there were no milestones—things that would be taken as read in the private sector. There was no personal accountability. We ask questions about that time after time in the PAC—did anybody lose their job as a result of some fiasco? The answer is almost always no.

In the NAO’s July report, the Treasury admitted that it did not have the capability to deliver value-for-money programmes in full, and that needs to be addressed urgently. I hope that my hon. Friends on the Front Bench will learn the lessons of that report and ensure that the comprehensive spending review is driven effectively in the new environment. We need a better framework, clear personal accountability, proper baselines, clear milestones of progress and detailed monitoring. As the NAO stated, the Treasury cannot just reduce budgets and then walk away. I hope that there will be a hands-on approach and that we will deliver the savings that have been set out.

I deplore the fact that the manufacturing industry went from representing 22% of the economy to 11% under the previous Government, and that a recent BBC Experian study showed that my area was 319th of 324 in the country economically; that Hartlepool, across the river, was 314th, and Middlesbrough, next to mine, 324th. I see my fellow local MP, the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop), in his place. We need take no lessons from the previous Government about economic development in the north-east.

I welcome today’s announcements on the Tees valley local enterprise partnership, the regional growth fund and the green investment bank, and I look forward to a revival of the local economy under this Government.

16:28

[Gordon Banks (Ochil and South Perthshire) (Lab)]

We have heard a lot today about the impact that the CSR will have on some of the most vulnerable people in society. I support the view that it cannot be acceptable that families are expected to pay more than the banks, and that the public and private sector workers who did not cause the crisis will pay more and lose their jobs, while the banks are treated lightly.

Among the doom and gloom of last week’s statement, there was a real prospect that the Chancellor would lay out a strategy for growth that would support our small businesses, which are the real drivers of the UK economy. He failed to grasp that opportunity, and I am not the only one who thinks so. Even this week, the Prime Minister and the Business Secretary have both failed to deliver a credible growth plan not just for the UK but for its small businesses.

The Federation of Small Businesses, of which I am a member, believes that a missing link in the Government’s deficit programme is the need to create growth by widening the tax base, creating more businesses and incentivising small firms to grow and innovate. I agree. As the shadow Chancellor said last week:

“Without growth, the job of getting the deficit down becomes impossible.”—[Official Report, 20 October 2010; Vol. 516, c. 968.]

Even after today’s statement, we are still waiting to hear a growth strategy that has any new thinking in it.

It has been well documented that the Government’s approach will throw 1 million people out of work, but I want to take the Chancellor to task about part of his speech last week. He said:

“Of course, there is a very understandable concern about the reduction in the total public sector head count that will result from the measures in the spending review.”—[Official Report, 20 October 2010; Vol. 516, c. 951.]

He used the phrase “head count”, but he was talking about people’s lives, jobs and futures. He should have the decency not to talk about people’s futures in such an insensitive way—off-hand, impersonal and using the phrase “head count”.

We make a fundamental mistake by trying to separate the public and private sectors because, as we have heard, they are intrinsically linked and mutually reliant. The construction industry is significantly of the private sector but it survives with a reliance on a large state commitment to improving our infrastructure, as under the previous Labour Government, with investment in hospitals and the Building Schools for the Future programme. PricewaterhouseCoopers suggests that more than 100,000 construction workers will lose their jobs as a result of this Government’s actions—that is more than 5% of the total employment in this sector and five times the loss expected in the financial services.

There are many ways to support businesses such as those in the construction industry, one of the best of which is having a well-trained and efficient work force. As my right hon. Friend the Leader of the Opposition has suggested, that could be done by offering tax cuts to employers who pay a living wage as an incentive to develop the skills of the people who work for them. Preventing our brightest students from following their chosen career path is not the best way of achieving those goals, and the cuts that will lead to reduced in-job training such as Train to Gain, which has supported more than 1 million workers in the UK, will make the job market stagnate.

My right hon. Friend the Leader of the Opposition said recently:

“There have been…too few in British politics who speak up for small business.”

Well, the genie is out of the bottle now, because my right hon. Friend saw fit to give me the business brief for the Opposition. I want to take this opportunity to stress that, given my small business background, this is one voice that will support the ambitions of small businesses, support the contribution they can make to the economy and skills of the UK and support my right hon. Friend in his endeavour to stand up for small businesses in the UK.

The comprehensive spending review did nothing to stimulate funding for small businesses, nothing to provide an opportunity for small businesses to grow and nothing to allow small businesses to grow their skills base. Quite the opposite, in fact: it takes money away from small businesses. Why? Because it puts 1 million people on the dole. It prevents small businesses from growing. Why? Because it puts 1 million people on the dole. And it shrinks the skills base of small businesses. Why? Because it puts 1 million people on the dole. It is clear from the CSR that the Government do not value small businesses in the UK, but in this House in the future there will be a voice that engages with them, and it will be on the Opposition side.

16:33

[Mark Pawsey (Rugby) (Con)]

Eight days have passed since the Chancellor stood at the Dispatch Box and made it clear why it was necessary to take decisions that many on both sides of the Chamber find difficult. We have heard more today from the Chief Secretary to the Treasury about the scale of the problem and why reducing our massive Budget deficit should be the country’s primary concern. We simply cannot go on borrowing £1 in every £4 spent—paying £120 million every day in debt interest alone. We know that failure to take action would lead to our paying £4 billion more in debt interest alone by the next election. That money would go to foreign creditors and would help to pay for their schools and hospitals rather than being spent on ours.

We know that had Labour remained in government it would have cut spending, so the debate is about the pace of the cuts that are about to be made, not whether they should be made. That became clear to me in discussions that I held on Friday in my constituency with an organisation that gives a clue to its aims and objectives in its name—Rugby Against the Cuts. Its representatives came to see me on the premise that the Government should take no action to deal with the Budget deficit. After our discussions, however, I believe they accepted that some form of action might be necessary. The group issued a press release, which stated:

“Mark Pawsey listened as we outlined our fears, and said he would be happy to meet us again to monitor developments…at least our MP was prepared to listen…Although we did not seem to change his views, overall, the lobby was worth organizing”.

Opposition Members will be unsurprised at that last sentence.

I will maintain that dialogue because it is important. We have offered an honest opinion to the electorate, which is why in the past eight days my hon. Friends have not had massive postbags criticising the measures in the spending review—[Interruption.] Well, many of the proposals were contained in the Conservative party manifesto, so it is no surprise that we are taking the action that we are taking. We are bringing forward the date at which the state pension will begin to rise, stopping the most well-off children receiving child tax credits and cutting spending on trust funds.

Last week, in addition to meeting that protest group I took a survey on to the streets of my constituency. In a poll, 87% of the people to whom we spoke said they thought it right and fair that the Government cut their expenditure at this time. It is clear that from the outset our objectives should be to ensure that people are better off in work. A poll in The Sunday Times on 24 October showed that 57% supported cutting welfare benefits. I believe that the proposals on welfare spending show a new sense of realism. Despite Opposition Members’ claims that they are ideological, they are clearly right.

The Government are committed to a stimulus for business. As someone who ran a business for 25 years, I have every confidence that the private sector will rise to the challenge. We are taking steps to reduce the regulatory burden on business and to provide a stimulus, never more so than through the announcement today of the new local enterprise partnership in Coventry and Warwickshire, whose size will be manageable in contrast with the cumbersome Advantage West Midlands. I believe that the LEP will set out economic priorities for the area that I represent.

The Government are acting responsibly and are in touch. The attitude across the country was for me summed up by a gentleman called George Smith, whose daughter intends to go to university next year. He was talking about the additional costs that his family would have to bear to send their daughter to university, but he could have been talking about many aspects of our public services. In The Sunday Times of 17 October, he said:

“I’m philosophical about it. Everybody and his brother is going to have to start paying more for all sorts of things. Much as we may think it’s unjust and unfair, it’s really a long overdue day of reckoning.”

16:38

[Liz Kendall (Leicester West) (Lab)]

I shall address two issues: first, whether the Government have kept their commitment to protect the NHS budget, and secondly, how their proposed reforms will affect the NHS’s ability to live within its budget in the next four years.

Before the election, the Government promised that the NHS budget would increase in real terms over the spending review period, and last week the Chancellor announced the headline figure that the NHS will receive 0.1% more than inflation in each of the next four years. That is the lowest four-year increase for the NHS since 1951 to 1956.

The Chancellor also announced that £1 billion from the NHS budget will be transferred to local councils to spend on social care. Social care services play a vital role in improving health and reducing NHS costs, for example by helping older people to stay mobile and independent in their own homes. However, the £1 billion going to local councils is not ring-fenced, so there is no guarantee that it will be spent on social care, especially when councils face a 28% cut in their budgets over the next four years. The spending review removed a further £5.5 billion from the NHS by taking its underspend. The NHS has accumulated £1.8 billion of capital underspend and £3.7 billion of revenue underspend—money that it would normally be allowed to keep to reinvest in patient care or to help deal with future overspends. But the spending review abolished the year-end flexibility for the first time.

Far from the Government protecting the NHS budget, the fine print of the Green Book shows that they will reduce the NHS’s budget by 0.5% during the spending review period. These cuts come after a period of significant increases in NHS funding, from some 6.6% of GDP in 1997 to 8.7% in 2009-10. While those increases are substantial, NHS spending as a proportion of GDP remains below the OECD average, and pressures on the NHS budget will increase because of our ageing population, new technologies and rising expectations. Meeting those challenges while continuing to provide universal health care free at the point of use means that the NHS will need to make big improvements in productivity over the next four years. The chief executive of the NHS has said that that will be the equivalent of £20 billion of savings or some 5% of the NHS’s budget in each of the next four years. The NHS has never achieved that, under any Government.

The question for coalition Members is whether the proposed reforms to the NHS will help or hinder in making those substantial productivity and efficiency savings. The Government are about to embark on major structural change to the NHS, despite promising before the election that there would be no more top-down reorganisations in the NHS. GPs will be given responsibility for commissioning £80 billion of NHS services, and PCTs and strategic health authorities will be abolished. Even when major reorganisations are well organised, they usually mean that health services stand still for a period, rather than progress. If structural change is poorly managed, patient care and finances suffer.

I fully support involving clinicians more in decisions about how services are shaped, but changes such as GP fundholding took time and significant management support to develop. The scale and pace of change that the Government are pressing ahead with pose significant risks. Major structural reforms are not cost-free, and the King’s Fund estimates that these reforms will cost £3 billion over the next four years. Many patient groups and professional organisations are rightly worried that having yet another major structural reorganisation, when the NHS faces the biggest financial challenge of its life, will not be good for patient care or for finances. I ask the Government to think again.

16:43

[David Rutley (Macclesfield) (Con)]

This is a vital debate, and the comprehensive spending review and its delivery will define this Parliament. The spending review charts a course that tackles the record budget deficit that we have inherited, it rebalances the shape of the economy and it sets out a path that will lead to lasting, sustainable economic growth.

