House of Commons

Wednesday 2nd February 2011 Commons Chamber

Wednesday 2 February 2011

The House met at half-past Eleven o’clock

Prayers

Wednesday 2nd February 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 2nd February 2011 Commons Chamber

The Secretary of State was asked—

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

1. What recent discussions she has had with the Secretary of State for Transport on the electrification of the great western main line.

[Mrs Siân C. James (Swansea East) (Lab)]

6. What recent discussions she has had with the Secretary of State for Transport on the electrification of the great western main line.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

I have many discussions about this matter, and I remain fully supportive of electrifying the great western main line.

[Huw Irranca-Davies]

I thank the Secretary of State for that update. I never thought that I would say this, but I agreed with the Chancellor when he said last week that high-speed rail

“will provide for the next generation.”

This generation of businessmen and commuters from south Wales are looking forward to a fully electrified higher-speed rail all the way to Swansea. Will the right hon. Lady do everything in her power to ensure that we have that as soon as possible?

[Mrs Gillan]

I hear the hon. Gentleman, and I am pleased to agree with him that good infrastructure will be of great benefit to our economy in Wales. However, I should remind him that his party had 13 years to electrify the great western line to Swansea, yet failed to electrify a single inch.

[Mrs James]

I am sure that the Minister is aware that electrification of the south Wales main line to Swansea is vital, especially for the economy of the city, but also for the economies of west Wales. The recent Centre for Cities report forecast that Swansea would face severe challenges during the recovery period. Given that news, does she agree that rail electrification to Swansea is even more vital to local businesses and citizens in the region?

[Mrs Gillan]

I am happy to say that I have had sight of that report. I continuously worry about how we will build up our economy in Wales and restore our fortunes. Like her hon. Friend the Member for Ogmore (Huw Irranca-Davies), the hon. Lady is absolutely right to say that infrastructure is important, whether it be railway or roads infrastructure, or broadband. I would encourage her to make her representations directly on this matter. I hope that she has written to my right hon. Friend the Secretary of State for Transport and also to my office.

[Jonathan Evans (Cardiff North) (Con)]

My right hon. Friend is right to draw attention to the abysmal record of the outgoing Labour Government, but let me make it clear that we on the Government Benches are arguing just as passionately for electrification right through to Swansea, to see the Welsh economy rebalanced from the public sector and private sector jobs coming through. We cannot have money spent on high-speed rail without electrification in Wales.

[Mrs Gillan]

My hon. Friend knows that we plan to invest £14 billion over the next four years to fund maintenance and investment in our railways. Whatever we end up with when an announcement is made, he can rest assured that we have left no stone unturned in making the case for electrification into Wales.

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

Electrification will take many years to complete, so will the Secretary of State consult the franchisee to see whether we can have direct routes from London Paddington to Bristol, Newport and Cardiff, thereby reducing the journey time to that achieved 20 years ago?

[Mrs Gillan]

My hon. Friend is right. I have already met First Great Western on that very subject, and I will continue to hold meetings. We appreciate that we are talking about a crucial project but, as my hon. Friend knows, the last Government had 13 years, and all they came up with was a cheap promise and no funding to back it up.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

Will the Secretary of State please confirm that it is entirely Westminster’s responsibility to maintain and develop the south Wales line?

[Mrs Gillan]

I am sure I do not have to tell the hon. Gentleman what is devolved and what is not. He knows that the electrification of the main line is Westminster’s responsibility. However, let me remind him that there are also important improvements that could be made to the diversionary lines and the Cardiff valleys network. That is the responsibility of the devolved Administration, yet we have not seen any progress on that front.

[Mr Llwyd]

Is the right hon. Lady aware that the cost-benefit analysis for electrification of the south Wales line is far better than that for Crossrail? However, whereas Crossrail, at £16 billion, is going apace, nothing has happened for the past nine months on this vital issue for the south Wales line.

[Mrs Gillan]

I remind the hon. Gentleman that plenty has happened in regard to this vital issue, but this is not a decision that can be taken overnight. The previous Government were very happy to make uncosted promises about this routing, but this is not a simple process. A range of factors must be thoroughly considered and, to that end, the Wales Office has been working not only with the Department for Transport but with the Welsh Assembly Government, and I remain optimistic about a good outcome.

[Mr Peter Hain (Neath) (Lab)]

Does the Secretary of State have any meetings on rail electrification scheduled for 1 April?

[Mrs Gillan]

I am sure that if the right hon. Gentleman wants details of my diary, he can ring the office.

[Mr Hain]

As it happens, I have details of the right hon. Lady’s diary here. Instead of progressing rail and other Wales matters, the entire Wales Office ministerial team—the Secretary of State and the Under-Secretary, the hon. Member for Clwyd West (Mr Jones)—will be at a Conservative party fundraising event in Chesham and Amersham. This is no April fool’s day story: I have the invitation here.

On the decision to electrify rail, the former Transport Secretary, Lord Adonis, said:

“The business case for electrification to Swansea is strong. All the technical issues, for example, electrifying the Severn tunnel, were resolved.”

If he says that the business case is strong, why the delay?

[Mrs Gillan]

I am ashamed that the shadow Secretary of State for Wales has wasted his two questions and resorted to trivia. Unlike him, I take this matter very seriously. The letter that I received from his wife actually made more sense than his questions at the Dispatch Box today.

[Andrew Griffiths (Burton) (Con)]

2. What discussions she has had with the Welsh Assembly Government and other stakeholders on steps to attract inward investment into Wales.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

I have had various discussions with the First Minister and the Deputy First Minister on attracting inward investment to Wales. I have also discussed the matter with ministerial colleagues, including the Secretary of State for Business, Innovation and Skills and the Government’s trade adviser, my right hon. Friend Lord Brittan. This afternoon, I shall facilitate a meeting between the First Minister, the Deputy First Minister and my hon. Friend Lord Green, the Trade Minister, on the same issue.

[Andrew Griffiths]

The Secretary of State will know that Wales is heavily reliant on a small number of very large companies: 1.8% of the companies in Wales account for 69% of turnover, and the number of new businesses established between 2004 and 2009 fell by 28%. What meetings is she having with the Welsh Assembly Government on support for small and medium-sized enterprises in Wales?

[Mrs Gillan]

My hon. Friend is quite right about the figures on the private sector in Wales. Indeed, the shadow Secretary of State has often said that he thought the private sector in Wales was too small, but he failed to address that issue while he was in government. I have continual meetings with the Welsh Assembly Government on these matters, and we are particularly committed to encouraging business confidence through the measures that we are taking for small businesses and others. I know, from meeting businesses in Wales, that the cancellation of the job tax proposed by Labour went down particularly well with the business community.

[Dr Hywel Francis (Aberavon) (Lab)]

Higher education plays a big role in attracting high-quality inward investment to Wales. Will the Secretary of State therefore join me in welcoming the decision of the Labour-led Welsh Assembly Government to announce a large investment in Swansea university’s new science and innovation campus, which will be located in my constituency? Will she also outline what she intends to do to support such initiatives across the whole of Wales?

[Mrs Gillan]

The hon. Gentleman is absolutely right. I have had the privilege of going down to Swansea and looking at the Institute of Life Science buildings, ILS1 and ILS2, and I welcome that investment. As he knows, this is a devolved matter, and the levers of power and the decisions about money rest with the Welsh Assembly Government. That is why I was so sad to see the closure, by the Labour Welsh Assembly Government, of some of the techniums across Wales. However, the hon. Gentleman can rest assured that I will continue to press this case, because I believe we have some of the best universities in the country providing the best research and support to businesses that are looking to invest in Wales.

[Jenny Willott (Cardiff Central) (LD)]

3. What discussions she has had with the Secretary of State for Transport on the closure of the Driving Standards Agency office in Cardiff.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend the Secretary of State and I have regular discussions with my right hon. Friend the Secretary of State for Transport and his ministerial team on a range of issues, including the restructuring of the Driving Standards Agency. The possibility of job losses is a serious matter for all concerned, and the staff in Cardiff should not have had to find out about this matter as a result of the information being leaked to the media.

[Jenny Willott]

I have been contacted by a number of constituents who are losing their jobs as a result of the Driving Standards Agency office closure, and they have told me that they are being offered no support to help them to find new work. Will the Minister speak to colleagues in the Department for Transport, the Department for Work and Pensions and the Welsh Assembly Government to ensure that my constituents are given as much help and support as possible so that they can secure new work as soon as possible?

[Mr Jones]

It is a matter on which my right hon. Friend and I have already been in touch with the Department for Transport, and I understand that that Department and the Driving Standards Agency are looking into possible redeployment options for those affected. Certainly the individuals concerned will need as much support as possible and I will work with ministerial colleagues to ensure that as much as can be done is done.

[Hywel Williams (Arfon) (PC)]

What assessment have the Government made of the effect of job losses on the already unsatisfactory service that the DSA provides through the medium of Welsh?

[Mr Jones]

I understand that the proposed closure will have no impact on services through the medium of Welsh.

[Paul Flynn (Newport West) (Lab)]

4. What recent estimate she has made of the number of public sector job losses in Wales attributable to the implementation of the outcomes of the comprehensive spending review.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

The Office for Budget Responsibility published figures last year on the expected public sector job losses. These are based on UK-wide macro-economic data, so no regional figures are available. We remain committed to working with ministerial colleagues and the Welsh Assembly Government to minimise the impact of the deficit reduction programme on the workers and families of Wales.

[Paul Flynn]

Will the Minister use the welcome additional two months to reflect on the proposed loss of jobs in the Newport passport office and to study the Centre for Cities report, which identifies Swansea and Newport as the two UK cities most vulnerable in the present economic situation and those that will have the greatest difficulty in recovering? Will he also study the impact of the proposed closures and come up with a proposal that does not unfairly punish south Wales?

[Mr Jones]

I am pleased that the hon. Gentleman welcomes the two-month extension of the consultation period. I can assure him that my right hon. Friend and I are working closely with the Department to ensure that the case for Newport is put forward. The Centre for Cities report makes worrying reading and it will be necessary for the Government to work closely with the Welsh Assembly Government to ensure that the people in this area have sufficient skills.

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

Will the Minister join me in welcoming the decision to extend the consultation period and to undertake a full economic impact assessment? Does this not show that the Government are listening, despite the problems caused by the £1 trillion deficit and debt left by Opposition Members?

[Mr Jones]

Yes indeed, and I am glad that my hon. Friend welcomes the extension of the consultation period. I can assure him that my right hon. Friend the Secretary of State and I are working closely with the Department to see what can be done to mitigate the impact on the area.

[Chris Ruane (Vale of Clwyd) (Lab)]

The Minister will be aware that nearly 50% of the workers in his constituency and mine work in the public sector. Thousands will be thrown on the dole by his party, so what consultations has he had with the Prime Minister and the Chancellor about providing additional ring-fenced funding for constituencies with large numbers of public sector workers?

[Mr Jones]

The hon. Gentleman should know that we liaise constantly with our ministerial colleagues, but he should recognise, as his right hon. Friend the shadow Secretary of State does, that the private sector is too small in Wales and the public sector too predominant. I was interested to see, by the way, that the hon. Gentleman has been appointed Parliamentary Private Secretary to the shadow Chancellor—no doubt deficit denial was part of the job description.

[Alun Cairns (Vale of Glamorgan) (Con)]

Inward investment and private sector job creation will help to overcome the public sector job losses that we have inherited as a result of the state of the economy under the last Administration. Given that millions of pounds worth of deals were struck between the UK and China last month, does the Minister recognise and share my disappointment that whereas the Scottish First Minister has been to China four times in the last two years, the Welsh First Minister has not been there once?

[Mr Jones]

Yes, that is disappointing. China presents enormous opportunities for inward investment to Wales and to the UK as a whole, and these are matters on which my right hon. Friend the Secretary of State is liaising closely with the Department for Business, Innovation and Skills.

[Owen Smith (Pontypridd) (Lab)]

As we have already heard and as the Secretary of State will know, hundreds of public sector jobs in Wales have already been lost on her watch. Is she aware that there will be further job losses at the Driver and Vehicle Licensing Agency when it closes its offices in Bangor and Cardiff? Will she tell us what she is doing to keep those precious jobs in Wales?

[Mr Jones]

The hon. Gentleman is clearly privy to information to which I am not privy, but in view of the leaked information that appears to fall into his hands so regularly, perhaps that is not surprising.

[Neil Carmichael (Stroud) (Con)]

5. What recent assessment she has made of the role of the aviation sector in Wales.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend and I have had regular discussions with ministerial colleagues on support for the aerospace industry in Wales. We have much in the sector of which to be proud. In recent weeks, both GE Aviation and Airbus have announced the creation of jobs owing to increased demand.

[Neil Carmichael]

Like Wales, my constituency has strong supply and service links with Airbus and other aviation sectors in the south-west. Does the Minister agree that it is essential for us to have free trade in the world of aviation, and to fight protectionism wherever we see it so that we can protect jobs and provide high-value-added industries for our communities?

[Mr Jones]

My hon. Friend is entirely right. Airbus, which is an important employer in his constituency as well as in north Wales, has a great deal of which to be proud. Its recent announcement that it will offer permanent contracts to 770 agency workers in Broughton, who will build aircraft wings following the largest commercial order ever, is a great vote of confidence in the sector.

[Ian Lucas (Wrexham) (Lab)]

Does the Minister agree that the development of the supply chain for Airbus through companies such as Magellan Aerospace and Tritech in my constituency is a vital part of the development of the aerospace sector in the United Kingdom? What are the Government doing to support that?

[Mr Jones]

The Government are doing a great deal. It is clear that the high-tech, high-value-added industries will be the powerhouse for the economy in the future, which is why my right hon. Friend the Secretary of State visited the Deeside area recently to see what is being done by companies such as Toyota. As my hon. Friend says, there are some extremely good high-value, high-tech companies in his constituency.

[Robert Halfon (Harlow) (Con)]

7. What recent discussions she has had with the Secretary of State for Business, Innovation and Skills on the effects of her Department's policies on apprentices on the number of apprentices in Wales.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

I have regular discussions with Cabinet colleagues on a range of issues, including apprentices. The Government believe that apprenticeships are a key component of the development of work force skills and one of the best forms of work-based learning.

[Robert Halfon]

Will the Secretary of State give Welsh backing to my campaign—supported by the Minister for Further Education, Skills and Lifelong Learning, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes), who is responsible for apprenticeships—for the establishment of a royal society of apprentices and an apprenticeship card to provide training, support and mentoring which would benefit apprentices in the whole United Kingdom, including Wales?

[Mrs Gillan]

This is the first time I have heard about such a scheme from my hon. Friend. Next week is apprenticeship week: between 7 and 11 February, efforts will be made to encourage more businesses to provide opportunities for apprentices in Wales. I should be delighted to meet my hon. Friend, and to give whatever support I can to that new organisation in order to confer greater status on what I consider to be a fantastic opportunity for many young people.

[Albert Owen (Ynys Môn) (Lab)]

There is a general consensus across the House that we need more apprenticeships in Wales, including apprenticeships in such areas as green technology. Will the Secretary of State ask the Secretaries of State for Business, Innovation and Skills and for Energy and Climate Change to reconsider their ports policy, which allows the construction of wind farms throughout the United Kingdom? The Government have now changed the rules to give English ports precedence over Welsh ports. Will the Secretary of State ask them to reconsider, and to introduce joined- up thinking to attract inward investment and create apprenticeships?

[Mrs Gillan]

Despite the deficit, we remain committed to apprenticeships, as, I am sure, does the hon. Gentleman. We are spending £250 million a year in England, and the Welsh Assembly Government have received consequential funding.

I have looked into one of the issues pertaining to ports, namely the money provided by the Department of Energy and Climate Change for renewables. I understand that there has been a Barnettised consequential. However, I will double-check because I know how important the issue is, but I suggest to the hon. Gentleman that when matters are Barnettised, he should press the Welsh Assembly Government to spend the funds in that way.

[Mr Speaker]

Order. Far too many private conversations are taking place in the Chamber. I want to hear Stephen Mosley.

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

8. What discussions she has had with the Welsh Assembly Government and other stakeholders on steps to attract inward investment into north-east Wales.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

I have regular discussions with Welsh Assembly Government Ministers and other stakeholders on a range of issues affecting Wales, including attracting inward investment.

[Stephen Mosley]

North-east Wales and Chester share the single economic sub-region that straddles the Anglo-Welsh border, so inward investment in north-east Wales benefits Chester too. What action is the Secretary of State taking to ensure that local authorities and the new local enterprise partnerships in England, over the border, support much-needed inward investment in north-east Wales?

[Mrs Gillan]

My hon. Friend knows that I am very keen on inward investment. One of the things I did in the past two weeks was visit the Deeside hub to look, in particular, at the apprentice training taking place at Deeside college. The college has links to large cities such as Manchester and Liverpool, which are established clusters of high technology and innovative business. I am keen to work with the Welsh Assembly Government and other Departments of state to get institutions working together in the interests of the Welsh economy and attracting inward investment to Wales.

[Mr Speaker]

May I appeal to the Secretary of State to face the House so that we can all hear her?

[Mr David Hanson (Delyn) (Lab)]

Will the Secretary of State make contact with Kerry Foods of Ireland, which proposes to transfer business out of north-east Wales from Headland Foods Ltd in Flint, in my constituency, to Grimsby? Will she examine whether steps can be taken, even at this late stage, to retain those jobs in Wales? If they cannot be retained, will she ensure that she stands up for the work force and their redundancy terms and seeks alternative inward investment to help to replace those jobs?

[Mrs Gillan]

I am sad to hear from the right hon. Gentleman that someone is thinking of moving business out of his constituency and across the border. I hope that he has made representations to the Welsh Assembly Government—I would not want to cut across anything that they are doing, as they are responsible for economic development, but my door is always open to him. If he would like to write to me about this particular case and company, and the associated issues, I will make investigations to see how I can help. I think that that is the proper way of conducting business.

[Greg Hands (Chelsea and Fulham) (Con)]

9. What recent discussions she has had with ministerial colleagues on steps to assist economic growth in Wales.

[The Secretary of State for Wales (Mrs Cheryl Gillan)]

In the past week, I have met my right hon. Friends the Secretary of State for Transport and the Home Secretary, and the Minister for Trade and Investment, Lord Green, to discuss a range of issues to assist economic growth in Wales.

[Greg Hands]

Given this year’s corporation tax cuts, the new national insurance contributions holiday for small businesses and the cancellation of Labour’s national insurance tax hike next month, does the Secretary of State agree that this Government are restoring Wales’s good reputation as a destination for inward investment, which was so badly damaged by the previous Government?

[Mrs Gillan]

My hon. Friend knows that we will be working night and day to restore Wales’s reputation as a good destination for inward investment. Indeed, my right hon. Friends have already started that work by reducing over-regulation on business, reducing the taxes on business, introducing national insurance holidays and rolling back the wicked jobs tax that would have affected business in Wales and all over the United Kingdom.

[Jonathan Edwards (Carmarthen East and Dinefwr) (PC)]

In the light of last week’s disastrous economic figures, where will the private sector jobs come from to replace the public sector jobs that the Government are intent on slashing?

[Mrs Gillan]

I think the hon. Gentleman should take a deep breath and not talk Wales down, but talk it up. I was particularly pleased to see this week’s manufacturing figures, which reflect very well on the United Kingdom and are a great source of optimism. I hope he will join me in sending out the message that Wales is open for business and that businesses should look to us for their investment.

[Mr Mark Williams (Ceredigion) (LD)]

10. What discussions she has had with the Secretary of State for Business, Innovation and Skills on the likely effect on Wales of the establishment of a groceries code adjudicator.

[The Parliamentary Under-Secretary of State for Wales (Mr David Jones)]

My right hon. Friend and I have regular discussions with ministerial colleagues on a range of issues affecting Wales, including the food industry. We believe that it is important to ensure a fair deal throughout the food supply chain. The new body will help future investment and innovation by increasing confidence among suppliers and consumers.

[Mr Williams]

I know that the Minister met the Farmers Union of Wales last week. Did he detect the impatience that I detected in my discussions with the union about progress being slow on the development of a supermarket ombudsman? Such an ombudsman will gain support across the House. What progress has he made in his discussions and will he push the agenda further in his discussions with the Department for Environment, Food and Rural Affairs?

[Mr Jones]

My hon. Friend will be pleased to know, I am sure, that I will be visiting his constituency tomorrow, when I will discuss this very issue with the Farmers Union of Wales. He is absolutely right: the proposal has been well received in the industry. This was mooted as long ago as 2001 by the former Prime Minister, Tony Blair, but nothing came of it.

The Prime Minister was asked—

[Bob Russell (Colchester) (LD)]

Q1. If he will list his official engagements for Wednesday 2 February.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to Private Martin Bell of the 2nd Battalion the Parachute Regiment, who died last week in Helmand province. He died a true hero, showing exceptional bravery and selflessness as he went to the aid of an injured colleague. It is clear from the tributes paid by those who served with him that he was a hugely respected and well-liked soldier. Our thoughts and deepest condolences should be with his family, friends and colleagues.

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

[Bob Russell]

I thank the Prime Minister for those generous words about Private Bell, because his battalion is based at the Colchester garrison.

A characteristic of the British way of life is its charities and voluntary organisations. Does the Prime Minister share my concern that some local authorities and health trusts are using the perceived cuts as an excuse to make cuts, thus undermining voluntary organisations and charities with the big society concept?

[The Prime Minister]

I absolutely share the hon. Gentleman’s concern and he is right to air it. In the case of the Department of Health, there are not cuts in the health budget, which is going up. It is very important that the Department does everything it can, as I know my right hon. Friend the Secretary of State is doing, to protect the very important voluntary organisations working in that Department. Yes, there are reductions in local government spending, as there would be, frankly, whoever was standing at the Dispatch Box now, but I urge local authorities to look first at their own costs. It is only when they can show that they are sharing chief executives and cutting out their own bureaucracies that they can show that they need to make reductions elsewhere. In some cases, they are not yet being convincing.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in honouring the memory of Private Martin Bell from 2nd Battalion the Parachute Regiment. He showed enormous bravery and dedication, as the Prime Minister has said, and we send condolences to all his family and friends. Last weekend, I saw for myself the bravery and commitment of our troops in Afghanistan and all those involved in our wider effort there. Like everyone who visits, I came away with an overwhelming sense of admiration and humility and I pay tribute to everyone who is based in Afghanistan.

May I ask the Prime Minister about the unfolding situation in Egypt? Will he update the House on the important issue of the security of British nationals, and inform us of the arrangements being made for those who want to return to the UK?

[The Prime Minister]

I thank the right hon. Gentleman for his generous tribute to our troops and for his visit to Afghanistan. It is very important that we go ahead in this difficult endeavour on a cross-party basis, and I praise him for what he has said.

On Egypt, of course he is right: the first concern should be for our UK nationals and the situation they are in. There are about 30,000 UK nationals in the Red sea area, which at the moment remains calm and stable. We have not yet changed travel advice about that part of Egypt. In terms of the rest of Egypt, there are about 3,000 UK citizens in Cairo and about 300 in Alexandria. In terms of making sure that those who want to return can, and we have urged many to do so, there are still very good commercial flights and we have added a flight commissioned by the British Government. In the past 48 hours, 1,000 UK citizens have returned.

The UK Government have acted swiftly. We had a rapid deployment of 25 special consular staff to Cairo and the military logistics team of eight was sent out immediately. We were the first country to set up a team at Cairo airport, and many other countries have gone on to imitate that. I do not take any of this for granted—there should be absolutely no complacency—but I think our ambassador, Dominic Asquith, and his team have done an excellent job and we should praise them.

[Edward Miliband]

I am grateful to the Prime Minister for that reply. Let me now ask him about the wider issues on Egypt. I think everybody has been moved by the images we have seen on our screens in the past few days of hundreds of thousands of people, against overwhelming odds, demanding a more democratic future. Following President Mubarak’s statement last night, may I ask the Prime Minister whether he agrees with President Obama that the stable and orderly transition to democracy must be meaningful, peaceful and begin now?

[The Prime Minister]

We absolutely take that view. The transition needs to be rapid and credible, and it needs to start now. As the right hon. Gentleman says, we should be clear: we stand with those in this country who want freedom, democracy and rights the world over. That should always be our view. We cannot watch the scenes in Cairo without finding it incredibly moving—people wanting to have those aspirations in Egypt, as we have them in our country.

The Government take a very strong view that political reform is what is required, not repression. We have made that clear in all the calls I have made, including to President Mubarak and, yesterday, the Egyptian Prime Minister. As the right hon. Gentleman says, the key question is, have they done enough? President Mubarak says he is going, and we respect that, but what matters is not just the orderly transition, but that it is urgent, credible and starts now. The more they can do with a timetable to convince people that it is true, the more I think the country can settle down to a stable and more democratic future.

[Edward Miliband]

I think the whole House will be pleased by the Prime Minister’s answer and share the view he has expressed. Is it not also clear that, far from indicating support for extremism, the people on the streets of Egypt are demanding some very basic things—jobs, freedom of speech and the right to choose by whom they are governed? We have a clear interest in stability in all countries in the region, but is it not now apparent that the best route to stability in Egypt is precisely through democracy?

[The Prime Minister]

I agree with that. I think that we should take the view that the long-term interests of Britain lie in a stable middle east and a stable Arab world. We will not get that stability unless they make moves towards greater democracy.

Where I think we need to be clear is that when we talk about greater democracy, we do not just mean the act of holding an election; we mean the building blocks of democracy. I want to see a partnership for open societies where we encourage stronger civil society, stronger rights, stronger rule of law, a proper place for the army in society and a proper independent judiciary. It is those things—the building blocks—that I think can give us a stronger, more stable, more democratic future that will very much be in our interests, and theirs as well.

[Edward Miliband]

I am sure there is a consensus across the House on the points that the Prime Minister makes, and I know he will keep the House updated on the situation in Egypt. I want to turn now to Afghanistan. We support the mission and the timetable he has set for the end of combat operations by British troops. During my visit, the commanders on the ground told me that we are bringing real pressure to bear on the insurgency. Will he provide the House with his latest assessment of the overall progress of our mission in the light of the timetable that has been set?

[The Prime Minister]

I am grateful for that. We are making progress in Helmand, but it is important not to focus just on Helmand; we have to look at the rest of Afghanistan too. If we look at where we are responsible for—Helmand itself—we see that Government authority has gone from six provinces to 12. That is where the Afghan Government have control, out of a total of 14. That is progress. Crucially, the increase in the Afghan national army is on target for 171,000 soldiers by the end of this year and 134,000 police.

I think the key is the better balance of forces we now have. There has been a surge in the number of troops and we have a better balance between the US and the UK forces, so we are more thickly concentrated in fewer areas and better able to do the job. We have set this clear timetable, saying we do not want UK forces to be in combat or in large numbers by 2015. I believe that is achievable, but we are going to have to work hard on training the Afghan national army and pursuing a political track to reintegrate those who have been involved in insurgency, and we also need to ensure that the government of Afghanistan improves in the way that I know the right hon. Gentleman believes, too, is important.

[Edward Miliband]

It is that point about the political track that I want to pursue with the Prime Minister. Does he agree that setting a timetable makes it even more important that we have a lasting political settlement, and one that endures beyond the departure of British troops? Does he further agree that an inclusive political settlement must reach out to those elements of the insurgency that are prepared to break all links with al-Qaeda, renounce violence and respect the Afghan constitution?

[The Prime Minister]

Those are the absolutely key conditions. To those who worry about a timetable, I would say that setting a timetable encourages people in Afghanistan themselves to recognise that they have to take the steps necessary to take control of their country again—so, yes, we do need this political track. We need to work much harder at it. The keys are separating the Taliban from al-Qaeda, rejecting violence and accepting the basic tenets of the Afghan constitution, and we need to push this extremely hard so that we can do what we all want to do, which is bring our brave soldiers home at the end of this conflict.

[Edward Miliband]

I sense that people are not used to this kind of Prime Minister’s questions, but let me finally emphasise to the right hon. Gentleman the urgency of supporting the Afghan Government in establishing that political settlement. I will support him in all the efforts he makes on that with the United Nations, the United States and all our NATO partners. What concrete steps does he believe we can take between now and the Bonn conference at the end of the year to make that happen?

[The Prime Minister]

I am sure the right hon. Gentleman is right. From all the noises off, it is clear that people would prefer a bun fight, but sometimes it is sensible to have a serious conversation about the issues that we face. I know and he knows that when we visit our troops in Afghanistan they want us to discuss what they are doing—to discuss it sensibly and try to get it right. With reference to encouraging the political track, it is important that we engage not just with the Afghan Government, but with the Pakistan Government. It should be our aim to create an Afghanistan that is stable enough for us to take our troops home without it becoming a hotbed of terrorism. We will not be able to do that unless we engage with the Pakistanis. That is the key to solving the problem, and having a political track so that those who have been opposed to us recognise that there is a democratic path—a peaceful path—that they can follow, but they must give up violence and renounce al-Qaeda before that can happen.

[Simon Wright (Norwich South) (LD)]

Q2. East Anglia celebrated in October the announcement that the Government had put aside the funding required to complete the dualling of the A11, and the support of the Prime Minister then was very much welcomed. Will he join me and our coalition colleagues across the region in pressing for an early start date for the scheme so that the economic benefits can be delivered as soon as possible?

[The Prime Minister]

All of us who visited Norwich at the time of the by-election remember how important the A11 is to people in Norwich. We have guaranteed the funding in the spending review. We are spending over £30 billion on transport infrastructure over the next four years. Work on the A11 is an important project. The Highways Agency is preparing a programme for how it will be delivered, and construction work will start in the current spending review period.

[Vernon Coaker (Gedling) (Lab)]

Q3. Dylan Scothern is a six-year-old autistic boy in my constituency. At six years old, he has had his speech and language therapy support at his school taken away because he is too old. What does the Prime Minister think I should say to his mother, Rachel, who is outraged at the way in which the support for that autistic boy has been taken away?

[The Prime Minister]

I am sure the hon. Gentleman, like anyone in the House, will work as hard as he can to help that family to get the therapies that they need. What that means is going to the county council and arguing the case, as many of us have had to do not only with constituents, but with our own children. One has to make the fight. We intend to produce a paper on special educational needs that will try to reform the way such things are done and make it less confrontational. I know as a parent how incredibly tough it is sometimes to get what one’s family needs.

[Laura Sandys (South Thanet) (Con)]

I thank the Prime Minister and the Ministers who have been so helpful over the past 24 hours with regard to the Pfizer closure in my constituency in Sandwich. Will my right hon. Friend assure me and my hon. Friends from east Kent that the Government will do everything they can to secure the site, the highly skilled employees and the local economy in east Kent?

[The Prime Minister]

My hon. Friend is right to speak out about that depressing news. Pfizer’s decision is bad news. My office has been in contact with the company and I spoke to the company again this morning. There is no doubt that the decision is being taken not because of some UK-based issue, but because the company has decided to exit some whole areas of endeavour, such as allergies and respiratory diseases. The company is keeping all the options open for what should happen to the site, including getting partner organisations to continue work there and getting other companies to come in, because it is a state of the art site and it has brilliant employees doing great work there. The Government will do everything they can, co-ordinated by my right hon. Friend the Minister for Universities and Science and the head of the Office for Life Sciences, to try and make sure that we make the best of a depressing piece of news.

[Ian Mearns (Gateshead) (Lab)]

Q4. Can the Prime Minister confirm a report in today’s Financial Times that the Deputy Prime Minister has written to him suggesting that councils should be given the power to raise their own fuel duty, and does he agree with him?

[The Prime Minister]

The Deputy Prime Minister and I write to each other and speak to each other on a frequent basis. I will put it like this: what we both want to see is well-resourced local councils that have greater powers, greater devolution and less top-down bureaucracy than we had under the Labour party.

[Nadine Dorries (Mid Bedfordshire) (Con)]

Q5. This Friday, hundreds of Mid Bedfordshire residents, 24 parish councils, the Marston Morteyne Action Group and I will provide a very warm welcome to the visiting members of the Infrastructure Planning Commission who will be coming to decide whether to grant planning permission for the huge incinerator that Covanta wishes to put in my constituency. If we are truly the party of localism, will the Prime Minister give his assurance that the draft national policy statements that will guide the IPC in its decision will be amended so that the weight is given to the wishes of local people? If they do not want it, it should not be imposed on them.

[The Prime Minister]

I thank my hon. Friend for her question. We can actually go a bit further than that: I can confirm in her own case that, yes, the IPC will be taking representations from local people, but of course as a Government we have committed to abolish the IPC, because we think that it is too much of a top-down, bureaucratic method and that there should be ministerial decisions that can take into account local opinion and be more democratically run.

[Mr Elfyn Llwyd (Dwyfor Meirionnydd) (PC)]

Does the Prime Minister share my dismay at the fact that, despite being 86% publicly owned, the Royal Bank of Scotland is still dishing out huge bonuses? May I suggest to him one course of action that might be helpful? Will he agree with me that those bankers who defy Government and continue to make these grotesque bonuses should never be considered for any honours in future?

[The Prime Minister]

First of all, I congratulate the right hon. Gentleman on his new position—[Laughter.] That has probably ended his career, so I am sorry for that. We are in discussions with RBS about this issue. We are bound by a contract that was signed by the previous Government, but I am absolutely clear that what we want to see from the banks is a lower bonus pool and more lending, and we want to see them contributing more in tax to the Exchequer. I am quite convinced that we will see all of those things from the discussions that we are having.

[Daniel Kawczynski (Shrewsbury and Atcham) (Con)]

Q6. The local NHS trust in Shropshire is proposing major reconfiguration changes to services throughout the county, including maternity and paediatric services. Those are causing significant concerns for local Shrewsbury doctors, GPs and patient groups. Can the Prime Minister give an assurance that those concerns will be taken on board and acted upon before any changes are made? My hon. Friend the Member for Montgomeryshire (Glyn Davies), whose constituents also use the Royal Shrewsbury hospital, shares my views.

[The Prime Minister]

I can certainly given that assurance, because my right hon. Friend the Health Secretary has put in place much stronger arrangements for making sure that local people are listened to when these discussions are taking place. No changes will be allowed unless they focus on improving patient outcomes, unless they consider patient choice and unless they have the support of the GP commissioners, and remember that in the future health system it will be the decisions of GPs and people that will drive the provision of health services, not top-down decisions made by Ministers in Whitehall.

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

Q7. With wage freezes, pension cuts, legal aid cuts, tens of thousands of public workers sacked and the disabled and poor hit, how can the Prime Minister justify the build up of a £50 billion election war chest at the expense of these vulnerable, hard-working people?

[The Prime Minister]

All of the things that the hon. Gentleman says about the tough decisions we have had to make about pay, about pensions and about welfare, they are all, each and every one, the consequence of the Government that he spent 13 years supporting.

[Kris Hopkins (Keighley) (Con)]

Q8. This week, I met a gathering of ESOL—English for speakers of other languages—students at the Keighley campus of Leeds City college. Sadly, too many children in Keighley start school unable to speak English. Does the Prime Minister agree that there is a responsibility and obligation on parents to make sure that their children speak English?

[The Prime Minister]

I completely agree, and the fact is that in too many cases that is not happening. The previous Government did make some progress on making sure people learned English when they came to our country; I think we need to go further. If we look at the number of people who are brought over as husbands and wives, particularly from the Indian sub-continent, we see that we should be putting in place, and we will be putting in place, tougher rules to make sure that they do learn English, so that when they come, if they come, they can be more integrated into our country.

[Ann Clwyd (Cynon Valley) (Lab)]

There are 51 disabled workers at the Remploy factory in Aberdare in my constituency, and they have all been offered voluntary redundancy. They take pride in the product they make. Two years ago, the current Deputy Prime Minister pledged his support to the Remploy workers. What will the Prime Minister do?

[The Prime Minister]

My understanding is that we inherited a plan that was actually phasing out support for the Remploy workers. That is actually what we inherited. [Hon. Members: “No.”] I will get back to the right hon. Lady if that is not correct, but we will do everything we can to try to support and help into work people who are disabled. That is exactly what the new benefits system and the new Work programme will be all about.

[Tony Baldry (Banbury) (Con)]

Q9. Would my right hon. Friend describe the biggest structural deficit in the G7 as a golden economic inheritance?

[The Prime Minister]

I certainly would not, and my hon. Friend makes an extremely good point, which is that at the weekend the shadow Chancellor stated boldly that there was no structural deficit when Labour left office, even though—

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

indicated assent.

[The Prime Minister]

He nods now, even though the Institute for Fiscal Studies could not be clearer that we had one of the biggest structural deficits of anywhere in the advanced world. I have to say, if you start in opposition from a position of complete deficit denial, you will never be taken seriously again.

[Stephen Timms (East Ham) (Lab)]

Q10. With youth unemployment at its highest level since records began, will the Prime Minister reconsider the decision to scrap the future jobs fund?