To achieve sustainable growth, we need to rebalance the economy. That will mean less reliance on the public sector. It is unsustainable for public spending to account for nearly 48% of GDP, which clearly crowds out investment from the private sector. That is why the Government are right to bring public spending down to nearer 40% of GDP by the end of this Parliament.

The rebalanced economy must also be less dependent on financial services. In the last decade, the banking sector was allowed to become far too dominant. We need to ensure that future economic growth is more broadly based and not as closely linked to the performance of the City. Instead, we need to encourage the growth of high value-added manufacturing and high-tech industries. AstraZeneca and its skilled work force is vital to Macclesfield’s local economy, and it shows that we can still successfully make things in this country and compete in global marketplaces such as pharmaceuticals. It is good to see that the Government are creating the right economic conditions for the next generation of global competitors and providing support for the all-important small and medium-sized enterprise sector.

Rebalancing the economy also means that there will need to be a greater focus on the regions outside London and the south-east. There has been much talk about that in the Chamber today. There is no question that the north-west will benefit from the strong resurgence predicted in the private sector. Over the past decade in the north-west, the number of jobs in the public sector has grown much faster than in the private sector, and since 1999, the number of people employed in the public sector has grown by 100,000—a massive 17% growth. In contrast, over the same period, job creation in the private sector has broadly flatlined, only increasing by 24,000—just 1%.

Recent announcements in Macclesfield will sadly lead to job losses. The Cheshire building society is closing down its back-office operations, and more recently it has been announced that nearby BAE Woodford is to close. However, we are working hard to strengthen the local economy. It will clearly benefit from much stronger growth in the wider economy, which is why it is encouraging to see private sector job creation improving, with a 308,000 increase in the UK over the past three months. The increase in the north-west was 28,000, and for the last year, that figure comes to 40,000. That is encouraging news.

I am delighted that the Government are looking to build on those positive developments. I fully support the decision to scrap Labour’s tax on jobs, because it will help businesses to save £340 million in the north-west. The Government have gone further by giving new businesses new national insurance holidays outside the south-east worth £5,000 over the next three years, which could help up to 69,000 businesses in the north-west. The regional growth fund will also help to stimulate growth and provide sustainable private sector jobs in the north-west, and the new local enterprise partnerships, such as the Cheshire and Warrington LEP in my area, will put in place private sector-led recovery plans to stimulate economic growth, not just in major metropolitan areas such as Manchester and Liverpool, but in Macclesfield, east Cheshire and right across the north-west.

Labour’s opposition to the CSR shows how out of touch it is with reality. The only path it seems to offer is to ignore the deficit, to continue to borrow, to spend and to rack up yet more debt. That is a risk that we on the Government Benches are not prepared to take. We are taking the right approach to dealing with the deficit, but clearly there is more work ahead, and I think that we can draw inspiration from one of the great entrepreneurs in Macclesfield’s history—Charles Roe, from the 18th century—whose memorial in Christ church reads:

“Difficulties to others were incitements to action in him”.

We would do well to adopt that same spirit in responding to these challenging times, rather than the bleating we hear from the Labour Benches.

16:48

[Mr Andy Slaughter (Hammersmith) (Lab)]

At the beginning of this debate, my hon. Friend the Member for Wallasey (Ms Eagle) quoted an article in The Wall Street Journal today that reported

“panic stations in the Treasury”

at finding out that the reduction in child benefit for higher earners was “unenforceable”. It continued:

“At root is a problem that should have been apparent to those designing the policy, if detailed advice had been sought from civil servants before it was announced at Conservative party conference.”

My hon. Friend the Member for Streatham (Mr Umunna) referred to himself—in all humility, I am sure—asking Sir Andrew Turnbull from the Treasury Committee this morning:

“Do you think it’s accurate to describe the UK as being on the brink of bankruptcy?”

The response was: “No I don’t.” Both those bits of hot-off-the-press news—

[Kwasi Kwarteng]

Will the hon. Gentleman give way?

[Mr Slaughter]

No, I have not got time—actually I will, because it gives me more time.

[Kwasi Kwarteng]

I thought I was attending one of those rallies in North Korea, so reluctant are Labour Members to engage in debate. However, I thank the hon. Gentleman for giving way. My question is very straightforward: does he acknowledge that the deficit was a problem that had to be dealt with?

[Mr Slaughter]

What a stupid question, although I thank the hon. Gentleman very much for the extra time that he has given me. Anybody else? No? Okay, let us move on.

What I have described shows that it is politics rather than economics that has driven the CSR. Far from fairness driving the CSR, it is a particular type of Tory ideology that has driven it. Nowhere is that more true than in housing, to which I shall confine my remarks and which some of my hon. Friends have also addressed.

The Under-Secretary of State for Communities and Local Government, the hon. Member for Hazel Grove (Andrew Stunell) apologised to the House earlier today—and rightly so—for inappropriate remarks that he made in the debate in Westminster Hall on the CSR and housing yesterday, when he said that Opposition Members had spread “lies and deceit”. I am glad that he apologised—it was good of him to do that—but the irony is that he made those comments in the context of the most selective quoting from the National Housing Federation’s brief. He managed to find two sentences in an excoriating brief that he thought supported the Government’s case. Let me read the bits either side of the bit that he quoted:

“This is a 60% cut in cash terms in comparison with the 2008-11 programme and in real terms a 63% cut. We are extremely disappointed that the Government has chosen to impose such significant cuts in capital funding…In an attempt to fill the gap caused by these significant capital cuts the Government is proposing to allow housing associations…to set rents on new lettings at levels between the current social rent up to a maximum of 80% of market rent.”

The briefing continued:

“However, we understand that any funds generated under this new ‘intermediate rent’…will only be allowed to be used to build more homes at this new intermediate rent and…across the four year spending period no homes will be built for social rent using these funds…there will be no further construction of social homes until at least 2015.”

That is the housing situation that we face, and for hon. Members who want to know what “intermediate rent” means, I looked at my Conservative council’s planning policies, which were announced last month. I found that the term excludes anybody on under £20,000 a year, which is 40% of my constituents and most of the people in housing need, but includes those on earnings of up to £79,400 a year—people in the top 2% of earnings. It is the Government’s policy that only intermediate housing will be built over the next 10 years.

Where does that leave my constituents? Where does it leave constituents such as the one whose case I was dealing with in my office this morning? That constituent is living with three teenage children in a highly damp one-bedroom flat, but has received the usual response from the local authority, which says:

“The average expected waiting time for a three bedroomed accommodation…is projected between 8-10 years. This is however only a projection but reflects the reality of…Social Housing waiting time as dictated by demand against availability.”

What tenants such as my constituent are being told is, “Give up your secured or assured tenancy, and take an insecure tenancy in the private sector. Then you may get some more space.” Up until now, people have not been told—they are being told now—that such accommodation is likely to be outside the borough, because of the restrictions on housing benefit. The situation now is that my constituents are being told that if they want decent accommodation, they should go into the private sector and be re-housed a significant distant outside the borough.

That is the reality of housing policy under the CSR. It is the reality for a constituent who came to see me this week, a teaching assistant taking £900 a week net and living in a shared room in a flat in Shepherd’s Bush, for which she pays £650 a month. She gets some housing benefit, but she can hardly make ends meet. Next year, she will not be able to, because of the cuts in housing benefit, and she will have to leave her job and move out of the area. That is the reality for people in my constituency.

While we are talking about apologies, perhaps someone else ought to apologise. The first interview that the Prime Minister gave after the election was to The Daily Telegraph. The article says:

“He was still angry over ‘appalling’ Labour lies that he blamed for preventing celebrated candidates such as Shaun Bailey winning in marginal seats”,

and quotes the Prime Minister as saying:

“‘They were telling people in Hammersmith they were going to have their council house taken away by the Tories.’”

Well, they are, and I will tell the House why. That candidate is at least honest, because he said at the Tory party conference:

“Inner city seats are so hard to win because Labour has filled them with poor people who are desperate and dependant on the state, so they vote for a party that they think is of the state.”

That is why those people are being punished. They vote Labour, and they want to live and work in the inner city, but that is not good enough for the Conservatives. That is what my constituents are facing, for ideological reasons of gerrymandering and social engineering.

16:54

[Stephen Lloyd (Eastbourne) (LD)]

I have had the pleasure of listening to speeches all afternoon. In a way, they could be summed up by saying that Labour Members believe we are all going to hell in a hand cart, whereas Government Members believe we are heading towards the sunny uplands. My own view is that we are somewhere in between, but I am a little closer to the Government side.

Tony Blair apparently said to the right hon. Member for Birkenhead (Mr Field) in 1997, “Go away and think the unthinkable on welfare reform.” He promptly went away and thought the unthinkable, and a key part of it was recognition that benefits had to follow low incomes for people to get back into work and that benefits cost far too much—and the then Chancellor of the Exchequer and subsequent Prime Minister crushed it on the spot. So what is happening under the comprehensive spending review? It looks as if welfare reform is heading towards thinking the unthinkable. My understanding is that an extra £2 billion is to be included within the universal benefit, which will mean that people on low salaries can take a lot of their benefit with them. I will obviously need to check the fine detail as it gets presented over the next few months, but if that is right, it will make a profound difference to many hundreds of thousands of people.

Let me provide an example. A few years ago, I had to do something in Eastbourne. Although it is clearly the best constituency in the whole country, this was a little bit of a nightmare, which I suspect other Members might have experienced at some time in their lives. I refer to judging a beautiful baby contest. Trust me, it is a nightmare. How do we ensure that we do not win only the winning parents’ votes and lose all the others of the babies that we do not choose? I recall coming across a particular lady whom I knew. She looked about 50, but was probably in her late 30s. She was holding a baby of about six months or less. Standing next to her was her daughter—probably 17 or 18, but she looked a lot older—and the grandmother, who was completely inebriated. This was at 2 o’clock in the afternoon. As I looked at that child, I have to admit that behind the veneer of the politician’s smile, I felt utter fury because I knew that I could write that baby’s curriculum vitae right away—it was a goner. I find that absolutely unacceptable. If the changes to welfare reform, when followed through by people coming off benefit and going into initially low-paid jobs, mean that they can take their benefits with them, it will be a rational decision to get a job.

[Chris Williamson]

If the hon. Gentleman is so concerned about low-paid workers, will he not concede that cuts to housing benefit will make it much more difficult for many of them to hold down their jobs? Contrary to his assertion that the policies he supports will help people to get into work, they will throw more low-paid workers out of the jobs that they are undertaking at the moment.

[Stephen Lloyd]

The reality is that when a nation has reached a place where it is acceptable and normal for rents upwards of £30,000, £35,000 or £40,000 a year to be paid by the state, something has to give. I see the challenges, but I am hopeful that the Government will come up with a greater amount of discretionary money, particularly for places like London. In principle, however, I support the narrative. We need to realise how crazy the vast majority of working people view the fact that they could never rent a £20,000-a-year flat in a million years, yet the state allows rentals for much more than that. Forgive me, but I genuinely believe that anyone supporting that lives on a different planet.

Let me make another couple of important points about this comprehensive spending review and welfare reform. Just last week, I stayed at the Premier Inn—as we all know, that very salubrious place across the river. I have stayed there about 20 times since the election. I have met about 20 to 30 members of staff, and very nice they are too, but not one of them is an indigenous black or white British person. Not one! What is going on? I spoke last week to a friend who runs a café in Eastbourne. He said, “Stephen, I keep trying to get people to work and I offer them jobs, but they keep telling me that they cannot accept them because they will lose their benefit if they work for more than 16 hours a week.” What is going on? We have to forget all the backwards and forwards; I profoundly believe that we have got to change the system. It is not only inefficient, it is profoundly cruel.

As I have the Minister here, I want to flag up a number of areas of the CSR about which I have concerns. The first relates to Equitable Life. I commend the Government for their payments to Equitable Life policyholders; they came forward when the previous Government did not. However, the payment of £1.5 billion could have been higher. Considering that the second instalment of £500 million is going to be paid in the second term, I certainly believe that we should increase and expand it. We have a moral duty to do so.

My second area of concern is small businesses. I spent a few years working as a consultant with the Federation of Small Businesses in south London before I got elected to this place. Small businesses broadly support the comprehensive spending review, but they need the Government to be really active on cutting bureaucracy and setting small businesses free. I urge the Government to do that. I believe that this is a fair comprehensive spending review. It is a challenging one, and I appreciate that we shall have to see what happens over the next few years, but I commend it to the House.

17:00

[Alex Cunningham (Stockton North) (Lab)]

Last week’s comprehensive spending review delivered cuts beyond the dreams of even Margaret Thatcher that were welcomed with glee from the Tory Benches. Those cuts will really impact on our children and schools. I have been inundated with e-mails from teachers in Stockton North, and from teachers in neighbouring Stockton South who teach children from my constituency. They are incensed by the axing of the schools sports partnership. The head teacher of a special school in my constituency, Abbey Hill school and technology college, Clare Devine, wrote to me to say:

“I fully endorse the partnership’s work in transforming PE and school sport, and believe that the withdrawal of funding is a betrayal of the Olympic legacy to inspire young people to take part in PE and sport.”

What is that head teacher going to say to a child with the most challenging physical and other special needs who enjoys participating in sport through the partnership but can no longer do so? Perhaps the Minister will offer us some ideas.

Today, I have chosen to focus specifically on what the cuts will mean to the Cleveland fire service, which serves Teesside and Hartlepool. Last Friday, I met the chief fire officer, who outlined exactly how dangerous the cuts announced in the comprehensive spending review will be. I also met real firefighters in Billingham in my constituency, in their fire station on the edge of Europe’s biggest fire risk—a huge chemical and related industrial complex. The Cleveland fire authority has already made cumulative efficiencies of £1.8 million over the past three years. The savings have been officially recognised by the Department for Communities and Local Government. This is taking place against a background of improved outcomes, including the greatest reduction in primary fires nationally.

The comprehensive spending review reduced the revenue support grant from central Government for fire and rescue authorities by 25% over the next four years. The effect on Cleveland will be significant, given that 67% of its budget comes from the revenue support grant, with the rest coming from council tax. A 25% cut in Cleveland equates to a reduction in the overall budget of almost £6 million. Our firemen and women put their lives on the line every time the bell goes. They accept their responsibilities quietly and get on with the job, yet they will now face a greater risk to their personal safety if numbers are cut and resources stretched way beyond any reasonable limit. We have already seen deaths in other parts of the country that have been blamed on cuts. Is the Minister prepared to pay with even more deaths?

The Cleveland fire service area hosts 12% of all the COMAH—control of major accident hazards—regulated sites in England and Wales, yet it is a net loser under the current funding formula, which has seen an increase of just 2% across three years. The fire service in Nottinghamshire has received an increase of 19%. On top of this, the service is now being asked to cope with the new 25% cut. The chief fire officer is not confident that cuts on this scale can be made through efficiency savings alone, and believes that the service will be compromised if personnel and equipment are reduced. Lives should not be put at risk. I am told that a fully staffed fire engine costs in the region of £800,000 a year to staff. My fear is that, with £6 million of cuts, front-line services will be badly hit. The local firefighters whom I met last week had a clear message for the Government: we have now cut right through the fat and we are down to the bone. We cannot cut any more. We simply cannot afford to remove fire engines against this risk.

I want to remind Ministers of the Flixborough disaster of 1 June 1974. It happened in an area that is not dissimilar to my own constituency and other parts of Teesside. We saw what disaster meant that day, and we saw the tremendous work done by fire crews. We need to know that our fire services have the people and equipment that they need in order to respond to potential disaster, but the Government are turning their back on that need.

I hope that the Minister responsible for the fire service will accept my written invitation to see these challenges for himself, and will think again about the cuts to which he has agreed. I am particularly anxious for authorities such as Cleveland which have already delivered efficiency savings to be given a level of protection. There is only so much money to be saved through efficiencies, and sooner rather than later the cuts will hit front-line fire services.

It is absurd that our fire authority is being forced to consider making full-time stations part-time, and to rely on part-time firemen in an area with the highest risk in the whole of Europe. Firefighters, workers and ordinary families whose homes surround our industrial sites are being put at risk by these arbitrary cuts. I hope that the Government will think again about that risk and the way in which they are adding to it, because lives are at stake.

17:05

[Bob Blackman (Harrow East) (Con)]

I congratulate the Chancellor and his team on beginning the process of righting what has been wrong for the past 13 years. After those 13 years, we find ourselves in circumstances in which, for many people, it is better to be on benefit than to be in work. I listened earlier for a word of apology for the record deficit that the Labour party had created, and for any plan it might suggest to get us out of it or even suggestions of cuts that it would make in public expenditure. We are still waiting for the answers.

I shall confine my remarks to two aspects of the CSR. The first is reform of the benefits system. We have heard much from Opposition Members, and from people outside the House, about housing benefit, which is one of the benefits that need fundamental reform. It is horrendously complicated. It is paid on a daily basis, with tapers which mean that if people obtain work they immediately lose the benefit. It has therefore become a positive disincentive to work. The principle that we are adopting as a Government is that it should always be better to work than to receive benefits. I strongly support the cap and, indeed, the gradual withdrawal of housing benefit from people who refuse to work.

We must also ensure that there are job opportunities in the private sector, and opportunities for people to be trained to take those jobs. I support the Work programme that the Government are implementing, because it will bring about a fundamental change in British society that we all want to see.

It is currently proposed that the housing benefit cap should apply to people paying £20,000 a year in rent. That is £35,000 in pre-tax income. Given the other benefits that claimants are likely to have accrued, they would have to earn a salary of about £50,000 before they would replace their lost benefit income. If that is not an incentive not to work, I do not know what is. We must change the whole philosophy of housing benefit, and the basis of its operation.

A system that taxes people with one hand and gives them benefits with the other cannot be right. It is far better to lift people out of taxation—as this Government have done—and give them more of their own money to spend as they wish than to tax them and give them benefits at the same time. We have an opportunity to simplify the whole process. I strongly support such action, and I hope that we will move rapidly to a form of universal benefits rather than the horrendously complicated arrangements that existed under the last Labour Government. I trust that they were the last ever Labour Government.

I applaud this Government for their prompt and firm action to settle the Equitable Life dispute once and for all. For 10 years the Labour Government prevented Equitable Life policyholders from receiving the compensation that was due to them, which was a disgraceful way to behave. I especially applaud what has been done to reward trapped annuitants who desperately need the money now. I urge Ministers to get on with that job as quickly as possible so that we can pay retired people who are living in relative poverty as a result of the Labour Government’s actions.

The Government have accepted that the proper compensation due to all the policyholders is some £4.26 billion. The £1.5 billion goes some way towards that. Many of those policyholders are still working; they will be working for 10, 20 or possibly 25 years more. They need support and help, too. I ask that, as the economic times get better, improvements come, we create more jobs and the economy recovers, our Treasury colleagues consider putting more money into those policyholders, so that they are properly rewarded for the pain that they have gone through under the last Labour Government. That is only right and just. I trust that we will see that happen in the not-too-distant future.

17:10

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

I echo the views of my colleagues who have already spoken. I concur with them about the impact that the CSR will have on the poorest people, as evidenced by the recent BBC-Experian poll placing my area and the surrounding area in Teesside and East Cleveland at the bottom of that list—evidence that my proud people who struggle so hard are in the least resilient position to deal with the Government’s harsh cuts.

Let us take the Government’s threatened public sector sackings, such as those of 180 firefighters in Cleveland fire authority, which not only affects the local economy in terms of spending and welfare, undermining the average man in the street’s confidence in the economy, but exposes the local population, massive processing sites, and the manufacturing, steel and petrochemical industries of Teesside to hugely increased fire risk and in turn only deters further future inward investment in that area. The result of such a policy will be increased unmanaged industrial risk, which will only increase the insurance costs of manufacturing industry in my area.

Inward investment for manufacturing is of real concern, from wherever it may come. Teesside is not fussy; it just wants the investment. However, on Wednesday 20 October, during Prime Minister’s questions, following a question asked by my hon. Friend the Member for Darlington (Mrs Chapman), the Prime Minister could not come up with one inward investment or new company in the north-east that had come to the region without public funds leading to and attracting private inward investment.

When the Prime Minister, at the recent CBI conference, made assurances of £60 million to the north-east as “new” money, he was being wholly disingenuous. These moneys were set aside by Labour as a result of the Prime Minister's fiscal friend Kirby Adams’s attempt to be a second MacGregor. The Prime Minister’s mate, Kirby Adams, tried to destroy steelmaking on Teesside. That £60 million was originally set aside by Labour to aid a green regeneration on Teesside; it is not new ConDem cash, as any union official on site whom I worked alongside at Teesside Cast Products will tell you.

The Secretary of State for Business, Innovation and Skills confirmed in a Select Committee hearing on Tuesday that LEPs would receive no Government funding and would have to rely on local authorities or businesses for their funds. If that is the case, LEPs are merely powerless, toothless, fundless talking shops. In Teesside, that is even more the case, as the back-up service to any potential Tees valley LEP will be reliant on the Tees Valley Unlimited staff and logistical support. However, that too has had £7 million of its £9 million budget slashed.

The regional growth fund will be expected to cover crucial areas such as roads and housing renewal, leaving little in terms of a funding pot for business to apply for. In any case, any would-be small business would have to make a submission for a bid of at least £l million, a sum most small businesses do not require, cutting out crucial small business growth.