[The Prime Minister]

First, may I say how good it is to see the right hon. Gentleman back, well and in his place? As I said last week, youth unemployment is a problem that got worse during the boom years under the previous Government, then got even worse during the recession and is still, yes, a very big problem. I do not believe the future jobs fund is the answer, because it was five times more expensive than other schemes, and in some places such as Birmingham only 3% of the jobs were in the private sector. It was not a good scheme, and it is going to be replaced with better schemes, but everyone in this House needs to work together on how we tackle youth unemployment—a scourge that has got worse over the past 13 years.

[Zac Goldsmith (Richmond Park) (Con)]

Will the Prime Minister commit to making continued support for the common fisheries policy absolutely conditional on an end to the appalling phenomenon of fish discards?

[The Prime Minister]

My hon. Friend will speak for many in this House when he says that the current regime of discarding perfectly healthy fish is not acceptable and needs to change, and now we are in government we have an opportunity to try to work to that end.

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

Q11. Prime Minister, before the election you came to the Province, entered into a contract with the people of Northern Ireland and promised to bring change to “our economy”. In your speech about the contract, you told the people to “read it, keep it, stick it to your fridge, use it to hold us to account”. Ten months later, we have lost £4 billion from our capital budget, and there is rising unemployment. Can you update the House on any progress to reduce radically Northern Ireland’s level of corporation tax, bearing in mind that we are in competition with the Irish Republic, which this country bailed out recently?

[The Prime Minister]

I remember the visit that the hon. Gentleman mentions, and one of the things we said was that we would sort out the Presbyterian Mutual Society, and I am proud to say that we have done that and delivered that important pledge to people in Northern Ireland. Everyone in Northern Ireland knows that we have got to rebalance the economy: the public sector is too big, the private sector is too small. My right hon. Friend the Northern Ireland Secretary is looking at all the potential of things such as enterprise zones and different tax rates to try to help to bring that about. That is exactly what we are committed to.

[Guy Opperman (Hexham) (Con)]

Q12. During my recent visit to Ponteland high school, pupils told me that apprenticeships were their No. 1 priority. With strong ongoing local schemes already operating in the area at Egger and SCA, will the Prime Minister back the skills for work campaign to encourage more youngsters in the north-east to take up the apprenticeships that are there?

[The Prime Minister]

My hon. Friend is absolutely right to raise this. We have made some difficult decisions in this spending round, but we have increased the funding for apprenticeships so that we will be funding 75,000 more apprenticeships than what was planned under Labour. We think this is absolutely vital not just to help young people into work for the short term but to make sure they can have good and worthwhile careers in our rebalanced economy.

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

Airborne Systems in my constituency is a brilliant little world-leading company that makes parachutes for the UK, but also the international market. However, it is in danger of being stuffed in a tender competition, which will cost 50 jobs that will go to a French company. My local company’s products are cheaper and better, and there is an opportunity for the Prime Minister to intervene and allow it, at its own cost, to put them into trial for the UK MOD. That will lead to exports as well.

[The Prime Minister]

The hon. Gentleman makes a passionate plea for a business in his constituency, and he is absolutely right to do that. I am sure that the Ministry of Defence will hear what he says. Of course, I want every opportunity for British defence manufacturers to compete and succeed, and we are doing everything we can to help them. We have just been talking about apprenticeships. We are also delivering the lowest rate of corporation tax in the G7. All these things will help us to compete with, take on and beat our competitors.

[John Glen (Salisbury) (Con)]

Q13. Following the report in December by the right hon. Member for Birkenhead (Mr Field) about how to prevent poor children from becoming poor adults, what actions does the Prime Minister intend to take to address the central recommendation of the report—that greater prominence should be given in public policy to the earliest years?

[The Prime Minister]

My hon. Friend is quite right. It is good that the right hon. Member for Birkenhead (Mr Field) has produced this excellent report about how we try to help children out of poverty. The two most important steps we are taking are funding two-year-olds in nursery education—a pledge never made and never delivered by Labour—and a pupil premium for all children who are on free school meals so that the money follows them into school. Labour Members shake their heads. They had 13 years to do it; they never did.

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

There were 4,000 stillbirths in the United Kingdom last year, and obviously the pain for those families is utterly unimaginable. Will the Prime Minister give a guarantee that there will be no cut in the funding of research into the causes of stillbirths?

[The Prime Minister]

What I can tell the hon. Gentleman is that there is no cut in the national health service. We are putting £10.6 billion extra into the national health service during this Parliament, against the advice of many, including his own Front Benchers. I will get back to him on the specific research that he speaks about. Every hon. Member will have met constituents who have been in this situation, and I know how heart-breaking it can be. Where we can get to understand more what the cause of stillbirth is, of course we should be doing that work.

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

Q14. Last month, Ockendon school in my constituency celebrated becoming an academy. Staff and governors at the school are delighted with the freedoms that becoming an academy has given them. Could my right hon. Friend give some words of encouragement to other schools in Thurrock that are considering taking this important step?

[The Prime Minister]

I would certainly encourage all schools to look at academy status because of the extra freedom and responsibility it gives them. The evidence is now clear that academy schools, particularly those in less well-off areas, have transformed the results in those places. In the past nine months, as a coalition Government, we have managed to create as many academy schools as the previous Government did in the past seven years. We are making good progress with this, but we should keep up the pressure.

[Anas Sarwar (Glasgow Central) (Lab)]

A ComRes poll for ITV News found that 48% of the British people feel that the Government have lost control of the economy, and the Chancellor himself has admitted that he has no plan B. Given that this Government have axed the future jobs fund, trebled tuition fees and scrapped the education maintenance allowance, the question that people up and down the country are asking is whether this Prime Minister even has a plan A for our young people.

[The Prime Minister]

What is clear is that only one side in this House has a plan at all. The Opposition have absolutely no plan apart from to deny the deficit, to say there was not a problem, and to pretend that somehow they handed on a golden inheritance when in fact we had the biggest budget deficit of advanced countries and an absolute pile of debt to deal with.

[Mr Oliver Heald (North East Hertfordshire) (Con)]

Given the commitment of the coalition Government to reinvigorate occupational pensions, will the Prime Minister welcome the launch yesterday by the National Association of Pension Funds of its workplace retirement income commission, which is designed to produce proposals to improve the adequacy of pensions so that people can live with dignity and with enough money in retirement?

[The Prime Minister]

My hon. Friend makes a very good point. We want to see strong private sector pension provision. The history of that provision over the past 13 years has been depressing, because so much money has been taken out of the pension system, not least by the pensions tax that happened year after year, and which was probably proposed by the two people who now run the Labour party. We want to see stronger private pension provision so that people can have independence and dignity in their old age.

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

Two hundred years ago, the privileged people in this country managed to steal the English common land from the English common people. Why are the Government returning to such activity by taking the forests and woods of our country from the ordinary people?

[The Prime Minister]

This Government are taking a completely different approach from the previous Government, who sold off forestry with no guarantees of access, no guarantees that it was free and no guarantees about habitat. I am, of course, listening to all the arguments that are being put on this matter. However, I ask whether there are organisations, such as the Woodland Trust and the National Trust, that could do a better job than the Forestry Commission. I believe that there are. Is there a problem with the Forestry Commission—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the Prime Minister. The Prime Minister must not be shouted at. The question was heard and the answer must be heard.

[The Prime Minister]

I say to the hon. Member for Huddersfield (Mr Sheerman), is there not a problem when the Forestry Commission is responsible for regulating forestry and is a massive owner of forestry? We do not accept that with the Bank of England or other organisations. It is therefore worth considering whether we can produce a system that is better for access, better for habitat, better for Natural England and better for the countryside that we love.

Point of Order

Wednesday 2nd February 2011 Commons Chamber

12:32

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

On a point of order, Mr Speaker. You are well known for standing up for the right of the House to hear statements from the Government before they are heard on the “Today” programme. Unfortunately, it has happened again. It was announced this morning on the “Today” programme and to readers of The Guardian and The Times, that an additional £400 million will be spent on mental health. On the face of it, that is good news. However, although the Deputy Prime Minister and the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow) have time to tour television studios, they do not have time to make an oral statement to this House and to answer questions such as whether this is new money and how the money will be spent to get the results that we all want to see.

[Mr Speaker]

I am grateful to the hon. Lady for her point of order, and for notice of it. A written ministerial statement has been given today. I have not received notice of an oral statement. The House will be aware that the Procedure Committee today published a report on ministerial statements. Matters of policy must be communicated first to the House, but the precise means by which that is done is ordinarily left to the Government. Today, there is nothing that I can usefully add, but she has registered her concerns forcefully and they will have been heard by the Leader of the House.

Before the hon. Member for Manchester Central (Tony Lloyd) rises to propose his ten-minute rule motion, I appeal, as I should have done before the hon. Member for Islington South and Finsbury (Emily Thornberry) rose, for Members to leave the Chamber quickly and quietly, showing the same courtesy to the hon. Gentleman as they would want to be shown to them in similar circumstances.

High Pay Commission

Wednesday 2nd February 2011 Commons Chamber

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

12:34

[Tony Lloyd (Manchester Central) (Lab)]

I beg to move,

That leave be given to bring in a Bill to make provision for the establishment of a High Pay Commission; and for connected purposes.

The Bill would begin to do something credible about the problem of high pay for those at the very top of the earnings ladder in Britain, who are gorging themselves while the rest of the country is doing badly. I am delighted that the Secretary of State for Business, Innovation and Skills is in his place, because he was an advocate of a high pay commission in an earlier incarnation. I hope that he still shares that view this side of the general election.

The public are still furious about the Government’s failure to deal with bankers’ bonuses. Nothing makes people up and down this land so angry as the knowledge that before the election both coalition partners promised tough action on bankers’ bonuses, but the Bob Diamonds of this world and their gilt-edged friends still operate seemingly with impunity. People contrast that with members of the Government who did not commit themselves to the austerity programme that is being brought in, but who are now presiding over a situation in which real wages will have dropped by 4% between 2009 and the end of this year, the Governor of the Bank of England is on record as warning of the biggest squeeze since the 1920s, and the Office for Budget Responsibility, the Government’s own independent body, says that average pay for those on low and middle incomes will drop by £720 a year.

People in work are making big sacrifices, and of course those who will lose their jobs as a result of the Government’s programme will lose out even more. When the Governor of the Bank of England says that that is the inevitable consequence of an economy that is rebalancing, we therefore have to say that we also need some rebalancing of the pay of those at the very top.

The top-paid are doing not just very well but very much better than they were not so long ago. There is very little evidence that very high pay makes a material difference to the success of business in our country. In fact, rather the opposite. The gross bonus culture has actually led to short-termism, not just in the banking industry but across British industry of all kinds. There is little evidence, too, that pay needs to be ratcheted up to such levels to retain the top managers. There is no brain drain of managers. British managers are actually better paid than those anywhere other than the United States, and there is no systematic evidence of our managers being poached and moving across the Atlantic. The arguments in favour of top pay are effectively spurious.

Top pay is driven by the bonus culture and by the capacity of remuneration committees—the old pals’ act—to operate on the basis of “I’ll scratch your pay packet as long as you’ll scratch mine.” That is wrong and unacceptable. If we look at the evidence on pay, we see that the bonus culture has grown massively in the years since 1997. That is not just in banking, because the Prime Minister is right that we should not scapegoat banking. We should examine the top pay across the whole of our society. In 1997, bonuses across the City were estimated at £1.5 billion, not a small sum. By 2006, that figure had grown to £8.8 billion. It dropped a little at the bottom of the financial crisis, to £3.6 billion in 2008, but it is believed that this year bonuses will be back up to £7 billion. The Government, frankly, have not dealt with the problem.

If we examine the pay of chief executives across British industry, we see that the average pay of chief executives in FTSE 100 companies was something in the order of 47 times that of the average worker in those companies in 2000. That difference had grown to 88 times in 2009, so it has doubled in real terms from already colossal levels. In fact, the average chief executive is now paid 200 times the minimum wage. In a society such as ours, fairness means that if the poor and those on squeezed middle incomes are playing their part in the Government’s austerity programme, so should those at the very top. People on 200 times the minimum wage—not just the Bob Diamonds but those across all our industries—ought to begin to take their fair share of the strain.

A high pay commission—as I said, the Business Secretary is already on record as supporting the concept—could begin to do something positive about the problem. I hope that it can be charged with the following, among other things. First, we have to have transparency. We have to know what these people really are paid, not simply through their basic pay but through bonuses and the very high pension contributions that companies make on their behalf. That is simply a matter of social equity. Stakeholders, not just shareholders—employees, customers and wider society—are entitled to know what is going on. The high pay commission should therefore establish mechanisms for making transparent the whole question of high pay.

Inevitably, the high pay commission ought also to deal with the regulation of bonus payments, and to set down a framework by which bonus payments can be paid. It could set limits and time frames within which bonuses can be achieved. Of course, it could also make recommendations about the taxation of bonuses, which is an important part of bringing the bonus culture into some form of realism.

The commission should look at the role of remuneration committees—the old pals’ act that I have described, when one person looks after his friend’s pay, with the inevitable result that pay is ratcheted ever upwards. Remuneration committees ought to be opened up to the wider world. For example, employee representatives, whether trade union officials or others, and perhaps representatives of society more widely, should be on them, so that there is some reality in how pay is fixed for top earners.

The commission should be charged, every year, with making a report on tax avoidance. We know that tax avoidance among top earners amounts at least to an astonishing £13 billion a year. I must tell Ministers that recouping that £13 billion would make a serious contribution to the kind of deficit reduction with which the Government are concerning themselves, and in particular that it would make a big, material difference to the cuts in our police forces and our social and health services. It is not unreasonable that those at the top, who after all have the biggest shoulders, take the weight and make a proper contribution by way of taxation.

The thing that many people would most like the commission to look at is pay ratios. The Prime Minister asked Will Hutton to look at pay ratios in the public sector, and recommended a guarantee that the top earners earn no more than 20 times those at the bottom. That is a good starting point, but there is absolutely no reason why the principle for the public sector should not also apply to the private sector. That 20:1 ratio might be a good starting point for the high pay commission. The Government could ask the commission to make recommendations and to begin the process of a proper national debate. People are now being paid 200 times the national minimum wage—200 times what the lowest paid people in our society are legally paid, even if we ignore those who are paid less than that.

Fairness, social cohesion, simple common justice and the natural decency of the British public say that we must now do something about high pay. The rich and the better off in our society are gorging themselves when the rest of society is being asked to make restraint a way of life. It is about time that those who can afford to make that contribution are asked to do so.

Question put and agreed to.

Ordered,

That Tony Lloyd, Mr Dennis Skinner, Kate Green, Ian Mearns, Jim Sheridan, Frank Dobson, Mr David Anderson, Mr David Crausby and Martin Caton present the Bill.

Tony Lloyd accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 18 March, and to be printed (Bill 141).

Opposition Day

Wednesday 2nd February 2011 Commons Chamber

[10th Allotted Day]

Department for Business, Innovation and Skills (Performance)

Wednesday 2nd February 2011 Commons Chamber

[Mr Speaker]

I advise the House that I have not selected the amendment on the Order Paper.

12:44

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

I beg to move,

That this House notes that the Business Secretary in June 2010 called the Department for Business, Innovation and Skills (BIS) the department of growth; believes that the overriding priority is growth and jobs; expresses deep concern that after nine months BIS has failed to deliver this promise on growth, that the Growth White Paper is still not published, that the dismantling of regional development agencies is ‘chaotic’, that local enterprise partnerships lack powers and resources, and that regional development funding is slashed and grants for business investment abolished, causing oversubscription to the Regional Growth Fund; regrets the refusal of the Sheffield Forgemasters loan; notes with concern that responsibility for the digital economy has been transferred to another department without consultation with business or rationale, that there has been no progress in securing lending to small businesses, while bank taxes have been cut, and that BIS has failed to persuade departments not to change planning policies and public services which damage jobs and growth; further notes the sharp reductions in adult training, that there is no longer a 10-year science funding strategy, and that BIS is prioritising unfair and damaging reforms to universities instead of enabling them to support growth; notes the lack of strategy or leadership for key sectors vital to rebalancing the economy; shares the CBI Director General’s concern that the Government has no plan for growth and that BIS is a ‘talking shop’; and calls on the Government to take decisive action to remedy the deficiencies in that Department.

On 3 June last year, the Secretary of State for Business, Innovation and Skills said that he wanted his Department to be the Department for economic growth. At that time, growth was running at 1.2%. Britain was emerging from the deepest global recession for two generations. Nine months later, Britain’s economy was shrinking—so much for the Department for growth. The Government blame the snow, but in the USA the snow struck too—and there last quarter growth was 0.8%. We must have had the wrong sort of snow—or perhaps the wrong sort of Government.

People are seeing prices rise, they are worried about their jobs and they wonder where jobs, growth and prosperity are meant to come from. The Business Department has failed to give the leadership on growth and jobs that this country needs. It has made the wrong choices, harming growth and business instead of supporting them. At a time when other Departments needed to be persuaded to put business first, the Business Department has lost the argument.

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

I cannot believe that the shadow Secretary of State has started his speech without admitting the appalling inheritance that he gave this Government and without coming clean about the mess in which his party left this country and the debt and deficit that it left behind.

[Mr Denham]

The hon. Gentleman is wrong: the reason for the large deficit was the global banking crisis, which cut corporation tax receipts by £40 billion in a year. The measures that we took, which got us out of recession quickly and had the economy growing this time last year, were the right measures. There are no deficit-deniers—we are proposing the right measures for tackling the deficit. The point of this debate is that the Business Department has made wrong choice after wrong choice in responding to the economic situation.

The Government have been reckless in their approach to deficit reduction. They are making the wrong choices on growth. By cutting too far, too fast, the Government are putting economic recovery at risk. Shrinking growth and rising unemployment are not only bad news for families, but will make it more difficult to get the deficit down. The economy should be growing by now, not shrinking. Unemployment should be coming down by now, not going up. To make things worse, the Business Department has failed to produce any plan for growth and jobs.

Even with a more measured and responsible approach to deficit reduction, it would be private sector growth and jobs that Britain needs. That means creating the confidence for businesses to invest, to take on people and grow their business, with every aspect of public policy being bent to ensuring the right conditions for a strong, competitive and fair economy. But there is no plan for growth. As Sir Richard Lambert, the outgoing director general of the CBI, said last week about the Business Department, the country needs it to be

“Less of a talking shop, more of an action-oriented growth champion.”

[Mr Dave Watts (St Helens North) (Lab)]

Does my right hon. Friend agree that if the Government were serious about encouraging private sector investment, they would not have cut the grants to business that poured money into our areas? That money has now been sucked away. Is not that a demonstration of the Government’s inability to encourage investment in our areas?

[Mr Denham]

My hon. Friend is absolutely right, and I shall address several such decisions that the Business Secretary has made.

[Mel Stride (Central Devon) (Con)]

Will the right hon. Gentleman give way?

[Mr Denham]

Not at the moment.

It is not as though the Government were not warned about what was coming. When the Tory-led Government took over, recovery was strengthening and unemployment falling. Since then, every decision they have made has made things worse. They stopped the loan to Forgemasters, showing that they had no plan to ensure that British companies gained from a new nuclear programme. When the emergency Budget was introduced in June, the Office for Budget Responsibility said that growth would be slower and employment down as a direct result of the Government’s measures. When they chose to make the biggest cuts in the most vulnerable communities, it was clear that the regions would need new growth and new jobs. When the Government published the comprehensive spending review in October, the Office for Budget Responsibility told them that growth would fall and unemployment would rise. Independent organisations from the Chartered Institute of Personnel and Development to PricewaterhouseCoopers and the Local Government Association warned that reckless cuts would destroy jobs in the public and private sectors, yet the Business Secretary did nothing.

We were promised a White Paper on growth in October. Then the civil servants said that there was not enough content to warrant one. Two months later, the Business Secretary was bundled aside and the Chancellor took charge, so now we are promised a Budget for growth on 23 March. This Tory-led Government will have been in office for 10 months and three weeks by then. That will be 321 wasted days of complacency, drift and inactivity. By the time any Budget measures are implemented, we will have had a wasted year that this country cannot afford.

[Margot James (Stourbridge) (Con)]

The shadow Minister’s accusations of inaction are not borne out by my area of the black country, which has already formed a local enterprise partnership and had it approved, and has submitted four bids to the regional growth fund, with a total of 12,000 jobs protected or created. Things are on their way in the black country, thanks to the policies of this Department.

[Mr Denham]

A year ago the black country had a functioning regional development agency. That agency has been destroyed. The hon. Lady is clutching at straws when she says that there may come a point when the Black Country LEP is fully functioning, but it will have no resources, no powers and no legal rights. That is not a step forward; it is a step backwards. That is typical of the damage that the Business Secretary and his Department have done to economic policy in the past year.

[Mr Dennis Skinner (Bolsover) (Lab)]

A week last Friday, together with Bolsover district council, we went to the east midlands region to try to get money for a firm that was going to provide 50 jobs on an old ex-pit site in the Bolsover area. There were quite a lot of applications, but the people there said that they could not deal with them. The net result is that we were talking for hours, but their hands were tied. The region still had some money available, but this Government, through this Department and the Department for Environment, Food and Rural Affairs, were refusing to let them use it to provide the jobs to get the economy to grow. What a shower!

[Mr Denham]

My hon. Friend is absolutely right, and his experience will be typical of many hon. Members’ experience, because this will have been a wasted year.

When the global banking crisis hit, the Labour Government did not sit by hoping that something would turn up. In the six months after that crisis hit, we cut VAT to boost growth; gave businesses time to pay the Revenue; speeded up payments to small businesses; introduced the scrappage scheme; started the enterprise finance guarantee; invested in key technologies and regionally important sectors; boosted investment in education and health; and reformed training support and expanded apprenticeships. In six months there was real energy and drive; from this Government and this Department there has been nothing in nearly nine months. Worse than that, the Business Secretary has made the wrong choices. Each has made life harder for businesses that wanted to invest to create jobs and grow. Instead of creating certainty and confidence, the Business Secretary has sown doubt and confusion.

[Alok Sharma (Reading West) (Con)]

The right hon. Gentleman talks about a wasted year. Does he not acknowledge that he was part of a Government who wasted 13 years, increasing taxes on businesses, national insurance, regulation and the complexity of the tax system, and doing everything to stifle jobs and growth? Does he not agree that he should be congratulating this Government on reversing many of those excesses and thanking us for putting in place a policy that will lead to growth and jobs?

[Mr Speaker]

Order. May I gently point out to the House, first, that interventions should always be brief, and secondly, that there are time constraints? A lot of Members want to get in, so over-long interventions are not just ineffective; they are damaging to colleagues, whatever the intention, and that is of wide application.

[Mr Denham]

Thank you, Mr Speaker, and given what you have said, the House will understand if I do not take too many more interventions. However, I would simply point out that I was proud to be part of a Government who created 3 million jobs. After we had been in office, there were 1.1 million more small businesses than there were when we came into power.

[Mel Stride]

Will the right hon. Gentleman give way?

[Mr Marcus Jones (Nuneaton) (Con)]

Will the right hon. Gentleman give way?

[Mr Denham]

No, I am afraid that I have tried a few interventions from the Government Benches, and they have not really added to the quality of the debate.

The Secretary of State himself described the abolition of regional development agencies as “chaotic” and “Maoist”. In June he gave a perfectly sensible interview, saying that regions that wanted to keep their regional development agencies could. He was overruled. He lost. The Communities Secretary beat him. Now no part of England has a fully functioning local economic partnership or a fully functioning regional development agency. It is the last thing that business needed. The Secretary of State let the Communities Secretary tear up regional planning policies and put nothing in their place. Some 160,000 planning permissions for new homes have been lost to the building industry already. That is a blow to construction, which is already struggling and reeling from the cancellation of Building Schools for the Future. Businesses have no idea how planning applications for new developments will be treated in different parts of the country under the new policies. It is the last thing that business needs.

The Business Secretary has failed to ensure that the migration cap does not prevent growth. Just yesterday, Airbus UK told the Select Committee on Business, Innovation and Skills that it could not access tier 2 immigration visas and that the Home Office was not responding or answering telephone calls on the matter. The Business Secretary lost that argument. The Home Office’s student visa policy threatens the income of further education colleges and universities. The UK’s seventh biggest export industry is now being put at risk because the Business Secretary has lost that battle too. Our universities are huge drivers of growth. This year above all years, the Business Secretary should have told every vice-chancellor to concentrate every effort on promoting growth and their business links in the regional, national and international economy. Instead, every university is preoccupied with working out how the shambolic, unfair and unnecessary new fees system is meant to work. That is a complete diversion from what business needed.

In September, the Business Secretary promised tough action on banks, arguing that there was a “compelling case” for taxing them if they continued to pay out bonuses when businesses cannot get access to finance. He has obviously lost that battle, too. Project Merlin has still not reported. Small businesses are still struggling to get finance. The Tory-led Government whom the Business Secretary supports are desperately casting around for face-saving measures while tax on the banks is being cut. Grants for business investment have stopped. Nissan says that those grants helped to safeguard or create 1,600 jobs in the north-east. Indeed, Nissan told the Business, Innovation and Skills Committee:

“The UK has a clear choice of whether it chooses to fight for new business, new jobs, and rebalance the economy or allow the opportunity of this business to go elsewhere.”

We should all be concerned that the Business Secretary has made the wrong choice.

The funding for English regional development has been slashed from about £1.4 billion a year from the regional development agencies to the £1.4 billion in the regional growth fund over three years. That is funding for the whole of English business, which, to put it into perspective, is about the same amount that the Government are planning to spend on sub-post offices. Predictably, because the regional growth fund has been told to include bids for transport and housing, it has been over-subscribed tenfold. The Business Secretary is in a panic, because the future jobs fund has been scrapped and unemployment is rising. Businesses were promised that the fund would support sustainable private sector growth and help to rebalance the economy. Will he confirm that he has changed the rules at the last minute, discouraging bids that will not create short-term sticking-plaster jobs, and that plans to expand Birmingham airport and regenerate Longbridge, which were going to be put into the regional growth fund, have been put on hold, because it is said that they have no chance of succeeding? There are many projects with private sector commitment, which could lever in huge sums of private investment, that are not going ahead. They will not even be considered, because this Tory-led Government are not prepared to tax the banks fairly to invest in jobs and growth.

The broadband infrastructure is vital for business, but it has been delayed and delayed again. Labour had a costed commitment to achieving universal broadband by 2012 and high-speed broadband by 2015. The Government have put back universal broadband by three years, putting the UK in the broadband slow lane.

There is no coherent approach to the use of tax policy to support business growth. Corporation tax has been cut, rewarding the banks, while capital allowances for manufacturers have been slashed. There is total confusion about the future of research and development tax credits. At one moment, the Government rightly back Labour’s patent box for the pharmaceutical industry; the next, Labour’s support for the video games industry is dropped, causing a predicted loss of 25% of jobs in that sector. The Government trumpet an additional 75,000 apprenticeships over the next three years, yet Labour increased the number from a planned 200,000 to 279,000 in the last year alone. This Government are slowing the growth in apprenticeships, and their own figures show that, each year, 500,000 fewer adults will get public support to improve their skills.

The Government’s record of failure in regional policy, higher education, bank lending and bankers’ bonuses is lengthy. It is hard to identify a single pro-business, pro-growth policy that BIS has successfully championed against opposition from the Treasury, the Department for Communities and Local Government and other Departments. There is no strategy for growth, and no one knows where the Government expect it to come from, how they will support it or how it will be achieved.

Today, Sir James Dyson, the Conservatives’ own innovation champion, has referred favourably to President Obama, who said:

“In America, innovation doesn’t just change our lives. It’s how we make a living.”

Sir James commented:

“That might seem like political rhetoric to some people, but I wish this philosophy was shared by the British Government.”

That is from the Government’s own innovation champion.

Sir Richard Lambert has said that the Government have

“taken a series of policy initiatives for political reasons, apparently careless of the damage that they might do to business and to job creation.”

We saw that happening just before Christmas. For no other reason than the Business Secretary’s personal unsuitability to make a competition judgment, the Prime Minister transferred responsibility for an entire critical industry, the digital economy, to the Department for Culture, Media and Sport. There was no public policy reason for doing that. There was no consultation with business. The media and the creative industries have a great interest in the digital economy, but so do advanced manufacturing, the IT industry, the service sector and retail. The years that were spent bringing industrial sponsorship together within Whitehall so that business could work better with the Government were swept aside in the crudest possible act of media management, to save the Secretary of State’s face.

The same is true when we look forward. For all the words about rebalancing our economy and supporting key sectors, there is no sign of that happening. Governments cannot create private sector growth, but they can create the conditions in which the private sector is most likely to grow. In the areas in which we hope to compete with the best in the world, such as advanced manufacturing, business services, the creative industries and the low-carbon economy, every part of Government policy, from fundamental research to export support, needs to be properly aligned and working together. This Government cling to a different view, however. They believe that if they simply cut the public sector and cut corporation tax, the private sector will rise up of its own accord to fill the gap. That will not work. Sure, the Government will make the odd eye-catching announcement to hit the headlines and make it look as though they are doing something, but, fundamentally, they do not believe in an active role for the Government.

Yesterday, Pfizer said that it was closing its plant at Sandwich, affecting 2,400 employees and many more in smaller companies. That is one of the industries in which Britain should be leading the world. We have a huge advantage in fundamental and applied research and the NHS has huge potential for properly regulated clinical trials, yet one of the world’s leading manufacturers is closing a major plant here, in Kent. Only a few weeks ago, the Prime Minister told us how he had personally been on the phone to the leadership of Pfizer to encourage them to invest and employ people in the UK. The truth is that the Prime Minister has been snubbed. The Government and the Business Department were not players in that huge decision. Whatever the immediate reason for Pfizer’s action, this warns us all that nothing can be taken for granted if this country is to remain strong in this global industry.

In the past year, the Business Department has done nothing apart from implementing Labour’s patent box tax relief. Science spending has been cut in real terms, with capital investment down by 40%. The Government have not set out a clear vision of the future of the pharmaceutical and bioscience industries. They have not said how they will support them, or made it clear to the rest of the world that we will fight tooth and claw for the largest share of this global industry.

The same challenge is true for the other key sectors of the economy—the areas in which, if we do not succeed, we will not be able to pay our way in the world. The truth is that where there should be action, there is a talking shop. There is no plan, no strategy and no vision. There is no leadership and no urgency. The Government are drifting, and making the wrong choices. They are buffeted by events, but not in control of them. For all our sakes, it is time they got a grip.

13:06

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

I welcome this opportunity to have a serious debate on economic growth and jobs, but listening to the right hon. Member for Southampton, Itchen (Mr Denham) giving us a lecture on economic growth was a little like being offered a lesson on seamanship by someone who was on the bridge of a ship that, despite innumerable warnings, was driven at full speed into an iceberg. That was the experience of the British economy over the past few years.

I sat on the Opposition Benches for 12 years, and twice a year the then Chancellor of the Exchequer would come along and tell us that the British economy had achieved the most impressive growth performance since the days of the Hanoverians. One thing that the previous Government could never be criticised for was a lack of reports or plans. Members who were around at the time will remember the documents that we used to get twice a year, telling us how growth had been achieved and how neoclassical endogenous growth theory had been translated into reality. It all came to a shuddering halt, however, because of a combination of massive personal debt, a housing bubble, a structural deficit in the budget and an overweight banking system that collapsed.

If we want judgments on the experience, which we have now inherited and are trying to sort out—[Interruption.] I am not looking for political comment—[Interruption.] I will take interventions later. I do not know how many Opposition Members read the speech that the Governor of the Bank of England made last week. He explained why there is a growth problem in the UK, and I will read out the relevant extracts. He said:

“The economy as a whole must deal with the legacy of extraordinarily high debt levels built up prior to the crisis…The indebtedness of the financial system doubled, from 3½ times GDP in 1998—already high by international standards—to over 7 times GDP in 2008. To appreciate the scale of that increase, even if the financial sector were to cap its debt at today’s level, it would take more than a decade for growth in the economy to return indebtedness relative to GDP to its 1998 ratio.”

That spells out the extremity of the problem that we inherited and the time scale that will be required to restore sustainable growth.

[Several hon. Members]

rose—

[Vince Cable]

I will finish this point before I take an intervention.

The Governor of the Bank of England calls in aid the former director-general of the CBI, who has made some strong criticisms. We have, of course, listened to those criticisms and treat them with respect. It is worth going back to what the director-general said. In the opening part of his speech, he described the fundamental problem facing the UK economy, which we are now trying to deal with. It is worth reading that part of his speech at a little length, because it encapsulates what this whole growth debate is about. He said:

“This coalition Government has been single-minded—some might even say ruthless—in its approach to spending cuts. Very unpopular decisions are being driven through on the argument that they are essential to the long-term stability of the economy. That policy is strongly supported by business, on the grounds that sound public finances are an essential foundation for a sound economy.”

[Interruption.] In case this gentleman becomes an icon for the Labour party, let me quote what he said next. He said that there were “two reasons” why the public finances were in a mess:

“One is that the tax and spending policies of the last Government created a substantial structural deficit—a hole in the budget that had to be tackled irrespective of what happened to the economic cycle.

That’s what made substantial spending cuts inevitable, irrespective of who won the last election.”

That is the position we are in.

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

I am grateful to the Secretary of State for giving way, but his professorial picking through of a variety of quotes is quite pitiful. Can he tell us where his growth plan is? Where is it?

[Vince Cable]

I will describe in detail the various steps being taken to sustain growth. If there were a silver bullet, the right hon. Member for Southampton, Itchen and his hon. Friends would have found it—but they did not.

[Mr David Hanson (Delyn) (Lab)]

The right hon. Gentleman says that he is concerned about the approach of business to the deficit issue. Does business support the VAT increase, which the right hon. Gentleman himself opposed during the general election?

[Vince Cable]

Business—the CBI and all other businesses —has made it absolutely clear that it supports the tough action necessary for debt reduction. What Sir Richard Lambert went on to say was:

“Spending cuts do less damage to employment and growth…than do tax increases.”

I think that provides a very convincing answer to the right hon. Gentleman.

[Several hon. Members]

rose—

[Vince Cable]

I will proceed.

I referred to the core problem of the Budget. One difficulty we have had in debating this subject with Opposition Members is the state of denial not just about the big problem, but more specifically about the Business, Innovation and Skills budget. Our preoccupation has been to deliver for the coalition our contribution to deficit reduction. That has been our major task over the last year, and we have done that. There was a 25% cut over the spending period in the BIS spend. What makes engagement in debate with Opposition Members difficult is the fact that we know—because of the ring-fencing decisions made by the last Government and because of the Institute for Fiscal Studies analysis—that they also planned to cut the BIS budget by 25%. Whenever we hear these appeals to have more money for industrial support, more money for the regions, more money for universities and science and more money for further education, we ask this simple question: where would the money have come from in the midst of those 25% cuts? Opposition Members have a basic problem, although I am not quite sure what it is. It is either an acute problem of amnesia or one of fundamental economic illiteracy.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Does my right hon. Friend agree that this goes beyond mere deficit denial, as it is political opportunism of the worst kind? It is also irresponsible, because talking down our manufacturing base and all the hard-working businessmen and women in our country does no good in helping us get out of the mess that Labour left behind.

[Vince Cable]

I will come on to manufacturing in a moment. We are trying to recover from a position in which there was active de-industrialisation for the best part of a decade—[Interruption.] I shall come to the figures shortly.

[Several hon. Members]

rose—

[Vince Cable]

I will take more interventions later.

Let me deal with the issue of growth. The right hon. Member for Southampton, Itchen has commented, quite reasonably, that the last quarter’s figures and the flash estimates of gross domestic product growth were negative. Those were not good figures, of course, but let us try to put them in the context of what those data tell us, and what the survey data tell us, about the UK economy. Private sector business investment, which is at the core of the recovery, is 3.73% up on last year’s performance. The OECD, the International Monetary Fund and the European Union all agree that for the first time in many years, trade—exports minus imports—is driving growth after a long period in which we had large importation to feed a consumer boom fed by debt. Crucially, on manufacturing, to deal with the point raised by my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), the Institute for Supply Management manufacturing survey published yesterday corroborated what the Chartered Institute of Purchasing and Supply and others have confirmed: that manufacturing is growing at the fastest pace—more than 5% a year—since records began 20 years ago.

[Several hon. Members]

rose—

[Vince Cable]

Let me finish my point about manufacturing and then I will take another intervention. I shall pursue the point I was making in response to my hon. Friend the Member for Stratford-on-Avon about what we have inherited from the previous Government—a decade of remarkable de-industrialisation. Let us go back over the numbers. In 1997 the share of manufacturing in the British economy was about 20%—just a little less than in Germany, Japan and Italy. A decade later it had fallen to 11%, and far more rapidly than in any other industrial country. Manufacturing employment in that period fell from 4.3 million to 2.5 million, so we lost almost 2 million people in the manufacturing sector. The manufacturing trade deficit over that period rose from £7 billion to £53 billion.

[Mr Marcus Jones]

My right hon. Friend’s argument is compelling. Does he agree that the Labour Government’s record on manufacturing was absolutely despicable, because we lost those 1.8 million manufacturing jobs on their watch? Labour Members seem to forget that.