I am also concerned at the delay in the green investment bank. The CSR referred, in small print, to the fact that the green bank will not be set up until 2013-14, missing the crucial 12 to 18-month window that we are currently in to take advantage of wind farm production and maintenance off our coastal ports, such as the port of the Tyne, the Wear and Teesport. I am also concerned that changes to the carbon reduction commitment scheme, which amounts to a £l billion tax, will delay green investment and hurt small downstream industry which aids steel production in the UK.

Only yesterday, steel producer Lakshmi Mittal called for more stimulus measures from all Governments to speed growth in the steel industry. I would impress upon the Government the need not to disturb the Thai Sahaviriya Steel Industries ongoing bid. The probable new owners of Tees Cast Products may well begin to doubt the coalition’s commitment to the ambitious investment plans, on which I have been seeking a definitive answer since May. I and other Members were promised that immediately following the CSR by the Secretary of State for Business, Innovation and Skills when he visited the north-east and made his magical mystery tour of the Beam mill at Redcar—a site totally separate from the TCP site.

In conclusion, I draw the House’s attention to another economic critic of the Chancellor. According with Chris Giles in the Financial Times, in all Departments other than Health and International Development, a 19% real-terms cut is being implemented, compared with the 12% cuts planned by the previous Labour Government. That was down to the fact that the Chancellor played fast and loose with an inconsistent definition of “unprotected”. What is clear is that the people of the north-east, and in particular Teesside and East Cleveland, have been left totally unprotected by this Government. I again agree with Chris Giles, as well as other esteemed and documented economic critics, that the Chancellor’s comparison in his oration was simply “bogus”.

17:15

[Kwasi Kwarteng (Spelthorne) (Con)]

Like my hon. Friend the Member for Central Devon (Mel Stride), I have sat through this debate all afternoon and have listened with increasing incredulity to what Opposition Members have been saying. There is an air of unreality in some parts of the Chamber. The question is not whether we should cut or carry on spending, as the second option is not on the table. Labour Members have accepted in their more lucid moments that they, too, would have had to cut, but as they now enjoy the luxury of opposition they do not have to say what they would have cut. It is the job of the Government to be responsible and take the decisions on which our future prosperity will depend.

There has been a lot of special pleading during the debate, and that is a part of our job as constituency MPs, but we also have a wider responsibility to the country as a whole, and it is one of the wider responsibilities of the Government to try to make sure that we are on track and that at the end of this Parliament Britain is much more prosperous than it was at the beginning of it.

The contents of the comprehensive spending review delivered by my right hon. Friend the Chancellor last week can be boiled down to just a few questions. First, how did we get here? We all know how we got here. A previous Chancellor—in accordance with the custom of the House, I will not mention him by name—believed he had abolished boom and bust, and his calculations on increasing spending were therefore based on the false premise that the economy would continue to expand. It did not, however. There was a recession, and because he had so many spending commitments, we ended up with a huge deficit.

No one is denying the scale of the deficit. It is the worst deficit of all the G20 countries; every international organisation has pointed out that the British deficit is far worse than those of our peers. The coalition Government had to deal with that, and I believe they have done so very well and effectively. The process has been a painful one, as many Members on both sides of the House have said, but it was the responsible course of action, to which the Conservative party was committed in the run-up to the general election and to which both coalition parties are signed up. We have been facing difficult choices, and as the Chancellor outlined last week, government is about choice. The cuts are necessary. After all, £1 in every £4 we spent was borrowed, which was unsustainable. No one in their right mind would lead their private life on that basis. We cannot keep on borrowing and spending. These are obvious truths which we have recognised and addressed.

The next question is an entirely legitimate one: are these cuts and restraints in spending fair? There is a big dispute about that between Members on the Opposition and Government Benches, but I want to remind the House of certain facts. The current benefits system simply is not working. It cannot be right that people are getting more than £20,000 a year on benefits and are therefore completely disincentivised from working. Many hard-working people in my constituency find it absurd and very frustrating that, as they feel, they are subsidising those who, as a lifestyle choice, have decided not to work. That cannot be right. Hon. Friends have alluded to a change in philosophy in this respect, and it is long overdue. In the long run, people will acknowledge that we did the right thing. It was a tough thing to do, but it was also a courageous thing to do, and it was the right thing for Britain as we look forward to the next few years.

The coalition Government have been utterly responsible and fearless in their determination to tackle our problems. That is what responsible government is about, and I am pleased to be supporting a Government who are responsible and determined enough to deal with our problems and to set our country on the right track.

17:19

[Mr Chuka Umunna (Streatham) (Lab)]

Although she is not in her place, I wish to associate myself with the comments, particularly those on welfare reform, made by my right hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), who is also a south London MP. Her comments apply equally to my constituency as they do to hers.

I wish to say a little about the banking sector in the context of this comprehensive spending review, because it has not been addressed in great detail during this debate. During his speech to the CBI on Monday, the Business Secretary said that

“the British economy, two years ago, suffered the economic equivalent of a heart attack with the near collapse of the banking system. Death was averted by speedy intervention to shore up the banking system to prevent an economic slump.”

Although he has tended to peddle some of the myths we have heard in the Chamber today, at least there he acknowledged that the previous Government stepped in to prevent the recession caused by the financial sector from turning into a depression. For me, the real question is what contribution the Government are expecting the banking sector to make to clear up the mess it created.

In his emergency Budget statement, the Chancellor said:

“The failures of the banks imposed a huge cost on the rest of society, so I believe that it is fair and right that in future banks should make a more appropriate contribution, reflecting the many risks that they generate.”—[Official Report, 22 June 2010; Vol. 512, c. 175.]

What was promised in that emergency Budget? First, the Government said that they would set up the Independent Commission on Banking. Secondly, they said that they would take action to tackle unacceptable bank bonuses, referring to the consultation that they would start on the remuneration disclosure scheme and talking about imposing more restrictions on remuneration arrangements for those working in the City. Of course, the centrepiece of the action that the Government said they were going to take on the banks was the banking levy.

So what did we see in the comprehensive spending review? Credit is due in respect of the Independent Commission on Banking. I, for one, am pleased to have seen that set up and its terms of reference are good. Beyond that, there are many questions to be asked about what the Government are doing to ensure that the financial services sector makes its fair contribution. We are constantly told that we will be consulted on the remuneration disclosure scheme in due course. I believe that the Financial Secretary to the Treasury, who is no longer in his place, said that that would take place shortly. However, at the moment it is nowhere to be seen. There is a real risk that if we do not see this in the remuneration disclosure scheme, which would require the banks to exercise more transparency in their remuneration arrangements, things will not be implemented in time for the forthcoming bonus round, which is about to start in December.

We have not seen much movement on the measures to tackle irresponsible bank bonuses either. We have seen movement on this in Europe, but not on the domestic front. As has been said in the Chamber today, the banking levy is to bring in about £2.5 billion of revenue, and the Government are fond of saying that that is higher in net terms than the previous Government’s payroll tax. That is completely disingenuous, because I tabled a parliamentary question during the summer on the likely income from the banking levy and was told by the Treasury that it would raise £1.15 billion in 2011-12, rather than £2.5 billion. I was told that £2.32 billion was to be raised in 2013-14, not £2.5 billion. The income would finally reach £2.5 billion in 2013-14 before falling back again to £2.4 billion in 2014-15. So in 2014-15 the banks would be paying less than the amount that families will lose in child benefit.

What we were also not told in the CSR was that, under the paper issued by the Government, the day after, the banks will have a tax-free allowance—a levy-free allowance—of £20 billion, so they will not pay the banking levy on the first £20 billion of taxable liabilities. This is not a levy; it is a walk in the park for the financial services sector. The five biggest UK banks have already announced well over £15 billion of profits this year, so I ask the Government to spell out how those whom they said they would make pay for the crisis they caused are to be required to make a fair contribution, because we do not see it in the Green Book this week.

17:24

[Mary Macleod (Brentford and Isleworth) (Con)]

It is good to have this debate on the comprehensive spending review following the gross domestic product growth figures and the news of the enhancement of Britain’s triple A rating, which was described by the Financial Times as

“offering a vote of confidence in the government’s austerity programme”.

For me, the CSR has summed up this Government’s intention to deal with the budget deficit in a way that gets this country back on a firm financial footing and invests in our future.

Earlier, I was appalled when the hon. Member for Wallasey (Ms Eagle) not only did not recognise that there were some women on this side of the House, and directed her comments to the gentlemen—as fond as I am of my hon. Friends, I thought she ought to have recognised the talent that we have on the Front Bench in the shape of my hon. Friend the Economic Secretary to the Treasury and elsewhere, too—but, more importantly, did not give us any one plan or any cut that we have come up with that she could agree with. She also did not come up with plan of action that showed exactly what the Opposition would do to get rid of the awful mess that we are in, which they created.

The comprehensive spending review is all about fairness and getting things back on track, ensuring that we get value for money and investing in the future. The general public appreciate that cuts need to be made, and that those cuts need to be right and fair, but that we need to ensure that we support those in need. That is what I believe we are doing. There is nothing fair about running a huge budget deficit and burdening future generations with the debts that we are not prepared to pay.

I have met several people in my constituency who are keen to work but who are prevented from doing so because they would be worse off. The time has come to make those changes and to ensure that we deliver real change for the future. The hon. Member for Hammersmith (Mr Slaughter) was talking about the impact on the local area in London, but let me tell him about my vision not only for Chiswick, Brentford, Isleworth, Osterley, Hounslow and Hammersmith but for the rest of London and for the country beyond. I want to build confidence in people, no matter where they come from or where they live. I want to ensure that we build skills for the future and that we build hope and aspirations, so that we can get people back into work again. That is what I believe that the comprehensive spending review will do.

Those of us who spent many hours, days and years in business know that we can get better value for money in the public sector. As part of this plan we will look at each Department to see where we can simplify how we do things, where we can remove duplication and where we can add value. Those things are possible.

It is also important that we do not forget those organisations that play a key role across our many constituencies. Let me bring one to mind: Refuge, which deals with domestic violence. When local authorities and others are considering their budgets and prioritising their spending, I want to put in a word for organisations such as Refuge, which need support because they provide valuable services to the local community.

Finally, I want to touch on our investment for the future—that is, investment in infrastructure, in people and in growth. I commend the Government for their announced investments in Crossrail and in many of our roads—including in the Hounslow highways private finance initiative, for which we have support—and for their many other investment announcements. I agree with our Mayor that London plays a vital role as the engine of the UK economy and that investment in the capital is critical to the well-being of the economy overall.

We are also investing in schools, with the announcement of capital funding for and the refurbishment of schools. Several schools in my community—Chiswick Community, Hounslow Manor and Oaklands—need that support. They also need the support for the additional places that they will need for the future.

In this comprehensive spending review, the Government have had to deal with the economic realities and they have not shied away from their responsibilities. We are committed to cutting waste and reforming public sector services while at the same time investing in infrastructure, people and businesses to make this country successful for the future.