[Vince Cable]

The hon. Gentleman is absolutely right: that is the core point. It is a strange irony, because many Labour Members came from industrial Britain and had built their movement on it. In that decade, however, manufacturing industry was substantially devastated, and we are living with the legacy of it now. What we must emphasise—this is the core of our growth strategy, which the hon. Member for Nottingham East (Chris Leslie) asked about—is that manufacturing matters, and we will do everything we can to support it.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

rose—

[Mr Watts]

rose—

[Vince Cable]

I will take one more intervention before moving on.

[Paul Farrelly]

The right hon. Gentleman is a respected economist and will know full well that an expansion of exports is to be expected following the decline of sterling. That is not a growth strategy; it is a consequence of the previous economic policy that he used to agree with. Before he gets too carried away in making accusations about amnesia, may I ask him whether he recognises these words, written in 2009 and reprinted this year:

“I have taken the view that in the current circumstances it is on balance right to attempt a fiscal stimulus, recognizing, however, the risks. The alternative—prolonged and deepening slump—would be worse”?

[Mr Speaker]

That is quite long enough.

[Vince Cable]

There are indeed many wise words in that book, which is why it has been reprinted several times—it retains its relevance.

Let me move on from the general picture of de-industrialisation to the specifics. Let me also deal specifically with the Pfizer closure, which is a serious matter and an extremely disappointing development. The implication in the remarks of the right hon. Member for Southampton, Itchen was that the Government had somehow or other failed to head off a closure, which could have been avoided. Let me therefore talk him through the sequence of events, which is also important to many colleagues behind me, and explain what we are doing about the problem.

We were first notified about this at the beginning of last week—on 28 January. The chief executive came to London and briefed the Minister for Universities and Science, who rightly immediately asked what the British Government should do to avert the closure. The answer was that this was not a matter for British Government policy, and that the choice was not made on the basis of whether Britain was an attractive place to do business. Rather, the company was making global closures, including large closures in Dusseldorf in Germany and Massachusetts in the United States. The cycle of the company’s patents was relevant, and it was a purely commercial decision. What happened with Pfizer is offset by what is happening elsewhere in the pharmaceutical industry. Only a few weeks ago GlaxoSmithKline announced a £500 million investment, creating 1,000 new jobs directly—and much else happening in the industry is positive.

The right hon. Member for Southampton, Itchen asked me what we were doing about the situation. First, I have established a taskforce comprising Kent county council, local interests and the Department for Work and Pensions working together to look at the local labour market and what we can do to help. My ministerial colleagues are involved in the process. The Minister for Universities and Science is working with the Secretary of State for Health to see how we can relocate scientists from those research facilities into the rest of the pharmaceutical industries. We may well establish a model based on the relative success so far of Allan Cook’s efforts in the defence industry to see how best to pursue the relocation policy. However, the decision was not based on the investment climate in the United Kingdom. It was a commercial decision, and we are acting promptly in doing whatever we can to help the people who are caught up in that difficulty.

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

Many of us who have been in the House for a while know that this country often suffers as a result of decisions involving local businesses which are made elsewhere in Europe—or, as was the case when the Peek Frean factory in my constituency was closed, in Idaho. However, all my experience since May, both in my constituency and around the country, suggests that people are desperate to see manufacturing back on its feet, and desperate for the skills and apprenticeships that will allow it to perform. That is the great demand out there in relation to Government economic policy, and my right hon. Friend is going in absolutely the right direction by making it a priority.

[Vince Cable]

My right hon. Friend is right. It was suggested a few moments ago that the process of manufacturing recovery that we are beginning to see was driven entirely by exchange rates. That is, of course, a major factor, and it is something for which neither the last Government nor this one claim credit.

[Several hon. Members]

rose—

[Vince Cable]

I will take interventions later.

What I think we can claim credit for is establishing a climate of confidence in which businesses can invest, and taking concrete action in specific areas—

[Several hon. Members]

rose—

[Vince Cable]

I will take interventions in a few moments.

I think that we can claim credit for specific actions that have made a real difference in terms of manufacturing skills.

I believe that the right hon. Member for Southampton, Itchen said that apprenticeships were in decline. It is worth reading out the latest quarterly figures, because they are directly relevant to the intervention of my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) and those of Labour Members.

A year ago there were 63,400 level 2 apprenticeships; now there are 76,300. A year ago there were 35,200 advanced apprenticeships at level 3; now there are 42,300. The number of higher-level apprenticeships has risen from 700 to 1,200. That is a direct consequence of our intervention during the spending review, when we had to make tough choices. We chose to concentrate on supporting the apprenticeships that are the backbone of British industry.

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

The Secretary of State is making a very good point. It is particularly applicable to the economy of the west midlands and the black country, where manufacturing still plays a very important role. The creation of a local enterprise partnership to focus specifically on manufacturing skills will directly benefit the local economy. It would be madness to pursue the policies of the previous Government, which failed to create the private sector jobs that we need in the west midlands.

[Vince Cable]

I thank the hon. Gentleman for his support. He makes the point extremely well. Local enterprise partnerships will achieve a great deal, at a far lower cost than the Labour party’s £21 billion investment in regional development agencies. They are already beginning to make their mark.

[Several hon. Members]

rose—

[Vince Cable]

I will take one intervention, and then move on.

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

Steel manufacturers’ confidence would increase if the Secretary of State could demonstrate that he was prepared to invest in steel, which he failed to do in the case of Sheffield Forgemasters, and if he came clean on whether his party supports the new generation of nuclear power stations that would create so much work for those manufacturers.

[Vince Cable]

As it happens, 10 days ago I talked to representatives of British Steel’s successor, Tata Steel in India, about its plans for investment in the United Kingdom. I made it absolutely clear that we stood behind it, and would do all we could to support it. My colleague at the Department of Energy and Climate Change has already made it clear that we support investment in nuclear power, provided that it is not accompanied by a state subsidy. I also met the largest investor in that industry in order to support his activities.

[Several hon. Members]

rose—

[Vince Cable]

I will move on now, and take interventions later.

Let me deal with the general complaint that the Department has made wrong choices by considering some of the decisions that we have had to make since coming to office. I will start with the universities. The Minister for Universities and Science will say a little more about fees policy later. It is an issue that we have debated several times.

I vividly recall, within days of beginning my job, having to sign off several key appointments to the Student Loans Company, and then having to make a very quick trip to Glasgow to visit an organisation which had been in a state of collapse and which we had inherited. I remind the right hon. Member for Southampton, Itchen—who, I believe, played a part in establishing that organisation; the Public Accounts Committee is currently reviewing the episode—that during a period at the beginning of the last academic year for which the last Government were responsible, when students were desperately telephoning the company about their finances, 87% of calls were unanswered. Moreover, only 46% of claims were processed. As a result of the decision to firm up the organisation, the percentage rose to 69% in the current academic year. That is still too low, but an organisation that was wholly dysfunctional under the last Government is beginning to be turned round.

[Mr David Lammy (Tottenham) (Lab)]

The Secretary of State prays in aid the example of the Student Loans Company. He will be aware that an independent review by Sir Deian Hopkin found the board and the chair culpable, which is why they are no longer in the organisation.

[Vince Cable]

I seem to remember that an independent report established very firmly that responsibility lay with Ministers.

[Mr Denham]

I am grateful to the Secretary of State for giving way, because he referred to me personally in this connection. I think that he is missing the point. Part of the business of being a Minister, or a Secretary of State, is sorting out problems that arise—[Interruption.] Let me tell Members that things will go wrong for this Government, as they occasionally went wrong for our Government. It is part of a Secretary of State’s job to sort those things out, but this Secretary of State is using that as an excuse for having done nothing about the really big challenges involved in promoting growth. It is no good his telling the House, “We couldn’t do anything about growth because I was sorting out the Student Loans Company.” That is a ridiculous argument.

[Vince Cable]

I am glad to hear it acknowledged that we began by having to sort out a mess. That is a good starting point for discussion.

Let me now deal with the further education sector, in which I became engaged, with the Minister for Further Education, Skills and Lifelong Learning. We began visiting further education colleges, many of which were utterly demoralised and unable to fulfil their function because their capital work had been stopped as a result of a process of utter incompetence. They had been authorised to spend nine times the amount that was actually available.

Let us examine the underlying trends, to which the motion refers. In the last five years of the Labour Government, adult learning—involving people over 19—fell by 1.1 million to 3.5 million. At a time when Government money was being thrown at problems, the Government’s priorities were such that a key area was neglected and declined. We have sought to refocus that energy on apprenticeships, with the consequences that I have already described.

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

May I return the Secretary of State to the subject of manufacturing? My right hon. Friend the Member for Southampton, Itchen (Mr Denham) raised the issue of Airbus at the Business, Innovation and Skills Committee. There is great concern about the fact that key workers who are vital to the future of the business will be prevented from entering the United Kingdom under tier 2 of the points-based system. I know that the Secretary of State is concerned about that as well, but what is he going to do about it?

[Vince Cable]

The right hon. Member for Southampton, Itchen made a wholly wrong assertion. The system of immigration for skilled workers was substantially modified to remove intra-company transfers from immigration control. If there are particular cases involving particular companies, I shall be happy to pursue them. As it happens, I met Mr Gallois yesterday and the issue was not raised, but I will happily pursue any specific cases.

Let me now deal with another issue. A few moments ago, I received a challenge. Why, I was asked, did we not move away from some of the messes that we had inherited, and concentrate on the issues relevant to business growth? Let me start with an issue that is absolutely critical but does not merit even a word in the motion—regulation.

We inherited a system in which five new regulations were introduced every day, at a cost to the business sector that was independently assessed at £80 billion— about 5% of GDP. A few days ago the Minister of State, Cabinet Office discovered a book, only one copy of which is in circulation, of all the regulations that had been accumulated. Some 22,800 were bearing on businesses and adding enormously to their costs—

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

rose—

[Vince Cable]

I shall finish this point and then give way. What we have done is, first, establish a process to stop the accumulation of regulation. Last week, with the support of the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), I started attacking an issue that is a particular concern to small business: the problem of tribunals. I believe that there are almost 250,000 such cases a year, many of which are frivolous. They are being brought by people who are not required to pay any fee in order to be heard before the tribunal. We are trying to establish, following a consultation, a level playing field to help small business deal with the problems established by the tribunal system. In future all cases will go through a mediation process before they get into the costly and disruptive process of a tribunal. It is worth remembering that the previous Government tried twice to reform this process, but backed off on both occasions, under pressure from the people who pay their bills.

[Alison McGovern (Wirral South) (Lab)]

The Secretary of State is talking about regulation, but he began his speech by giving us a history lesson on the financial services sector crash. So will he take this opportunity to explain what he would have done to regulate that sector further and prevent the global financial crash?

[Vince Cable]

It is a pity that the hon. Lady was not here to hear my speeches on this subject for the five years running up to the crisis, but I shall make two simple points now. The first is that when the financial crisis occurred, I thought and said openly, as I shall repeat now, that the interventions made at that time by the then Chancellor were exactly right and deserved support. What the then Government did not do—this is what we are doing through the Banking Commission—is look at the fundamental issues of overly large banks, concentrations of retail and investment banking, and how to deal with the very complex problems of those two things being locked in the same institution. We are dealing with the fundamental issues behind the banking crash, rather than the superficial aspects of it.

[Mr Watts]

I am grateful to the Secretary of State for finally giving way. He seems keen on encouraging manufacturing investment, so may I suggest that he restore the grants for business, which actually brought in £3.9 billion of investment and created 70,000 jobs, before he scrapped them?

[Vince Cable]

No doubt the hon. Gentleman will tell us where that fits on the shopping list. On industrial support, I shall simply say that where the previous Government promoted good schemes, such as the manufacturing advisory service, we are building on them, because we are looking at them on their merits, not doctrinally. However, where schemes were failing and were not cost-efficient, we have reduced them and scrapped them.

[Julian Smith]

Small businesses across Britain were delighted to hear last week’s announcement by the Government on tribunals. May I encourage the Secretary of State and his excellent employment Minister, the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), to go further and faster on freeing things up, and freeing small business from Labour’s legacy of red tape?

[Vince Cable]

I am grateful for my hon. Friend’s encouragement, and the Government intend to do exactly what he suggests. Shortly, we will take a forward look at the pipeline of regulation, and how we plan to reduce regulation and make it proportionate.

[Richard Burden]

A little earlier, the Secretary of State answered a question about the west midlands, so may I tell him what is worrying people and businesses there? On 28 October he made a statement on local growth, and his answer to everything in terms of industrial and other assistance was, “There will be a regional growth fund.” That fund is oversubscribed and the rules have been changed at the last minute—although the Government have denied that they have done that. In Birmingham and the west midlands, the vital infrastructure projects for Birmingham airport and the regeneration of Longbridge look like being left high and dry. In practical terms, what confidence can he give to people in the west midlands that he will stand by them on such things?

[Vince Cable]

Rather than prejudge what the first tranche of the regional growth fund will be, let us just wait for the outcome and decide which projects will proceed on the basis of the independent evaluation that they have had.

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

rose—

[Vince Cable]

I have taken a large number of interventions. I will take one more, from the Chair of the Select Committee, and then move on.

[Mr Bailey]

The Secretary of State mentioned the manufacturing advisory service, and I welcome his comment that he is going to build on it. However, I had a meeting with a representative of that service who seemed very unsure what its future would be in the context of the new Government policy. Will he take the opportunity to give reassurance to members of that service?

[Vince Cable]

I can certainly reassure the hon. Gentleman that that organisation has a good record and a good future. If he wants to talk through the details, I am sure that the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk) will engage with him on that subject.

I was reviewing some of the areas where the Government inherited major problems and are now trying to deal with them—university administration, further education colleges, apprenticeships and regulations—but let me mention another, which does not even figure in the motion: the appalling history of Royal Mail and the Post Office. One of the things that we have done, which the previous Government were not able to do, is pass through the first stage of parliamentary scrutiny of a process that will eventually get those organisations on a sound footing.

Let us remind Labour Members what we inherited: a collapsing post office network, which had declined from 19,400 post offices to 12,000, mostly as a result of a forced planned closure programme; and a Royal Mail that had a negative cash flow in the last financial year of £520 million, an operating loss of £320 million and a pension deficit of almost £10 billion. We are taking the necessary action to solve those problems, whereas the previous Government had an opportunity to do so but walked away from them.

[Mr Mike Weir (Angus) (SNP)]

rose—

[Vince Cable]

I am not taking any more interventions, because I have been very generous.

I wish to conclude by discussing some of the other issues that the Government now have to deal with. These are major issues that we have inherited and where major policy is required in order to strengthen growth. The first issue is trade. That is fundamental to recovery, yet does not even merit a word in the Opposition’s long motion. Do they not understand its importance? In the next few days a trade White Paper will: set out a new approach to the Export Credits Guarantee Department, a largely moribund organisation to which we are giving a new suite of products; refocus the activities of UK Trade & Investment; and stress the importance that we attach—I am personally involved in this—to trade liberalisation within the single market, in bilateral agreements with India, Brazil and the European Union, and through multilateral trade.

One of the things that we do, and I do—the Prime Minister has given his personal leadership on this—is ensure that Ministers spend a lot of their time attracting inward investment and opening up the big emerging markets that will be crucial to our growth. The right hon. Member for Southampton, Itchen asked what I had been doing in the past few weeks and months. Most recently I have been to India twice; I have also visited China, Brazil and Russia trying to open up markets and attract inward investment that will provide the growth and the jobs of the future, many of which are now materialising.

The second issue covers finance and the banks, which have been referred to on several occasions. The only reference to it in the motion is a factually incorrect one to tax revenue.

[Priti Patel (Witham) (Con)]

rose—

[Vince Cable]

I shall give way in a moment. The factually incorrect reference is to tax revenue, because in fact the banking levy will result in the Government raising three to four times as much tax revenue from the banks as was going to be raised by the one-off profits levy last year, and that is excluding the effects of getting the major banks to comply with anti-avoidance procedures; the previous Government completely ignored that. There is an issue to address—I am sure that my hon. Friend the Member for Witham (Priti Patel) is intervening to tell me about it—concerning medium-sized and small companies that cannot attract bank lending. That serious problem is continuing because of the massive deleveraging taking place in the banking system. We have extended the system of bank guarantees. We now have a fund of £2 billion, and that process will continue. The Chancellor and I are personally negotiating with the banks to ensure that we deliver a substantially improved flow of funding to viable British companies.

[Priti Patel]

I have previously raised with the Secretary of State the horrendous time that my constituent, the chocolate maker Amelia Rope, has had in getting finance for her business so that she can make even more of her outstanding chocolate bars. Will the Secretary of State comment further on what he is doing to get more finance to businesses such as hers so that they can thrive and prosper and start doing more trade internationally?

[Vince Cable]

I know of my hon. Friend’s frustration regarding this particular company and the banks, and I, or the relevant Minister of State, will be happy to meet her and the banks if that will help to get a proper evaluation of what is happening there. One development in that area is that a bank task force has been established, which will have a proper system of investigating complaints when banks behave unreasonably. I am very happy to take her through that, to meet her and to try to expedite that particular business transaction.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I congratulate my right hon. Friend on what he is doing to increase trade in this country, because the one way that we can help small businesses to grow is through trade. Will he commit to providing more help for small and medium-sized businesses to trade not only with north America and Europe but in the more difficult markets of Asia?

[Vince Cable]

The hon. Gentleman is exactly right that that is what we are doing, and that is what the trade White Paper will emphasise when we talk about the future tasking of UKTI.

[Mr Lammy]

Will the Secretary of State give way on that point?

[Vince Cable]

I have taken a lot of interventions, and I propose to conclude now.

There are many areas in which we have improved, and are improving, policy, but our overriding concern, over which the right hon. Member for Southampton, Itchen and his colleagues seem to have a serious amnesia problem, is sorting out the underlying problem of the public finances. That process will continue for several years. It is worth quoting from an OECD peer group of government that has been looking at our progress. Last week the OECD’s secretary-general said:

“dealing with the deficit is the best way to prepare the ground for growth in the future. In fact, if you don’t deal with the deficit you can be assured that there will not be growth because confidence will not recover.”

That has been the central preoccupation of Government policy. It is painful and difficult but we are going to persist with it, and for that reason we will succeed in restoring stable and balanced growth to the British economy.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This is a popular debate and a six-minute limit has been introduced on all Back Benchers’ speeches, with the usual injury time for two interventions.

13:42

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

Let me start by saying that, on a personal level, I know from my discussions with Ministers that they are personally committed to the growth agenda. My reason for speaking in this debate is that I feel that they have failed to get their personal priorities and commitment translated across the rest of Government policy. Current Government policy on the economy and growth is politically driven and fundamentally economically flawed. Above all—even if one does not accept those first two premises—it is totally incoherent in its application.

The Secretary of State spoke at length about the comments of the former director-general of the CBI, Richard Lambert, but he failed to mention Mr Lambert’s subsequent comments:

“But my argument this morning is that the Government has not been nearly so consistent and focussed when it comes to policies that support growth. It’s failed so far to articulate in big picture terms its vision of what the UK economy might become under its stewardship.”

He went on—this is the crux of the matter:

“And it’s taken a series of policy initiatives for political reasons, apparently careless of the damage that they might do to business and to job creation.”

We must emphasise the importance of job creation and growth in dealing with the deficit. Mr Lambert pointed out in the same speech that the deficit was partly a result of public spending last year being up by 3% from 2008, but was, above all, because tax receipts were down by 13%. One would reasonably expect, in a policy designed to eliminate the deficit, that there would be a balance of measures designed to cut public spending and get economic growth, but what we have had are measures designed simply to cut public spending and not to get economic growth.

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

The hon. Gentleman says that our policies are not designed to promote economic growth, but what about our tax policy, which will make us one of the lowest-taxed countries in the G7? Will that not generate economic growth?

[Mr Bailey]

I would love to talk about tax policy such as the VAT rise that is cutting demand, particularly in the construction industry, in which 7,500 people are going to be made unemployed as a number of businesses go down. I could go on for a very long time about the Government’s tax policy. Corporation tax cuts will benefit the rich—[Hon. Members: “Oh, come on!”] They will benefit the banking community and those within it, but I want to see an increase in capital allowances, which is what the manufacturing sector wants to enable investment to take place. However, I shall move on.

Let us consider the financial implications of economic growth for tax receipts. A 1% rise in gross domestic product brings in £7.7 billion in tax receipts. Over the lifetime of a Government, a 1% increase in GDP growth would bring in something like £37.5 billion—nearly half the deficit that the Chancellor says we need to cut over this period. It is therefore the responsibility of BIS to push and push for Government priorities to ensure that the elimination of that deficit is effected largely through economic growth, but it has failed to do that. I think that was acknowledged in Mr Lambert’s comments.

The growth White Paper has been abandoned because there was not enough in it—hardly sterling support for industry and the private sector. Some of the policies we are talking about do not involve any expenditure to implement but are about the priorities of other Departments and how they impact on growth. One would reasonably expect BIS to demonstrate to other Departments how they are damaging growth. Localism is one example. We have heard a lot about the abolition of regional development agencies and their replacement with local enterprise partnerships. By abolishing RDAs, the Government stripped away a core of local business support and they put in its place LEPs, which may or may not be successful, but which have not delivered a single job so far.

[Geoffrey Clifton-Brown]

I am grateful to the Chairman of the Select Committee on Business, Innovation and Skills for giving way. I have listened to the spokesman for the Opposition and to the hon. Gentleman, but apart from one costed programme to accelerate broadband I have not heard a single policy from Her Majesty’s Opposition. Is it too much to expect the Chairman of the Select Committee, who should know about these things, to announce some positive policies?

[Mr Bailey]

We would have sustained the level of support at local level that would have allowed manufacturers to benefit from the sort of programmes that were being developed to get us out of recession. However, the hon. Gentleman must forgive me if I concentrate on the issue at stake, which is the performance of BIS in promoting growth.

On LEPs, I am second to none in my praise for my local Black Country chamber of commerce and those who are committed to making it work. I shall do everything I can to support the LEP, but I know that there are serious reservations about the lack of funding it has for submitting applications and about the delay that occurred when its original application to become an LEP was turned down.

What, above all, is very worrying as regards the potential for LEPs is the fact that the planning proposals in the Localism Bill do not include LEPs having any role whatever in the process. How the Government can create a local organisation with a brief to drive growth but not include it in the local planning plans for a local community defies all credibility and belief. Without the support of local planning authorities, it will be difficult for local businesses to push for growth.

Immigration has already been mentioned. The revelations that we heard yesterday in the Business, Innovation and Skills Committee on the impact of the Government’s cap on recruiting people for vital, iconic businesses that have demonstrated time and again their ability to deliver jobs and growth are a real worry. Some of us thought that the Secretary of State had had some success in that regard, but it looks as though the headline announcements are not being reflected by the attitudes of the Departments involved. That is, in itself, a reflection on this particular Department’s ability to get what it needs from other Departments in delivering on an agenda that is essential for the Government and the economy.

BIS should be taking a lead role and ensuring that there is a growth impact test on the actions taken by other Departments. That is not so. This is why, under a Labour Government, we were growing ourselves out of—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I call Simon Kirby.

13:51

[Simon Kirby (Brighton, Kemptown) (Con)]

The right hon. Member for Southampton, Itchen (Mr Denham) is absolutely right when he says that the Government must take decisive action—decisive action to address the staggering deficit and huge public debt inherited from the Labour party; decisive action as a direct result of the previous Government spending more than they raised in taxation; and decisive action because the Labour party burdened generations to come with the liabilities incurred for the current generation. That decisive action will help to put in place the right macro-economic conditions for recovery.

[Mel Stride]

Does my hon. Friend agree that only the prompt action that the Government took in the emergency Budget shortly after the election ensured that we stabilised the markets, which in turn kept interest rates low, which in turn kept sterling low and encouraged manufacturing exports?

[Simon Kirby]

My hon. Friend is, as usual, correct. We inherited a very big mess indeed.

Coalition Ministers are driving forward a programme with one purpose—creating jobs. There is talk about what is happening. A raft of measures have been introduced, and those are designed to support economic recovery, boost business and help the private sector to create jobs. Corporation tax is falling for both small and large firms. The previous Government’s planned increase in employer national insurance contributions has been stopped. National insurance contribution discounts are being offered to encourage new start-ups to take on employees. Small-business rate relief has been doubled for a year, and the Government are getting to grips with the red tape that strangles so many of our small firms.

Let me be clear on this point—

[Ian Murray (Edinburgh South) (Lab)]

Will the hon. Gentleman give way?

[Simon Kirby]

I will not.

Business needs to be liberated, not submerged in legislation, not taxed out of existence, not immobilised by red tape. We must release the shackles and set business free.

Brand UK is strong, and it is important that we talk Britain up, not down. We must dispel any perception that the UK is a burdensome place to do business. We need to be aware of the huge competition from Asia. The Prime Minister, the Foreign Office, the Treasury and BIS have all given the highest priority to the business and skills agenda.

The coalition Government are ensuring that entrepreneurs and business owners are able to access the information and advice that they need. The Business Department is undertaking a number of reforms to Government-funded business support. The Work programme will provide personalised support for those with the greatest barriers to employment. The new enterprise allowance will help people to make the jump from unemployment to self-employment. Investment will ensure that workers have the skills that they need in a modern labour market. Young unemployed people will get much more help to access extended work experience opportunities.

[Mr Gyimah]

Does my hon. Friend agree that our skills strategy goes further than the previous Government’s in enabling people who want to reskill to gain funding to do part-time courses, and therefore get back into the workplace and get jobs?

[Simon Kirby]

I agree. Our policy is totally in keeping with the 21st century we all live in.

Let me tell the House something about my constituency of Brighton, Kemptown—somewhere that the Centre for Cities has once again singled out as performing strongly post-recession:

“Cities with strong private sector economies and limited public spending cuts, such as Brighton, will be well placed to drive the UK’s economic recovery.”

Just this week, recruitment specialists are reporting a surge in vacancies in Brighton and Hove, with firms returning to pre-recession staff levels. Amex announced last week that it is looking to expand still further in Brighton by relocating many hundreds of well paid and permanent jobs from Madrid.

Developers are still looking to invest in Brighton and Hove, and Brighton and Hove, with its Conservative-run council and its three new non-Labour MPs, is a place to do business. No wonder the right hon. Member for Doncaster North (Edward Miliband), the Leader of the Opposition, came down recently to see how it is done. Contrast that with the previous Government—the Labour party, which told us, “There is no money left.” We see in the new Government decisive action, both locally and nationally.

[Karl Turner (Kingston upon Hull East) (Lab)]

When Labour left office, growth was picking up, unemployment was falling, inflation was low and the deficit came in more than £20 billion lower than forecast. Under this Government, inflation is rising, growth has stalled and unemployment is rising. They really are facts, so will the hon. Gentleman accept them?

[Simon Kirby]

No, I will not accept those facts. I am often struck, looking at those on the Opposition Benches, by how few people have been in business, how few have employed people and how few have filled in a VAT return. I have employed more people than could fit in this Chamber, and I speak from some experience.

[Mel Stride]

On the point made by the hon. Member for Kingston upon Hull East (Karl Turner), does my hon. Friend agree that it is typical of the previous Government that they left office with unemployment higher than when they came to office—the case with every single Labour Government in history?

[Simon Kirby]

I agree with my hon. Friend. One of the sad things about unemployment is the youth unemployment element, which is particularly prevalent in my constituency. It is, frankly, a disgrace.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Gentleman give way?

[Simon Kirby]

I will not, because I do not have much time left.

There is much more to do, and the times we live in are very difficult, but, taken together, the Government’s measures will create the right conditions for business to thrive, compete and create sustainable economic growth and employment. The coalition Government are doing a good job, getting us out of the mess left by the previous Labour Government—decisive action by a decisive Government. I, for one, applaud the progress made by the Government and wholeheartedly disagree with this very mean and inconsiderate motion.

13:59

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

We should begin the debate by considering, as the motion asks us to do, the role of the Department for Business, Innovation and Skills. It has in recent years become a major spending Department, with the stewardship of universities and further education colleges. It is different from other Departments in that, uniquely, it stands on the boundary of the public and private sectors. Its job is to sell Britain abroad as a great location for doing business, and to help UK businesses to penetrate foreign markets. It is also, of course, the key location for business and employees to come to Government with business-related issues. It is, as the Secretary of State has described, the Department for growth—or it should be.

How Government achieve that growth—the role of Government in helping to foster growth—is what divides the House. There are those on the Government Benches, including the Secretary of State, who is no longer in his place, who previously called for the Department to be abolished, and who thought that there was no role for Government to play in fostering growth, apart from getting out of the way. That is not our view; we believe that there is an important and active role in fostering growth.

I take issue with one of the arguments that the Secretary of State has deployed time after time since the election—that the actions taken by the present Government would have been taken by Labour because we were committed to the same level of cuts. It is not true. The Government have launched a programme of cuts which is tens of billions of pounds more than anything that was being planned by the Labour Government, and he cannot continue to rest on that argument.

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

I am grateful to the right hon. Gentleman for giving way. He is always very kind in these matters. If he knew the plans of the previous Government, having been a member of the previous Government, will he explain them to us in order that we can understand how the deficit would have been met?

[Mr McFadden]

If the hon. Gentleman casts his mind back a little more than a year to the pre-Budget report, he will find that cuts in spending were set out by the Department while I was a Minister there. He simply needs to read the pre-Budget report.

I admit that over time during the Labour Government our view on the Department’s role shifted. In the early days we were, perhaps, too reluctant to intervene in markets, but we got to the point where we were playing a much more active role and co-ordinating activity across Whitehall on key industrial and employment opportunities.

For example, with the Department of Energy and Climate Change, we produced the low carbon industrial strategy to achieve the most for UK industry out of the shift to low carbon power generation. On transport, we worked with the Department for Transport on an ultra-low-carbon vehicle strategy. In other words, the Department for Business, Innovation and Skills played a leading and co-ordinating role to take advantage of the industrial and employment opportunities of the future. That is what we were doing to try to foster growth and employment.

[Alison McGovern]

As my right hon. Friend knows, Vauxhall Motors is close to the southern end of my constituency. Will he comment on the previous Government’s approach in setting the ground work for electric vehicles and ensuring that high-tech manufacturing, which is employing people in my constituency, is part of this country’s future and not part of our past?

[Mr McFadden]

My hon. Friend is right. The sad fact is that whereas we wanted to support General Motors in its plans for restructuring in Europe, by the time the current Government got round to making a decision on that, Vauxhall had decided to go away and sort out its own financing.

Let me turn to some of the issues that have arisen since the election. We could trade quotes from Sir Richard Lambert all day, so let us be candid about what he said last week. He said that he agreed with the Government on the deficit reduction strategy, but he thought that there was no wider vision for the economy and there was a danger that the Department was turning into a “talking shop”. That is a fair summary of Sir Richard Lambert’s speech.

[Jim Shannon]

Will the right hon. Gentleman give way?

[Mr McFadden]

I will not give way because I want to make progress.

What business wants is for the Department to be winning battles in Whitehall. That, sadly, has not been happening. The Department and the Government talk about rebalancing the economy. By that we mean rebalancing away from an excessive dependence on financial services and from excessive dependence on certain parts of the country. How, then, can the Government justify in their first Budget cutting some £2.8 billion in investment allowances to manufacturing industry? The corporation tax cut, which has been mentioned, adds up to a benefit of £2.7 billion. In other words, what has happened is that manufacturing industry is paying for a tax cut for the rest of the economy.

The Secretary of State referred to the decline in manufacturing as a proportion of output and of employment. What he did not mention was the fact that we were going through the biggest wave of globalisation in world economic history. He takes an entirely national view, when there was profound change going on in constituencies such as mine and other black country constituencies in manufacturing during that period.

The programme of grants for business investment has been responsible in the past six years for some £400 million of grants to small and medium-sized mostly manufacturing businesses. Fewer than one in five of the grants is more than £1 million. Those grants have supported some 1,800 projects, secured almost £4 billion in investment, and helped to secure almost 80,000 jobs. How on earth does abolishing that programme fit in with rhetoric about trying to rebalance the economy?

Further, those grants are specifically geared to the assisted areas—areas that need help most, such as my own in the west midlands. We met people from the Black Country local enterprise partnership a few days ago. I pay tribute to the business people in that area who have worked so hard to pull together the Black Country LEP. I reflect a fear and a concern, which I suspect are shared elsewhere. Despite the commitment of the business people, will they get the support that they need from the regional growth fund? That fund is grossly oversubscribed. If business has put in the effort but Government do not back those bids and projects, business will rightly feel let down, and my constituents will rightly feel let down by the prospectus that has been offered.

On trade and immigration, the Minister for Universities and Science is in his place. How does he feel that the soft power that is gained from the UK as a wonderful location to study will be affected by the new proposals on restricting the right to work of people who come here to study? How does that help us to sell Britain abroad as an attractive location for investment?

The truth is that business is concerned about the difference between commentary and delivery that we see in the current Department. That is the difference between opposition and government. The Secretary of State, having lost the battles over LEPs, where the Department for Communities and Local Government appears to be running the show, and over immigration policy, has been left to bet the farm on the banking commission. It is not even fully within his control. Business will want to see less commentary and more delivery in future.

14:08

[Lorely Burt (Solihull) (LD)]

The thrust of the Opposition motion is that the coalition failed to deliver its promise on growth and jobs. Let us consider the facts. We are seeking to rebalance an economy which, under Labour, became over-dependent on the financial sector. For a long time I have called for more focus on encouraging manufacturing in the UK. Last year, sadly, we dropped to seventh in the global league in manufacturing, but now we have the beginnings of a different story.

In January this year, manufacturing hit a record high. The purchasing managers index recorded:

“Rates of expansion in UK manufacturing new orders and employment accelerated to reach levels without precedent in the nineteen-year survey history”.

Manufacturing employment rose for the 10th successive month in January. How have we as a coalition Government contributed to this encouraging expansion?

I often say that the role of Government is not to interfere, but to create a fair playing field and then get off the pitch. Government should create an atmosphere in which businesses can survive and grow, and the coalition is doing that. The effect of the moves that we have made to reduce regulation is not yet being felt. The Secretary of State has announced new rules that will be coming in to create fairness in employment law so that employers and employees can navigate through disputes more easily, and tax rules are being simplified.

We can restore economic stability in this country only by bringing the deficit under control, but we need to ensure that business continues to invest. That is why the Government have set out plans to promote growth by reducing corporation tax to the lowest level in the G7. Many welcome measures are being introduced, and I particularly welcome the new enterprise allowance that will allow unemployed people to get off the dole and realise their often long-held dreams of starting up their own business.

[Ian Murray]

The hon. Lady, like many of her coalition colleagues, has mentioned the cut in corporation tax as a massive driver of economic growth. Does she agree that corporation tax is paid only on profits and that many small businesses, particularly those in the service and tourism sector in my constituency that write to me, are more concerned about their profits because they have either no customers or fewer customers as a result of the massive VAT hike?

[Lorely Burt]

The Government have been particularly generous to small businesses for the coming year. The hon. Gentleman is right that no one wanted to increase VAT, but unfortunately the alternatives were even less palatable.

[Mr Mike Weir (Angus) (SNP)]

Will the hon. Lady give way?

[Lorely Burt]

In a moment.

There is also the national insurance contributions holiday for the first 10 employees in the first year of business for new companies outside London and the south-east. The regional growth fund has been much maligned today, but I think it will play an important part in stimulating growth.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

When providing help to business, one of the most important things is to check that it is administered correctly. One need only look at the Export Credits Guarantee Department to see the symptoms of the previous Government’s failures: 90% has gone on aerospace help, which is wonderful for that industry, but the 10% for other industries has dropped by 40%. Such funding is obviously not fit for purpose, compared with other countries where it is going up. That is a perfect example of the previous Government’s failures of administration.

[Lorely Burt]

I totally agree with the hon. Gentleman. The big companies that shout the loudest often benefit disproportionately from Government funding. On that point, I note that the Government have an aspiration to procure 25% from small businesses. With regard to exports, it is important that small businesses receive their fair dues. I also welcome the technology and innovation centres, which will bridge the gap between good ideas and their implementation and the readiness to bring them to market.

[Angela Smith]

Will the hon. Lady give way?

[Lorely Burt]

I am sorry, but I have given way twice already and that is it.

All those measures are yet to come into effect, so how can we claim that the improving business situation is due to us? We have created a climate of confidence in this country. We have put in some pretty harsh measures to tackle the deficit. Not a single Liberal Democrat colleague has taken a moment of pleasure in that, but we joined the coalition and signed up to the agreement because we felt that it was necessary to restore confidence, and it did. Following the June Budget, we saw our triple A credit rating restored. The credit rating agencies backed our deficit plan, and so did the International Monetary Fund, the OECD, the CBI, the European Commission, the World Bank, the Governor of the Bank of England and one Mr Tony Blair. Other countries, before and after the Budget, have faced financial meltdown, and if we had not done that, we would be paying the crippling interest rates that people in Ireland are now paying.

[Ian Lucas (Wrexham) (Lab)]

Fiction.