17:29

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

Last Wednesday, the Chancellor took a huge gamble on the future of the UK economy. The CSR statement, coupled with the June Budget, will take a staggering £80 billion out of our economy over the review period. Never before has any Chancellor cut so deeply and so quickly.

The people who will pay the price for that squeeze on the state will not be the 18 or so millionaires who sit around the Cabinet table. No, the price for the Chancellor’s gamble will be paid by people on council estates who will see rents rise dramatically, civil servants in my constituency who will lose their jobs and students who will see their debts treble.

We all agree that the deficit needs to be reduced to a sustainable level, but that should not be at the risk of weakening an already fragile economic position, and it must be based on a strategy for growth and jobs—a strategy absent from the Chancellor’s statement. The facts are that the Chancellor is hoping that export volumes will rise significantly over the period covered by the review. At the same time, according to the Chancellor’s own figures, the economy will have to find an extra 2.5 million private sector jobs in the next five years.

To put that into perspective, during the last recession the UK managed to create 1.2 million jobs between 1993 and 1999. To get anywhere near the target that the Government have set themselves will require investment and an export boom on a scale that has never been achieved before—a point underlined recently by many political and economic commentators, including the well respected Will Hutton.

Although the £200 million to establish the elite research centres is certainly welcome and nothing new to us in south Yorkshire, where we already have the advanced manufacturing research centre, this investment is nowhere near enough, in the context of the sheer scale of the growth required, to rebalance the economy.

It is also important to remember at this point that the Government have already failed a key test on the support that they are prepared to give the private sector. In June they withdrew a Government commitment to fund the £80 million loan to Sheffield Forgemasters. Although I will not go into the stupidity of that decision now, it is clear, as the Business Secretary said in the Select Committee recently, that the nuclear reactor components at the heart of the proposed investment will now have to be manufactured abroad, and the UK will lose millions of pounds of exports to our international competitors. Surely that is not the way to go about rebalancing our economy.

How will 40% of cuts in funding to the higher education sector help to rebalance the economy? All that will do is damage our economic future. Also in further education, the Government are abolishing the education maintenance allowance, which has been recognised by many as a success. The Institute for Fiscal Studies, which is so obviously a thorn in the side of the Deputy Prime Minister, said that since the allowance was introduced, attainment at GCSE and A-level by recipients of EMA has risen by five to seven percentage points, and by even more for those living in the most deprived neighbourhoods.

That evidence is reinforced by college principals, who believe that many young people will not be able to stay in education and training without EMA, so why have the Government withdrawn a scheme which, in the great scale of things, costs relatively little and helps to give so many young people the skills desperately needed, if the Government are genuine about rebalancing the economy?

It is clear that the Government believe that private sector growth will, over the period, pull our economy on an upwards trajectory. I hope the Government have got that right, but I fear not. I fear that in a few months they will come back to the Chamber to revise the figures as the economy goes into a death spiral, and they will tell us that they cannot deliver the £17 billion savings and the cuts that they announced last week. That will not be achievable because unemployment will rise. The CSR is bad for Britain and bad for our economy. They should think again.

17:33

[Mr David Hanson (Delyn) (Lab)]

Thirty-one Members from all parties and all parts of the House, including the Chair of the Treasury Committee, have contributed to the debate, which has been interesting and well informed. It is clear that there is a real divide between the Government and the Opposition on how to tackle the deficit, the impact of the CSR, and the fairness of the measures proposed by the Government.

[Several hon. Members]

rose—

[Mr Hanson]

I have five minutes or so to wind up the debate. I will not give way at present.

The spending review will hit jobs, children and families. It will gamble with jobs. It will gamble with the growth of the British economy and, as my hon. Friend the Member for South Down (Ms Ritchie) said, that of Northern Ireland as well. The spending review will hit the most vulnerable in our society the hardest.

[Kwasi Kwarteng]

rose—

[Mel Stride]

rose—

[Mr Hanson]

I shall give way to the hon. Member for Spelthorne (Kwasi Kwarteng).

[Kwasi Kwarteng]

I am obliged to the right hon. Gentleman. He acknowledges that there is a deficit and his party acknowledges that it would have made cuts, so will he please tell the House where those cuts would have fallen?

[Mr Hanson]

I know the hon. Gentleman was not a Member at the time, but I wish he had been here for the Budget proposals in March, when we set out clearly our deficit reduction plan.

The hon. Member for Colchester (Bob Russell) quoted the Bible at us. May I refer him to “Matthew”, chapter 7, verse 16, and the notion, “By their deeds shall ye know them”? The spending review cuts too fast and too deep, and it rejects the sensible, balanced approach put forward by my right hon. Friends the Members for Edinburgh South West (Mr Darling) and for Kingston upon Hull West and Hessle (Alan Johnson).

The Government plan to take out of our economy and our spending £40 billion more than Labour thought sensible, so I was surprised to hear the hon. Member for Thurrock (Jackie Doyle-Price) call for more expenditure. Even the Office for Budget Responsibility thinks that the Government’s measures will downgrade next year’s growth forecast from 2.6 to 2.3%.

The Budget and the comprehensive spending review will hit jobs, essential services and, crucially, take public investment out of the private sector at a time when the Government want the private sector to grow. My hon. Friends the Members for Liverpool, Riverside (Mrs Ellman) and for Ochil and South Perthshire (Gordon Banks) and, indeed, the hon. Member for Macclesfield (David Rutley) recognised the importance of the public sector in helping to support future private sector investment.

We know, because the Chancellor admitted it last week, that 490,000 jobs will be lost in the public sector. The hon. Member for Dundee East (Stewart Hosie) mentioned the impact on the defence sector, PricewaterhouseCoopers estimates that another 500,000 jobs will be lost in the private sector as a result, and my hon. Friend the Member for Nottingham South (Lilian Greenwood) described the impact of those losses. So let us not kid ourselves: the economy is still fragile. This week’s announcement on growth over the last quarter still demonstrates that point and, put simply, throwing 1 million people out of work—out of the economy—will cost us more jobs than that and impact on the private sector in the long run.

The Government’s measures will hit the private sector hardest. The hon. Member for Watford (Richard Harrington) talked about confidence, but confidence will fall if 1 million people are out of work. It will mean more people claiming benefits. As my hon. Friend the Member for Nottingham South said: fewer people in jobs, fewer people helping to grow the economy and higher welfare bills.

Government Members have been asking for it: there is an alternative to the Government’s proposals. We clearly said in the Budget presented by my right hon. Friend the Member for Edinburgh South West in March that we would take steps to halve the deficit over four years.

[Mr Raab]

The right hon. Gentleman refers to the March Budget, but the former Chancellor, who sat in on much of today’s debate, said in August of the election:

“Labour lost because we failed to persuade the country we had a plan for the future.”

Was he right then? What has changed now?

[Mr Hanson]

The hon. Gentleman was not a Member in March, but if he had been, he would have seen our proposals to make efficiencies in policing, for which I was responsible at the time, of about £1 billion. He would have seen proposed efficiencies through savings on back-office staff, police procurement, public sector pensions and pay caps—a range of issues. The Conservative and Liberal Democrat policy, which has been brought before the House today, and which, by the way, we have not had sufficient time to debate, has been shown to be misguided. The people who will find it hard to get back into work will be hit hardest. [Interruption.] The right hon. Member for Rayleigh and Wickford (Mr Francois) has not even been in the Chamber most of the afternoon. He will whip Conservative Members to vote against child tax credits, child trust funds and the health in pregnancy grant, but he will not sit here and listen to the arguments about those issues.

There will be cuts in working tax credits for child care and a freeze on working tax credits, and people on jobseeker’s allowance will be punished. As my right hon. Friends the Members for Barking (Margaret Hodge) and for Lewisham, Deptford (Joan Ruddock) and my hon. Friends the Members for Hackney North and Stoke Newington (Ms Abbott) and for Hammersmith (Mr Slaughter) said, cuts in housing benefit will exacerbate the problem. Women, children and the poorest in society will bear the brunt of these cuts.

As my hon. Friends the Members for Easington (Grahame M. Morris) and for Middlesbrough South and East Cleveland (Tom Blenkinsop) pointed out, the regions in the north of England will be hit the hardest, with the loss of the pregnancy grant, the ending of contributions to the child trust fund, the scrapping of the savings gateway scheme, and the cutting of child benefit, which, as my right hon. Friend the Member for Croydon North (Malcolm Wicks) so eloquently pointed out, is an unfair approach to tackling the deficit. My hon. Friend the Member for Hammersmith also said that that will raise serious issues. Even today the Chief Secretary to the Treasury stated very strongly that there was not a problem in the Treasury with enforcing these policies. Well, let us find out downstream whether there is a problem when we see how he ensures that there is fairness between those who earn a top rate of tax, with two incomes, and those who earn a lower rate of tax, with one income. I will be interested to see how that works in due course.

The poorest 10% of the population will be hit hardest by the deficit reduction plan proposed by the Conservatives and the Liberals. Members need not take my word for it—it comes from the Treasury’s own figures in the Red Book. Massive cuts to public spending will threaten vital local services, which my hon. Friend the Member for Stockton North (Alex Cunningham) mentioned with reference to the fire service. Capital spending benefits the private sector most, because it is not the public sector that spends money on building things in the economy—the private sector does that.

[David Rutley]

rose—

[Mary Macleod]

Will the right hon. Gentleman give way?

[Mr Hanson]

No, not in view of the little time I have left.

More widely, there are cuts to front-line policing, putting at risk Labour’s record falls in crime and, as my hon. Friend the Member for Leicester West (Liz Kendall) noted, putting extra pressure on health and education services, despite pledges to support them.

[Mary Macleod]

Will the right hon. Gentleman give way?

[Mr Hanson]

Yes, I will, so that the hon. Lady can defend these policies, which are unfair, short-sighted and just plain wrong.

[Mary Macleod]

What is the right hon. Gentleman’s plan, and which cuts does he agree with?

[Mr Hanson]

I can see a pattern developing. Members who were not here in March of this year did not hear my right hon. Friend the Member for Edinburgh South West outline his proposals.

Despite what the coalition would have us believe, this grossly unfair series of cuts is not inevitable—there is another way. The deficit was there because as a Government we faced a choice. Incidentally, the right hon. Member for Witney (Mr Cameron), as Leader of the Opposition, supported our deficit reduction plan and spending programmes. After much dithering, he supported us in taking measures to ensure that we did not let the United Kingdom slip into a depression. Members such as the hon. Members for Central Devon (Mel Stride) and for Watford do not realise that the official Opposition supported us in ensuring that we took action to help to support the banks to keep people in their jobs and to keep people’s mortgages alive.

That is unlike what happened in the recessions of the early 1990s, which I remember as a Member of Parliament, when we saw mortgages go up, houses repossessed, and jobs lost in their thousands. We took action to save those things on behalf of the British people, and we were proud to do so. The action that we took kept people in their jobs, kept people in their homes, and gave more businesses the support they needed than at any time during the 1990s. Through our action, inflation stayed at a historical low and plans were put in place to ensure that we saw a return to growth at the end of this year. We took that action to support the economy.