[Lorely Burt]

We are hearing a lot of denial from those on the Opposition Front Bench. Had we not taken that action, we would be facing greater wage cuts than we are already suffering and more job losses. Not everything that John Cridland, the director-general of the CBI, has said about the coalition Government has been complimentary, but this week he said that

“the coalition government has a lot of credit in the bank with the British business community for the way it’s tackled the deficit. That was task number one and it needs driving through and it mustn’t allow itself to be knocked off course”.

The Secretary of State has referred to the £4 billion cut in the Department’s budget. Labour has opposed this, but it has failed to say even once where it would have cut to achieve their stated £44 billion worth of cuts. BIS was an unprotected Department under its plans. It criticises us for our plan for business, but it does not have a plan. It should criticise after it has produced an alternative, because what it did for the past 13 years certainly did not work. Under Labour, Britain fell from seventh to 13th in the World Economic Forum’s global competitiveness league. Tax competitiveness also fell: in 1997, the UK had the 11th lowest corporate tax rate in the world; but in 2009 it was the 23rd lowest. The British Chambers of Commerce has claimed that Labour created £83 billion of red tape that was simply choking off businesses’ ability to grow.

I know that things are choppy, and we have heard about the lack of growth in the past month, but I would like to finish on a positive note, because it is not just about manufacturing. The Reed job index, which is run by the country’s largest recruitment website, has shown that employers seem to be in job creation mode. I am not pretending that we are out of the woods yet, but things are certainly improving under this Government.

14:17

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

I am sure that the Minister is aware of the great success story of the North East of England Process Industry Cluster: it made £1 billion, gross value added, in six years with just £3 million of public support. It was set up by One North East, the local regional development agency, and has an ongoing portfolio of 62 projects worth £8 million. One particular project, the Tenergis project, which is worth $5 billion, could rejuvenate the local economy and, in turn, attract further world-scale investment.

Chemicals contribute to more than 30% of the nation’s industrial economy, and the sector attracts some of the chemical and process industry’s world leaders. Teesside’s process industry contributes about £10 billion to the north-east’s economy—almost a third of regional GDP—but has seen a series of job cuts and plant closure announcements in recent months, despite having grown in the past five years.

What has that sector seen from the Department since May? The Government have put much emphasis on export-led growth—pretty much a statement of the bleeding obvious. A friendly voice from the Government Benches will no doubt state that manufacturing growth in general has increased amidst a sea of GDP decline, but such statements will not be followed with the caveat that the majority of that growth is in inventory spending, meaning the restocking of raw materials for production. It is a restocking at a time when raw material and commodity prices are at a real high, inflating the costs per measure of materials purchased. I fear that that will be demonstrated in the second and third quarters of this year as domestic demand unfortunately wanes, especially if domestic interest rates are raised. That is combined with the VAT increase, the increased national insurance contributions, wage cuts, fuel costs and the fact that although the world function is based on the retail prices index, the Government function is based on the consumer prices index. We are looking for a domestic multiplier here.

Any policy that is reliant on export-led growth ignores reality as the EU’s internal problems continue and Asian markets become increasingly protectionist and insular in their dissemination of vital raw materials. NEPIC’s vision in its industrial plan is to seek out other clusters like itself and send its industrialists there to win the crucial research and development contracts that will hugely benefit our economy. Getting £l billion in six years from £3 million is good business in anyone’s book. It is a clear example of how public investment can and does attract private investment, both domestic and from abroad.

As well as the scrapping of One North East, the body that helped set up and support NEPIC, we have now seen the abrupt end to the emergency package devised for Teesside in the wake of steel job losses. It targeted jobs growth in the chemicals sector as an alternative to steel jobs. That scheme has been axed, even though it is still allocating work and has £18 million in uncommitted funds that could have been used to support and enhance the objectives of NEPIC member companies.

Now we hear that a long-standing and successful job-creation fund, which over the past decade has helped to create many hundreds of thousands of jobs in areas such as the north-east, is to be axed by stealth. That fund, the grants for business investment scheme, has been—under its own name of regional selective assistance—responsible in the north-east for pumping £112 million into poorer parts of the region and for helping to create 25,000 jobs.

[Jim Shannon]

Does the hon. Gentleman agree that we need to foster opportunities for young people, especially when unemployment among young people has reached 951,000, the highest it has ever been? One in four people between 16 and 25 years old are out of work, and there is a need to create opportunity for young people.

[Tom Blenkinsop]

I wholeheartedly agree. Indeed, the grants for business investment scheme helped deal with that problem.

In various forms and under successive Governments, the scheme has been in place since the late 1960s. It survived the Heath years, the 1970s Labour Governments and even the Thatcher and Major years and the most recent round of Labour Government. Despite differences on economic policy, all those Administrations recognised the value of regional selective assistance. It was a genuine central-local partnership, handled by the Department for Trade and Industry and then by Department for Business, Innovation and Skills’ offices in London, but its decisions were guided by a regional evaluation board made up of regional businessmen and women. A measure of its success was its crucial role in bringing Nissan to the north-east in the 1970s. More recently, it helped Teesside to secure jobs in the offshore engineering sector and underpinned the decision to rebuild the SABIC Wilton site catalytic kraken, currently the single-most important plant on the Wilton site.

What is worse, and what puts us at even more of a disadvantage, is that the scheme will close only in England; Scotland and Wales will keep it and be able therefore to compete directly with the north-east for a position of advantage. It is tragic that the scheme will go, because it will only put more pressure on the hopelessly oversubscribed and underfunded regional growth fund, which seems to be the Government’s sole contribution to regional economic growth. The RGF, which has about £300 million to allocate, has already had bids from throughout the region, from Berwick in the north to Boulby in the south, topping £3 billion.

The Government cannot keep relying on a weak pound or ignore industry’s need for direct investment in research and development and for partnership with them. I asked the Secretary of State where his influence on the feted local enterprise partnerships is in the Localism Bill. Why has he handed the European regional development fund over to the Secretary of State for Communities and Local Government?

Does the Business Secretary not acknowledge that the Office for Budget Responsibility told him explicitly that unemployment would increase as a result of his policies? Only 3% of people who have achieved work since the recession have gained full-time work. Could he not have reformed RDAs rather than destroy them, or at least asked industrialists in the north-east what they thought? Does he not find it bizarre that more money will be spent on post offices than on the entire English RGF? Why is he allowing long-term timber deals between biomass generation plants and the Forestry Commission to be undermined by Ministers in the Department for Environment, Food and Rural Affairs, who want to sell off cash-crop forests?

The Department for Business, Innovation and Skills and its Secretary of State are summed up by his magical mystery tour last year of the beam mill at Tata’s Redcar plant, which is part of the long products division, not of Teesside Cast Products, the actual plant in question. His party and his Government promised that they would not stand by while steel jobs were lost. In fact, they did more than that. At Forgemasters in Sheffield, a site where I was the union official, Labour put pen to paper when money was requested to help industry. The Secretary of State’s Government ripped it up.

When my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), the Business Minister in the previous Labour Government, contacted the former chief executive officer of Corus Europe, Kirby Adams, a personal friend of the Prime Minister and much mentioned in the leaders’ television debates, he literally put the phone down on a Labour Minister offering help.

The Secretary of State has metaphorically put the phone down on Teesside’s manufacturing, cutting almost one third of the funds set aside for the Tees valley industrial aid package. Standing idly by? No, I could not accuse him of that. Turning his back on Teesside? Yes, I could certainly say that. It was again evident when he was dictated to by his colleagues in DCLG, the Treasury and the Departments of Energy and Climate Change and for Environment, Food and Rural Affairs.

The Secretary of State’s colleagues at DECC refer to high-energy manufacturing as sunset industries. Why on earth is he allowing a rammed-through consultation on carbon price support and energy market reform with no impact assessment on energy-intensive industry in either case? Why does the consultation have a short time scale? He says he wants to take away regulation. That is utter nonsense: he is allowing far more complex and damaging regulation through that programme; and he is attacking workers, particularly those in the steel industry, who kept their patience over two and a half years when they had more than a few good reasons to take industrial action. I know, because I led them alongside colleagues, but we restrained ourselves to ensure that we had an industry in Teesside and an industry for this country.

14:24

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

In America the official unemployment rate is 9.5%; unofficially, it is 13%. Americans face the worst fiscal deficit since the slump of the 1930s, and, despite the huge fiscal stimulus package introduced by President Obama, the US economy is not producing enough jobs to reduce those rates of unemployment, let alone to create enough jobs for new entrants to the job market.

Unfortunately, our economy faces similar conditions, and, as I said in my speech during the Budget debate on 23 June last year, it is essential that as the public sector contracts, everything is done to encourage the private sector to grow as fast as possible in order to take up the necessary slack and to create desperately needed jobs, particularly among the young. At this time, small and medium-sized enterprises collectively account for 99.9% of all enterprises, 59.8% of private sector employment and 49% of private sector turnover. It is clear that our economic recovery will be fuelled by those firms, to which the Government should provide all possible help. The Government have taken a number of steps to help in doing so. They have reduced corporation tax, both large and small; increased the threshold at which employers begin paying national insurance contributions; they are consulting on reforming employment tribunals; and there is a welcome and significant increase in apprenticeships.

There are significant problems out there, however. The banks are lending to certain favoured sectors, and even in other sectors their arrangement fees have increased hugely over the past year or so, thereby increasing borrowing costs. The introduction of regulation on flexible working and paternity leave, although desirable in themselves, could have serious negative implications for small businesses, which can ill afford to lose a member of staff for a considerable time. It is vital that the Department for Business, Innovation and Skills wins those arguments with other Departments, and that business policy is ruthlessly put first.

[Julian Smith]

Does my hon. Friend agree that on family-friendly policies, which are vital for supporting the improvement of children in our country, small businesses with very few employees need to be given special attention? They are special cases, and we need to look after their needs as much as possible.

[Geoffrey Clifton-Brown]

My hon. Friend is prescient, because I was about to move on to that subject. The European Union has what it calls a “Small Business Act”, which requires the EU to look at every new regulation before it is introduced and consider its effect on small businesses to see whether very small firms might be exempted from it. We should do more of the same here.

The greatest challenges and opportunities lie in inward investment—foreign direct investment, FDI—and exports. As I identified when I was shadow Trade Minister, the previous Government’s policies on those matters were incoherent, particularly with regard to the enormously expensive regional development authority offices that were based throughout the world, often in the same city, and competing for the same inward investment to UK. Thankfully, we have put a stop to that, and I am delighted to hear that my right hon. Friend the Secretary of State is about to produce a White Paper on trade. That will be very welcome, indeed, and I am sure it will address several measures that I am going to discuss in my speech.

If the newly created local enterprise partnerships are not to have any role in FDI, presumably UK Trade & Investment will deliver the policy centrally from London, with small teams on the ground in the regions, something that I have advocated. Perhaps the Minister, when he makes his winding-up speech, will confirm that, because FDI is a vital part of the economy. We must not only seek new FDI from throughout the world, but carefully look after what we have. I was alarmed to see that Hua Wei, one of the world’s largest IT companies and based in Beijing, has just moved its European headquarters from Basingstoke to Düsseldorf. Eventually, that could affect 6,000 jobs, and the Pfizer decision today is another reminder of FDI’s importance.

[Alison McGovern]

Will the hon. Gentleman give way?

[Geoffrey Clifton-Brown]

I shall, but the hon. Lady is the last person I am going to give way to.

[Alison McGovern]

The hon. Gentleman mentions FDI and UKTI—forgive me for using so many acronyms —and their role in bringing inward investment. Will he comment on how successful centralised action to bring in FDI to regions of this country, such as the north-west and the north-east, was in the 1980s and the 1990s?

[Geoffrey Clifton-Brown]

The simple answer is that the previous Government were not as successful at doing that as they should have been, and their policies were not coherent enough.

I say to the Minister for Universities and Science that we also have to look at bringing in visas for a few very highly skilled people. The other day I visited a local plc. It employs several thousand people, but only a very few—about half a dozen—of the brightest and best people from around the world. It needs visas to get such people into this country—people who, with their ideas and innovation, can act as a multiplier for many other jobs.

Exports will be similarly vital to a growing economy. Recent estimates for the period 1996 to 2004 suggest that firms that are new to exporting experience, on average, a 34% increase in productivity in the year of entry, whereas companies that stopped exporting saw a drop in productivity of 7% to 8%. That is self-evident, because to export they have to be competitive. It is concerning that despite the weakness of the pound against the dollar and the euro, the UK’s overall monthly trade deficit on goods and services for the month of November declined from £4.1 billion to £4 billion. We need to keep a watch on that.

Only 23% of small businesses export, and those that do are often stifled by the red tape inherited from the previous Government. Some 70% of our total exports go to the markets of North America and the EU. However, estimates suggest that by 2020 the EU’s and the USA’s share of global gross domestic product will have declined to less than 40%. It is therefore vital that we give more help to small businesses wishing to export to markets outside Europe and North America, particularly the growing markets of the BRIC countries—Brazil, Russia, India and China—although many other countries out there are also growing very fast.

It was encouraging to see that last year UKTI’s budget was increased because of the Foreign Office administration programme, but its future is much less clear. I would say to my right hon. Friend the Minister that as it is about the only bit of government that makes money for the country, and it has a huge task to do, it would be folly to cut its budget.

The ministerial structure that we have at present is too fragmented. Exports and UKTI are handled by the new Minister for Trade and Investment, Lord Green. The Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey), handles the ECGD; and my golly, as my hon. Friend and neighbour, the Member for Stratford-on-Avon (Nadhim Zahawi), said, it desperately needs an overhaul, with 80%—he said 90%, which is even worse—of all its lending going to aerospace, mostly to Airbus. That is unacceptable. Other countries do much better with their equivalent bodies, and so should we. Local enterprise partnerships are handled by the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk). It is not yet clear what role LEPs will have in FDI and exports.

Export licensing is another area that we desperately need to overhaul. I have here a quote from Mark Ridgway of Group Rhodes, who says—I hope that my right hon. Friend the Minister will pay close attention to this—

“We are currently, for example, awaiting an export licence to Pakistan, for which we first applied over 3 months ago. The order will be lost before permission is granted.”

We cannot afford, as a country, to go on like this. Either the export should be refused in a reasonable space of time, or it should be allowed.

In summary, our economy is fragile. The private sector must take up the slack of the public sector. It is vital that we have a legislative and regulatory structure that is ruthlessly pro-business. We must have a coherent plan for FDI and exports, as that is where economic growth is going to come from in the future.

14:33

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

I am grateful for the opportunity to participate in this debate. South Yorkshire has a very proud history of manufacturing, which has been demonstrated in recent years by investment in advanced manufacturing on a major scale—in partnership with our two fine universities, Sheffield and Sheffield Hallam—and by the advanced manufacturing park established on the border of Sheffield and Rotherham, which boasts partners such as blue-chip companies Rolls-Royce and Boeing, and which was supported very strongly by the regional development agency, Yorkshire Forward. The very model now being recommended by the Tory-led Government is already working in practice in South Yorkshire and is succeeding entirely because of the support and co-ordinating work offered by Yorkshire Forward.

However, much of that is at risk because of the shambolic way in which this Tory-led Government are now running the Department for Business, Innovation and Skills. There is no doubt that the economy of South Yorkshire was hit hard last time the Tories were in power. South Yorkshire suffered the double whammy of the absolute decimation of the coal industry and the serious damaging of the steel industry in places such as Sheffield, Doncaster and Rotherham. Now the same patterns are emerging again, with short-termism—the enemy of manufacturing—no real plan for growth, and no real plan to help South Yorkshire companies build for a better tomorrow.

[David Simpson (Upper Bann) (DUP)]

Does the hon. Lady agree that, although we can reduce regulation and bureaucracy to help small businesses, one of the most difficult issues for them is the cost of energy? The Government have talked about the fuel stabiliser, which will be a vital component in helping small businesses at this time.

[Angela Smith]

I entirely agree with the hon. Gentleman. The Government’s current, very rushed, consultation on energy market reform could add significant extra burdens to the intensive energy-use industries that predominate in my constituency and could make them incredibly uncompetitive internationally.

Given the latest growth figures—or should I say shrinkage figures?—we need more than ever a plan for growth that invests in industry and helps to rebalance the economy away from the financial services and property speculation model that was built not by the previous Labour Government but by the Thatcher Government of the 1980s, with big bang and all the rest of it. I hear nothing about that planning from those on the Government Benches. All I hear is mixed messages and talk that is all about pleasing elements within the coalition rather than what is good for UK plc.

I know that it has been mentioned many times in this Chamber, but the story of the loan to Sheffield Forgemasters typifies all that is going wrong with the Department for Business, Innovation and Skills.

[Mr Binley]

Is the hon. Lady aware that the Secretary of State has said that he is more than happy to receive a further application from Forgemasters?

[Angela Smith]

In that case, why did he not give the loan to Forgemasters in the first place?

The damage of the withdrawal of that loan has been done. The costs have already gone up and made life very difficult for the future of the nuclear supply chain in this country. As everyone knows, the loan—yes, loan—was evaluated over a two-year period. The conclusion was that the loan made sense for Forgemasters, was good for the nuclear power industry supply chain, and was strategically important for UK manufacturing. Why, then, was the loan cancelled at the whim of Ministers and the real reasons never fully explained? We need an explanation from the Minister today. Was it because the Lib Dems—the coalition partners—do not believe in nuclear power and had to be dragged kicking and screaming into a nuclear power supply arrangement for the future? We need to know, because it has been demonstrated time and again that the money was available and was properly signed off by the Treasury. That is the crux of the problem with how the Department is being run at present. Why should any company take the risk of investing in the future of our nuclear power industry when there is no clarity from the Government on the issue? I ask the Minister to clarify what role the Department is playing in pushing the future of our nuclear supply industry in the Government’s planning for the future.

During the previous Parliament, the then Government’s industrial activism started to help key industries of the future to ensure that our economy would be better balanced between financial services and manufacturing. Unfortunately, the current Secretary of State and this Government have failed to build on that work. Yes, we have heard tough words from the Secretary of State about how he will get the banks to lend money, how he will stop the bonuses, and how he has an arsenal capable of making nuclear strikes, if necessary, against vested interests. Unfortunately, his tough words melted away with the snows of December, and his arsenal of nuclear weapons turned out to be as intangible as a Lib Dem promise—in other words, it did not amount to very much.

Even the Secretary of State has said that his plans for regional growth are “Maoist and chaotic”, and business leaders have said that the process has been badly handled. At a time when the Government tell us that money needs to be directed towards investment, they are scrapping the RDAs, at a cost of £435 million, and their replacement local enterprise partnerships are not even up and running yet. Increasingly, businesses are asking us what is happening in the meantime and where the money is for investment.

The truth is that, at a time when the regions need greater help to grow their economies, the regional growth fund represents a cut in funding from the £1.4 billion a year that was available to £1.4 billion over three years. So much for the boasts from those on the Government Benches on this issue. The fund now includes investment not only for industry and regional development, but for housing and transport—no wonder it is 10-times oversubscribed.

Now is the time for brave Ministers and brave solutions. Now is the time, as Will Hutton recently commented, to build great companies. Now is the time to make the banks work for us, and not in the interests of the bankers. Now is the time to invest in all our futures and in UK plc. Instead, we have a weak Secretary of State who cannot even hold on to his portfolio, and no growth strategy other than a crossing of the fingers and a “hope for the best”. There is a regional growth strategy that even he thinks is chaotic. He can change course—it is not too late. He can decide to invest in British manufacturing. After all, he is a Lib Dem and, as we all know, Lib Dems can change their minds and do so frequently.

14:41

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

Today has been a revelation to me. I understood that denial was a medically treatable condition, but I did not know that it was a collective condition. Today has opened my eyes in that respect. The denial is best illustrated by the shadow Chancellor’s recent statement:

“I don’t think we had a structural deficit at all”.

By golly, we have had a deficit every year since 2002. Indeed, it rose massively to the point when, in 2010, we were borrowing £1 of every £4 we spent. If that is not a structural deficit in anybody’s book, I do not know what is.

This matter is best understood by recognising the growth in public sector employment of 20%. More than 1 million new people now work in the public sector. That productivity barely rose in some areas and went down in others shows how successful that was. That is an unbelievable fact that any businessman would say is the road to bankruptcy. That is exactly what the previous Government did to this country. Thank God we had an election and a change of Government.

I will move on to other areas in which the previous Government let down British industry. First, let us consider employment tribunals. When I was in business, I stood in four tribunals and won each of them. On each occasion, I was told by colleagues, “Pay ’em.” The previous Government created an aura of commercial blackmail that is totally unacceptable. Thank God the present Government are doing something about that.

[Mel Stride]

Does my hon. Friend agree that it is essential that we do something about claims to employment tribunals, which increased by 57% in 2010? They are feeding lawyers and depriving businesses of investment.

[Mr Binley]

My hon. Friend is right. There were 236,000 cases last year—a record figure. That suggests that something needs to be done. This Government are doing something about it and I am grateful.

The cost burden of regulation on business increased by £10 billion a year under the previous Government. That money could have been used for investment, but instead it had to be spent on complying with regulation after regulation, which the previous Government had gold-plated.

[Nadhim Zahawi]

My hon. Friend has a long and respected record in business. Does he agree that there is a lack of recognition that regulation is one of the major factors that holds back small business, along with access to finance? The lack of the word “regulation” in the motion demonstrates the lack of understanding among those on the Opposition Benches of the pain of small business.

[Mr Binley]

I am grateful to my hon. Friend. I am delighted that he is a member of the Select Committee on Business, Innovation and Skills, because he brings such knowledge to it. Perhaps with his help, we can get the changes we need to ensure that small businesses thrive in this country again. They have found it very difficult over recent years.

The working time directive was introduced in 1999 and has cost businesses £1.8 billion a year. The vehicle excise duty regulations introduced in 2000 cost businesses £1.2 billion. I could go on. I refer Opposition Members to the words of David Frost, the director general of the British Chambers of Commerce:

“Businesses are facing the toughest economic environment for a generation. Company cash flow is being squeezed and unemployment is growing as a result”

of regulation.

Let us lay that at the door of Opposition Members and let them deny it.

Let us consider the plethora of schemes that the previous Government introduced with a shotgun effect. They were all good headline-catching schemes, but they forgot one thing. Often, it is not what one decides to do that matters within a given set of parameters, but the way that it is managed. Of course, the previous Government did not know anything about management, because most of them had not turned a penny in the real world in their lives. That experience is vital in understanding small and medium-sized businesses, as I can tell them and as the British Chambers of Commerce has told them. The number of companies helped by the enterprise investment scheme fell from 2,379 in 2001 to 1,073 in 2008. It ceased to be effective to a considerable degree year by year. That underlines the fact that it needed to be managed properly.

I could talk about many other areas in which the previous Government failed the people of my constituency sizeably, but I want to make one particular claim, which is supported by information in the Library, so nobody can jump up and question it. The number of unemployed claimants in my constituency rose to 3,460 under Labour. That is 7.4% of the economically active working population. In 1997, my constituency was only 440th among the 630 or so constituencies in terms of the highest proportion of claimants. It rose to 132nd under Labour. There was such a big effect in Northampton, because 94% of the people who are in the private sector work in small and medium-sized businesses. That is how much the previous Government helped my constituents.

As I have said, I could go on. I could talk about a number of schemes, but time is limited. The truth is that the manufacturing industry is beginning to grow. My town has the fastest rate of employment growth in the country. That has only happened since this Government came to power. They have created a new confidence and a new belief that we have a Government who help small and medium-sized businesses. David Noble, the chief executive of the Chartered Institute of Purchasing and Supply, said:

“UK manufacturing steamed ahead in January as the sector continues to expand quicker than even the most optimistic amongst us could have predicted. As well as improved market conditions abroad, demand in the UK market also showed signs of growth. This is the much needed kick start to 2011 everyone in the sector was hoping for. A very different picture from last year.”

That message will be repeated by small businesses in my constituency again and again. I have one plea, however: they need help from this Government, and they need more cash to help sustain the growth agenda. It is not happening, and I ask the Secretary of State to ensure that we put our money where our mouth is. If we do not, the growth agenda will be much more difficult to sustain.

14:50

[Mr Mike Weir (Angus) (SNP)]

I am very pleased to follow a typically robust speech by the hon. Member for Northampton South (Mr Binley). I assure him that I ran a small business before coming into the House, and it is small businesses on which I wish to concentrate.

Many Conservative Members have talked about what has been done for small businesses, and they have mentioned the reduction in corporation tax. That is fine, but I remind them that very many small businesses do not pay corporation tax, because they are self-employed individuals or partnerships. They pay income tax, so a reduction in corporation tax does not in fact help them. They are suffering as much as anyone else who pays income tax.

I also note that towards the end of Labour’s time in government, Her Majesty’s Revenue and Customs made the situation slightly worse by examining small companies and deciding that many of them were not real companies, because they were operated by a husband and wife. They therefore had to come back out of the corporation tax system and pay income tax again. Many people are not being helped by what the Government are doing on corporation tax, so I ask them to consider how those people can be helped.

[Lorely Burt]

I am glad to inform the hon. Gentleman that we are indeed examining a lot of those issues, particularly the vexed issue of IR35, which the previous Government did not manage to sort out. It is difficult to do so, but I am sure it is not beyond the wit of man to make tax fair for all small businesses.

[Mr Weir]

I hope that is correct—but action is needed, not just talk. The situation has been going on for a long time, and many small businesses in my constituency and rural constituencies throughout the country are in serious difficulties and struggling to keep their heads above water. They need help now, and the Government have to move on that.

The motion mainly concerns growth in the economy, which I understand, and I wish to talk about some of the things that small businesses need in order to grow. Many of the points in the motion are specific to England, but I wish to mention two matters that cover all small businesses, including in Scotland.

The Minister may know that, just today, the First Ministers of all the devolved Administrations have issued a joint declaration calling for action to protect the economy. The second point made in it is about addressing access to finance, and it states:

“It is clear that securing affordable finance remains a considerable challenge for many of our companies. This is particularly true for many small and medium sized firms—the bedrock of the Scottish, Welsh and Northern Irish economies.

It is unacceptable that many businesses are being prevented from expanding or are faced with significant increases in lending charges and we need to ensure there is in place transparency and accountability in the flow of finance for SMEs. We must also ensure that the planned £1.5 bn Business Growth Fund is implemented now to support lending to viable companies.”

That is the vital point. Many companies in my constituency are finding it very difficult to access finance, and even when they can, it is at a high cost. At a time when the Bank rate of interest is 0.5%, probably the lowest in recorded history, it is ludicrous that small businesses are having to pay ever-higher charges to banks to get finance, if they can get it at all. It is worrying to small business people to read daily in the papers that the Monetary Policy Committee is being pressed to raise the interest rate to deal with fears of inflation, because that would hit small businesses seriously.

For all the talk of making banks pay more to small businesses, there is no sign of that actually happening. The mood music from the Davos summit, which the Prime Minister and the Chancellor attended, appeared to be that the banks are not interested in that any more. They seem to think that they have got through it all and can get on with business as usual, which is totally unacceptable. The issue has to be tackled now. My constituents do not understand why so much taxpayers’ money bailed out the banks yet they are unable to get finance and help local employment. The banks have a duty to help the people who helped them when they were in trouble.

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

Perhaps I could draw to the hon. Gentleman’s attention the fact that I had a meeting yesterday with the business finance taskforce of the British Bankers Association, whose chief executive told me that its 17 initiatives to support lending are on track. Indeed, mentors are beginning to be recruited and the lending code is almost in place. The business growth fund is pretty much ready and just requires some changes in FSA regulation. I hope that that provides some comfort.

[Mr Weir]

Again, we hear, “It is almost there, it is coming”, but it is not here. Help is needed now. The Merlin process seems to have stalled—we were told that there would be announcements, but they have not come. If they do not come soon, it will be too late for many businesses.

I turn to the second point that I wish to discuss. I agree with the Secretary of State that it is ridiculous that there is no mention of the Post Office in the motion. I tabled an amendment to that effect, but Mr Speaker did not select it. I suppose that, to be honest, it is unlikely that the Secretary of State would have supported it even if it had been selected.

If we are talking about growth, we have to remember that a postal service is an engine of growth for many small companies. Many of them are very worried about it. This morning I chaired a session of the Westminster eForum at which we talked about Royal Mail’s universal service obligation. It was interesting to hear the Federation of Small Businesses say that when the Government initially talked to it about privatisation, it was given assurances that small businesses would be okay and that their interests would be looked after. However, it is becoming increasingly worried about what is happening. It points out that in April, first-class mail will go up by 12%, large letters by 13%, a 2 kg parcel by 8% and a special delivery by 8%. Worse still—I find this utterly ludicrous—a business that currently goes to a sorting centre to collect its own mail will apparently be charged £210 for the privilege of doing so. Where is the logic in that? What on earth is going on?

I urge Members to read, if they have not done so, Postcomm’s research paper “Business customer needs from a sustainable universal postal service in the UK”, which was published towards the end of last year. It makes very interesting reading about how small businesses see the postal service.

[Mr Binley]

rose—

[Mr Weir]

Sorry; I have taken two interventions.

Many small businesses continue to use the post, as they do not have the ability to get the special deals that are available from other carriers. Of those that spend between £100 and £500 a month on mail, which include the smallest businesses, 72% have either stayed at the same level of Royal Mail usage or increased it in the past year. Many businesses see e-fulfilment, as I am told we have to call it, as a way to extend and grow their business, but they need access to the postal service. Many are becoming increasingly worried, as I am, about what will happen to the universal service after privatisation. They see a reduction in service as meaning that they will be unable to access business at a reasonable cost. The changes that are already coming in show that that cost will go up and up, at a time when businesses are already suffering from fuel price increases. They have been hit all ways, and action is needed now to help them.

14:59

[Gavin Williamson (South Staffordshire) (Con)]

I share some of the incredulity of my hon. Friend the Member for Northampton South (Mr Binley) at Opposition Members’ apparent total denial of the fact that their party was greatly responsible for the catastrophic economic situation that it bequeathed the coalition Government.

I remember talking to a gentleman from a trade organisation who told me that the problem with the previous Government was that they were obsessed with presentation and constantly wanted to change the names of the Department, but did not consider the problems affecting business. I am shocked that a Department led by Lord Mandelson would be more interested in presentation, marketing and publicity than anything else.

[Mr Binley]

I am incredulous that my hon. Friend was surprised at that fact.

[Gavin Williamson]

I put it down to the naivety of youth. Hopefully age will make me wiser.

[Alison McGovern]

Will the hon. Gentleman therefore explain, for the benefit of the House, why one of the Government’s first acts was to change the name of the Department for Children, Schools and Families to the Department for Education?

[Hon. Members]

That’s what it is!

[Gavin Williamson]

As hon. Members say, the name was changed to the Department for Education because that is what it is. I am very proud that the Department for Business, Innovation and Skills is not about to change its name again for about the fourth or fifth time in as many years.

While the Labour Government focused on name and branding, they ignored the importance of our manufacturing base, which is much talked about. As has been pointed out, 4.3 million people were employed in manufacturing in 1997, but only 2.5 million were employed in 2010. That is a catastrophic decline. Opposition Members might say that there was an increase in output, but the reality is shown in OECD figures. In the industrial sector, which covers manufacturing, mining and energy production, UK gross value added was 25% in 1997—the same as in Germany. However, the figures for 2008, which are the latest figures, show that gross value added was 26% in Germany, but only 18% in the UK. That is decline in anyone’s judgment, and it is the dreadful legacy of Lord Mandelson, the Labour party and their inaction.

[Tom Blenkinsop]

Is the hon. Gentleman aware that in 1987, 26,000 worked at British Steel and Redcar Teesside Cast Products, but by 1992, fewer than 5,000 worked there?

[Gavin Williamson]

I was unaware of that but I thank the hon. Gentleman for saying so. We need a revival of all manufacturing, right across the country.

Opposition Members might say that lower corporation tax will not encourage growth, but actually, lower taxes do encourage growth. They encourage people to invest in this country, and encourage people both in this country and abroad to bring jobs and investment here.

I welcome the Government’s move to introduce the enterprise allowance, which will encourage those who are unemployed to create new jobs and to seize the opportunity to create wealth.

[Neil Carmichael (Stroud) (Con)]

My hon. Friend makes some fascinating points. I am amazed that we are talking about the machinery of government. I would like to focus on something on which the Department is doing a fantastic job: improving our skills base. That is an area that really needs attention. If he is right about manufacturing, I am certainly right that we need to ensure that we have the right people to employ in a growing manufacturing sector, and it is important also—

[Gavin Williamson]

I thank my hon. Friend for such a—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Will the hon. Gentlemen resume their seats? There is a time limit on speeches, and also a time limit on interventions—it is called “short”.

[Gavin Williamson]

Thank you, Mr Deputy Speaker. I also thank my hon. Friend the Member for Stroud (Neil Carmichael) for making such lucid points.

My hon. Friend is right about training and giving business the freedom to succeed—freedom from regulation. That is why I pay tribute to Ministers in the Department. They have introduced a one-in, one-out policy on regulations —or I very much hope they will do so shortly. I would encourage them to be bolder, and certainly to be bolder than the Labour Government, and to make that a one-in, two-out policy. Let us be bold. Let us free industry from the shackles of government.

The hon. Member for Penistone and Stocksbridge (Angela Smith) made a valid point on intensive users of energy. We must be wary of environmental regulation. If we are not careful, we will ship business from this country to countries such as Ukraine, which do not have a care for environmental regulation. We will not just be shipping carbon abroad; we will also ship jobs. I ask my right hon. and hon. Friends on the Treasury Bench to bear that in mind.

The hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) made the valid point that we need to encourage jobs right across the manufacturing sector. We must be careful with all regulation, but especially with environmental regulation.

Opposition Members sometimes seem not to accept the fact that businesses do not always want to be involved in the intricacies of government. Businesses want the freedom to get on, but they need help with financing. There is a real squeeze for many small and medium-sized businesses in getting the finance that they need. The Black Country Reinvestment Society helps many SMEs in my constituency and much of the black country, including new businesses. It uses small amounts of capital to give those businesses the opportunity to grow and expand. I encourage Ministers to look at the model to see how it can be expanded across the country.

I also encourage Ministers to look at the German model. Many German banks do not simply lend to businesses and provide mortgages and banking facilities; they actually take an equity stake in the businesses. That stake means that they have a long-term vision for those businesses. More support, rather than more interference, is what is needed in this country.

Businessmen do not want a constant dialogue with civil servants and politicians. They want and need low taxes, low levels of regulation and most important of all, a stable economy. I encourage Ministers not to think that more government will lead to more business, but to think that less government will lead to more business.

15:07

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

When times are tough, it is all the more important for the Government to have a strategy for growth. That is why the Labour Government, at a time of global crisis, invested in the economy to get it moving, with enormous benefits for our manufacturing base. The car scrappage scheme was warmly welcomed by the Society of Motor Manufacturers and Traders because 400,000 cars were built. The stimulus package in the construction industry was warmly welcomed by everyone from the National House-Building Council to the Home Builders Federation. Some 110,000 homes were built, and 70,000 jobs and 3,000 apprentices were created or saved.

The Government inherited a growing economy when they took power, but they have slammed on the brakes, and the economy has gone into reverse. Let me give three examples. First, 10% of our gross domestic product growth comes from construction. The construction industry was growing in the first half of 2010 as a consequence of the steps that Labour took in government, but in the last quarter of 2010, it fell by 3.3%. The construction industry and house builders are increasingly concerned about the consequences of the Government’s actions in respect of everything from cuts in capital investment to the scrapping of regional spatial strategies. Two hundred thousand planned homes will not now be built, which is why the Federation of Master Builders, which represents SMEs in the building industry, predicts 11,000 job losses, and why the Construction Products Association predicts a 2% fall this year.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

Is my hon. Friend aware that one of the major concerns of the construction industry is skills training and whether it will have a skilled work force for the future? Labour worked to increase the number of apprenticeships vastly, and it is welcome that the Government have made a similar commitment. However, it will not be sufficient to meet the future demand of the construction industry, especially in a low-carbon economy.

[Jack Dromey]

I agree with my hon. Friend. Representatives of the construction industry who have come to see me have said with one voice that the danger in what is now happening is that capacity is going and vitally needed skills are being dispersed and, in the event of recovery, they would no longer be available.

My second example comes from local government, which has had 27% cuts, frontloaded by the Secretary of State. The impact will be enormous, and it is already clear from the Local Government Association that 140,000 jobs will go in local government. But as PricewaterhouseCoopers has said, for every job that goes in local government, a job will go in the private sector. Local government’s procurement budget is £38 billion. Some £20 billion goes to SMEs, so the impact of these savage, deep and frontloaded cuts will be catastrophic for SMEs that depend on local government throughout Britain.

[Anne Marie Morris]

Is the hon. Gentleman aware that the Reed job index went up nine points in January, and that the growth is in engineering and construction?

[Jack Dromey]

With the greatest respect, I am not sure what planet the hon. Lady lives on. The figures on the economy are clear: the Government inherited a growing economy, but it has now stalled and gone into reverse.

My third example relates to the abolition of the regional development agencies. Thirty years ago, the midlands used to be one of the two strongest economies in the country, but it is now one of the two weakest. We had the most successful RDA, Advantage West Midlands, of anywhere in Britain. For every £1 of public money invested, £8.14 was produced in wealth in the private sector. Crucially and in addition, Advantage West Midlands managed shocks to the motor industry, such as the closure of Rover, and promoted the motor manufacturing cluster in the midlands. The cluster is 150,000 strong, from the prime companies through the components companies, the machine tool companies and the logistics companies, all the way down to the games companies with which Jaguar Land Rover is working right now on the next generation of in-car entertainment systems. That cluster, galvanised by Advantage West Midlands, was one of the key reasons why Jaguar Land Rover last year decided to commit to Britain as its global hub and to invest £5 billion over 10 years, creating thousands of jobs and bringing wealth to our economy.

[Mr Marcus Jones]

The hon. Gentleman praises the RDA Advantage West Midlands. How does he square that praise with the fact that private sector employment in the west midlands fell rather than increased during the time that this RDA was in place?

[Jack Dromey]

I believe in the real world of work and in listening to the voice of the business community. There has been widespread concern and criticism from across the business community in the midlands about the abolition of Advantage West Midlands. Indeed, Business Voice WM, on behalf of the business community in the midlands, has put forward a proposal that stresses the importance of maintaining a regional strategic structure if the success of that motor manufacturing cluster is to continue.

[Lorely Burt]

The hon. Gentleman’s experience of the business community in the west midlands is not mine. I have found that the business community has been excited about the prospect of taking its destiny in its own hands, together with elected representatives from the local authority, and creating a forward-thinking local enterprise partnership.

[Jack Dromey]

Again, with the greatest respect, I am not sure which business community the hon. Lady is talking about. All five of the organisations that represent the business community in the midlands have told me that they are determined to try to make the best of a bad job, following the abolition of Advantage West Midlands, and make the LEPs work, but they are dealing with confused and competing voices. The LEPs have no statutory basis and no funding at a time of major local government cuts. Those organisations are increasingly despairing, because they have lost what worked in favour of something that, at the moment, looks like it will not work.

I listened with amazement to the arguments which in effect said that the Government should get out of the economy and industry. Anyone who has ever had anything to do with the real world of work, here in Britain and in France or Germany, knows the simple truth that the role of good government is key to a successful economy. Time and again over the years I have worked with the private sector and engaged with the Government to try to get them to do the right thing—such as the scrappage scheme and the stimulus scheme that kept our house building industry from collapse.

In the next stages, I hope that Ministers will recognise the value of partnership and industrial activism, and will make the right decisions. Jaguar Land Rover is making applications, under the regional growth fund, on both the lightweight platform and the small engine. Investment in those will create tens of thousands of jobs in Britain. Warwick university’s proposal to become a technology and innovation centre would make it the global hub for automotive research and development worldwide and is strongly supported by Jaguar. Investment in that would greatly strengthen the motor manufacturing cluster in the midlands.

Let us not repeat the mistakes of history. It was a tragic error of judgment not to agree the Forgemasters application. If we are to see a renaissance of the nuclear industry in Britain, with British manufacturing benefiting as a consequence, we should back Forgemasters.

15:10

[Mr Marcus Jones (Nuneaton) (Con)]

It is an honour to follow the hon. Member for Birmingham, Erdington (Jack Dromey) who has a very positive outlook on the current situation. I welcome the opportunity to speak in this debate. We should not underestimate the importance of getting economic growth back into our economy. We still face difficult economic times. We must not forget that we have had the worst recession since the second world war, with six quarters of negative growth. We are now suffering from the hangover from that, and from the debt inherited from Labour.

The deficit is one of the greatest barriers to growth. My right hon. Friend the Chancellor is right to stick to his guns on his deficit-reducing strategy. The IMF agrees: it has identified that insufficient progress with fiscal consolidation in the medium term would be a key downside risk to growth. We should all remember that.

The path to growth is likely to be rocky, but we must put the building blocks in place to rebalance our economy into a more sustainable and resilient model, based on a broader spread of industry, rather than put all our eggs into one basket. We must also listen to business. Before and after the election, business was looking for three things—lower taxes, less regulation and more bank lending. Some progress has been made by the new Government and there is far greater intent than there was in the past. But there is still some way to go.

I read today’s motion with interest. It seems to hark back to a golden age in which the previous Government proclaimed the success of the RDAs. The former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), and his then Business Secretary toured the country handing out rubber cheques that no one ever mentioned in the Budget, and which could never have been cashed. Their tenure did not result in an enviable record. The RDAs were top-heavy, with £246 million spent on administration alone in 2008-09. That is not a record to be proud of. However, despite the RDA my region—the west midlands—saw a contraction in private sector employment. That does not make sense, because the RDA was there to promote private sector employment, not throw money into the public sector. Across the country we saw a reduction in manufacturing jobs of 1.8 million under the Labour Government. That is not a record to be proud of, nor is it a golden legacy; it is something that this Government have inherited and are having to deal with.

Let me turn to the coalition Government and the difficult balance that we are having to strike between dealing with the deficit and getting sustainable growth. Despite the Opposition’s rhetoric, the coalition parties do have a plan for sustainable growth. There is a common theme or thread running through many policy areas. We have the LEPs, which are far more focused and business-led. I am sure that they will not be like Labour’s talking shops, which disengaged business. In particular, the Coventry and Warwickshire LEP, with which I have been proud to associate myself, is doing a fantastic job promoting the Coventry and Warwickshire area. I look forward to the progress that it will make in future.

Nor should we dismiss the £30 billion of investment being pumped into our transport infrastructure, or the fact that the regional growth fund is bringing £1.4 billion into the economy to pump-prime projects such as those being considered at MIRA—the Motor Industry Research Association—on the A5 on the edge of my constituency, which will bring in £250 million of private sector investment and could create 2,000 jobs. [Interruption.] Opposition Members shake their heads. They obviously do not want such investments to be made. I am also encouraged by the way in which the Government have started to reduce red tape and regulation, with the one-in, one-out strategy, reducing gold-plating and introducing business mentors to help new businesses grow. All those measures will create jobs. I hope that when the Minister winds up he will elaborate on how we will expedite that process and ensure that it moves forward far more quickly.

I am also pleased that we are committed to reducing corporation tax, which we need to do to move all businesses forward. Lower taxes are a way of stimulating the economy, benefiting not just the banks, as Opposition Members have said. I am also absolutely delighted that my hon. Friend the Minister for Further Education, Skills and Lifelong Learning has introduced another 75,000 apprenticeships this year to close the skills gap left by Labour. We had to bring in labour from abroad to fill the skills gap when the economy was expanding, when we had many people here who could have filled it themselves. I have only a short time left, so I hope that when the Minister winds up he can give me more information on what is happening with bank lending, which is an extremely important part of the package. I know that the previous Government failed miserably on that, and that the new Government are grappling to get it right, but if the Minister can tell us what is happening, that would be very helpful for us to pass back to our constituencies.

To conclude, we do have a package for growth and we are moving it forward. There are areas where it needs to be moved forward more quickly—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.

15:22

[Alison McGovern (Wirral South) (Lab)]

I am sorry that the hon. Member for Northampton South (Mr Binley) has left his place, because he made quite an accusation about Opposition Members, saying that we had no insights into the world of business. I have the greatest respect for the hon. Gentleman, but I will take no lessons from a party that is led by not one but two former special advisers—especially when the only experience in industry that one of them has comes from working in telly.

I want to say a few words about growth and, briefly, about the impact on young people of the circumstances that we face. Since the election I have visited a huge number of companies in my constituency and the Wirral, especially science-led, high-tech and efficient manufacturing companies. The message from those companies is universal and clear. The thing that they want to drive the growth of their businesses is investment. The question that I am often asked is: where is the Government action to improve investment in high-tech manufacturing? There seems to be some sort of ideological opposition from the Government to backing investment. The Chair of the Business, Innovation and Skills Committee, my hon. Friend the Member for West Bromwich West (Mr Bailey), mentioned research and development tax credits, and we have seen the sweeping away of investment allowances.

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

Is my hon. Friend as surprised as I am that the Government’s policy seems to be replicated only by Romania, which is countering recession by cutting investment in universities and science, whereas everyone else is adopting a counter-cyclical investment strategy?

[Alison McGovern]

I thank my hon. Friend for that intervention. As Bill Shankly used to say, “I’m only surprised that people are surprised at the surprises.”

The Liverpool Daily Post said today:

“The scrapping of the Grants for Business Investment scheme will leave Merseyside companies seeking smaller amounts of investment aid with nowhere to turn…The flagship ‘regional growth fund’ currently only accepts applications for at least £1m—and its first round of bids was seven times oversubscribed. Local Enterprise Partnerships will have no funding.”

So if the companies in my constituency did not believe that when I said it, they have now heard it from our local media too.

[Margot James]

The hon. Lady mentioned the science base and investment. The Business, Innovation and Skills Committee heard evidence yesterday from representatives of the aerospace industry, who said that they wanted to continue to invest in the UK because of our skills base. It is not just me saying that the Government are supporting science; the president of the Royal Society has complimented the Government on recognising the importance of Britain’s standing in the scientific world. All savings from the science base will be reinvested back into science.

[Alison McGovern]

That is an interesting perspective, and I obviously have great respect for the learned people that the hon. Lady has mentioned—[Interruption.] Of course I have great respect for the Royal Society.

The Government cannot say that the corporation tax cut will enable investment. Ireland had one of the lowest corporation tax rates, and look what happened there.

[Mel Stride]

Will the hon. Lady give way?

[Alison McGovern]

I have given way twice; I will not give way again.

The corporation tax cut will help only companies with profits. We want to see strategic Government-led and business-led investment in the sectors that can most help us to progress out of the recession. I see no leadership from the Government on this issue. They constantly crow about tax cuts for business, but they have effectively handed profits back to the profitable bits of the banking sector and large companies, when they should be using that money to invest in high-technology manufacturing, such as that in my constituency. That message is coming to me loud and clear from the global corporations that invest in Merseyside, as well as from the small companies. They need investment now, not an across-the-board corporation tax cut.

I now turn to the impact of all this on young people and on employment. Everyone in this House is concerned about young people, as well we should be. People will know that in the protests that have been taking place around the world, the action has been most pronounced in countries with extremely high unemployment. We have to face the facts. The Government’s offer to young people in Britain has been massively diminished. We have seen an end to the September guarantee and an end to the future jobs fund, which I know was helping young people in my constituency to build their CVs, so that when the recession ended and growth returned, they would be able to apply for jobs. We have seen an end to the education maintenance allowance, which was helping young people in my constituency to travel to the best possible courses for them, and an end to the commitment of the previous Government to the level of funding for further and higher education.

I was so concerned about what might happen to young people’s employment prospects that I asked the Minister responsible for employment some parliamentary questions about his expectations for the number of 16 to 24-year-olds on the dole. By my calculation, once we have taken into account the population projection for the current cohort of 16 to 24-year-olds, the Government expect there to be a reduction in the number of 16 to 24-year-olds on the dole across the life of this Parliament of less than one percentage point. I must ask Government Members whether they think it is good enough that the Government’s ambition throughout this Parliament is to reduce the number of young people on the dole by one percentage point. I do not think that is good enough.

The only answer that the Government seem to have to the unemployment that young people are facing because of the global crash and the Government’s inaction is their spurious figure of 75,000 new apprenticeships. We have already heard evidence that, even during the recession, the Labour Government were supporting a greater year-on-year increase in the number of apprenticeships, so the present plan seems wholly unambitious.

There is a further problem for 16 to 18-year-olds, many of whom are the very people we want to get into industry and business. They might not want to stay in full-time education, for whatever reason. As far as I can ascertain—I stand to be corrected if the Minister wants to intervene—16 to 18-year-olds will not be eligible for the new adult apprenticeships that the Minister wants to fund.

[The Minister for Further Education, Skills and Lifelong Learning (Mr John Hayes)]

We do not have much time, so I will be brief. The hon. Lady is right that 16 to 18-year-olds are not eligible for the 75,000 extra apprenticeships, which are based on the £250 million we have invested in adult apprenticeships, but my role in the Department for Education means that I have been able to secure money to allow for 30,000 more apprenticeships for 16 to 18-year-olds, making more than 100,000 in all—the biggest boost ever in the number of apprenticeships in Britain.

[Alison McGovern]

I am glad to hear the Minister’s intervention; I have often found him to be a partner for peace on this subject. However, I still worry about investment in business and about business growth. Money might well be set aside, but we still might not see the increase in opportunities for young people that we need.

Let me leave the Minister responsible for further education and the Business Secretary with this final point. They must work with local government. In Wirral, the one thing that has made a real difference to apprenticeships and young people’s employment is the Wirral apprentice scheme. It was funded with working neighbourhoods fund money via the local authority, which meant that that small and medium-sized enterprises could access support to hire apprentices. That is the one thing that has worked. Making local government suffer the biggest cuts in any part of government is not fair, and the impact will be worse on young people. I plead with the Secretary of State and the Minister—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order.

15:31

[Brandon Lewis (Great Yarmouth) (Con)]

Over the last few years, the thing that I have heard most from business—whether it be from the Federation of Small Businesses, the chambers of commerce or individual businesses that I have dealt with in my own business, as a parliamentary candidate or, for the past 10 months or so, as an MP—is that there is too much regulation. My hon. Friend the Member for Northampton South (Mr Binley) made the point extremely well earlier, and just how much of a predicament that poses for business growth cannot be underestimated. It really does hamper too many business men, particularly those in small businesses, who spend too much of their time dealing with regulation. They spend more time dealing with that and feeding back data than they ever do developing and selling their businesses. That has got to stop. I congratulate the Government on taking steps to deal with it.

Business is unlikely to thank the Labour party or Opposition Members for tabling this motion. When business people look through it, they will find that it contains nothing positive about either this country’s business or what the Labour party suggests should be done about it. Perhaps we are back to the original blank sheet of paper; I suspect that it will stay like that for some time yet.

What business is more interested in is not the clunking fist of Whitehall that pulls a lever and delivers a box that it has to fit into—through some fictionally created regional development agency that was simply not delivering—but the opportunity to develop its own destiny. In my area, for example, the New Anglia local enterprise partnership is excited about the opportunities available for Norfolk and Suffolk businesses to work together. It is something that they desired, which they brought forward themselves, and it is led by the business community. This is not a Government quango or something directed from Whitehall, but something that the businesses want, working on issues that they want to work on. That is hugely important to the LEP. It is why organisations ranging from Adnams and the Federation of Small Businesses to the energy industry and companies such as Lotus are excited about what this can deliver. It has been fantastic to see businesses working together, and with local authorities, to deliver the LEP for our area.

The key is the “L” in “LEP”—local. The LEP can look at what Norfolk and Suffolk want and need. That is why it is able to focus correctly on tourism, for example, or other industries that can create jobs and develop the economy more quickly and more cheaply than almost anything else. Energy, as I say, is also hugely important to our region. The energy industry in our area is represented largely by an organisation called the East of England Energy Group, which brings together private companies, which fund it, support it and work together within it. The LEP has recognised that and is working with the energy industry.

One important shortage is skills. There is a huge gap between the demand for skills in the energy industry—we have a burgeoning energy industry, with even more to come from renewable energy and wind farms—and what is currently available. That is why I congratulate the Department and the Minister for Further Education, Skills and Lifelong Learning on the great work already done. As we have just heard, they are now delivering more than 100,000 apprenticeships for various ages. Potentially even more important is the fact that colleges will have the freedom to develop the skill sets that people need in their local areas to deliver for business.

The energy industry in my region has been screaming out for some time, but it has not been telling me about the great work that the RDAs were doing or thanking the previous Government for what they did. It has been saying, “We need freedom from regulation, and we need to be able to develop skills for the future.” I urge the Minister and his Department to view carefully and sympathetically the bid from Norfolk and Suffolk for a skills centre that would focus particularly on the delivery of skills for the energy industry.

The Government’s moves to free up colleges, create apprenticeships and invest money are enabling us to develop the skill sets that our country, and in particular my region, needs. It is that development of skill sets that will deliver growth, and it is that education and those apprentices that will enable our economy to develop. I congratulate the Department, and our Government as a whole, on the fantastic work it is doing in that regard. It is just a shame that the Opposition seem to have no ideas of their own to take us forward.

15:35

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

As only a few minutes remain before the winding-up speeches, I shall be able to make only a limited number of points. I pay tribute to my right hon. Friend the Member for Wolverhampton South East (Mr McFadden), who summed up the Department’s current problem succinctly. Its problem is that it focuses on commentary and has no focus on delivery. It is a backward-looking Department.

Something obviously happened to the Secretary of State, once a great champion of intervention, during his transmogrification as he took public office. [Interruption.] My hon. Friend the Member for Wrexham (Ian Lucas) suggests that the Secretary of State’s political motives may have changed. In any event, he lost all sight and knowledge of the role that stimulus can play in our economy, and returned to the laissez-faire approach that his new-found friends have always adopted. He has no plans for growth. He ran through a number of analytical critiques of the previous Administration, but at no point did he reveal a strategy of his own to boost jobs and growth in our economy. That is a great pity.

I shall make two points in the short time available to me. The first concerns the economy beyond Twickenham—the economy that exists out there in the rest of the country. Notwithstanding all the criticisms that Government Members may make of regional development agencies in their particular form, it was not necessary to put in the bin all the programmes, grants, loans and interventions and all the legal powers that were at their disposal at such a critical time for growth in our economy. Unfortunately, our growth rate does appear to be faltering. I am not sure that that can be attributed entirely to such measures as the scrapping of RDAs, but there is no doubt that RDAs brought with them an acumen, and an ability to intervene and engage in dialogue with business, that we are missing as they begin to wind down.

Others have mentioned schemes such as the grant for business investment and regional selective assistance, which invested a significant amount in about 50 companies in Nottinghamshire and created an enormous number of jobs. Every pound that was invested produced £9 worth of growth. I urge the Department to think again about its lack of regional growth policy: it is essential that they return to that mode.

The second point that I wish to raise in the couple of minutes that I have left relates to the Department’s failure to tackle the banking crisis properly. Only about 12 months ago, the Secretary of State made a number of fine promises to the country. He said that he would insist that bankers were transparent about executive remuneration. Just 14 months ago, he told the Daily Mail that it was “a small advance”—I believe that he used the word “whitewash”—to make executive pay of over £1 million transparent purely on the basis of the numbers involved. That, he said, was a puny act. He said:

“Shareholders who own the banks and the taxpayers who guarantee them have every right to know who is being paid how much and for what… Directors of public companies are already required to declare their earnings… The failure of Walker to grasp this is compounded by Alistair Darling’s meek acceptance of his recommendations. There are splits in the Government… Taxpayers sign the bankers’ bonus cheques – so we must see the names and numbers on them.”

The Secretary of State’s own words are coming back to haunt him. It would be tragic if his emasculation in government meant that his diminishing power slipped further as he moved down the Cabinet table. It is important that he meets that weakness test. I hope that he will find a way to strengthen his position in government and take some action on the basic measures that we need to increase transparency in our economy.

15:39

[Ian Lucas (Wrexham) (Lab)]

The shortness of time available means that I will not have the opportunity to refer to all Members in my summing up of this debate. It has become better humoured as it has progressed and although that is perhaps unusual, I hope that it will continue. I particularly thank my hon. Friend the Member for West Bromwich West (Mr Bailey), the Chair of the Select Committee, for his contribution, which made mention of Sir Richard Lambert’s statement that the Government have “failed to articulate” their vision for growth. That was the case before his speech, but I regret that they have failed to articulate their vision for growth again today. My right hon. Friend the Member for Wolverhampton South East (Mr McFadden) made a particularly valuable contribution, pointing out that £2.8 billion has come out of capital allowances for manufacturing industry and £2.7 billion has gone into the rest of the economy, including a tax cut for bankers. Bankers were mentioned regularly in the debate.

The hon. Member for The Cotswolds (Geoffrey Clifton-Brown) made an interesting contribution, in which he referred to investment and the issue of visas. That continues to be a problem, notwithstanding the efforts that the Secretary of State has made. The important issue of foreign direct investment was also raised. The hon. Member for Angus (Mr Weir) made the valuable point about individuals and partnerships that do not pay corporation tax and therefore do not benefit from tax cuts of that nature. We need to examine ways in which those individuals and partnerships can benefit from support. Investment in business is very important indeed, a fact stressed by the hon. Member for South Staffordshire (Gavin Williamson) in a valuable contribution. I particularly enjoyed the contribution from my hon. Friend the Member for Wirral South (Alison McGovern), who introduced Bill Shankly into the debate. I have to say that the late, great Bill Shankly’s views on economic growth were much more coherent than the Secretary of State’s.

Last week’s growth figures were truly shocking. When Labour left office, growth was increasing and unemployment was falling. The net result of this Tory-led Government’s policies has been to create conditions where the economy has contracted and unemployment is rising. In 2008, the Labour Government faced the most severe world economic crisis since 1929. Their response was to introduce a number of policies to support industry and jobs, and they acted fast. They gave business more time to pay taxes. They introduced an enterprise finance guarantee scheme to assist lending to business, and a car scrappage scheme to support our automotive industry at its most difficult time. They also used Train to Gain to help businesses to invest in training. Not one of those initiatives was opposed at the time by any of the parties now on the Government Benches; on the contrary, the criticism that I received at the Dispatch Box was that our Government were not spending enough money fast enough. So all the tears that we see at the moment do not reflect the position of the parties now on the Government Benches when they were in opposition.

As well as providing effective help fast in the short term, Labour’s active industrial strategy helped to create the right conditions for industry to grow—that growth was the legacy of the Labour Government to this Tory-led Government. We married research with industry to create the right conditions for investment. We got investment from Nissan and Toyota in low-carbon vehicles, and from Clipper in offshore wind. We obtained investment and support for institutions such as the National Composites Centre in aerospace, with companies such as Airbus, AgustaWestland and GKN plc being involved. That response was led by a Business Department that was at the heart of government when it needed to be. Growth took place and the deficit, about which we have heard so much from those on the Government Benches, came in £20 billion less because of the action taken by business and by Government to reduce the crisis that faced this country in 2008.

Let us contrast that with the lack of urgency and complacency of this Government. In their hallowed coalition agreement, they said that they needed “to take urgent action”, but they have not done so. Nine months on, we have no major loan guarantee scheme and no effective proposals to ensure a flow of credit for SMEs. That point has been made across the House and it is about time Government Front Benchers started to listen. The only step that they have taken on finance is to extend the Labour enterprise finance guarantee scheme. We have had no growth White Paper, and the Maoist and chaotic establishment of local enterprise partnerships means that those who should be working to bring jobs to British industry are looking for jobs themselves. The university sector that is so crucial to our long-term future is, after a decade of increased investment, wrestling with the consequences of an 80% cut in its budget.

At a Federation of Small Businesses dinner last night, I was asked, “What has happened to the one-in, one-out rule?” What are the Government doing about it? We have had the soundbite, but when is the policy going to be implemented? That is what businesses are asking me. The Secretary of State was at the dinner last night, so I hope he heard that, too. I was talking to people from the chemical industry yesterday and they told me about the negative impact on business of the Government’s new visa regulations. Similarly, research from the Federation of Master Builders tells us that the VAT increase will cost 7,500 jobs in the construction sector alone. That is the sort of contribution that the Government are making to industry at this time. As the Secretary of State has said today, increased taxes cost more jobs than cuts in expenditure. That is absolutely right, so why did he increase VAT?

To cap it all, responsibility for one of the most successful and important industrial sectors in the United Kingdom—telecommunications—has been transferred out of BIS because of the Secretary of State’s incompetence. This very morning, I was asked by telecoms representatives if the sector will be transferred back to BIS when the Secretary of State leaves. Perhaps he can answer that. There is no clearer symbol of the diminution of the Department than that transfer of responsibility for a major sector of the industrial economy. It is a disgrace and it will have a detrimental effect on British business and British industry as a whole.

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

Will the hon. Gentleman give way?

[Ian Lucas]

No, I will not give way.

The Department for Business, Innovation and Skills is at the margins at the very time when it needs to be at the centre of Government policy—and it loses battles. It has lost a battle with the Department for Communities and Local Government about planning, it has lost a battle with the Home Office over visas and it has lost a battle with the Treasury on banks. It is a Department diminished in influence and it is failing and letting down business. For the sake of British industry it needs to change and it needs to change fast.

15:47

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

What a dismal picture of the business of government the hon. Member for Wrexham (Ian Lucas) has just painted. He thinks that all we should ever do is wage war with our own colleagues in order to raise the growth rate. That might be how the Labour Government functioned, with everyone having to fight their own corner against all the other Departments, but it is not how the coalition Government function. We all work together on an agenda to sort out the mess we were left by the previous Labour Government and the only way we can sort out a mess that big is if all the Departments share the same agenda—and we absolutely do. That agenda has business and being pro-business and pro-growth at its heart.

Let me take hon. Members through the measures we are introducing that are aimed absolutely at backing British business and raising our growth rate. For a start, we are reforming corporation tax, bringing the main rate down from 28% to 24%, making it one of the lowest rates in the advanced western world. We have already eased the burden of national insurance on British business by £3 billion and we are specifically helping small businesses. Several colleagues, including my hon. Friends the Members for Brighton, Kemptown (Simon Kirby), for Northampton South (Mr Binley) and for South Staffordshire (Gavin Williamson), have raised the issue of small businesses, to which we are committed. There is the scheme that the hon. Member for Wrexham mentioned, which we inherited from Labour—the enterprise finance guarantee scheme—which helps small businesses. We have put an extra £600 million into it so that there is extra lending to small businesses. In addition, we have created the new enterprise allowance scheme, aimed at helping unemployed people to get work as self-employed. Of course, we know that one of the biggest problems that small businesses face is the burden of employment regulation, which is why we are committed to reforming employment tribunals—to give small businesses confidence to take on new staff.

Of course we are committed to bringing down the burden of red tape. We are absolutely committed to the one-in, one-out rule, and we are also ending the gold-plating of regulations from Brussels that add completely unnecessary burdens to British business. We are committed to well-balanced regional growth, which is why we already have 28 local enterprise partnerships going. They already represent two thirds of all businesses across the country. There is a regional growth fund with £1.4 billion to invest on excellent projects across our regions.

Yes, we are absolutely backing growth and we are tackling the fundamental weaknesses that we inherited from the Labour Government, such as insufficient investment in infrastructure. That is why we have produced a national infrastructure plan, with a green investment bank and £1 billion for energy-efficient investment, with more to come as asset sales come through.

We are committed to trade and to ensuring that Britain is open for business. I can tell my hon. Friend the Member for The Cotswolds (Geoffrey Clifton-Brown) that we absolutely understand that and we will be setting out in our trade policy White Paper, which is due very soon, the overall framework of trade policy. We do not believe that LEPs should automatically be held responsible for trade policy. Inward investment will be a responsibility of UK Trade & Investment, but if LEPs wish to work with UKTI on that, they are welcome to do so.

[Mr Tom Harris (Glasgow South) (Lab)]

Will the Minister give way?

[Mr Willetts]

No, I shall try to make progress.

We have taken a deliberate decision to focus our trade activity on the big, growing economies of the future—Brazil, Russia, India and China. My right hon. Friend the Secretary of State has already personally led trade missions to all four of those growing economies—crucial markets for the future. So yes, we are absolutely battling for Britain in trade talks.

[Geoffrey Clifton-Brown]

I made this point in my speech: we should be concentrating not only on the BRIC countries, but on other fast-growing markets such as Indonesia and Turkey, and I seek the Minister’s assurance that we will do that.

[Mr Willetts]

I intend, time permitting, to go to Indonesia, where we have some specific trade objectives, and I think the Secretary of State plans to be in Turkey, so we recognise those countries’ importance. All of us, working with Lord Green in the other House, have trade promotion at the top of our agenda for this Government.

I have referred to the burden of tax, the burden of regulation, our support for small businesses, infrastructure and trade. There is also the crucial investment in the skills that we need for the future. Again, we inherited a mess from Labour. Many Members on both sides of the House will remember the disappointment when further education colleges, having had their hopes raised that there would be billions of pounds for capital projects, found that the money ran out. Labour’s problem with further education was that the money ran out even before the election, so Labour Members were holding the baby. They know the situation they left us.

[Mr Harris]

The Minister has outlined the impressive growth strategy being pursued by this Conservative-led Government, which has resulted in a 0.5% contraction in the economy. What would that have looked like without his growth strategy? What would have been the result if we had been deprived of that strategy?

[Mr Willetts]

We do not know what would have happened to the British economy if the Labour party had been in office, but I tell the House that if Labour had carried on borrowing in the way it was, we could well have faced a crisis of the kind that happened in Ireland, Greece and Portugal. We will never let Labour Members forget that they were taking Britain to the brink of that type of financial crisis. We have taken our country away from it.

I was about to refer to the investment that we are also making in skills, with support through the capital renewal fund for our FE colleges, steered by my hon. Friend the Minister for Further Education, Skills and Lifelong Learning, and a commitment to 75,000 extra apprenticeships. We can already see the impact of our commitment on apprenticeships: in the first quarter of the year, we had 120,000 new apprenticeship starts, while a year ago, at the same moment, the figure was 100,000. Extra apprenticeships are already coming through because of our practical commitment to vocational training.

Alongside vocational training, of course we recognise the continuing pressure on our universities. That is why we had to reform their financing. Had we not done so, we would have faced reductions in the number of university places or reductions in the financial support for each student at university. Instead, we have been able to maintain our commitment to 10,000 extra places at university and urge universities, with requirements to back this up, to focus on the employability skills of their students. When people emerge from university, they should have had practical experience of the world of work already, so we are focusing on skills and universities as well.

We are protecting the budget for science and research and enabling important capital projects to go ahead, such as the UK centre for medical research and innovation at King’s Cross. We are taking practical steps to ensure that we can enjoy the benefits of our excellent research effort—speeding up the process of getting a patent and intellectual property protection, which can be too slow. Yes, we are backing research and development, and we are backing the technological application of that by encouraging our new technology innovation centres.

It was a great disappointment when we had the news from Pfizer. I met the global chief executive officer and the UK chief executive of Pfizer on Monday 24 January, when they informed us in strict confidence of their intention to close the Sandwich plant. We did, of course, press them on their decision. They made it clear that it was a decision based on global strategic considerations by the company as a whole, as it moved away from some of the lines of research in which Sandwich specialised. They made it clear that it was not because of any disagreement that they had with this Government’s economic policies.

Since then we have been in close contact with Pfizer. I have asked Paul Carter, the leader of Kent county council, to lead a local task force on the matter. The Secretary of State and I will be working hard to try to find innovative alternative uses for that excellent research facility and to back the very skilled people there.

We are doing all this against the background of a serious financial crisis left for us by the previous Labour Government. The shadow Secretary of State, the right hon. Member for Southampton, Itchen (Mr Denham), said, “There are no deficit deniers” on the Opposition Front Bench. He was able to say that only because the shadow Chancellor was not sitting beside him at the time. We know that deficit denial is one of the fundamental problems that the Labour Opposition face if they are ever to become a credible party of government again.

Although the shadow Secretary of State said that he was not a deficit denier, he went on to say that the large deficit had arisen because of the banking crisis. Britain was running one of the worst structural deficits of any advanced western country before the banking crisis. One of the tests of whether people recognise the seriousness of the challenge that they face is their willingness to accept that that was the problem. If they do not accept that that is the problem, they are deficit deniers. It is as simple as that.

Then the right hon. Gentleman seemed to fail to recognise the wide range of business leaders in Britain and elsewhere who have backed our policy to tackle the deficit. He went on to say that we just blamed the snow for the economic problems that we faced. Okay, I will do a deal with the shadow Secretary of State. We do not just blame the snow; we blame the last Labour Government.

It was the last Labour Government who got us into this mess. They left us an economy with the worst deficit, unsustainable spending, the most leveraged banks, the biggest housing boom, unsustainable levels of personal debt and personal saving negative—almost unprecedented in any advanced western country. That is the mess that they left us. That is what we have to sort out. Already, working with the Secretary of State, we are putting in place a growth strategy to emerge from the mess.

My right hon. Friend the Secretary of State was one of the most eloquent and effective people in warning about the mess that Labour was making of our economic situation. He warned about the level of debt. He was quite right to do so. Now, the present Government must tackle it. It was those on the Labour Benches who left the patient dangerously ill. Now they complain as we, sadly, have to deliver the treatment.

Question put.

15:59

Division 187

Ayes: 245

---

Labour: 230
Democratic Unionist Party: 5
Scottish National Party: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2

Noes: 323

---

Conservative: 274
Liberal Democrat: 48

Public Forest Estate (England)

Wednesday 2nd February 2011 Commons Chamber

[Madam Deputy Speaker (Dawn Primarolo)]

I have to inform the House that Mr Speaker has selected the amendment in the name of the Prime Minister.

16:13

[Mary Creagh (Wakefield) (Lab)]

I beg to move,

That this House believes that the Government’s intention in the Public Bodies Bill to sell off up to 100 per cent. of England’s public forestry estate is fundamentally unsound; notes that over 225,000 people have signed a petition against such a sell-off; recognises the valuable role that the Forestry Commission and England’s forests have made to increasing woodland biodiversity and public access, with 40 million visits a year; further recognises that the total subsidy to the Forestry Commission has reduced from 35 per cent. of income in 2003-04 to 14 per cent. of income in 2010-11; further notes that the value of the ecosystems services provided by England’s public forest estate is estimated to be £680 million a year; notes that the value of such services could increase substantially in the future through the transition to a low carbon economy as a carbon market emerges; notes that the public forest estate has been retained in Scotland, Wales and Northern Ireland; and calls on the Government to rethink its decision on the sale of England’s public forest estate in order to protect it for future generations.

The countryside is on the move against the Tory-led Government’s plans to privatise England’s forests. People are furious about this environmental vandalism. The Government’s impact assessment shows us that it is economic madness, too. The Government are carrying out a hatchet job that destroys the funding model which has protected England’s forests for nearly 100 years. If the commercial timberlands are sold, the ancient woodlands starve. The true value of England’s forests cannot be measured by the price that the Government will get from selling them.

[Bob Russell (Colchester) (LD)]

Will the hon. Lady inform the House when she first discovered that the last Labour Government sold by stealth thousands of acres of forestry land?

[Mary Creagh]

I am delighted that the hon. Gentleman has raised that issue, because we can put paid to the lies about it. Under the last Labour Government, there was a net sale of 4,000 hectares in England. We sold 9,000 hectares and bought 5,000 hectares. We expanded community access to the forests. The money was recycled back into the forests, and did not go to the Treasury.

[Helen Jones (Warrington North) (Lab)]

Will my hon. Friend confirm that the policy of the last Labour Government involved selling off some woodland and reinvesting the proceeds in areas such as mine to create woodland in urban areas such as the Mersey forest?

[Mary Creagh]

I am delighted by my hon. Friend’s mention of the Mersey forest, where 1 million trees were planted in and around her constituency.

How did the Government get this so wrong? Over the summer, the Secretary of State for Environment, Food and Rural Affairs rolled up her sleeves and took the axe to her own Department. She cut the Department for Environment, Food and Rural Affairs by 30%—the biggest cut of any spending Department. There are cuts to flood defence schemes, and nature reserves are next on the transfer list. England’s forests were slipped into the Public Bodies Bill in the bonfire of the quangos. However, she was seeking not a bonfire of the quangos, but the power to sell off all England’s forests.

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

If the hon. Lady is so opposed to this Government taking the powers in the Public Bodies Bill, why do the Labour-led Welsh Assembly Government want the same powers?

[Mary Creagh]

The right hon. Gentleman makes a point about the future—[Interruption.] My question back to him is what is happening to the future of forestry in this country under his Government? If they take the heart out of the Forestry Commission model—take away what is happening in Scotland and Wales—they will effectively destroy the system that has protected the national forests for 100 years.

[Albert Owen (Ynys Môn) (Lab)]

My hon. Friend said that England is on the march. Wales is on the march as well, going by the number of Welsh people who have written in to safeguard England’s forests. However, they do not just visit those forests. To answer the Minister of State, the Welsh Assembly Government want the powers to safeguard Welsh forests against this very measure. They fear that Welsh forests will be rolled into the Bill that has been mentioned.

[Mary Creagh]

The Public Bodies Bill, which was introduced in the Lords in October, gives the Government the power to sell the lot—1,500 woods and 258,000 hectares. It is the biggest change in England’s land ownership since the second world war. This is not the first time that the Tories have sold England’s forests. After introducing the Forestry Act 1981, they sold off 72,500 hectares in three years. Let their actions then stand as a warning to us today.

[Paul Farrelly (Newcastle-under-Lyme) (Lab)]

I declare a passing interest: my wife was born in the Forest of Dean and my constituency town takes its name from the old Lyme forest along the Cheshire and Staffordshire border. Does my hon. Friend agree that the strand that links this policy with all the other policies for which there is no public mandate is the pretence that debt and borrowing are worse than was expected before the election? Does she agree that that is a pretence and that it does not justify this further act of public vandalism?