We need to bring the deficit down—certainly we do. We know that tough spending choices are needed, and in our Budget we looked at saving money on IT systems in the NHS, police overtime and welfare, and made £15 billion of efficiency and back-office savings on a range of other issues. They were important savings. [Interruption.] As my hon. Friend the Member for Streatham (Mr Umunna) says, we raised money through a higher and more effective banking levy.

This comprehensive spending review debate is about choices. It is about choosing whether the banks bear more of a burden than our children. It is about choosing whether we cut public services spending deeply or quickly—and we would not. It is about targeting new tax rises to fund £7.5 billion of capital spending in order to support jobs now. The Government are making the wrong choices. We are not “all in this together”. They are gambling with jobs, gambling with growth, deepening unfairness, and increasing inequality. To cite a notable former Prime Minister, there is an alternative.

We announced our programme in our Budget in March, and we were elected—every single one of us—on that programme for the future. In the coming weeks and months, we will promote that alternative vigorously, expose this Government’s reckless policies and ensure that we stand up for the ordinary, squeezed, middle-class people of this country and the people on lower incomes. We will reject the cuts where it is appropriate to reject them and support efficiencies where they should be made. [Interruption.] Again, the right hon. Member for Rayleigh and Wickford was not listening to what was said earlier. He has not been here listening to the debates and the arguments. I urge him and the House to reject this comprehensive spending review, support the Labour alternative and ensure that we defend the poorest in our society.

17:45

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

We have had a very good debate on the Government’s spending review, and I thank all hon. Members who have contributed.

Last week my right hon. Friend the Chancellor stood in the House and set out a clear plan to pull Britain back from the brink, to deal with our debts and to put our nation’s finances back on a sustainable path. When we came to power, we inherited an economy that was on its knees and took over from a Government with no clear plan for getting it up and running. There was no strategy for recovery and no ideas for reform, and not a single penny of savings had been identified. If Opposition Members would like to intervene to tell me which of our spending cuts they would like to support, I would be very happy to take the intervention right now.

The right hon. Member for Delyn (Mr Hanson) talked about the March Budget, but it was a Budget and a plan that the British people rejected at the ballot box. While the Opposition are in denial, they will have no prospect of coming up with a plan to solve the grave problems that this country faces following 13 years of their being in government.

We took over when our country was borrowing £1 for every £4 it spent. We were running the highest deficit in our peacetime history and the highest in the G20. Britain was not living within her means, and the world knew it, as my hon. Friends the Members for Spelthorne (Kwasi Kwarteng) and for Central Devon (Mel Stride) pointed out. In fact, the previous year, the International Monetary Fund warned that we needed to accelerate deficit reduction. As my right hon. Friend the Member for Wokingham (Mr Redwood) said, that was critical to getting our country’s finances back on track.

In May we announced immediate reductions in in-year spending, avoiding the sovereign debt crisis that was engulfing the eurozone. In June, we set out our emergency Budget, returning credibility to the nation’s finances, and this October we have had the spending review, bringing years of irresponsible borrowing to an end and giving our country the best chance of keeping interest rates low, stimulating business investment and keeping mortgage rates low, and so helping families.

We have had to tackle the deficit—it has been unavoidable. However, we have chosen to spend the money that we have on the areas that matter most to Britain, which are the education of our children, the health care of our people and the infrastructure that sustains a prosperous economy. As my right hon. Friend the Chief Secretary said, underpinning all our decisions have been three guiding principles: first, the need to support growth; secondly, that our choices are fair; and thirdly, that we deliver reforms to our public services, making them fit for the 21st century. As the hon. Member for Redcar (Ian Swales) pointed out, those principles were entirely missing in the last Government’s comprehensive spending review of 2007.

[Angela Smith]

Can the Economic Secretary give us any indication of the evidence that the Government have used to rely on the creation of 2.5 million new jobs in the private sector over the next five years?

[Justine Greening]

As the hon. Lady will be aware, we have set up the Office for Budget Responsibility, which is an independent office. It is the OBR that is predicting year-on-year falling unemployment and rising employment. I hear Opposition Members talking about 480,000 or 490,000 public sector job losses, but I am afraid they have to consider that the same report assesses that 1.6 million jobs will be created in the private sector. They cannot have it both ways.

[Chris Williamson]

Will the Economic Secretary give way?

[Justine Greening]

I will not, because we have had a long debate and I have three minutes to respond to each hour of it. I really do want to try to cover the points that hon. Members who participated raised. I apologise to the hon. Gentleman, but I want to respond to what has been said.

The bottom line is that if a country loses control of its finances, it loses the ability to choose how to spend its money, and its priorities become those of its debtors, not of its people. That is why we outlined a clear and credible plan to deal with the deficit when we came to government and that is why we will stick to it. The Government are firmly focused on achieving sustainable growth. Tackling the deficit will help to provide the strong economic bedrock on which the private sector can build, as my hon. Friend the Member for Esher and Walton (Mr Raab) pointed out.

[Chris Williamson]

This morning, I met a representative from the UK construction group that represents some of the largest construction companies in the country, which said that it did not recognise the growth figures that the Prime Minister quoted yesterday. It said:

“The 4% increase in construction turnover in”

quarter 3

“is unbelievable and does not reflect the mood of the major players”.

Is it not a fact that the private sector-led recovery on which the hon. Lady is relying is just a fantasy and will not come to fruition?

[Justine Greening]

I was about to ask the hon. Gentleman to give way, Mr Deputy Speaker. The Government are spending slightly more on capital infrastructure than the previous Government, so heaven knows what the industry would have thought of Labour’s plans. In the next four years, we will invest more than £30 billion in transport projects, £14 billion of which will fund maintenance and investment in our railways and £10 billion of which will be spent on road, regional and local transport schemes. We have created the new green investment bank to help finance sustainable infrastructure for the future and we have launched the £1.4 billion regional growth fund, which has rightly been welcomed by my hon. Friends the Members for Bristol West (Stephen Williams) and for Macclesfield (David Rutley).

Even when faced with the economic problems bestowed by the Labour party, we are still investing tens of billions of pounds in Britain’s future. That goes alongside the reduction in corporation tax that we brought forward in the emergency Budget and the reduction in national insurance that we have also brought forward, scrapping the Labour party’s jobs tax. The hon. Member for Wallasey (Ms Eagle) said that the spending review is not just about numbers, but I shall give her a number—400,000. That was the number of extra unemployed at the end of Labour’s time in power, but Labour still wanted to introduce the jobs tax.

The hon. Members for Easington (Grahame M. Morris), for Stockton North (Alex Cunningham), for Middlesbrough South and East Cleveland (Tom Blenkinsop), for Penistone and Stocksbridge (Angela Smith) and for Nottingham South (Lilian Greenwood) all spoke of their concerns about the spending review and the cuts, but none of them offered any alternatives. We hear about the Opposition supporting cuts, but we never find out which ones they support.

The second principle behind our decisions is to ensure fairness and make sure that those with the biggest shoulders bear the largest burden, while protecting the most vulnerable in our society. That is why the Government have restored the earnings link for the state pension and ring-fenced NHS funding. We want to give every child the best possible start in life by increasing the child tax credit for the lowest-income families and by protecting our investment in schools. There is nothing fair about not tackling the deficit and placing the millstone of debt that we currently have around the necks of our country’s 20-somethings for the future.

[Malcolm Wicks]

Is it fair that when the cuts, including those to child benefit, are analysed, time and time again those who are hit the hardest are mothers and children? Does that make sense in terms of family policy?

[Justine Greening]

I do not accept that at all. The right hon. Gentleman needs to have a chat with the hon. Member for Hammersmith (Mr Slaughter), who was claiming that families on £79,000 a year are too rich to get support from the local council to access housing in London but too poor to have their child benefit withdrawn. That shows the incoherence of Labour’s policy on the economy, particularly on welfare—a budget that accounts for almost £1 in every £3 that we spend.

As my hon. Friends the Members for Harrow East (Bob Blackman) and for Brentford and Isleworth (Mary Macleod) said in their powerful speeches, work simply does not pay in our welfare system. People are put on benefits with no prospect of ever being better off in work and, as my hon. Friend the Member for Eastbourne (Stephen Lloyd) pointed out, successive generations are condemned to a life of state dependency. Opposition Members might think that that is fair, but I do not. It is one reason why over the coming years and next two Parliaments the Government will introduce the universal credit—to make sure that people on welfare will always be better off by moving into work.

[Mr Slaughter]

The Leader of the House will confirm that at business questions today, I quoted the Mayor of London on the reduction of housing benefit, which he described as “Kosovo-style social cleansing.” Since then, he has said:

“I do not agree with the wild accusations that reform will lead to social cleansing.”

Why has he changed his mind in the six hours between now and then? Is it by any chance anything to do with a call from No. 10 Downing street?

[Justine Greening]

That was a completely ineffective intervention. The hon. Gentleman ought to complain to Labour Front Benchers for their being so utterly ineffective at creating extra social housing in the capital during their many years in power. It was shocking how little affordable housing was created under the previous Government.

Even when spending is being reined in, we have found more resources for our schools and for the early-years education of our children. That has meant other Departments taking bigger cuts, but we believe that that is the right choice for our country’s future. The right hon. Member for Croydon North (Malcolm Wicks) quoted Eleanor Rathbone, who said that children are assets to the community. She was right, which is precisely why there will be a real increase in the money for schools in the next four years. In fact, my hon. Friend the Member for St Austell and Newquay (Stephen Gilbert) also recognised the importance of that. That is why the schools budget will rise from £35 billion to £39 billion, why we are maintaining cash spending on Sure Start, and why we are introducing a new £2.5 billion pupil premium to focus our resources on the children from the most deprived backgrounds in our country.

Our third and final principle in the spending review was public service reform. We are reducing back-office costs to free more resources for the front line. The right hon. Member for Barking (Margaret Hodge) spoke of the challenges of improving efficiency in government, but unlike her party when in power, we aim to be successful. We have started that process by finding every last penny of possible savings, and we are beginning to eliminate the monumental waste that became endemic in the past decade. We are tackling administration, improving procurement, and scrapping ineffective and expensive IT systems, which became a feature of the previous Government. When we started that process, we looked to make £3 billion of savings, but now we will make £6 billion of savings.

Finally, our reform agenda will see a massive devolution of power from the centre. Apart from schools and public health, we will end the ring-fencing of all Government grants to local authorities from April next year. More than 90 separate core grants to councils will be reduced to fewer than 10. Councils welcome that freedom even if the hon. Member for Leicester West (Liz Kendall) does not. We will change how services are delivered through increased payment by results and personal budgets, and by introducing new rights for communities to run services and own assets. We are therefore giving more powers to the front line and more to local government and communities—the very people who know their area best.