[Mary Creagh]

Absolutely; I am grateful to my hon. Friend for that point.

Let us look at the maths. The Forestry Commission costs each of us 30p a year. Our ancient trees, worshipped by our ancestors as a source of food, fuel and shelter, will go in this sale of the century. The Secretary of State wants to finish a task that proved too much even for Mrs Thatcher.

[Mr Paice]

How many acres of ancient trees?

[Mary Creagh]

The Minister asks how many acres of ancient trees we have. The answer is that he does not know, because I met Forestry Commission officials this morning, and they told me that the mapping tool that the Government are using has excluded sites of special scientific interest. [Interruption.] The Minister should perhaps talk to his staff a little more. I have been talking to a lot of them, and I have not met a single one who supports his plans.

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

My hon. Friend refers to the countryside being on the march. Is she aware that in Islington South, where we have the smallest amount of green space in the whole of England, I have had 323 letters on this issue? They are our trees too.

[Mary Creagh]

I am grateful to my hon. Friend. Perhaps I should have said that the country is on the march.

The Secretary of State did not reckon on the campaigns against these plans, both national and local, which have united people from across the political spectrum. Some 360,000 people have signed the “Save our Forests” petition—the largest public protest since the Government were elected.

[Geraint Davies (Swansea West) (Lab/Co-op)]

Does my hon. Friend agree that Lloyd George, who set up the Forestry Commission in the previous Tory-Liberal Government in 1919, would turn in his grave at the thought that this coalition was selling off England’s forests and leaving only Wales and Scotland to manage and own our public land and forests?

[Mary Creagh]

I am sure he would be spinning in his grave.

I turn to the consultation document that the Government published last week. I have read it, unlike many Government Members, and it rewards reading. It raises more questions than it answers. There are a lot of warm words in it about communities instead of the Forestry Commission managing forests, yet on page 33 there is a harsh reality:

“Any sale would be at the open market value”.

Forests currently sell for between £3,000 and £6,000 a hectare. I will give way to any Government Member whose community can afford to compete with the private sector to buy up thousands of acres of woodland. [Hon. Members: “Come on!”] No takers?

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

rose—

[Mary Creagh]

Oh, we have one!

[Dr Coffey]

I thank the hon. Lady for her challenge. It is not in my constituency, but the community did indeed come together to purchase Bradfield woods.

[Mary Creagh]

My question is this: was it at full open market value? That is the question to which we shall return.

Page 13 of the consultation document contains more warm words about public access. However, although the Countryside and Rights of Way Act 2000, introduced by a Labour Government, provides pedestrian access to 90% of the freehold area of the public forest estate, 20% of the estate is leasehold, so CROW rights there depend on the lease. The document warns:

“So-called ‘higher rights’, such as cycling and horse riding, have not been dedicated.”

Ministers talk of conditions in leases, but if they lease land for 150 years, who will enforce the leases a century from now? The public forest estate makes up 18% of the woodland in England but accounts for nearly half the publicly accessible woodland. That tells us all that we need to know about public access to private woodlands.

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

Does the hon. Lady think that the Woodland Trust and the National Trust will or will not be able to compete in the free market to purchase important forests?

[Mary Creagh]

The National Trust has come out this morning and said that the Government’s plans are absolutely no way to manage the public forest estate—I do not know whether the hon. Gentleman has seen the news today—and the Woodland Trust has a big petition on its website saying, “Save our forests”. He needs to look at what they are saying. They will not pay their members’ subscriptions to the Treasury to buy something that we already own.

[Hugh Bayley (York Central) (Lab)]

Literally hundreds of my constituents have written to me saying that something must be done to stop the sale. On Saturday week I am holding a public meeting to discuss—[Interruption.] The Minister of State may laugh, but we will be discussing how they can respond to his consultation. Will my hon. Friend come to York on that day to meet people and hear what they have to say?

[Mary Creagh]

I thank my hon. Friend for that invitation. I shall certainly make the journey to York to hear what his constituents have to say, and I hope that Ministers go out and listen to what the country has to say on the matter.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

The hon. Lady mentioned the Woodland Trust. Does she agree with its chief executive, who told Radio 4 last week that:

“Public ownership is not delivering full protection…it is not as simple as saying that public ownership is better”?

Does she agree that different forests need different types of ownership structure?

[Mary Creagh]

Different forests are already under different sorts of ownership—the public forest estate makes up 18% of England’s woodlands. The question is what the nation values and for what we are prepared to pay.

[Clive Efford (Eltham) (Lab)]

Oxleas wood in my constituency is a sight of special scientific interest and has a great deal of biodiversity. It is small wonder that those on the Government Benches understand nothing about biodiversity, because under the previous Tory Government we came together and fought to save Oxley woods from a six-lane motorway that they wanted to build. We did not succeed by buying the woods, but would it not be invidious if the only way to stop such development under this rotten coalition was people subscribing to buy them?

[Mary Creagh]

My hon. Friend makes a very interesting point and brings us back to the question of money.

Who will pay to look after England’s forests? Page 17 of the consultation document has many warm words on the English woodland grant scheme. It says that any new owners could apply to create new woodlands and to care for existing ones. However, that document must be read in conjunction with a much more serious one—the impact assessment, page 39 of which states that payments under the woodland grant scheme

“may not be sufficient to secure the level of public goods currently provided on the PFE.”

[Tim Farron (Westmorland and Lonsdale) (LD)]

The hon. Lady makes some good points. Does she agree that this Government could learn lessons from the mistakes of the previous Government, of whom she was a member? Rigg wood in my constituency was sold off under the Labour Government, and as a result, public access has now been restricted. Would it be right for this Government to think carefully about how we protect public access to our forests, whether publicly owned or otherwise, given that her Government failed so badly?

[Mary Creagh]

Let us go back to the numbers. We sold off 9,000 hectares and bought 5,000. The Government whom he supports—I am grateful that he is backing our campaign on this issue—will sell off more land in the next year than the previous Labour Government sold off in 13 years, and they will do so without giving any guarantees whatever on public access. Government Members should think on that and reflect on the 40,000 hectares that are going in the sale of the century.

Page 18 of the consultation document states that

“significantly increasing woodland cover across the UK would be a cost-effective way to help with both climate change mitigation and adaptation.”

When I met Forestry Commission staff, they told me that they estimated that the future value of biomass and wind power on the public forest estate could be as much as £75 million a year. Perhaps Government Members can tell the House how the sell-off will increase tree planting if there are not enough grants to go around.

I recently met free miners and verderers from the Forest of Dean. They told me that it costs £500,000 to look after their forest, and that it brings £100 million to the rural economy. They want their questions answered. Who will run the forest? What would happen if the much-vaunted charitable trust collapses? How would their commoners’ rights be protected in any transfer? The New Forest costs the Forestry Commission £2.9 million to run. How will that money be raised in perpetuity? I shall answer that question for the House: the money will be raised through increasing parking charges, by closing toilets and by reducing spending on wildlife management. That is not my view, but the view expressed in the Forestry Commission’s staff consultation, which was published today and which lays everything out for us in black and white.

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

The Forestry Commission currently manages all our forests to the Forest Stewardship Council standard, which is well above the base legal level, and does so at a cost of about 30p a year to each of us, which is a pretty good bargain.

[Mary Creagh]

That is a very interesting point and one that I was going to make later. As the hon. Lady has raised it, however, I will address it now. All the timber is responsibly produced, but in an answer on 17 January, the Minister of State said:

“Certification under the UK Woodland Assurance Standard is voluntary and this will be a decision for the new owners of woodland…The consultation…will include proposals on how certification might be maintained.”—[Official Report, 17 January 2011; Vol. 521, c. 471W.]

[Mr Desmond Swayne (New Forest West) (Con)]

There are no car parking charges in the New Forest, but there are car parking charges in plenty of other Forestry Commission forests. It is entirely a local matter.

[Mary Creagh]

I am interested that the Prime Minister’s Parliamentary Private Secretary—who has been writing some interesting blogs about strawberry jam and other matters—is perhaps feeling the pressure from his local community on this issue—[Interruption.] Do wooden pips and strawberry jam ring any bells? That is a sign of someone who is under a great deal of pressure. One thing that we can guarantee the hon. Gentleman’s constituents is that if this sale goes ahead, they will be paying for car parking.

[Several hon. Members]

rose—

[Mary Creagh]

I wish to make a little more progress, and then I will give way.

Page 20 of the document talks about experience from other countries and cites the privatisation of forests in Russia and central Africa, and the need to tailor our approach to the national context. I am still trying to work out—perhaps the Secretary of State will be able to tell us in her speech—in what ways England’s national context is similar to that of Russia or the Democratic Republic of the Congo, whose economy has been shattered by seven years of war and where one in five children die before their fifth birthday—[Interruption.] It is a country that I have visited and about which I care a great deal. I care about the natural timber resources of the Congo and I know that the Government give money to protect them, but the Congo is not the model that we should use as an excuse for privatising our forests.

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

Is not the point that many of us would be happy to chain ourselves to trees and forests, but not to the structure and jobs of the Forestry Commission?

[Mary Creagh]

I do not know what the hon. Gentleman has got against those dedicated public servants, but when I met them they were very concerned about the 270 jobs that will go instantly in the Forestry Commission and about how woodland will be managed with 25% fewer staff. They were concerned about how national diseases, such as sudden oak death, will be managed and about the loss of a critical mass of expertise from the Forestry Commission. The hon. Gentleman derides that concern as if it were all about jobs for the boys and girls. It is not: those workers care about the forests, which is more than can be said for the Conservatives.

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

I am glad that we are talking about the jobs of those who work for the Forestry Commission. Although we are talking about forests in England, jobs throughout the UK are at risk. There are several hundred staff at the former UK headquarters in Edinburgh, many of whom live in my constituency and are very worried about the future. They have told me that between 400 and 600 jobs in Scotland depend on the link with the English Forestry Commission and they are very worried about the future because of the Government’s proposals.

[Mary Creagh]

Yes, we risk a cross-infection of job losses across the Forestry Commission estate with these proposals.

It is not only Forestry Commission staff who are worried. David Sulman, executive director of the UK Forest Products Association, called the proposals

“a recipe for disaster. If these leasing plans go ahead, thousands of jobs in the forestry and forest products sector will be put in jeopardy; many businesses could be starved of their wood supply and would face closure as a consequence.”

There is no plan for rural jobs and growth here.

The consultation is full of holes. The Government talk about the big society, but the Forestry Commission and its communities are the big society. The Department’s impact assessment shows that the costs will outweigh the benefits. There is no mandate for this. The coalition agreement promised

“measures to…promote green spaces and wildlife corridors in order to halt the loss of habitats and restore biodiversity.”

How will these sales achieve that?

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

Does my hon. Friend have any idea what would happen to partnerships such as the Capital Woodlands project, which cares for biodiversity and conservation in the urban areas of London? More than 300 of my constituents from the inner city have written to express their concern about the wider issues that she has described, but also about those precious green spaces in the capital.

[Mary Creagh]

My right hon. Friend is right to raise the issue of woodland in the capital, which is something that the Labour Government sought to extend. Also, it is important that people living in cities have the enjoyment of woodlands and access to forests. How do the sales achieve that? What has happened to the Government’s woodland strategy?

What role can a broken-up forest play in carbon capture and storage? The answer is on page 51 of the closely read impact assessment, which says:

“The co-ordinated approach to implementing adaptation measures across the public forest estate would be put at risk through large-scale changes in ownership.”

However, we need to step back from the Public Bodies Bill and the full sell-off and look at what is happening in England’s forests right now. Ministers can sell off 15% of English woodland without any change to the law. [Interruption.] The Under-Secretary says from a seated position that that is why we did it. I have already explained how much was sold under the Labour Government; I want now to come to what will be sold by him. In our 13 years in government, we sold just 4,000 hectares net, reinvesting the proceeds in forestry.

The Secretary of State told the Select Committee on Environment, Food and Rural Affairs in November that she and her Ministers had already factored in £74.5 million of sales under existing laws. However, she gave no guarantees that the money would flow back to the Forestry Commission. Indeed she was at pains to point out that

“it would be perfectly possible for us to use the proceeds from sales of these assets towards increasing the capital available for flood defences”.

We need to step back a minute. She has cut the flood defence budget by 27% and wants to sell off our forests to make up the shortfall that she has imposed. That does not strike me as any way to run a Department.

[Mr Mark Spencer (Sherwood) (Con)]

If the model that the hon. Lady is talking about is so impressive, does she advocate using public money to purchase private sector woods back into the public sector?

[Mary Creagh]

That is indeed what has happened. [Interruption.] Yes, it has happened in the past. Why the shock? Some people cannot manage the timber or the forest. Forests cost money to run, so what the Forestry Commission does is advise the private sector on how best to manage them. I do not see any problem in that.

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

Surely what the thousands of people who are contacting MPs about this matter are concerned about is not the public sector buying out private forests, but private developers preventing their families from using them, as the Secretary of State says her children were able to use them. Those developers will build golf courses, luxury chalets and adventure parks on those forests. What is proposed is an excuse for private developers to deprive everyone else.

[Mary Creagh]

That is a good point, well made.

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

People care about our forests in this country. What we all want is a more diverse forest, with the old English oaks alongside other trees, but that is very expensive to achieve, so yes, I want a Forestry Commission that buys more land and turns it into diverse forest. What we have with commercial interests is a drive always to plant fir, to secure quick commercial returns.

[Mary Creagh]

My hon. Friend raises a key point. Much of the timber stock that is now ready for felling is being felled by the Forestry Commission, which is replanting it with broadleaf native English oak, ash and beech. If we sell off the timber stock, we lose the chance to change the shape and structure of the forests. Next year, with the sale of 10,000 hectares, this Government will sell more in one year than Labour sold in 13 years in government, and they will do the same for each of the following years. The holdings could include sites in national parks—I hope that Members from Exmoor are listening—community forests, areas of outstanding natural beauty, or sites of special scientific interest.

[Geoffrey Clifton-Brown (The Cotswolds) (Con)]

I hope that the hon. Lady will not seek to mislead either the House or the nation. Does she not accept that we have one of the toughest regulatory regimes in the world? It is not possible to fell a mature tree in this country without a felling licence, and part of the conditions for such a licence is nearly always that a new tree must be planted, and very often a broadleaf tree.

[Mary Creagh]

The hon. Gentleman is quite right; and who oversees felling licences? It is the Forestry Commission, which the Government are cutting by 25%.

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

Does it not surprise my hon. Friend that the Government appear to have made no mention of our much-loved national parks in relation to this issue, despite the fact that some of our best forestry land, including Grizedale and the New Forest, is in national parks?

[Mary Creagh]

My hon. Friend makes an interesting point. I think that the reason is that the Government are planning the transfer of nature reserves away from Natural England, and planning changes to the governance of the national parks. Those changes are coming down the tracks, and those on the Government Benches would do well to heed them now so that they are not caught napping next time.

[Bill Esterson (Sefton Central) (Lab)]

I want to raise the issue of the public perception of the plans, and to read out what my constituent, Lindsey Page, has told me. She says:

“I have heard the argument that if a forest area is sold off then there will be safeguards written into the contract of sale that should safeguard the access, but I don’t believe such contracts are enforceable.”

Does not that go to the heart of the matter? The public have no faith that there will be adequate safeguards.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Interventions need to be brief.

[Mary Creagh]

Thank you, Madam Deputy Speaker.

My hon. Friend’s point goes to the heart of the matter. The only legally enforceable rights are public access rights guaranteed under the Countryside and Rights of Way Act 2000. The introduction of further “higher rights” would require changes to primary legislation. [Interruption.] Who will enforce the leases in 150 years’ time? It is certain that none of us will be around to remember this debate at that time.

Who will benefit from the sales? The Confederation of Forest Industries’ website says that the price of commercial forests rose

“138% since 2002, which equates to a 17% average annual growth over the period”.

So the forests that the Tories sold off in the 1980s and ’90s have trebled or quadrupled in value. Where is the public benefit from those increased land values? There is none. Forestry land is exempt from inheritance tax after two years, and timber sales have no income tax or capital gains tax. When we sell our forests, the taxpayer loses many times over.

“Private companies buying 75-year rights to woodland would naturally seek to maximise returns from timber extraction”—

[Interruption.] The Minister should allow me to finish my quote before chuntering; I think that he is going to like it:

“There is no sign that the consequences for conservation, recreation and tourism have been properly weighed up in these plans. The Government is using ‘slash and burn’ tactics”.

Those are not my words; that was a press release from the current Chief Secretary to the Treasury in January 2009, when a similar plan was proposed by the Scottish Government. I do not see the right hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) in the Chamber today.

[Ian Murray (Edinburgh South) (Lab)]

I should like to draw my hon. Friend’s attention to a quote:

“Liberal Democrats believe that the SNP are in a real way threatening to destroy rural Scotland through this hugely flawed proposal and are prepared to sell off the family silver for what amounts to a very small, one off sum of money.”

Will she join me and the Liberal Democrats in their “Save our Forests!” campaign?

[Mary Creagh]

My hon. Friend makes an excellent point. For some reason, the photograph of the Chief Secretary to the Treasury with a “Save our Forests!” sign has disappeared from the Liberal Democrats’ website. If anyone can find it, please will they e-mail it to me?

[Anas Sarwar (Glasgow Central) (Lab)]

Does my hon. Friend share the anger of thousands of people across the country at the double-dealing of the Liberal Democrats, who say one thing in their campaign leaflets and their pictures, but do the opposite in government? Is it not the case that, on this issue, they cannot see the wood for the fees?

[Mary Creagh]

My hon. Friend is taking all my lines. How can the Liberal Democrats fight forestry sell-offs in Scotland, yet vote for them here in the Lobby tonight? We can answer that question: they are just doing on the national stage what they have always done on the local stage.

[Mr Paice]

When the hon. Lady provides the House with quotes, it would be useful if she properly attributed them in the context of the events that they addressed. She referred to the current Chief Secretary to the Treasury, but is she not aware that what he said was in response to the then Scottish Government’s proposals? Is she not aware that we are proposing not 75-year leases, but 150-year leases? Most importantly, is she not aware that under the Scottish national land use scheme—[Interruption.]

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Minister, you must be brief. I think we have got the point.

[Mr Paice]

rose—[Interruption.]

[Madam Deputy Speaker]

Order.

[Mr Paice]

rose—

[Madam Deputy Speaker]

Minister, you will resume your seat now. Thank you. I am on my feet and I have already said that interventions must be brief. That applies to everyone, including Front-Bench Members. This is a very important debate and many Members wish to contribute to it.

[Mary Creagh]

I missed some of what the Minister said, but I do not understand how his offering leases of 150 years is somehow better than the Scottish Government offering a 75-year lease.

We in the Labour party are proud of our record on forestry. We gave people the right to roam; we established two national parks; we replanted coalfield sites and landfill sites; and we brought trees closer to cities for all to enjoy. We planted 2 million trees in Warrington, 2 million in St Helens and 1 million each in Ellesmere Port, Moseley and Wigan.

The United Nations has announced 2011 as the international year of forestry. The Government have chosen a very strange way of marking it. The countryside is walking, cycling and riding against this Government’s plans to privatise England’s forests. People are furious at this environmental vandalism. We plant a tree to remember our loved ones, to mark an event, to leave a gift for those who come after us. The Forestry Commission costs each of us 30p a year. That is 30p to preserve our shared history, our cherished ancient oaks, ash and beech—sold for 30 pieces of silver! The Government’s plans will destroy the funding model that has protected England’s forests for nearly 100 years. If we sell the commercial timber lands, we starve the ancient woodlands. That is the simple equation and the fundamental fallacy at the heart of the Government’s proposals. The true value of our forests will never be reflected in the price the Government get from selling them.

16:44

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“deplores the actions of the previous administration in selling off 25,000 acres of public forestry estate with wholly inadequate protections; notes that the previous administration sought to go even further in finding ways to exploit the forestry estate for commercial gain as recently as 2009; welcomes the consultation proposals to guarantee the future protection of heritage forests by offering them charitable trust status; supports the consultation proposals for robust access and public benefit conditions that will be put in place through lease conditions, including access rights for cyclists and horse-riders; believes the leasehold conditions regarding biodiversity and wildlife conservation will safeguard significant important environmental benefits; sees these proposals as important in resolving the conflict of interest whereby the Forestry Commission is the regulator of the timber sector whilst being the largest operator in the England timber market; considers that debate on the future of the forest estate ought to be conducted on the basis of the facts of the Government’s proposals; and believes that under these proposals people will continue to enjoy the access and benefits they currently have from the woodlands of England.”

Clearly, the hon. Member for Wakefield (Mary Creagh) has not read our consultation document. For example, sites of special scientific interest are included, and there were many other inaccuracies in her speech. At least we now have an opportunity to nail some of myths that have been peddled on this issue. Of course it is an important function of Her Majesty’s Opposition to hold the Government to account, but they should do so on the basis of facts, not fiction. Let us start, then, with some plain facts about our proposals.

First, we are consulting on proposals to create a new heritage forest status, whereby our most precious national assets are given over to charitable trusts, giving them far greater protection and financial security than they have ever had. Secondly, we propose to uprate massively protections for public access and other public benefits by replacing the freehold sales that took place under the last Government and moving instead to leaseholds that provide better protection for access and other public benefits.

[Several hon. Members]

rose—

[Mrs Spelman]

I will give way, but I have listened to a lot of myths, so let me set the record straight first.

Thirdly, we propose to give community groups and civic organisations the opportunity to own or manage their local forests if they wish—and why should they not have this opportunity? Fourthly, we are opening up the commercial functions of the Forestry Commission to other operators on a leasehold basis so that their commercial potential is realised alongside the need to protect public benefits.

[Angela Smith]

rose—

[Hugh Bayley]

rose—

[Mrs Spelman]

I will give way in a minute.

Fifthly, we are refocusing the work of the Forestry Commission so that rather than devoting expertise and resources to commercial activities that should not be performed by Government, it can focus on conducting research on combating the challenges of new tree diseases, maintaining and enforcing access rights, providing expert advice, giving grants, and discharging its duty as a regulator.

[Angela Smith]

Will the right hon. Lady add to that list of facts an agreement on the part of the Government to guarantee the current permissive access provisions granted by the Forestry Commission on its lands?

[Mrs Spelman]

Permissive rights apply to 2,000 hectares of the public forest estate, which itself accounts for 18% of the woodland cover of the country.

[Hugh Bayley]

Talking of facts, I have here a parliamentary answer given to me by a former forests Minister in 1996. It records that under the previous Conservative Government 209,956 hectares of Forestry Commission land were sold. What proportion of that retained public access, what proportion went to community trusts, and what proportion of the new sales will go to such trusts?

[Mrs Spelman]

In 1996 I was not a Member of Parliament. I am dealing with a new policy, and that, it seems, is what Opposition Members are opposing.

What is most saddening about the debate is that rather than setting out her reasons for opposing our measures, the hon. Member for Wakefield insisted on sowing further misinformation and fear about what we are consulting on.

[Several hon. Members]

rose—

[Mrs Spelman]

I will give way in a minute.

The hon. Lady claimed that we were planning to sell the forests for short-term gain. In fact, we are proposing to end the last Government’s policy of selling land and replace it with a leasing policy, specifically to secure access to rights for all—including horse riders, cyclists and other recreational users. The hon. Lady claimed that that was environmental vandalism. In fact, we are introducing more environmental safeguards than existed before. We are providing a once-in-a-generation opportunity to accelerate the recovery of plantations on ancient woodland sites, and enforcing replanting in other woodlands.

[Ian Lavery (Wansbeck) (Lab)]

Will the Secretary of State give way?

[Mrs Spelman]

In a minute.

The Forestry Commission was previously commended for the restoration of ancient woodland sites. It pledged to restore 20,000 hectares of plantations on such sites; it has managed to restore just 2,000 hectares. I have a greater ambition in regard to the restoration and enhancement of biodiversity than the last Government ever entertained.

[Mr Sheerman]

The right hon. Lady produced some very well-crafted words in an earlier paragraph. She referred to an “opportunity” to acquire land. If there is a competition between a private buyer and a community interest, will preference be given to the community buyer, or will it all be decided on the basis of price?

[Mrs Spelman]

Oh, dear: yet another Opposition Member has not actually read the consultation document, which states explicitly that the community will be given preference. Of course people must be given preference when it comes to the woodlands near which they live.

[Tony Baldry (Banbury) (Con)]

Is it not clear from the demeanour of Opposition Members that this is an Opposition knockabout day? Will my right hon. Friend confirm that there will be a three-month consultation period? May we hope that during those three months Ministers will be prepared to listen to serious representations from people who have read the consultation paper and will respond on the basis of facts rather than Opposition knockabout myths?

[Mrs Spelman]

As always, my hon. Friend makes a sensible intervention, pointing out that we are still in the first week of a 12-week consultation. To be kind to Labour Members, a lot of their questions arise from reading media reports, and they would do well to read the consultation document.

The hon. Member for Wakefield claims that people are going to turn up at their local woods only to find them locked up and gated off. The case to which her party leader has consistently referred—that of Rigg wood—has also been mentioned in this debate, but in fact that wood was put up for sale by her Government in April 2010. So perhaps she would like to go to Grizedale to explain to the people of Rigg wood what happened as a result of what her Government did. We, on the other hand, will be guaranteeing access and public benefit rights through the terms of the leases.

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

I believe that many people have read the consultation document and have understood the Government’s proposal. Taking the Government at face value on this consultation, if a vast majority of people oppose this proposal, will the Government accede to their wishes?

[Mrs Spelman]

I have made it very clear that this is a genuine consultation. It is written in an open manner and does not contain leading questions. It invites the hon. Gentleman’s community—his local groups and community groups—to have, for the first time, an opportunity to be involved in the ownership of the woodlands. I suggest that he talks to them about that.

[Geoffrey Clifton-Brown]

Will my right hon. Friend give a guarantee this afternoon that any sale or lease will have cast-iron legal safeguards for all existing rights of way? Will she go further than that by publishing what those rights of way are before a lease or sale takes place, so that local groups will know for evermore what rights they have over their forests?

[Mrs Spelman]

I am very happy to give my hon. Friend that assurance, because we live in an age of transparency and that is what community groups have every right to expect.

[Andrew George (St Ives) (LD)]

Further to the point about a consultation, would my right hon. Friend care to reassure the House that the Public Bodies Bill seeks to establish enabling powers, rather than duties, and that that will fundamentally enshrine the opportunities proposed in the consultation, not force things through?

[Mrs Spelman]

I thank my hon. Friend for that intervention, because it is important to note that when we published the consultation document on 27 January it was accompanied by a written ministerial statement. If Members would like to read it in conjunction with the consultation document, they will find an assurance on this point. We will introduce a general duty for Ministers

“to have regard to the maintenance of public benefits when exercising”

the forestry-related powers and the powers in the Public Bodies Bill. [Interruption.] I am sure that Labour Members would be interested to know what those additional powers of protection are, as they have been making a lot of noise about this.

Secondly, the statement mentions

“exempting the most iconic heritage forests from the full range of options so that”

they

“could only be transferred to a charitable organisation or remain in public ownership”. —[Official Report, 27 January 2011; Vol. 522, c. 17WS.]

That is far more protection than currently exists. If the Labour party would stop holding up the business in the other place, we might get those amendments on the statute book.

Imagine my surprise, then, when I read a document—“Operational Efficiency Programme: Asset Portfolio”, which was published by the previous Government just months before the election—and discovered, on page 54, an explicit reference to the case for the “long-term lease” of the public forestry estate. What about this document—the “Operational Efficiency Programme: final report”? It states clearly that “greater commercial benefit” could be obtained from the public forest estate. And what about this document—“A Strategy for England’s Trees, Woods and Forests”—published by none other than the right hon. Member for South Shields (David Miliband) when he was the Environment Secretary? It makes the case for local communities actively participating in the ownership and management of the public forest estate. Does that not lay completely bare the hypocrisy of the position now being taken by the Opposition? Their synthetic outrage cannot disguise the fact that they already had the public forest estate well and truly in their sights, so let us have no more of this self-righteous indignation.

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

Will the right hon. Lady acknowledge that those options were ruled out of consideration and dismissed? They were dismissed for two very good reasons—first, because they did not add up economically or against cost-benefit analysis, and secondly, because they would not have been accepted by the great British public.

[Mrs Spelman]

And the hon. Gentleman’s party was not accepted by the great British public as being fit to govern this country for the time being.

[Tim Farron]

Taking my right hon. Friend back to Rigg wood and giving reassurance to local populations, our experience with the sale of Rigg wood makes us extremely nervous about the lack of clarity about whether forests within national parks such as the Lake District count as heritage woodland. Will she agree that national park woodlands should all be considered as heritage, and should not be leased or sold?

[Mrs Spelman]

The consultation document sets out different categories of forest and woodland, because the public forest estate is very diverse. The Forestry Commission has published a set of criteria in relation to sales. There is a consultation and I suggest that the hon. Gentleman should make representations as part of that consultation about the category he wants included under the definition of heritage.

[Tessa Munt (Wells) (LD)]

As the right hon. Lady will know, I have been very disappointed that some 100,000 acres is not covered by the consultation that started last Thursday. Will she guarantee for my constituents that the land for sale or lease in that 100,000 acres will be subject to absolute guarantees on protecting and enhancing biodiversity, on maintaining, protecting and improving public access for recreation and leisure, on ensuring the continued and increasing role of woodlands in climate change mitigation—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Goodness me. I would like Members to make their interventions brief, and not take the opportunity of an intervention to make their speech. I call the Secretary of State.

[Mrs Spelman]

Thank you, Madam Deputy Speaker. I can assure the hon. Member for Wells (Tessa Munt) that there are statutory requirements for biodiversity. Planned sales under the spending review—plans that are published—will have greater protection than was afforded under the previous Government. Our objective in the amendment to the Public Bodies Bill is to make sure that we increase protection for access and other public benefits.

[Sir Paul Beresford (Mole Valley) (Con)]

Is my right hon. Friend aware that a similar approach to hers on commercial forests has been extremely successful in New Zealand? The huge Kaingaroa forest—717,000 acres—is now out of Government hands, the land belongs to the Maoris and commercial organisations are doing the trees, with enhanced biodiversity.

[Mrs Spelman]

My hon. Friend’s helpful intervention gives me the opportunity to advise Labour Members that, while the hon. Member for Wakefield made selective choices of countries that have explored other models of ownership and management that involve their local communities, the largest worked examples in the consultation document pertain to Queensland and to New Zealand.

[Several hon. Members]

rose—

[Mrs Spelman]

I would like to make progress.

Now we have some of the facts on the record, perhaps we can have a rather more honest debate about the consultation. Let us recall why the Forestry Commission came about. It was established after the first world war to reduce our reliance on imported timber. Timber was vital—for example, as pit props—at a time when state ownership was the orthodoxy. It was felt that state supply of timber was essential. At the time, timber covered just 5% of the land under the public forest estate, and even over the long period in which the Forestry Commission has been in operation, that has increased to only 8%.

Ninety years later, things have changed. The Forestry Commission still has a role of supplying timber to industry, but the reality is that it accounts for less than 5% of the timber used in England. To be clear, the state is running timber supplies, yet 95% of the timber used is from outside England. That cannot be sustainable.

On top of that, the public forest estate in England operated at a net loss of £16 million last year. If we are to carry on maintaining our forests as we currently do—and in fact improve them, which is what we want to do, so that they have greater biodiversity and environmental value—we need to think about better ways of doing this and invite other organisations to come in and look at how we can put it on a better footing. That, frankly, is no bad thing, not least because the lease terms will secure access and benefits. Does it really have to be the state’s role to sell Christmas trees? I know that the Opposition have taken a lurch to the left, but are they really suggesting that supplying Christmas trees, hosting music concerts and running log cabins should be national industries?

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

Public consultations under the Labour Government used to be a complete and utter sham. Can my right hon. Friend give us an assurance that, if the majority of respondents to the consultation express concerns about the policy, she will listen?

[Mrs Spelman]

Of course I can give my hon. Friend that assurance. I was very frustrated during 13 years of opposition by the sham nature of Government consultations. Let us not forget that we are talking about less than 18% of England’s woodland cover. Members will know that the vast majority of our woodlands are not in state ownership, but are still offering outstanding recreational and environmental value. Some are community woodlands. Some are held by organisations such as the National Trust. Some are held by charities. [Interruption.] And yes, many are held by individuals, from farmers to philanthropists. In my view, Opposition scaremongering has been such that they owe a great many of those people an apology for characterising them as being so disinterested in the public benefit. I can only say that I am glad that I am not so cynical about society; it must be a very miserable approach to life.

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

Does my right hon. Friend accept that the concern in all parts of the House and in all parts of the country is real? Will she acknowledge that it is genuine concern? Will she agree to meet with me and other Liberal Democrat Members to talk about those concerns?

[Mrs Spelman]

The concern has in large part been whipped up on the back of ludicrous speculation in the media. I am confident that, when our constituents have the opportunity to read the consultation document, we will have a much more meaningful discussion about the best way to protect our heritage, woodlands and forest, but of course I would be happy to meet the hon. Gentleman.

Some of the woodlands that we are discussing will be viable and some will not, but I can give the House this assurance: there will be no change in the status of woodland sites unless we are convinced that the access right and public benefits have been protected, and that those wanting to own or manage have the ability to do so. We will not accept second best on that.

[Barry Gardiner (Brent North) (Lab)]

The Secretary of State said that there would be no transfer of woodland unless the protections that she has just mentioned can be put in place. Is she aware that not an hour ago, in Committee Room 18, Simon Hodgson, chief executive of the Forestry Commission, advised the all-party parliamentary conservation and wildlife group that it would not be possible to insist that the same management regime conducted by the Forestry Commission to protect biodiversity would be passed on to any new owner?

[Mrs Spelman]

Simon Hodgson is not the chief executive of the Forestry Commission, he is wrong and his fears are misplaced.

The difference in expressions of interest is perfectly logical because of the diversity in our woodland. There is no one-size-fits-all approach. We will look at what works best for each individual site. Our mixed model approach considers what works best for the different woodlands and how we can apply it in a way that gives greater public benefit.

Our proposals will mean that the nationally important heritage forests will continue to be managed for the benefit of the nation. By pursuing charitable ownership for our most valued heritage sites—for example, the New Forest and the Forest of Dean—the Government are making it clear that they are not for sale. They are secure for future generations to enjoy, and we will give that force of law with amendments to the Public Bodies Bill.

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

I was interested to hear that my right hon. Friend said that no organisation would be allowed to take over one of those forests unless it was capable of running it. She has heard already the figure of £2.9 million, which is the deficit cost to the Forestry Commission from running the New Forest. What sort of charity would be able to shoulder that deficit?

[Mrs Spelman]

I can give my hon. Friend the same assurance as I have given the National Trust, the Woodland Trust and any new trust that would like to manage our heritage forests for us: we do not expect them to do it for nothing. Let us look at the model of British Waterways. Our canal network is to be moved into the hands of a mutual trust. Obviously, the Government will continue providing running costs to that trust because we understand that it cannot manage the network for nothing.

[Mr Edward Leigh (Gainsborough) (Con)]

The public care about one thing. As a result of these plans, will public access be increased or reduced?

[Mrs Spelman]

I think I have said this, but for the avoidance of doubt, public access and other public benefits will be improved and enhanced as a result of the proposals that we set out in our consultation document.

Having exposed the fact that the previous Government indeed looked at disposal of the public forest estate, I would like the Opposition to hear—[Interruption.] I would like them all to listen. That would be a start. I would like them to hear clearly why it is important to give the opportunity for the heritage forests to pass into the hands of charitable trusts. What we have seen from the evidence of documents from the previous Government is that the forests run the risk of successive Governments continually coming back to the question of how they should be owned and managed. Putting them safely in the hands of charitable trusts, as we propose to do, will mean that they will continue to be managed for the benefit of the nation. Their enhanced status in the hands of charitable trusts will put them beyond the reach of Whitehall politics once and for all.

[Sir Peter Soulsby (Leicester South) (Lab)]

In practice, would not trusts and charitable organisations be absolutely crazy to take on the burden of the New forest, for example? How could they possibly expect to have the fundraising capacity to meet the ongoing costs of managing it appropriately, particularly given the Government’s expectation, clearly stated in their consultation paper, that such gifts to those organisations should move towards self-reliance? They would be crazy to take that on in such circumstances.

[Mrs Spelman]

The hon. Gentleman clearly was not listening to the question asked by my hon. Friend the Member for New Forest East (Dr Lewis). We have made it clear that we would not expect charitable trusts to take these on without the running costs, so the hon. Gentleman’s fear is unfounded. Some smaller, local areas of woodland might fall into heritage status, but for those that do not, we are consulting on whether to offer them to local community groups or charities to take over first and foremost. If no local groups or charities want to take on the leasehold and no suitable buyer with a credible access and environmental protection plan comes forward, the woodland will simply remain in public ownership.