We are cutting the ridiculous levels of red tape that tie the hands of our police forces and so many other people who are working hard in the public sector to deliver the services on which our communities rely. Our approach is different to that of the previous Government. By cutting waste and abolishing unnecessary targets, we will free the public sector to deliver a more efficient, transparent and better-tailored service to the people and communities who rely on them most.

Let me conclude the debate by saying that the decisions that we have taken have restored credibility to our public finances and stability to our economy. When the coalition Government came to power, we faced the worst economic inheritance in modern history. The previous Government spent our money like there was no tomorrow, but tomorrow has now arrived. The Labour Government left debts that undermined the funding of our public services and threatened every job in the country. They wanted to introduce a jobs tax at the very time when employers were crying out for help.

We have had to make tough choices, but they are the right choices. We are determined to ensure that everybody pays their fair share. I simply reject the comments of Opposition Members. As ever in such debates, they spent several hours explaining what they did not like, but simply failed to say what they did like. It is unacceptable to participate in such a debate without offering a meaningful alternative plan.

We have ensured that everybody pays their fair share. We are reforming welfare and cutting waste, and we are investing in growth, schools and health. That is how we will drive growth in this country and create jobs for the future. With no help from the Labour party, we have taken our country back from the brink of bankruptcy and we will build the more dynamic, prosperous and sustainable economy that Britain so badly deserves.

That is why this spending review is how we will get our country back on track. I believe that generations to come will recognise that when our—

18:00

Motion lapsed (Standing Order No. 9(3)).

[Tony Cunningham (Workington) (Lab)]

On a point of order, Mr. Deputy Speaker. Why was no decision made about whether the debate that we had been having all afternoon had gone on long enough?

[Mr Deputy Speaker (Mr Nigel Evans)]

The rules of the House dictate that once the debate has gone past 6 o’clock it finishes and we move on to the Adjournment debate.

European Arrest Warrants and Extradition

Thursday 28th October 2010 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Angela Watkinson.)

18:01

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

Thank you, Mr Deputy Speaker, for the opportunity to address this issue and for allowing my hon. Friend the Member for Enfield North (Nick de Bois) to speak too. This issue has affected several of my constituents, often referred to as the Crete five, as well as my hon. Friend’s constituent, Andrew Symeou, who is a notorious example of the frailties of the legislation. The subjugation of an individual to the will of the state—any state—is an important issue and one on which the new Government are right to focus attention.

I commend the Government for appreciating that all is not right with our extradition treaties at present and that a review is a sensible step to address some of the concerns felt by many people. Without doubt, there are discrepancies between the justice systems of the many countries involved in extradition treaties. For example, a number of the offences for which a European arrest warrant can be issued are not crimes in this country. Indeed, many have fought hard so that racism and xenophobia do not become crimes in Britain. There are also clear differences between nations regarding prisoner rights and prison conditions, and these were at the forefront of the minds of the Crete five when they faced extradition proceedings earlier this year. Not only were they concerned by the initial summons they received, which was unclear as to its force and required them to appear in a Greek court just two weeks later, but they also feared a repeat of the case of Mr Symeou, who spent 10 months in a Greek jail without trial.

Those concerns remain very real for anyone facing the threat of extradition to a foreign country. Irrespective of innocence or guilt, the nature of the alleged crime or indeed nationality, certain standards must be maintained regarding the treatment of prisoners. That is as much a part of our justice system as the final verdict handed down, and we should expect our treaty partners to adhere to those same values.

At present, not enough safeguards exist to ensure that people are not sent to foreign prisons under foreign laws without good reason. The experience of many is that extradition is a fine thing only to someone who is running the criminal justice system. Individuals risk their whole life collapsing while they are hauled away without evidence and without hope of a trial any time soon.

We must be careful that the long-held, much cherished value of “innocent until proven guilty” is not swept under the carpet as simply the price we have to pay for international co-operation. I hope we do not move towards the French system, about which some have commented that people are seen as guilty from the moment the judicial system is interested in them. Judiciaries of any nation should have to provide some sort of prima facie evidence before extradition takes place. It cannot be right that an unfounded allegation based on evidence that would never stand up in a British court can lead to an extradition once a couple of boxes have been ticked.

There should be some element of proportionality in the system. I would venture that spending vast sums of money to extradite someone accused of stealing a piglet, as has happened recently, may somewhat diminish the power of the warrant when it is issued for more serious offences. The Government should seek assurances about the provision of legal aid and representation for extradited citizens. We must never send people overseas without any idea of whether bail will be granted or whether they will spend the next year of their life in prison with no trial date and no chance to clear their name. As we have seen in the case of Gary McKinnon, Britain should not be signing treaties that will allow other signatories to refuse to extradite when we are sacrificing that right. It is not in the interests of British citizens, and it leads to unbalanced treaty agreements.

There are many reasons for a review. It is long overdue, so I applaud the Government for acting so quickly on the matter. However, if I may, I would like to offer a word of caution. The European arrest warrant was introduced into British law in 2003. The then Prime Minister, Tony Blair, dismissed concerns raised by the Opposition, saying that

“there is one problem with the proposal for a large part of the Conservative party; it has got the word “Europe” in it.”—[Official Report, 12 December 2001; Vol. 376, c. 836.]

Although I recognise the politics he was playing, I would not agree with the substance of what he said. This is not an issue primarily about Euroscepticism. It is not a rant against all things European. It is to do with the British values that we hold and our determination to protect those values and our citizens wherever they are in the world.

I urge those conducting the review not to be browbeaten into believing that the valid concerns that were raised in 2003, and which will undoubtedly be raised again, are in fact nothing but the rantings of anti-Europeans. In fact, we have seen, with every day of this coalition Government, that co-operation between different tribes is a good thing. It gets things done, and can turn a desperate situation into a more promising outcome. So there are good reasons for having extradition treaties, and there were many good reasons when the Extradition Act 2003 was first passed. It is now quicker and easier to bring people to justice for the crimes they commit. They cannot just flee across the channel, and they cannot drop in and out of countries with scant regard for the law, and in the globalised world we inhabit, it is a tool we can use to combat one of the biggest challenges facing us—that of a terrorist threat which knows no borders and no nationalities.

At the time of the 2003 Act, however, concerns about how these laws would operate were raised from across the political spectrum. We ploughed on unbowed. Perhaps that was understandable. The events of 9/11 tipped the balance in favour of the EAW. The catastrophic nature of those events no doubt shaped much of our security policy in the following years, and the belief prevailed that “needs must” and that although the objections had some merit, they did not outweigh the need for immediate, decisive action. Now that those events, although still a constant reminder of the danger we face, are less pressing and less immediate, perhaps we can have a period of considered reflection under this review, so that we can begin to answer some of the questions that were batted away when the law was first introduced.

That is why a review is long overdue. Our allies have made the EAW work for them—for example, Germany has the sort of proportionality test I have mentioned—and I hope that the review does the same for Britain. Yes, if British nationals break the law, they must face justice, as should those from other countries who transgress here. However, every time we read about one of these cases I have mentioned, every time someone is mistreated in a foreign prison off the back of a loosely issued EAW, and every time a year of a young person’s life is lost because of something that someone somewhere claims to have seen happen, we lose faith in this process as a proper tool of justice, and we retreat to an unhelpful position of instinctive distrust in international co-operation.

18:08

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

I congratulate my hon. Friend the Member for East Surrey (Mr Gyimah) on securing this important Adjournment debate. In the time permitted, I cannot review all the aspects of this matter, but I must focus on the key points as pertaining to my constituent, Andrew Symeou. Enfield has a unique and specific interest in the European arrest warrant and extradition, given that two of the current most high-profile cases exposing the system’s failings involve Enfield residents—Andrew Symeou and, of course, Gary McKinnon. I and my constituency neighbour, my hon. Friend the Member for Enfield, Southgate (Mr Burrowes), hope and expect that the review of Gary McKinnon’s case will mean that he is not the last victim of an imbalanced process, but the recipient of a new, just and proportionate approach. Perhaps the Minister can update us on that review.

My central premise today, however, is that for the last decade the European Union has been driven by procedural safeguards and processes, not defendants’ rights, as moves to enhance speed and efficiency do so at the price, in this case—I believe—of a potential miscarriage of justice. Those who support the European arrest warrant do so because they believe that more criminals get caught. That is a noble goal, and one that I and, I am sure, all Members of the House fully support, but the performance of the warrant is flawed.

Sadly, those who criticise the operation of the European arrest warrant are often cast as apologists for wild European extremists, or organised crime and terrorism. That, of course, is arrant nonsense. For me, it is a question of balance. I do not believe that a system that produces potential miscarriages of justice at one level should be tolerated in the interests of speed at another. The application of the warrant without proper procedural guarantees has in some cases led to the denial of justice. One of those cases concerns my constituent Andrew Symeou. Andrew was in prison in Greece for 10 months awaiting trial on a charge of manslaughter. Until his final release on bail, the charge was one of manslaughter, although as testified by our High Court, there is sufficient evidence of what I can perhaps describe as the over-enthusiastic interrogation of witnesses. Indeed, there even appears to have been a case of mistaken identity. In Andrew’s case and others, surely the European arrest warrant has been misused.

Let me summarise Andrew’s experiences. In doing so, I hope in parallel to illustrate how the European arrest warrant has failed, and perhaps thereby help the review by Lord Scott Baker. In short, there has been a failure to scrutinise the case by British courts for prima facie evidence; a lack of bail or euro-bail; a failure of mutual recognition; and, we must never forget, delayed justice for the family of the victim of that tragic incident, which led to the death of Jonathan Hiles—a delayed process that, three years on, leaves us with no one having come to trial yet. As much as anything else, that is not good for the family of the victim.

I cannot address all those issues, but let me turn to the point highlighted earlier, about submitting prima facie evidence prior to extradition. In British law, the Crown Prosecution Service makes the decision to charge individuals with criminal offences in complex cases. The decisions must be made fairly, independently and objectively. It is the duty of the CPS prosecutors to ensure that the right person is charged for the right offence. The key point is that when making a decision, the CPS will always decide whether there is enough evidence against the defendant. Therefore, the quality and reliability of that evidence will also be investigated, and cases progress only if there is considered to be a realistic prospect of conviction.

However, the EAW is based on one of 32 listed crimes in respect of which there is no need for a dual criminality test or any obligation to ensure that prima facie evidence is provided by the member state requesting extradition. Essentially, it requires us to go through a tick-box exercise. All that is required is that the judicial authority in the member state requesting extradition should detail the criminal offence believed to have been committed—that is, ticking the box—and indicate the length of sentence to be expected. In Andrew’s case, he contested the request for extradition between 27 June 2008 and May 2009, but the court was able to examine only the process, and at no stage the facts of the case.