As I have said, for sites that are predominantly commercial in nature, we propose offering long leases with conditions attached. To be clear, there will be no one-size-fits-all approach, no land grabs and no fire sale. Instead, there will be a thoughtful, detailed, long-term programme of reviewing the estate, potentially over 10 years. There will be no rush; it is more important to get this right. We will look at how to improve the rate of recovery of plantations on ancient woodland sites, thereby enhancing biodiversity.

We will look at how the Forestry Commission can work with communities to help them to bid for local woodlands and at how we can actively improve access rights. I am thinking in particular of how we can access resource improvements for people with disabilities. We will look at how we can enable groups who run woodlands to draw down environmental grants in a way that the Forestry Commission currently cannot.

Those are all things that the Forestry Commission, with its expertise and dedication, is perfectly well placed to do. It is where it will really add value. If Members were to ask someone from the Forestry Commission whether they would rather be working with communities to help in the recovery of ancient woodland sites, or shrink-wrapping Christmas trees, what do they think they would say?

[Julie Hilling (Bolton West) (Lab)]

Even if community groups could afford to purchase woodland, why should they if it is already in public ownership? It is rather like a thief stealing a car and then offering to sell it back.

[Mrs Spelman]

As I have tried to point out, and as evidenced in the documents prepared by the previous Government, the fact of the matter is that as long as there are no opportunities for communities in respect of the public forest estate, there is a risk in Whitehall politics. The point about giving the community that lives nearest the forest that opportunity is that they are the most likely to protect it in perpetuity.

This is a really exciting opportunity for our woodlands. We share completely the desire of those who love to walk, cycle, ride, kayak or go ape in our woodlands. I have children and know what a lifeline woodlands are in the long summer holidays. I am certainly not going to deny others the respite that those woodlands gave me, not now and not for future generations. I want to see whether we can improve on the status quo. I want many people to be engaged in the consultation, and I mean genuinely engaged by the facts, not the fiction. This is an opportunity to do things better. If access rights, public benefits and environmental protections are not the same or better, we will not make any changes. I believe that they can be better, that they should be better and that the consultation points the way to making them better.

17:19

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

I do not know where to start. When I was in the position—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. My apologies to the hon. Gentleman. Before he starts, I thought it might be a good time to remind Members that, on this debate as well, there is a time limit of six minutes, and it is from now. So, Huw Irranca-Davies, you have six minutes from now.

[Huw Irranca-Davies]

A second start. Thank you Madam Deputy Speaker.

When I was in the privileged position of being the Minister for Marine and Natural Environment at the Department for Environment, Food and Rural Affairs, one thing stood out about DEFRA: all the staff, agencies, green organisations and third sector organisations believed that they were on a mission in terms of the natural environment. We created national parks, protected wildlife, tackled wildlife crime, worked internationally to protect biodiversity and we increased access to the countryside and the quality of our uplands and seas. We also looked after the forests and promoted more woodland coverage, making steady strides to increase our poor showing among European nations.

I do not honestly believe that anybody from DEFRA, the Forestry Commission, Natural England or a host of other organisations, whose staff deeply care emotionally and intellectually about our woodlands and our natural environment, genuinely supports the policy. I do not believe that the Minister’s heart is in it; that might be the same for the Secretary of State, truth be told. I am sure that the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Newbury (Richard Benyon) does not support it.

Interestingly, however, the hon. Gentleman does not have a say. He has most of my old responsibilities as a Minister for the environment, but with one hugely noticeable exception: forestry. Why? He still covers, as I did, everything else in the natural environment, but forestry has disappeared from the environment Minister’s remit. That is no slur on his abilities, because he is no fool, but it is telling that forestry has gone from the environment Minister’s portfolio. The message is quite simple: the forests and woodland, from the inception of this Government, were downgraded in importance; they were no longer part of the natural environment brief.

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I am very grateful to my predecessor for giving way. There is a very good reason why I do not have responsibility for forestry: I have some personal interests. I am happy to declare an interest now. My local village of Beenham had a small piece of Forestry Commission land in which my children and I bought small shares with the village as part of a community project. It is an absolute model, which we are trying to follow under the consultation before us.

[Huw Irranca-Davies]

That is a very useful clarification, which I accept.

The former Secretary of State, my right hon. Friend the Member for Leeds Central (Hilary Benn), who is now shadow Leader of the House, was always clear about the Forestry Commission. He and generations of senior Ministers with the same responsibility held jealously to public ownership of the forest estate, because that was in the interests of the British people. Why? There are 13 million tonnes of carbon stored in the trees, 22 million tonnes in the ground and more than 100 million day visitors every year. Public access is protected under the Countryside and Rights of Way Act 2000, and the forest estate is the largest provider of green space around cities, including regeneration and growth areas such as Merseyside, Manchester and the Thames Gateway, with 3,500 hectares established over the 10 years to 2009 and more potential to expand that green infrastructure. Even then, only 10% of the population—notably, in disadvantaged areas—have access to any woodland within 500 metres of home. We are still way below the EU average.

[Bill Esterson]

My hon. Friend mentions Merseyside, and one of my constituents from Crosby, Kay Redmond, backs up what he says about keeping the forests in public ownership

“to maintain current access for the public and to protect the diverse wildlife found in forests”.

[Huw Irranca-Davies]

My hon. Friend’s constituent is absolutely right. The issue is about not only timber production and public access, but biodiversity and locked-up carbon. It is about the 1.5 million tonnes of timber produced annually and sustainably; the £1.1 billion of economic value for £17 million in operating costs; the potential further restoration, which comes with the Forestry Commission, of ancient woodlands; and the £100 million of partnership funding in the 10 years to 2009. It is also about the commercial ventures, which were expanding, with the Caravan Club, Go Ape, forest concerts and the Forest Holidays company. In addition, parliamentary funding for the Forestry Commission dropped from 36% in 2003 to 24% in 2007. If that were not good enough, there was also potential for 200 MW of renewable wood fuel energy from managed forests, hydro, geothermal, and, if Ministers were so included, wind energy. I could go on and on.

All that is now at risk, despite reassurances from the Minister and the Secretary of State. Those sound to the public—and to an old sceptic and former Minister like me—like the reassuring words spoken at a deathbed, because that is what this is. It is the funeral of the publicly owned forestry estate. It is the death of the body of expertise and co-ordination that lies within the Forestry Commission. It is the killing off of jobs, skills and knowledge.

Public access is at risk, too. The post-war Labour Government brought in the National Parks and Access to the Countryside Act 1949. We introduced the right to roam. Only recently, my right hon. Friend the Member for Leeds Central designated the South Downs national park, and I took through the provisions for the England coastal path in the Marine and Coastal Access Act 2009. Since this Government came in, we have seen soft-pedalling on the England coastal path, and now we are seeing back-pedalling on access to our woodlands.

It does not even make economic sense, even by the Government’s own figures and the figures in the report mentioned by the Secretary of State. The cost in public goods lost far outweighs the benefits. The Treasury has not given thought to the fact that for every £100 million of woodlands sold off, £40 million will be lost in inheritance or other taxes, as companies and individuals buy woodland as tax write-offs. Are they going to look after it?

There is not enough time to say how the Government are now trashing the hard-won policy launched only last year which brought together, for the first time ever, carbon and climate change issues with biodiversity to improve the diversity of woodland habitats. There is the issue of climate change alone. I quote from our public service agreement 28—yes, we were the Government who had binding targets for ancient woodlands and priority habitats—which said:

“In the face of climate change, a successful strategy would require a landscape-scale approach, joining up the highly fragmented ownership pattern into a shared endeavour”.

The last and only other time this sell-off was contemplated was under John Major’s Conservative Government. Here we go again—back to the 1980s. If I have not made the Government think again, the public surely will.

17:27

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

I am delighted to follow the hon. Member for Ogmore (Huw Irranca-Davies), whom I had the privilege to shadow in the previous Parliament. There are six forests and woods in the new constituency of Thirsk, Malton and Filey—namely, Dalby, Cropton, Boltby, Kilburn woods, Newgate Bank and Silton forest.

I congratulate my right hon. Friend the Secretary of State on responding to this debate and on moving our amendment. We are absolutely right to discuss ownership of the forests and woodlands at this time. One has to consider the history, and the history that pertained in 1919 and 1920 is not necessarily relevant in 2011. The background then was that many of the trees and forests, particularly the fast-growing trees, had been decimated to build the trenches during the first world war.

My regret about the debate being called at this time is that the consultation should have preceded the Second Reading of the Public Bodies Bill in this House, because then we would have had the legal base and context so that we knew precisely about the management and the access issues to which my right hon. Friend referred. I have a severe reservation that that Bill will remove, once and for all, the right of this House and the other place to scrutinise these issues over the next 10 years and thereafter. I hope that when my hon. Friend the Minister responds to the debate, he will put my mind at rest on that point.

Most of the issues raised by people who have written to me and by other Members relate to access. The Woodland Trust has put it on the record that the issue is not ownership, but how woodlands and forests are managed. In preparing for today’s debate, I tried to find out about the status of the forests and woods in my constituency. I have not found that information on the Forestry Commission website, in the Library document or in the consultation. It would be helpful for Members who represent areas containing forests and woodlands, and for the people who enjoy them to know the precise status of those forests and woodlands. Otherwise, we will be queuing up to make our cases.

[Damian Hinds (East Hampshire) (Con)]

We all recognise that this is only a consultation, but given the distinction between heritage forests and other forests, there is some nervousness about which forests count as heritage forests. Does my hon. Friend agree that people want the reassurance that there will be no loss of access or amenity for walkers, cyclists and horse riders even in the forests that do not count as heritage forests but that are an important public amenity?

[Miss McIntosh]

I welcome my hon. Friend’s intervention, but I would go further. I would like to know the precise mechanism being proposed. If it could be achieved through an amendment to the Public Bodies Bill, we should agree to it now and it would remove many of the anxieties that we are debating this afternoon. If the Minister responded on that point, it would progress the debate and allay many of my anxieties and those of my hon. Friend’s constituents.

I would like clarification on the written ministerial statement to which the Secretary of State referred. It stated:

“I am today publishing tightened criteria for those sales under the Forestry Commission's programme to deliver £100 million in gross receipts during 2011-15.”—[Official Report, 27 January 2011; Vol. 522, c. 17WS.]

Does that relate to 85% or 100% of the sales? I would like to explain to my constituents how the sums add up and what the exact financial figures will be.

I am surprised that in introducing the debate, the hon. Member for Wakefield (Mary Creagh) did not mention the role of woods, trees and forests in promoting flood defences. The Forestry Commission is playing a flood defence role in the Pickering pilot scheme. It is planting a number of trees that will create a carbon sink and retain water, which will prevent Pickering from being at risk of flooding in the future.

[Hugh Bayley]

The hon. Lady makes an extremely important point. However, if the Forestry Commission is not there, does she think there will be the same investment in tree planting on Forestry Commission land and private land to reduce flood risks?

[Miss McIntosh]

I would put that question directly to the Minister, as I have done before. I want an assurance that the Pickering project, if it is successful, will be the forerunner of many similar projects in areas such as mine across the country. I want an assurance today that the trees will be planted and that the investment will be made. The hon. Gentleman prompts the question of why we should rely on the state to make that investment. We have moved a long way from the previous Government’s mistake of selling off the national treasure of Rigg wood in the Lake district without guarantees of access, the enjoyment of benefits and the continued biodiversity for which we have called.

I should like assurances on the economics, including what the gross receipts will be, and on continuing access. If, as the Woodland Trust states, ownership is not the key, I should like to know what guarantees there can be about how management and commercial interests will fund the commercial forests. In the case of heritage forests, I may be being very simple, but I should like to know how the Government are going to fund investment in the charitable funds that will run those forests.

[Sir Peter Soulsby]

The hon. Lady has spoken about some of the public benefits delivered by the Forestry Commission, particularly with regard to flooding in her constituency. Does she seriously think that there is any prospect at all of any private operator being prepared to give guarantees that it will deliver the same public benefits, on flooding or other matters, that the Forestry Commission currently can?

[Miss McIntosh]

I take great heart from what the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), said. There is a large private estate in the heart of Thirsk, Malton and Filey that makes many investments for the public good and allows access. My concern is that I do not know the status of my area’s forests, so I do not know whether I should be arguing for heritage protection or another type of protection, but I want to keep an open mind on the question of ownership.

I end with a plea to the Minister. If the consultation is to be worth anything, the Government must listen to, and act on, the tone and content of the responses.

17:36

[Helen Goodman (Bishop Auckland) (Lab)]

I begin by congratulating my hon. Friend the Member for Wakefield (Mary Creagh) on introducing the debate, because it is absolutely clear that the way in which Ministers incorporated the power to sell the forests in the Public Bodies Bill was designed to avoid parliamentary scrutiny. Furthermore, the Bill was published before the consultation document, which I suppose we can take to be part of the Maoist approach that the Government are now taking to the management of public business.

Hamsterley forest, in my constituency, is a Forestry Commission forest that has 200,000 visitors every year. It is the largest forest in County Durham and includes two sites of special scientific interest, Low Redford meadows and Frog Wood bog. A huge number of my constituents are concerned about what is going on, and they are right to be concerned.

One of the most important points about people being able to visit forests is that it makes them a source of economic regeneration. That is absolutely vital in many parts of the country. People need access for physical and spiritual restoration. What is the point of the Prime Minister giving speeches on the importance of well-being when he denies people access to the sources of well-being? He said in November last year about well-being:

“I am excited about this because it’s one of those things you talk about in opposition, and people think ‘well of course, you say these things in opposition, but when you get into government you’ll never actually do anything about it’”.

But the reality is on page 42 of the impact assessment that the Secretary of State published last week, which states that the Government

“did not see it necessary to carry out a Health and Wellbeing Impact Test, because if access is reduced at preferred woodland it is likely users would substitute their preferred woodland for another”.

In other words, “Your wood is closed, go to the one 60 miles away.”

The main problem with what the Secretary of State is doing is that she does not seem to understand the importance of landscape in developing our national consciousness and identity. She has seriously misjudged the national mood. In his wonderful book “Landscape and Memory”, Simon Schama writes:

“If the entire history of landscape is indeed just a mindless race towards a machine driven universe, uncomplicated by myth, metaphor and allegory, where measurement not memory is the absolute arbiter of value, then we are indeed trapped in the engine of our self-destruction.”

He illustrates that point with a poster from world war two of somebody walking through the countryside, and the caption is, “Your Britain—fight for it now”. That is true today, as well. Do the Secretary of State and other Ministers think it is an accident that Robin Hood has such a hold over the imagination of the nation’s children? Of course it is not. It is because every child knows what eludes Ministers—that the forest is a place where we can be free. The Secretary of State evidently wants to take on the role of the sheriff of Nottingham.

Since 1500, the central argument on the true purpose of the nation’s forests has been the same. It is a question of development or conservation. The Prime Minister is not the first to see the value of green photo opportunities. Charles I was always sure to be painted under a spreading oak tree. The similarity between them does not end there; Charles I was the last king to sell the Forest of Dean. The Prime Minister should reflect on what happened to him after that.

[Alex Cunningham (Stockton North) (Lab)]

The Prime Minister is the one who promised the north-east that the region would suffer more than most from Tory policies. The Forestry Commission owns 67,000 hectares of forest in the region, more than anywhere else in the country. Does my hon. Friend agree that the Government have abandoned the people of the north-east, and now want to sell or give away their forest heritage and their play places?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Mr Cunningham, everybody quite rightly wants to intervene, but we have six minutes per speaker, and every time someone makes an intervention, another minute is added. All I am bothered about is getting as many Members in as possible. If we are to have interventions, they have to be short and very quick.

[Helen Goodman]

I agree with my hon. Friend. I notice that the heritage forests, which are to be saved, are in the south of England, not the north.

People need forests for the physical, mental and spiritual freedom that they get from them, but the Treasury has succumbed to what used to be called political arithmeticians. Nothing has changed. A parliamentary committee of inquiry in 1763 was told in evidence that there would be a loss of hedgerows and a decline in the linnet population. It is perhaps not a coincidence that Trevelyan, the great historian, became a founder of the National Trust. His view was that

“without access to wild nature the English would spiritually perish”.

I am therefore calling on Ministers and the Secretary of State to stop this fire sale. The hastily-put-together retreat of selling the forests to community organisations is utterly ludicrous. Why should people pay for what they already own? The forest is a place for free spirits. Those spirits will not be quenched by this pathetic, mean, small-minded Government. The inestimable Teesdale Mercury has launched a “Hands of Hamsterley” campaign. I am calling on everyone who cares to come to Hamsterley forest on 26 February for the ramble in aid of keeping Ministers’ hands off Hamsterley.

17:42

[Guy Opperman (Hexham) (Con)]

I live just outside Wark in Northumberland, which is at the centre of three historic forests—Wark, Redesdale and the mighty Kielder. That is barely to touch on the multiple other forests in the area, such as Slaley or Sidwood. Kielder alone covers more than 250 square miles and is a truly enchanting place. Without a shadow of a doubt, it is the green lungs of the north-east and the heart and soul of the Northumberland countryside.

Kielder is a very important local employer and one of the region’s major tourist attractions, with more than 250,000 visitors a year. It is also home to several sites of special scientific interest; it is one of the last bastions of the red squirrel in England; it has species of birds from osprey to curlew; it has whiskered bats, otters and the magnificent roe deer; and it has cycling and the observatory. I could go on. I might sound passionate about Kielder forest, but that is because it holds a special place in the hearts of all who, like me, choose to call Northumberland home.

[Ian Lavery]

The hon. Gentleman says that Kielder forest is the green lungs of Northumberland, and it is the jewel in the crown of the county. Does he share my concerns that the proposals that the coalition Government are pushing forward will put Kielder forest in jeopardy?

[Guy Opperman]

I have some concerns and I need assurances on them. The key one is public access. For the reasons given by others, it is crucial that all public access is safeguarded permanently. With respect, that could be a deal-breaker. Biodiversity and long-term environmental management are equally important, as are jobs. This is not an area with a preponderance of other jobs. Above all, as we have all found through 500 e-mails each, people want a rethink, with all options potentially on the table. That means that people need to be flexible.

[Claire Perry (Devizes) (Con)]

My hon. Friend knows Savernake forest in my constituency probably better than I do, and we share a great concern about biodiversity and public access. Does he agree that in specifically making those issues the underpinning of the consultation process, along with other key variables, we are doing a far better job to protect public woodlands than the last Government, who sold off 25,000 acres with no consultation?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I did not make a ruling from the Chair for it to be breached. This is a very important issue to Members on both sides and many want to speak.

[Guy Opperman]

Each year, 475,000 cubic metres of timber are felled to supply local wood as fuel and to provide timber-intensive local businesses, such as Egger, which is the largest employer in Hexham. It has more than 400 employees. Kielder is a working forest, unashamed of its clearings and felled areas which, while not always postcard pretty, are replanted to provide a continuous cycle on which much of the employment and way of life and the whole ethos of the area are dependent. It is also the biggest employer in the north Tyne area.

I have worked closely with Northumbria Water, which is responsible for Kielder Water, the largest artificial lake in the UK. It sits at the heart of the forest. The development of these vast resources is already subject to a 25-year investment plan which has outdoor activities and all manner of other aspects of the environment at its heart. I find it hard to believe that that will be undeveloped and not taken forward, with a FTSE 100 company at the heart of the development.

Fundamental to this issue is ongoing access to walkers, cyclists, horse riders and a host of others. I hope that these plans will see an additional £31 million boost to the local economy, and several hundred new jobs in the next 10 years in an area where employment is far from guaranteed. I have genuine concerns that all that will be put at risk. I strongly urge the Minister to look closely at the proposals and to consider the many representations that I have received from my constituents who share my scepticism, and to reflect on the possible effect on this special place at the heart of my constituency.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

Like my hon. Friend, I have had many constituents expressing concerns about the Government’s plans and the consultation. Does he agree that access and the maintenance of biodiversity are the crucial components, and we should not have dishonest misrepresentation about the proposals? People deserve to be dealt with honestly. I do not mind opportunism, but I cannot stand dishonesty—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We have heard quite enough. We need very short interventions. This debate will otherwise be very disappointing for constituents who are affected by the issue that we are discussing. Hon. Members should know better.

[Guy Opperman]

I have yet to be satisfied that a good economic case has been made, and with so much at stake I await genuine satisfaction that it will be made. I will fight the specific clauses that are linked to this issue in the Public Bodies Bill.

17:49

[Lilian Greenwood (Nottingham South) (Lab)]

I have been prompted to speak in today’s debate by the tremendous anxiety expressed by so many of my constituents about the Government’s proposals. I know that this is not a concern peculiar to residents in my city, but perhaps Nottingham folk feel it even more keenly because they regard themselves as the descendants of our great hero Robin Hood, who made his home in nearby Sherwood forest. I was going to say that Robin’s hiding place, the 1,000-year-old Major oak in Sherwood forest country park, is safe from the proposals, because it is in a national nature reserve managed by Nottinghamshire county council and because even the council’s aptly named leader, Kay Cutts, would not dare to take her axe to our famous forest. However, I read earlier today that the Government are shortly to begin a consultation on divesting themselves of the country’s national nature reserves too, so, perhaps like many of our Forestry Commission local woodlands, the Major oak’s future is not secure either.

Nottinghamshire has nine Forestry Commission woodlands, including the east midlands’ largest tract of forest open to the public, Sherwood Pines forest park, which is just a few miles north of Nottingham. Sherwood Pines is a large mixed conifer and broad-leaf woodland with open spaces, heathland and pond, providing space for timber production, wildlife and recreation. I have been a regular visitor to Sherwood Pines since my children were small, and in that time I have witnessed the tremendous work that the Forestry Commission has done to encourage local people to get out and enjoy our beautiful countryside. There is a new café and visitor’s centre, children’s play areas, walking and cycling trails, a mountain biking area, an adventure course with ropes and zip wires, and, away from the centre, miles of peaceful woodland habitat and wildlife to enjoy. The forest is also used by many local schools, and the education service at Sherwood Pines was one of the first to be awarded a Learning Outside the Classroom quality badge.

Sherwood Pines is well developed as a visitor attraction, so perhaps public access would be secure, but what of the local woods that so many people enjoy, such as Blidworth woods, Haywood oaks, Silverhill wood, Boundary wood, Thieves wood, Oxclose wood and the Birklands? The Government tell us not to worry. The Secretary of State says that public rights of way and access will be unaffected, but can we trust this Government? My constituent Dr Chris Edwards certainly does not, saying that he has

“no faith in the promises being made to preserve access…this is the government that’s broken every election promise it made”.

This is the Government who promised to keep the education maintenance allowance and told us that there would be no more top-down reorganisations of the NHS—a Government who include Ministers who signed pledges saying that they would scrap tuition fees, but then voted to treble them. I would say that their promises are not worth the paper they are written on.

The Countryside and Rights of Way Act 2000 guarantees public access on foot, but as I have explained, the Forestry Commission has done much more than that, providing car parking, signage, visitor centres and leisure opportunities. The Government proposals contain no safeguards to guarantee that they will continue in the future.

[Jim Shannon (Strangford) (DUP)]

Is there not something obscene about the sale of English woods and forests when the other regions of the United Kingdom—Scotland, Wales and Northern Ireland—have all decided to retain their forests, keeping rights of access and the right to roam for ever?

[Lilian Greenwood]

The hon. Gentleman is absolutely right: those are things that we should protect. We should seek to learn from countries that appreciate the value of those public assets. Indeed, recent experience tells us that we are right to be wary. Rigg wood near Coniston water was sold off last autumn.

[Mr Aidan Burley (Cannock Chase) (Con)]

By Labour.

[Lilian Greenwood]

We should learn from things that we get wrong as well as from things that we get right. Indeed, what happened at Rigg wood, where there are padlocks on the car park, is why so many people—85% of the public, according to recent polls—want us to keep our woodlands in public hands.

Those people include my constituent Donna, who works at a local country park, who said:

“I am quite shocked that the present government is planning to sell off our land—land that we have a right to keep free and open for us all to enjoy”;

Carl, who has used forests all his life, who says:

“It grieves and horrifies me to hear that these beautiful places are going to be sold off and ruined forever, so that future generations will no longer be able to enjoy them as I have, please don’t support this awful bill”;

and Alison, another constituent, who described the potential sell-off as

“devastating for the people of Nottinghamshire,”

adding:

“Families are already feeling the effects of cutbacks in terms of affordable leisure activities for the whole family to enjoy”.

Dozens and dozens of constituents have been in touch to express their concerns about the potential damage to native woodland species, habitats and wildlife, and especially to our national treasures such as Grizedale forest, Kielder and the Forest of Dean, and to tell me their stories of using local forests and woodlands, week in and week out, for dog walking, orienteering, rambling and even historical re-enactments. Others have talked about their passionate love of the outdoors, developed as a result of childhood visits to our local woodland. They recognise that the Government have a duty to protect access to areas of natural beauty and to ensure that these irreplaceable natural habitats and their wildlife can be enjoyed by future generations.

[Richard Graham (Gloucester) (Con)]

Will the hon. Lady give way?

[Lilian Greenwood]

I will not give way to the hon. Gentleman. He has not been here for the whole debate.

Today in New York, the United Nations is launching the international year of forests, which is described on the UN website as “Celebrating Forests for People”. Our Government seem to be out of step not only with public opinion here but with the rest of the world. Some things are too important to leave to the market. Our ancient woodlands should be for the whole nation, and kept safe for future generations, not sold off for a quick buck.

[Richard Graham]

Will the hon. Lady give way?

[Lilian Greenwood]

I have already said that I will not give way.

I hope that the consultation is genuine, and that the Government will rethink this deeply unpopular plan.

17:55

[Mr Desmond Swayne (New Forest West) (Con)]

I am an enthusiast of the Government’s policy, but given the brevity of the debate, I shall restrict my remarks entirely to the opportunities for the New Forest that I see in the proposals. I have received a large number of communications, many of them very thoughtful, raising perfectly legitimate and proper concerns. I hope that the consultation will address many of them. What has surprised me is that the people who are the most vociferous in their opposition to the proposals are the very same people who stood shoulder to shoulder with me and my hon. Friend the Member for New Forest East (Dr Lewis) as we campaigned against the New Forest being shoe-horned into a highly inappropriate structure in the national park. I hope that those critics will look at these proposals with an open mind and wonder whether they might just be looking a gift horse in the mouth. There might be an opportunity to rebalance the interests of the forests that have been so shoddily disrupted by the creation of a national park. Within the Crown lands of the New Forest, there are already many private lands and private commons. Indeed, the National Trust itself owns two of the real gems: Hale Purlieu and the Bramshaw Commons. The land is not all owned and managed by the Forestry Commission.

I pay tribute to the fine public servants among the staff of the Forestry Commission who have been responsible for the stewardship of the New Forest, but we cannot hide from the fact that there have been enormous problems. The fact is that I have constantly had representations about the impact on ancient and ornamental woodlands, and on archaeological sites, of commercial forestry operations. I have endured arguments about the impact of the campsites—and their increasing commercialisation —on the local communities and on the habitats. I have also endured controversies—here is the humbug!—regarding the disposal of New Forest properties under the last Administration, and I brought one of those cases to an Adjournment debate in the House to raise the disgraceful way in which that property was disposed of. I endured the absolute furore when the Forestry Commission brought forward proposals to restrict dog walking in the New Forest. My hon. Friend and I were able to see off that threat.

Keepers of the New Forest have beaten their way to my door to complain about the way in which the byelaws of the forest were being flouted and not enforced. I have also had complaints about the way in which the skills, the stature and the place of the keepers are being diminished and downgraded. I do not lay any of these complaints and problems at the door of the management of the New Forest by the Forestry Commission in Queen’s house. However, the reality is that the Forestry Commission is headquartered in Edinburgh, and those who manage the New Forest report to Edinburgh. I want to see an arrangement whereby we have much more local control over the forest.

I offer a word of caution about the possibility of the National Trust stepping in. As I have said, it already manages part of the forest. I do not want another national organisation with a national strategy and a national vision. The New Forest is unique and what I would like to see is something along the lines of what we have in Queen’s house in Lyndhurst—perhaps even with exactly the same staff and personnel who currently manage the forest there—but reporting not to a board in Edinburgh, but to a board in the New Forest representing the proper interests of the New Forest, and particularly those of the people who have always safeguarded the forest and been responsible for the law of the forest—namely, the verderers.

Such a board, however, could not possibly be the board of the national park authority, which has, by its own choice, made itself a planning authority almost exclusively concerned with development control. It could play no part in this process, but I say again to my hon. Friend the Member for New Forest East, and also to opponents, that there is an opportunity here for us that we would be foolish to pass up.

18:01

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

It is difficult to follow that. Let me be as brief as possible. I commend the hon. Member for New Forest West (Mr Swayne) on referring to the staff of the Forestry Commission. It was a shame, however, that the Secretary of State never said a single word about the staff; indeed, it was more than a shame—it was a disgrace. The staff of the Forestry Commission are extremely loyal and they have built up expertise over time.

I chair the Public and Commercial Services trade union parliamentary group. I have a representation from the president of the PCS branch at the Forestry Commission. It is worth our while listening to what he wanted Parliament to hear. He says that the staff

“have spent their entire careers, a lot of them, in the FC and are deeply traumatised at the prospect of losing their jobs.”

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

I very much endorse what the hon. Gentleman says about Forestry Commission staff, but as a constituency MP, I have seen the Forestry Commission in Northumberland shed good quality, experienced staff over many years, and whole villages that were built for forestry employees no longer have a single Forestry Commission employee living in them.

[John McDonnell]

I understand the right hon. Gentleman’s point and I have shared his concerns over the years as well.

The PCS president continued:

“For many there is no prospect of picking up other work because the economy is in such a poor state that there simply isn’t work as all of the other public services also have to make cuts…Staff in the FC are unique; they regard their jobs as vocational. They are amongst the most loyal and committed that I have ever seen.”

Most of us would share that viewpoint and want it to be placed on the record. Where we have loyal staff, I believe they deserve some loyalty from us, as their employers, as well.

The current position has been mentioned, but not as starkly as I am about to put it. The 25% cuts from the comprehensive spending review mean that from a staff of 1,400, between 300 and 350 will lose their jobs. About 29% of the cuts relate to Forest Enterprise, which manages the estate. Already 256 jobs are notified as being lost in that section. Moreover, in the Forestry Authority and Forest Research, at least 40 to 50 and possibly more jobs will be lost as the 19% cuts takes place. The organisation is structured in those three elements: Forest Enterprise, Forestry Authority and Forest Research. Expertise, however, has been built up in the whole organisation so that one feeds information to the other and the expertise becomes interchangeable. By breaking up the organisation, as the Government propose, the bulk of the work within Forest Enterprise will be sold off either to the private sector or to charities and others. The expertise will therefore be cut off from the regulatory authority section of the Forestry Commission as well as from the research element.

[Richard Graham]

I hear what the hon. Gentleman says, but given that the debate is about the future of our forests, it is vital for Members in all parts of the House to recognise that heritage forests such as the Forest of Dean—which is next to my constituency—are not for sale, and that whatever the outcome of the consultation, access rights and biodiversity will be preserved for ever.

[John McDonnell]

As I have said, we need to recognise that these forests have been preserved for us by staff who have worked for us for generations over the last century. In my view, failure to discuss the staff undermines the Government’s duty of care to those people who have served us so well.

[Mr Graham Stuart]

Will the hon. Gentleman give way?

[John McDonnell]

Will the hon. Gentleman allow me to continue? Other Members wish to speak.

The consultation document contains only one paragraph that deals with staff. It states that the Transfer of Undertakings (Protection of Employment) Regulations will apply to the transfer of any of them. However, as we know from other privatisations and sell-offs, TUPE does not prevent a new employer from laying off staff in due course. It does not protect pay and terms and conditions in the long term.

[Mr Stuart]

Will the hon. Gentleman give way on that point?

[John McDonnell]

No, I will not.

TUPE does not even protect pensions. There is nothing to prevent a new employer from laying off staff while also undermining their conditions and pensions. I urge the Government to address the issue of their future. When I looked at the impact assessment to see whether there was any reference to it, I found that the only reference in the first seven pages related to redundancy costs. It reads as follows:

“Transition costs of redundancy, TUPE and possible further professional fees have not been quantified.”

That is repeated six times. It appears on each of the first seven pages of the document.

There are real anxieties among this group of expert staff about their future. There are anxieties about a transfer to the voluntary sector. Most Members have been involved with charities—most of us have served on their boards—and we know how difficult it is to maintain a charity. In any charitable or voluntary organisation, about 30% of the time is spent on trying to find funds for future years.

[Mr Sheerman]

I chair a charitable trust, the John Clare trust. We hoped to buy some woodland, but were told that the cost of managing woodland is 10 times the purchase price. Managing woodland is very expensive, and charities will not be able to do it.

[John McDonnell]

When charities encounter difficulties in these circumstances, they will be forced to make further savings like any other organisation, and the only savings that they will be able to make will be secured by further staff cuts. The House must understand the insecurities that exist among this group of people. I also believe that the sell-off will degrade the overall expertise that has been built up over the last century, and that as a result the very management of the forests will be put at risk.

The management met the staff and unions this morning. People were dismayed; and yes, a number of union representatives have said that, if necessary, they will resort to industrial action in an attempt to protect their jobs. I believe that it would be the first occasion on which industrial action had taken place in the Forestry Commission. That should demonstrate to Members the depth of the anger that exists about how these people are being treated. They are being treated like chattels rather than as the staff who have been so loyal to us over the last century.

18:08

[Mr John Leech (Manchester, Withington) (LD)]

I am glad to have the opportunity to take part in the debate.

Although my constituency may not be the most directly affected by the proposals to sell off or lease woodland currently owned by the state, the issue has attracted considerable interest among hundreds of my constituents who are rightly concerned about the impact that such a sale might have. There is little doubt that there has been much speculation, and even scaremongering, about what may or may not happen to public forests. I have received hundreds of e-mails from constituents, some of whom have been led to believe that whole swathes of woodland will be razed to the ground to make way for housing developments, golf courses and leisure clubs.

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

Will the hon. Gentleman or any of his colleagues emulate his party’s president, the hon. Member for Westmorland and Lonsdale (Tim Farron), in ripping up the Public Bodies Bill and voting with us this evening?

[Mr Leech]

I am not sure whether to thank the hon. Gentleman for that intervention, but we are not voting on the Public Bodies Bill today; we are voting on an Opposition day motion. I shall go on to discuss how I am going to vote.

Other constituents have sent e-mails suggesting that forests are going to be closed off to the public and surrounded by 10-foot fences, but that is clearly not the case. Unfortunately, the Labour party has been complicit in this misinformation and shameless in its attempts to scare people into believing that the future of our forests is under threat. Instead of participating constructively in the consultation on the future of our woodland, Labour Members simply choose to try to score cheap political points by tabling an Opposition day motion to grab the headlines. That is why I certainly will not be voting for Labour’s motion and why I will support the Government’s amendment, which exposes the disgraceful sell-off of thousands of acres of public woodland by the previous Labour Government without any of the protection being put in place and promised under the coalition Government’s consultation. However, I wish to go on record as welcoming the measured comments made by the hon. Member for Hayes and Harlington (John McDonnell) about staff at the Forestry Commission, which should be added to the consultation process.

[Mr David Anderson (Blaydon) (Lab)]

Does the hon. Gentleman agree that people would take the consultation more seriously if it was a genuine debate about whether or not we take these forests out of public control, rather than how we do that, as it is now? The public want this to be about “whether or not”, so that they could tell us not to do this.

[Mr Leech]

I thank the hon. Gentleman for his intervention. I endorse this as a proper consultation, and I hope that everyone who has an interest in this issue will participate in it and put their views clearly on the record.

I will never support the sell-off or leasing of woodland if I think that it will be detrimental to the long-term sustainability of the woodland and its biodiversity, and will threaten the access that people have enjoyed over a long period. What better safeguards will Minister’s introduce to protect the land and access to it compared with those that we already have? These forests will outlive all of us in this Chamber today and the public want to know how long these safeguards will be in place. Can I be assured that, whichever organisation might take on the running of a public forest, these safeguards will remain in place for not only our lifetime, but centuries to come?

[Neil Carmichael (Stroud) (Con)]

I have received more than 400 comments about these proposals, so I am keen for the consultation exercise to go ahead. I am thinking of holding a meeting in my constituency to meet all 400 contributors, because this is important. I wish to raise the following questions: first, can I be absolutely sure that communities—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Mr Carmichael, I have tried to tell everybody recently that we want short interventions, because we want to get as many people in as possible. Indeed, people who are speaking do not have to take the full six minutes or interventions.

[Mr Leech]

Guaranteeing the future of the woodland is important, but so, too, is the guardianship of that land in the meantime. There is a real fear that the trend to improve the forests will fade over time. What assurances can the Minister give that the woodland will not just be maintained as it is and that the new owners will be compelled to improve both access and the natural habitat? The public estate enjoys 40 million visits a year, a quarter of it is dedicated as a site of special scientific interest and it hosts a wealth of biodiversity. None of those things should be under threat, and they must flourish under this coalition Government.