How powerless has British justice become when the High Court dismisses the appeal by the Symeou family even though in some instances it agrees that the evidence submitted shows that the local police investigation was flawed and when it could not rule out the possibility that the police were guilty of the manipulation and fabrication of evidence? How futile is our justice when it is decided that a young British man’s future is not under our control, but is instead an argument to be had in Greek courts? Leave was granted to appeal to the House of Lords, but the House of Lords in turn rejected it.

The second point that I would like to consider in the time available is the issue of bail. When the European arrest warrant was agreed in 2002, it was with the understanding from all sides that this measure, which would have the effect of causing EU citizens standing trial to be held in prison in another member state, would be swiftly followed by measures guaranteeing their fair trial rights, as well as guaranteeing that there would be no miscarriages of justice. That promise was betrayed by member states when they failed to agree in 2004 to a proposal for a framework decision on procedural rights. All we can hope for now is, at best, a piecemeal approach.

The European Council is promising only to consider, not to legislate on, a so-called euro-bail, which would have helped my constituent who had been explicitly refused bail because he was a foreigner. Several years ago, Lord Lamont predicted with characteristic foresight the plight of my constituent when he said:

“In some countries, bail is frequently refused to foreigners for fear they will abscond. In fact, there are several hundred British citizens on remand in Europe’s prisons many of whom would have been released on bail if they were nationals of the country holding them.”

Is it any wonder that my constituent and his family feel the UK Government have repeatedly let them down? Andrew was forced to languish in jail on remand for 10 months until June this year, yet with the existing EAW, one member state could all too easily have returned him, if he had been able to serve bail over here—under the European arrest warrant.

The emotional and financial cost to the family, who have remained supportive throughout, has been extraordinary. They have had to decamp to Greece to be with their son when he was first extradited 16 months ago. Their ability to continue to run their business and provide an income has been seriously compromised, but despite that, the family members have remained united and passionate in their campaign for justice for their son. They want him to have his day in court. I pay tribute to their courage and resilience in the face of this huge adversity.

To conclude, we should have an agreed framework of extradition for member states within the European Union—I accept that. The process needs to be fast, but should not be carried out without respect for an individual’s right to a fair trial and a fair judicial process. At the heart of these flaws is the expected notion of mutual recognition between the judicial process in member states. The process of mutual recognition allows for miscarriages, as we have discussed. I suggest that a system of mutual understanding would suit the process of a European arrest warrant far better. Such a process would allow for reasoned debate before EAWs were acted on rather than allow European law simply to supersede our law. This would allow European warrants to be declined if the acts were viewed as non-criminal in the UK or the evidence was insufficient.

It seems perverse that hon. Members on both sides of the House were up in arms over the 42-day detention provisions of the last Parliament, yet we are willing to have our own citizens held in foreign prisons for far longer as a result of a flawed piece of legislation. Should we as a House accept that liberty and justice be sacrificed for expediency?

18:18

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

I congratulate my hon. Friend the Member for East Surrey (Mr Gyimah) on securing this debate and on the measured way in which he delivered his comments this evening. I would also like to thank my hon. Friend the Member for Enfield North (Nick de Bois) for highlighting a number of issues about the European arrest warrant and for posing a number of questions about the operation of the system. In the time available, I shall try to address as many of the points highlighted by my hon. Friends as I can.

The European arrest warrant is an important mechanism in the administration of justice in the European Union, where citizens can move across its borders with relative freedom for the purposes of business or leisure. Of course, no one sought for trial in the EU should be able to evade justice by crossing a border, which is why the warrant is important, but to be really effective it must command the confidence of those whom it affects, striking a fair balance between the rights of those sought and the rights of their alleged victims. For that reason, I welcome the opportunity this debate affords to explore some of the pertinent issues.

My hon. Friends have raised a number of points, and I would like to add some of my own. My hon. Friend the Member for East Surrey is aware that there is no ministerial involvement in European arrest warrant proceedings. A European arrest warrant can be issued only by a recognised judicial authority, and the decision about whether to order surrender is a matter for the courts in the country receiving the warrant. Having said that, I appreciate the concerns that my hon. Friend has expressed about the welfare of his constituent and his constituent’s co-accused, who were surrendered on a European arrest warrant earlier this year to Crete to face serious criminal charges. I am aware of the circumstances of the case, in which another young man, Mr Robert Hughes—also a British citizen—was assaulted and very seriously injured.

The House will appreciate that I cannot comment on, and still less seek to intervene in, the judicial processes of another state. But I can say that the accused were surrendered to Crete in early August after their appeal rights under part 1 of the Extradition Act 2003, which gives effect to the European arrest warrant in the United Kingdom, were exhausted. Once there, they were granted bail on payment of a surety, and as far as the Foreign and Commonwealth Office is aware, they have been permitted to return to the United Kingdom pending the setting of a trial date.

My hon. Friend the Member for Enfield North mentioned the case of his constituent, Andrew Symeou. Mr Symeou was surrendered to Greece on a European arrest warrant last year, where he is accused of the manslaughter in 2007 of Mr Jonathan Hiles, also a British citizen. I can certainly confirm the advice received from the Foreign and Commonwealth Office that Mr Symeou is now on bail in Greece and awaiting trial in March next year. The trial was postponed from June this year because summonses for British witnesses were regrettably not able to be served on time. This is self-evidently distressing for all those involved in this tragic case, but I trust that the delay will not result in a denial of justice to any of the parties. I can assure the House that the unit in the Home Office that processes summonses from overseas has flagged its system with the names of these witnesses. That means that when the summonses containing the necessary information are re-sent by the Greek authorities, they will be identified promptly and served on the witnesses.

It would not be appropriate for me to comment further on individual cases, but in general terms Members will be aware that the Extradition Act 2003, and the various treaties and instruments to which it gives effect, contain a range of safeguards for the person whose extradition is sought. These safeguards are in place to strike a balance between the rights of the requested person and the rights of their alleged victim or victims, as I said earlier. It is important that suspects are quickly brought to justice, and that is no less the case when the offence has cross-border elements.

My hon. Friend the Member for Enfield North mentioned that a European arrest warrant may be issued when a fugitive is merely required for investigation. I can reassure him on that point. The instrument states categorically:

“The European arrest warrant is a judicial decision issued by a Member State with a view to the arrest and surrender by another Member State of a requested person, for the purposes of conducting a criminal prosecution or executing a custodial sentence or detention order.”

I hope that that provides a measure of clarification. He also made the general point that, in cross-border cases, bail is often denied to defendants who are not residents of the country in which they are charged. He might be aware that another EU criminal justice measure, the European supervision order, was adopted last year. It is not yet in force, but it will provide for a more flexible system of bail in cross-border cases. In any event, decisions on bail, whether here in the United Kingdom or abroad, are a matter for the trial court, which will be mindful of the importance of ensuring the attendance of defendants.

The coalition Government are aware of the public interest in the United Kingdom’s extradition arrangements, and I have noted with care the comments that my hon. Friends have made in this regard. That is why my right hon. Friend the Home Secretary announced a judge-led review of our extradition arrangements to Parliament on 8 September. On 14 October, the coalition Government announced that the independent review would be led by Sir Scott Baker, a former Lord Justice of Appeal. He will be supported by two lawyers with wide experience and in-depth knowledge of extradition law. The operation of the European arrest warrant will be looked at as part of the review to ensure that it operates as effectively as possible and in the interests of justice. In her statement to the House, the Home Secretary announced that the five issues that would be covered by the review were the

“breadth of Secretary of State discretion in an extradition case; the operation of the European arrest warrant, including the way in which those of its safeguards which are optional have been transposed into UK law; whether the forum bar to extradition should be commenced; whether the US-UK extradition treaty is unbalanced; whether requesting states should be required to provide prima facie evidence.”—[Official Report, 8 September 2010; Vol. 515, c. 18WS.]

The issue of prima facie evidence is one of those that are under review as part of the investigation. It is a long time—nearly 20 years—since prima facie evidence has been required to support an extradition request between European countries. The European convention on extradition, which preceded the European arrest warrant in the EU, abolished the requirement for prima facie evidence. The United Kingdom implemented the convention in 1991, when the Extradition Act 1989 came into force. My hon. Friend the Member for Enfield North asked about the case of Gary McKinnon. The Home Secretary obtained an adjournment of the High Court hearing so that she could consider the issues for herself, along with further representations from Mr McKinnon. She can legally stop extradition at this stage in the proceedings only if she concludes that Mr McKinnon’s human rights would be breached if he were extradited. She is actively considering those issues with a view to reaching a decision as soon as possible.

[Mr Gyimah]

The Minister has mentioned the Home Secretary’s involvement in the Gary McKinnon case. Would it not be helpful to ensuring justice if she became more directly involved in other extradition cases? At present, political involvement is completely absent from extradition.

[James Brokenshire]

As I have said, the extradition review will consider a range of issues relating to extradition arrangements. Obviously I do not want to prejudge the outcome of the review, but I am sure that the hon. Gentleman’s point will have been heard very clearly.

A number of concerns have been expressed about the European arrest warrant, but, as Members have pointed out this evening, it has been an invaluable tool in the fight against international crime within the EU. The European arrest warrant system has simplified and speeded up the extradition of persons both to and from the United Kingdom, and has made possible some procedures that were not formerly possible. Before the warrant was introduced, some EU member states had a constitutional bar on the extradition of their own nationals. The warrant has removed that barrier to extradition, and has updated or streamlined the extradition process in a number of other ways.

An increasing number of European arrest warrants are being dealt with in the United Kingdom. They are issued for a range of different offences. For an offence to be extraditable, it must be punishable by the law of the issuing member state with a custodial sentence for a maximum period of at least 12 months, or, when sentence has been passed, with a sentence of at least four months. Offences that fall into one of the categories on the list contained in the European arrest warrant framework decision—all serious offence types—and that are punishable with a maximum sentence of at least three years in the issuing state may not be subject to the dual criminality test in the executing state. However, for the purposes of all other offences, the United Kingdom has implemented an optional further safeguard, and requires that the offence must also be an offence in the United Kingdom. The EU is actively exploring the best means of addressing the issue of proportionality in the number of warrants issued, and the United Kingdom is playing a leading role in its discussions.

When it comes to justice and home affairs in the EU, the picture is constantly evolving. The Government have decided to opt into the EU directive on the right to information in criminal proceedings. Opting in will help to protect the civil liberties of our citizens abroad without compromising the integrity of the United Kingdom justice system.

My hon. Friend the Member for East Surrey mentioned legal aid. Legal assistance is an issue that is included in the Stockholm programme and the Commission is introducing a proposal on legal assistance for consideration next year.

I am pleased to have had the opportunity to debate the United Kingdom's extradition arrangements with member states of the European Union. Clearly, the issue is being examined carefully as part of the review that I have highlighted. That is why the review has been set up. It will report next summer, after thorough consultation—

18:30

House adjourned without Question put (Standing Order No. 9(7)).