One of the big unanswered questions is whether or not the private ownership or leasing of forest land will make the savings that the Government anticipate. I am not convinced that these proposals will save any money; they may end up leaving the Government with a bigger bill to maintain the forests, because the sale or lease of commercially attractive forests will mean that their revenue is no longer available to subsidise the running of heritage and other loss-making forests. That was the only sensible point made by the shadow Secretary of State.

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

Does my hon. Friend agree that Ministers simply have not allayed the very real fears in this country and that we need assurances from them that the consultation process is genuine and that decisions have not already been taken?

[Mr Leech]

I do. One problem is the fact that the Opposition have tabled the motion at this stage rather than allowing the consultation to take place so that people can have their say and a proper, sensible decision can be made following the consultation.

I do not think we should be too precious about the model of ownership of our forests. The previous Government could not be trusted to safeguard the future of the public forests that have been sold off in the past 13 years. It is certainly not the case that the forests would be safer in Labour hands. Many might argue that the future of the forests would be more certain if they were run and managed by organisations such as the Woodland Trust or the National Trust. It is not the model of ownership that we should be precious about but the people, including the staff, and the organisations that might run the forests.

In my constituency, after the previous Labour Government closed my local hospital, Withington hospital, Paupers wood on that site was put up for sale. Like many others, I expressed grave concerns about what that might mean for the future of that relatively small piece of woodland. However, the sale of that land to one of my constituents, Mary, resulted in enormous benefit for the community. That area of woodland, which had not been maintained for years and had been inaccessible to local people, is now available for local community groups to enjoy and for schools to use for outdoor classrooms. The woodland is well managed and is now sustainable for the future. That would not have happened without that sale. It is not simply a case of public ownership being good and private ownership being bad. This debate should be about what is best for individual woodlands and communities and about securing the future of our forests for generations to come.

18:14

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

It is a great pleasure to follow the hon. Member for Manchester, Withington (Mr Leech), who, along with the hon. Member for Hexham (Guy Opperman), has laid out some of the problems confronting the Government’s proposals. It is a source of legitimate confusion that a party whose new symbol is the oak tree is involved in this extraordinary sell-off of our forests. It was chosen as a symbol of the Tories’ newly discovered environmentalism, belief in British strength and protection of our heritage, but that all seems a long time ago now.

The Government seem to have been taken by surprise at the outburst of concern about their proposals. I think it was Harold Macmillan who said:

“First of all the Georgian silver goes. And then all that nice furniture that used to be in the salon. Then the Canalettos go.”

This Government have surpassed Mrs Thatcher and are now selling the wood that built the furniture that was in the salon. In my view it is a grave error, for which there is no support or mandate.

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

I am sure that my hon. Friend will recall that a previous Conservative Government sold off the playing fields. This is phase two—selling off the trees and woodlands.

[Tristram Hunt]

I thank my hon. Friend for making that point. The Conservatives have, as they say, previous in this field.

Since the announcement of this Opposition debate, the internet and other social networking sources have come alive with people hoping to save their local forests. Cannock Chase, near my constituency, now has a Facebook site with 2,500 supporters. A YouGov poll suggests that 84% of people oppose the sale. The Secretary of State says that people simply do not understand the proposals and have been misled by the media, but we do understand the Government’s plans and we do not like them, because they will limit public access. The hon. Member for Manchester, Withington spoke about access being allowed to a forest in his constituency, but as my hon. Friend the Member for Brent North (Barry Gardiner) says, that was because of principles and legislation that Labour put in place to make sure that access was preserved.

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

The issue is not only the potential private ownership of woods, but the nationality of the private company that might own those woods.

[Tristram Hunt]

The matter becomes difficult when we think about where many of our trees have come from. I take my hon. Friend’s point, but the forests and woodlands have come into this country from many sources across the world .

I shall touch briefly on something mentioned by my hon. Friend the Member for Bishop Auckland (Helen Goodman): the forests and woodlands are a great matter with regard to our national identity. The Government are striking at something very particular to English identity and British identity. In the 18th century the idea of the British heart of oak recurred on pub signs and in pamphlets. It was a bulwark against Catholic absolutism. According to Simon Schama the very idea of Britain, which was new in the late 18th century, was planted with acorns. In 1763 Roger Fisher—a disciple of John Evelyn, the great 17th-century arboreal enthusiast —published “Heart of Oak, The British Bulwark”, in which he argued that empires rose or fell depending on the dearth of the sovereign hardwood.

As Government Members have pointed out, this Government are not the first to try to offload our national forests. King Charles I, in the 1630s, tried to do the same. Again, it was an attempt to limit public ownership: with the forests went the common lands, the moorlands and the wetlands of East Anglia. This is a tradition in Toryism that Opposition Members recognise and do not like. The point of this history is to suggest that this is a shared inheritance, and we are particularly worried about access in the context of the Government’s plans.

[Jeremy Corbyn (Islington North) (Lab)]

What my hon. Friend is saying is fascinating and excellent. Does he recall that the Forestry Commission was established because of the loss of so much forest cover in this country, designed to recreate the environment that had been destroyed by previous generations and their greed?

[Tristram Hunt]

Absolutely. I do not accept the idea that the state intervening in the control of forests is somehow an evil. I regard it, in many situations, as a virtue.

Let me move on briefly to the situation facing Cannock Chase, which is the woodland that my constituents in Stoke-on-Trent Central like to enjoy. We have heard Ministers provide special securities for the heritage forests, but Cannock Chase does not fall into that particular category. However, it contains precisely the kind of forest that the Woodland Trust is most concerned about—that mixture of ancient habitat, conifer and recreation. Over the past few years the Forestry Commission has opened up access to it, with more and more enjoying it. The idea that local community groups will be able to compete at market value for the same amount of land is simply not credible. There is a lot of talk about community groups having special provision, but history simply does not show that. When we look back at previous Conservative-led Governments, we see that hundreds of thousands of acres were sold off.

The debate points to the core of the Government’s notion of the big society, and there is a hole in the middle of it as large as that in which King Charles II hid from the forces of republicanism. It will take investment—a belief in social capital and in capacity—if those community groups are to be built up to manage our woodlands. Nothing in the consultation or the Public Bodies Bill suggests that that is anywhere near the mind of this Government.

18:24

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

At the end of the classic film “It’s a Wonderful Life”, the James Stewart character is taken back to see what would have happened to his home town, Bedford Falls, if he had never lived. He discovers that it would have been cheapened, commercialised and degraded. Indeed, even its name would have been changed to Pottersville after the greedy grasping capitalist who was the villain of the film. I know that no one would wish to see any such fate befall the New Forest, but there is huge concern in my constituency that steps may be taken in that sort of direction.

I had an early start this morning. I had to go to the New Forest and get back in time for the debate, because I was attending the funeral of my constituent and friend, Mr Mike Gilling. Mike was the sort of person who, by anyone’s definition of a society, big or not, put into it far more than he took out of it. It was therefore not surprising that there was a wide spectrum of mourners at that funeral, representing a good cross-section of the people of Hythe, which is on the edge of the New Forest. Did any of them come up to me after the funeral and say, “Julian, I really think you should be supporting these proposals that the Government are putting forward for the New Forest”? Not one. Did anyone come up to me and say, “Julian, I do hope you’re going to speak out against these proposals this afternoon in the debate”? Quite a few.

I did not just go by an, as it were, self-selecting sample like that. Nor did I just go by the self-selecting sample of people who have written a sheaf of letters to me, even though the balance is still dozens on one side of the argument and not yet a single letter—the Whips Office had better get cracking and find someone in my constituency so that I cannot say this again—in favour of the Government’s proposals. No, I am afraid it is all anti.

I did not rely even on those two samples, the small one and the larger one via the correspondence. I also spoke to one of the most senior figures in the New Forest, who has all the expertise that I freely confess I lack. What he said to me was that everybody in the New Forest who is involved in its administration in various types, capacities and dimensions is in a state of deep shock; that the status quo is unanimously preferred; and that, if there is a consultation, we had better hope that it is a genuine one, because then, on the basis of the sampling that I am seeing so far, there will be an overwhelming series of representations against what is proposed.

[Neil Carmichael]

What I would like to know is what will happen to multi-purpose woods—those which are commercial, heritage and used for recreation.

[Dr Lewis]

My hon. Friend will find that I am coming to that very point. There are two models according to which the New Forest can be run. There is the old model, with many sources of power intermixing, interacting and influencing each other, and there is the overarching model, with some authority in place to which everything else is subservient. My dear and hon. Friend the Member for New Forest West (Mr Swayne) was right when he said that we stood shoulder to shoulder to battle against the national park authority being imposed on us, because we felt that that was an overarching model rather than an interacting model of different organisations.

That is where I fear my Front-Bench team has lost its way. It is not as if the Forestry Commission has, or ever has had, overall control. The Forestry Commission is one of a number of bodies in this universe, along with the verderers, the New Forest Commoners Defence Association, and voluntary bodies such as the New Forest Association, all of which have to work together and persuade each other before they can go forward. The Forestry Commission is not just about commerce or timber; it is also about conservation and disease control.

[Dr Sarah Wollaston (Totnes) (Con)]

Does my hon. Friend share my concern that when phytophthora ramorum, otherwise known as sudden oak death, is starting to devastate large forests and mixed woodland, it is not the right time to do something that might put at risk measures to control it?

[Dr Lewis]

I share that concern. It comes back to the exchange that I had with the Secretary of State during her initial contribution. There is a deficit in the running of the New Forest, and there is a good reason why there is a deficit. It is precisely because the Forestry Commission has duties, such as trying to address matters concerning disease and matters concerning conservation, as well as trying to make what profit it can from the commercial management of the timber industry.

When we consider what the future holds, we are told not to worry because either the Government will be convinced that a new or existing charitable trust will be able to take on the burden, or they will not give up the forest and it will remain in public ownership. This is not dissent; this is me participating in the consultation. Here is my answer: do not give up the forest or give it to a charity, either a new one or an old one, because they will be unable to take on the £2.9 million deficit. If the Government say, “Don’t worry, we’ll pay for that,” why the heck are they bothering to make the change? We really do not need this.

There is particular concern about the Public Bodies Bill. The New Forest has traditionally always been governed by its own legislation, which is laid out in the New Forest Acts, but there are provisions in the Public Bodies Bill that look as though they will take precedence over those Acts. If I seek any assurances at all from those on the Government Front Bench, it is an assurance that no provision in that Bill will have supremacy over the provisions of the New Forest Acts. It is terribly important that we have a constellation of organisations and that the verderers are able to say no. We need a sort of mixed economy, with neither statism on the one side, nor total privatisation, or hand-over to a private organisation or charity, on the other.

[John Pugh (Southport) (LD)]

Will the hon. Gentleman give way?

[Dr Lewis]

No, I will not.

I must say that I am getting a bit fed up with being put in this position, as this is not the first time. At the general election there were Liberal Democrats who pledged in good faith that they would not raise tuition fees, and yet they have had to treble them, and there were Conservatives, like me, who pledged in good faith that the nuclear deterrent would be safe, yet we have seen its confirmation put off until after the next election. Now we have this measure, which I do not think was in any party’s manifesto. Much effort has been put into ensuring that the Conservative party is no longer seen as the nasty party. We may no longer be the nasty party, but I do not want the new party that I understand some people are trying to form—a strange permanent coalition of Conservatives and Liberals—to get the reputation of being the party of nasty surprises. This is a nasty surprise, and we can do without it.

18:32

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

I seem to spend a lot of time following the hon. Member for New Forest East (Dr Lewis) and agreeing with his criticism of his party and the Government on the nuclear deterrent, so it is a great pleasure to follow him and agree with his criticism of the Government Front-Bench team on the issue of the nation’s forests.

The Secretary of State, in her rather long speech, invited Members to go to Grizedale forest and have a look around to see what they think. I wish that she had been there last Sunday for the rally that I attended, as did Lord Clark of Windermere and the hon. Member for Westmorland and Lonsdale (Tim Farron), whose constituency neighbours mine. We all spoke at the rally and saw the great, diverse and angry crowd of people who gathered to make their points. I have been surprised by the tone adopted by many Members who have participated in the debate, because the people who attended the rally were not in the main Labour party supporters—I have been to a few Labour rallies and trade union do’s. Although there were many Labour party members present, there were voters for all parties there. Indeed, if one party represented there was in the majority, I speculate that it probably was not my own.

Those people did not feel that they had been duped, and if anyone had put it to them that they were being dishonest in their concerns, I think that they would have given the accuser very short shrift. They are people who honestly and rightly believe that the rights of access that they are vaguely being promised through the consultation are not worth banking on. They are people who, because of the huge deficit that the hon. Member for New Forest East so amply laid out, do not buy the idea that there could be a great renaissance in the voluntary sector, in charitable bodies and in people coming together to buy woodland. They believe, absolutely rightly, that they already own that land; it is owned by the British people.

We all know, from the past 13 years, that we cannot have a referendum on every issue—on the many difficult things that people disagree with. On an issue as fundamental as this, however, we have to have the consent of the people before we go ahead. On Sunday, like the thousands of people who have made their views known and written to hon. Members, people at the rally made it very clear that the Government simply do not have that consent and should think again.

I hope that Liberal Democrat Members will pay heed to the stand that their party president, my constituency neighbour, the hon. Member for Westmorland and Lonsdale, has taken, and consider voting with us today and in opposition to the Public Bodies Bill, on which the hon. Member for Thirsk and Malton (Miss McIntosh) made a good point, when she noted the potential dangers in relation both to this issue and to others if we go down that route. Ultimately, however, on that and on many other measures going through the House, such as that on tuition fees—I am thinking of all the other broken promises that we have seen—there are only so many times that Members, who undoubtedly have genuine grievances with what their party and Government are doing in their name, can credibly go to their constituents and wash their hands of it. Eventually, every Government Member, but the Liberal Democrats in particular, will have to account to their constituents and parties for the way in which they have propped up the Government.

[Karl Turner (Kingston upon Hull East) (Lab)]

Does my hon. Friend agree that this is an opportunity for Liberal Democrat Members not to break their promises but to come along and vote with us on the issue?

[John Woodcock]

Yes, it is. I hope that many Liberal Democrats do so today and on the Public Bodies Bill, because no Member, unless they have not checked their e-mail or post, can have failed to see the anger about this issue. I hope that they act on it with us and take into account what their constituents are rightly telling them, but ultimately they will have to take into account what they are doing daily to prop up the Government, who are not listening to the British people, and act accordingly.

18:38

[Sir Peter Soulsby (Leicester South) (Lab)]

The Forestry Commission is a British success story. I say that deliberately, because although we are talking about England’s forests, as my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) reminded us, the Forestry Commission operates throughout the United Kingdom, and weakening it, as the Government are doing in the measures before us, will have an impact throughout the UK.

The Forestry Commission, as we were also reminded, was set up in 1919, and its core business originally was the production of pit props. Those days are long gone, however, as are the days when it planted insensitive and destructive plantations of parade ground conifers that marched across our hillsides.

Over recent years, the commission has been at the forefront of rural protection. My hon. Friend the Member for Ogmore (Huw Irranca-Davies) and several other hon. Members drew attention to its work on the stewardship of the natural environment, on which it has set an example to other organisations.

The Forestry Commission has shown genuine concern for the environment and has put it at the heart of its work, and it has given the highest priority to the protection and enhancement of biodiversity. As several hon. Members reminded us, particularly my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt), it has been particularly successful in opening access to its estate, even to those parts that it does not own but leases. One of the major concerns as this process goes forward is what will happen to that access. At the moment, the estate has some 40 million visitors a year. They go there not only to walk, ride and cycle but to have their experience enhanced and interpreted by the Forestry Commission in producing educational material.

Those are all outstanding achievements for the Forestry Commission, in the course of which it has been able to reduce its dependency on public funds. The hon. Member for Brighton, Pavilion (Caroline Lucas) drew attention to an outstanding aspect of its record—it is the only state-owned forest in Europe to have been declared truly sustainable. As she said, the whole of the public forest estate has received Forest Stewardship Council certification and, as such, is recognised as being managed responsibly. It is significant that, when questioned on this, the Minister of State has been completely unable to guarantee that attaining such certification will be a requirement for those who might take over its ownership and management. He has described that as being something that will be optional for them, which means, of course, something that they will not wish to subscribe to.

Throughout this debate, we have struggled to understand the reason for what the Government are doing. The first reason given by the Secretary of State—[Interruption.] She says that we do not understand; well, perhaps the Minister of State will explain it to us. Originally she described the sale as something that would fill the black hole in the flood defence budget. That was until she realised that the cost to the Government of subsidising other people to manage the forests would far outweigh any of those proceeds. Indeed, the impact assessment published today makes it clear that in fact the Government stand to make a net loss from the sale of these forests, and that the burden on the public purse will be greater as a result of their disposal, not less.

When that excuse wore thin, the Government turned to the explanation that this was about allowing communities and environmental groups to manage the land—the big society. That was until most of those bodies realised, as has been confirmed today, that they would have to meet the market price to purchase the land and that they would be scraping around for years afterwards to try to pay for its upkeep—for the assets and liabilities that they would be taking on.

Only when the Secretary of State realised that neither of those two explanations for the Government’s action had any credibility were we given the spurious reason that it was necessary because of the failings of the Forestry Commission constitution. Significantly, we did not hear that from her until today, but we have heard it on several occasions recently. It was mentioned briefly today by the Prime Minister. The argument is that there is some inherent conflict of interest in the Forestry Commission that makes it unable to carry out the role that is given to it. We have heard no evidence that such a conflict of interest gets in the way of the commission doing its work. All we have heard is that it is a very successful organisation that is performing an admirable duty in protecting our forests and enhancing their biodiversity, and ensuring that we, the public, have access to them.

First, it was the money, then it was the big society, and then it was the alleged conflict of interest. I hope that the Minister will give us the real reason for this, because there is widespread suspicion that we have not heard it. I understand that he has let slip one of his primary motivating forces—that this is unfinished business; even though Baroness Thatcher thought of selling off the forestry estate, she never had the determination to carry it through. For her, privatising our nation’s forests was one privatisation too far. The people of England, whether they be walkers, cyclists, riders or just ordinary people who care about our natural woodlands, are united in saying no to that privatisation.

It is clear that the Government’s use of the big society to justify the policy is a sham. This is not about new opportunities for public participation or new ownership models. It is not about giving preference to local people, because they would have to bid for the land alongside international logging companies.

We have heard about the position of heritage forests such as the New Forest and the Forest of Dean. I want to put on record what the Government’s consultation paper says about those forests. It states that they might be handed over to charities, but that those charities

“would be expected to become less reliant on Government support over time.”

What charity or trust in its right mind would take on the liability of the New Forest or the Forest of Dean if it were expected to make savings over time?

My hon. Friends the Members for Bishop Auckland (Helen Goodman) and for Nottingham South (Lilian Greenwood) spoke about Robin Hood in the context of the forests. My hon. Friend the Member for Nottingham South described the sale of these assets as mean and small-minded. To that, I add stupid and destructive.

The sale of our forests and woodlands is opposed by 84% of the public. The Secretary of State was dismissive of public opinion, but 300,000 people have already signed a petition against the sell-off. I wonder whether she is dismissive of the people because she thinks that they do not understand what she is doing. That point has been made by some Members, who have said that there is scaremongering. I suggest that most Members know that the people understand only too well the threat of what the Secretary of State is doing to our precious forests and woodlands.

In this comparatively short debate, we have only begun to reflect the concern and anger of people up and down the country about the future of our precious forests and woodlands. Our woods and forests are just that—ours. Of course the Forestry Commission must continue to be commercially effective, but it must also be there to protect our access as walkers, cyclists and riders in our forests, to continue its excellent work in education, and to protect and improve forest habitats. As my hon. Friend the Member for Hayes and Harlington (John McDonnell) reminded us, it must have the staff and the scientific expertise to carry out its wider public duties as an adviser and a regulator.

Forests were indeed sold off while Labour was in government, but the first tranche of sales planned by this Government involves 10 times more land than was sold off in the last five years of the Labour Government. Those sales made possible the purchase of land to plant 1 million trees in Wigan, 2 million in Warrington, 2 million in St Helens, 1 million in Moseley and 1 million in Ellesmere Port. Every penny went back into forestry, not to fill a black hole in the Secretary of State’s flood defence budget.

The protests about this issue are only beginning. They will go on until the Government get the message. Members from all parts of the House will continue to get the message from their constituents. We have heard brave words from the hon. Members for Hexham (Guy Opperman) and for New Forest East (Dr Lewis), who spoke with authority and conviction on behalf of their constituents and their beloved forests.

[George Freeman (Mid Norfolk) (Con)]

Will the hon. Gentleman give way?

[Sir Peter Soulsby]

I do not have time, I am afraid.

Those Members reflected this evening a message that we will all hear in the weeks and months to come—that these are our woods and our forests, and they are precious to us all. They must remain open to the public, protected for the public and owned by the public.

18:49

[The Minister of State, Department for Environment, Food and Rural Affairs (Mr James Paice)]

A lot of issues have been raised in the debate, and I intend to respond to as many as possible. I undertake to write to hon. Members who have asked specific questions if I do not have time to answer them all.

We have heard speculation about all sorts of risks to aspects of forests if our proposals go ahead. I hope in the next few minutes to be able to debunk most of that nonsense. Those risks have been invented for totally spurious reasons. I stress that this is a consultation, and that it will last for the full 12 weeks, as is the convention. During it, we will listen to many of the organisations referred to this evening that have an interest in the matter, and I will personally discuss it with them.

We have repeatedly stated that existing public benefits will be protected in any transaction. I shall return to that point later. I also emphasise that the programme that we propose will take 10 years. It is not, as one Member suggested, a fire sale; it is a long and transitional but dramatic change in the ownership and management of Britain’s farms and woodlands. If we are not satisfied with any offer that comes forward, there will be no deal on the forest in question.

I am afraid that the hon. Member for Wakefield (Mary Creagh) demonstrated a considerable lack of true knowledge. [Interruption.] If Labour Members wait, they will hear the reality. She asserted that there was no information available about the area of ancient woodlands involved—it is 53,000 hectares, for her information—and, contrary to what she said, SSSIs are included in the mapping process. She also went on about Labour having sold only a net 4,000 hectares, but the fact is that it got rid of 9,000 hectares without adequate protection for public benefits.

[Mary Creagh]

Will the Minister give way?

[Mr Paice]

On the issue of—[Hon. Members: “Give way!”] No, I am not going to give way.

On the issue of funding, the reality is open for us to see in the Forestry Commission’s accounts. It costs £17 million a year to run the Forest Enterprise in England, excluding research and regulatory costs.

[Barry Gardiner]

Will the Minister give way?

[Mr Paice]

No.

We get just a £1 million surplus from commercial logging activity. That is one of the drivers of the change. The commercial timber sector tells us that if it could have access to our commercial forests, not the recreational ones, it could do better and would return the improvement to us through the lease.

[Barry Gardiner]

Will the Minister give way?

[Mr Paice]

No, I am not going to give way.

[Barry Gardiner]

On a point of order, Mr Speaker. I tabled a parliamentary question for named day answer on 31 January, seeking to elicit information from the Minister. My office phoned the Department today only to be told that it was waiting for the Minister to—

[Mr Speaker]

Order. That is not a point of order for the Chair, and it is not a matter to be dealt with now.

[Mr Paice]

Somebody referred to the opportunity for wind farms, and we have just heard some more.

A number of Members referred to people’s rights, and I wish to spend a few moments explaining where we are on access. Permissive rights have been mentioned, and I have to stress that very little of the forest estate carries such rights. I suspect that Members are confusing them with dedicated rights under the Countryside and Rights of Way Act 2000. Some 2,000 hectares of land carries permissive rights, and that is all land that is held on 999-year leases. Of the land that we actually own, 90% has dedicated access, which cannot be extinguished. Indeed before transfer, we could and would enhance that provision to cover any forms of access not already covered by it.

The hon. Member for Leicester South (Sir Peter Soulsby) suggested that the Government are weakening the Forestry Commission, but nothing could be further from the truth.

[Frank Dobson (Holborn and St Pancras) (Lab)]

Will the Minister give way?

[Mr Paice]

I am not giving way to the right hon. Gentleman because he has only just come into the Chamber.

The Forestry Commission will have its role altered over time, as this period transpires. We want it to concentrate on regulation, advice and research, and on promoting the wider planting of trees. Let us not forget that the under the last five years of the Labour Government, tree planting in this country fell by 60%.

A number of hon. Members referred to the Forest Stewardship Council. I can assure the House—I am happy to give this guarantee—that the council’s certification scheme will remain a condition if we transfer any forests that are currently subject to it, as they all are.

My hon. Friend the Member for Hexham (Guy Opperman) understandably wanted assurances and called the issue of access “a deal-breaker”. I can assure him—I promise him—that access as it currently exists will be guaranteed. I cannot make it any clearer than that.

[Mr Steve Brine (Winchester) (Con)]

Access is the key point in the hundreds of communications that I have received. Does the Minister agree that over the course of the consultation, the challenge for Ministers is to make the case on access to the hundreds and thousands of people who are e-mailing hon. Members?

[Mr Paice]

I cannot say it more clearly than I just did. We will guarantee existing rights of access on any land that is moved away from its current operation.

My hon. Friend the Member for Hexham also rightly referred to jobs in his area—specifically to those at Egger—as did the hon. Member for Hayes and Harlington (John McDonnell). I do not often agree with the latter politically, but I respect his passionate belief in the interests of the working people of this country. I can assure my hon. Friend and the hon. Gentleman that the Government care about those jobs too. The announcement of job losses today is extremely sad and distressing, and we understand and sympathise with those who might lose their jobs, but that was not the result of our consultation.

[Mr Burley]

I represent Cannock chase, which is one of the great forests of England and important to everybody in the west midlands. Does the Minister agree that it is an historic forest and, as such, deserves heritage status?

[Mr Paice]

There will be lots of bids for heritage forest status. The criteria by which they will be judged are laid down in the consultation document. I fully recognise that Cannock chase has major attributes in that respect, as have other forests, but I am not at this stage going to start listing every single one.

[Ian Murray]

Will the Minister give way?

[Mr Paice]

No—I am not giving way anymore.

Finally, on jobs, I want to make this point. The Government believe that any commercial undertaking that leases parts of our forests for commercial purposes will want to increase commercial and economic activity. That is the best way to encourage job creation. People will not take forests on just to shut the gate—they would be unable to do so even if they wanted to—and leave it there; they will want to run that area as a commercial, job-creating business.

This debate was based on Opposition claims that range, frankly, from the spurious to the absurd. Not only do the Government not intend, as the Opposition motion suggests, to sell 100% of the forest estate; we could not do so, because we do not even own 58,000 hectares of it. The actual figures are in the document.

The Secretary of State and I have repeatedly stressed—

[Ms Rosie Winterton (Doncaster Central) (Lab)]

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

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly, (Standing Order No. 31(2)), That the original words stand part of the Question.

18:59

Division 188

Ayes: 260

---

Labour: 235
Liberal Democrat: 7
Democratic Unionist Party: 4
Scottish National Party: 4
Plaid Cymru: 3
Conservative: 3
Social Democratic & Labour Party: 1
Green Party: 1
Independent: 1

Noes: 310

---

Conservative: 266
Liberal Democrat: 43

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

19:15

Division 189

Ayes: 301

---

Conservative: 261
Liberal Democrat: 39

Noes: 253

---

Labour: 232
Liberal Democrat: 6
Democratic Unionist Party: 4
Scottish National Party: 4
Plaid Cymru: 3
Social Democratic & Labour Party: 1
Conservative: 1
Green Party: 1
Independent: 1

The Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)),

Resolved,

That this House deplores the actions of the previous administration in selling off 25,000 acres of public forestry estate with wholly inadequate protections; notes that the previous administration sought to go even further in finding ways to exploit the forestry estate for commercial gain as recently as 2009; welcomes the consultation proposals to guarantee the future protection of heritage forests by offering them charitable trust status; supports the consultation proposals for robust access and public benefit conditions that will be put in place through lease conditions, including access rights for cyclists and horse-riders; believes the leasehold conditions regarding biodiversity and wildlife conservation will safeguard significant important environmental benefits; sees these proposals as important in resolving the conflict of interest whereby the Forestry Commission is the regulator of the timber sector whilst being the largest operator in the England timber market; considers that debate on the future of the forest estate ought to be conducted on the basis of the facts of the Government’s proposals; and believes that under these proposals people will continue to enjoy the access and benefits they currently have from the woodlands of England.

Court of Auditors 2009 Report

Wednesday 2nd February 2011 Commons Chamber

19:27

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

I beg to move,

That this House takes note of the Unnumbered Explanatory Memorandum dated 25 November 2010 submitted by HM Treasury on the implementation of the 2009 EU budget, the Unnumbered Explanatory Memorandum dated 24 November 2010 submitted by the Department for International Development on the activities funded by the Eighth, Ninth and Tenth European Development Funds in the financial year 2009, European Union Document No. 12393/10 and Addenda 1 and 2 on Protection of the European Union’s financial interests, European Union Document No. 13075/10 and Addendum, relating to an annual report to the discharge authority on internal audits carried out in 2009, the Unnumbered Explanatory Memorandum dated 22 October 2010 submitted by HM Treasury on the European Anti-Fraud Office’s tenth activity report for the period 1 January to 31 December 2009, and European Union Document No. 16662/10 and Addenda 1 and 2, Commission Report to the European Parliament and the Council on the follow-up to 2008 Discharge; and supports the Government’s continued engagement with its EU partners to improve financial management of the EU budget.

I should start by saying that it is a pleasure to have this debate on the Floor of the House, as I believe that this is the first time that that has happened. European Union issues are occupying hon. Members’ thoughts at this time, so holding this debate on the Floor of the House demonstrates how important it is to focus also on the crucial issue of ensuring sound financial management of the EU budget. I therefore wish to emphasise at the outset the seriousness with which this Government take the issue. Managing taxpayers’ money properly is crucial.

[Kelvin Hopkins (Luton North) (Lab)]

Yet again, the European Court of Auditors has failed to approve the European budget. Will the Minister tell us for how many consecutive years that has occurred?

[Bob Russell (Colchester) (LD)]

Fifteen.

[Justine Greening]

In fact, it is 16 years, and the Government view that as completely unacceptable. I hope that the hon. Member for Luton North (Kelvin Hopkins) will bear with me while I set out some of the steps we have already taken and those we plan to take over the coming months to play our part in getting these issues tackled.

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

Does the Minister accept that every previous Government, of whatever party, have always said that that situation is unacceptable, yet nothing has ever changed? Why are her Government so soft on Europe?

[Justine Greening]

I completely reject the hon. Gentleman’s intervention about this Government being soft on Europe, and I think that even he does not believe it. Far from being soft, we have taken a proactive approach to managing down the EU budget and getting control over it. We are dealing with a key part of that because, as he is aware, we have been leading the debate on the size of the EU budget, with some success. We plan to lead the debate as we enter the next financial perspective about how large the budget should be and the need for it to reduce in real terms over time. He will also be pleased to hear that we are steering the debate on what we should be spending the budget on. However, we are here tonight to debate the fact that although that is crucial, if we do not have the final piece in place—ensuring that once the decision has been taken on that money it gets spent in the way that was intended—we are not fulfilling what we need to fulfil. That means we are not getting value for taxpayers’ money, and that is why this debate is so critical.

The hon. Member for Glasgow South West (Mr Davidson) asks how we can make a difference. I hope the fact that I am an accountant will bring some—[Interruption.] He is groaning, but it is a good thing to be an accountant in this role. I understand some of the technical issues involved in auditing and managing financial accounts and in managing budgets, and I assure him that I shall bring that experience to my role as Economic Secretary on behalf of the Government.

Let me set out for the House the background to this issue before taking more interventions from hon. Members who rightly want to have their say on this topic. First, managing taxpayers’ money properly is crucial at any level, be it local or national Government or across the EU. It is a key part of the responsibility of Government and essential to the credibility of the EU budget and the European Union as a whole. As I have said, this Government and I, like other Members of the House, find it completely unacceptable that the Court of Auditors was, for the 16th year in succession, unable to provide a positive statement of assurance on the EU’s accounts. That is a continuing blot on the EU’s reputation and it raises serious questions about the management of EU funds. As I have said, British and EU taxpayers need to know their money is being well spent, but the Court of Auditors cannot provide that assurance. We are talking about large sums of money and it remains difficult to spend them effectively to deliver clearly the results we want—growth, jobs and a stable EU.

[Kelvin Hopkins]

As an accountant, the Minister will understand large numbers. In 2009, reported irregularities in agriculture increased by 43%. Things are getting worse, not better.

[Justine Greening]

The hon. Gentleman is right that in some areas things are getting worse, but in others they are getting better. The problem is that there is no clear pace of improvement at a rate that will make a big enough difference fast enough. The key challenge that we have to debate tonight and that the Government are keen to push within Europe is how to get that step change. What will it take to make sure that core financial management of EU funds is further up the agenda in the European Union than it has been? I will discuss later how to manage that more effectively.

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

There is one way: we could say to the EU, “If you don’t balance your books, we won’t pay our contributions.” Will the Government consider taking that position?

[Justine Greening]

My hon. Friend echoes a sentiment that many people in the country will feel. Clearly, we have a legal obligation in terms of our payments to the EU budget, but the challenge is sorting out the underlying problem and even doing what he suggests would not do that. We have to address the underlying problem now, and there are ways in which we can do that.

If I can make a little progress, I shall provide some context and talk about the steps that we are taking and are planning to take. It is important to have this debate, because the views of Members across the House and their constituents on the budget are key in pointing out how important this matter is not only for the UK Government but to represent in Europe, which we plan to do. To give some background, the European Court of Auditors report on the 2009 EU budget was published on 9 November 2010. As hon. Members will know, at that time the Government were taking extremely tough decisions domestically, having just published the spending review that was our plan to deal with the largest peacetime deficit in British history. At home, we are taking the steps needed to cut the deficit and start tackling our debt. Actually, the experience is the same for most people and most countries across Europe—member states bringing their deficits under control by cutting spending.

[Henry Smith (Crawley) (Con)]

I do not doubt the determination of the UK Government to bring down the deficit—nor do I doubt the determination of many other countries in the EU to bring down their deficits—but is it not telling that great countries trying to work together to bring down deficits do not seem to be able to make an impact on the EU, because it is so remote from the peoples of Europe, particularly the people of this country?

[Justine Greening]

That remoteness—the lack of the ability, day to day, rigorously to monitor how spend is going on—is one reason why we have reached this stage today. Also, it is fair to recognise that 80% of the spending happens at member state level. Therefore, there is some challenging complexity for any system in ensuring that that spend across those disparate member states, some of them new, is effective.

In spite of that, we have to get a grip. Our Government in the UK are getting a grip on departmental spending and the EU needs to do the same. I say to my hon. Friend the Member for Crawley (Henry Smith) that I think that there is now an appetite across member states to start to address the issue. There is more of a common agenda—perhaps at the EU and member state level—to address financial management. I welcome that development, but I am also determined to harness it while it is there to get change for the better.

As I was saying, the Court of Auditors report was published at the same time as the EU-level negotiations were taking place on the 2011 annual budget.

[Jim Shannon (Strangford) (DUP)]

The number of member states has risen from nine to 27, and the number of staff involved here has risen to some 200, yet the number of reports produced has gone down from 15 to six. If we are going to get a grip, we also need to get a grip on the financial situation in relation to what the Court of Auditors delivers and the work that it does. Does the Minister agree that something has to be done about that as well?

[Justine Greening]

Yes, I do. The Government thought it totally unacceptable that EU officials received a 3.7% pay rise when our Government had to propose a pay freeze for public sector workers. We are not the only member state taking difficult decisions such as that. The debate the hon. Gentleman is referring to is the one we have already actively engaged in, which is about not only the level of the EU budget, but what we spend that money on and ensuring it is spent on the right things that deliver the right priorities for people on the ground, whichever member state they are in.

We are about to engage in a debate, which is important for the longer term, on how we change that mix of investment to make it more significant. It is called the debate on the financial perspective, and the hon. Gentleman will be aware that that relates to the seven-year plan, whereas early last year we debated the budget for 2011. We have a chance to have that more fundamental debate about how we spend money within Europe. The Government are keen to lead that debate at EU level.

[Mr William Cash (Stone) (Con)]

My hon. Friend—a member of the coalition Government—knows that I am one of her greatest fans. Having said that, is she aware, as I know she will be, that the irregularities by Bulgaria and Romania in relation to pre-accession funds amount to 81% of all the cases, and that there is also this yawning hole concerning cohesion funds? Really, this is totally unacceptable. I have been involved in such debates for 26 years. Nothing has changed.

[Justine Greening]

My hon. Friend is right to raise that issue, for lots of different reasons. Two spring to mind. The first is the macro level of the argument, which is that new members joined the EU during the ’80s. Those member states got cohesion funds to help to develop their economies. There is a question as to the effectiveness of that spend. We are about to embark on investment in a new group of countries that are coming in. The assumption about and the argument made for the accession countries is opening up markets, but we need to see those economies develop for that business model of the EU to work.

My hon. Friend will be pleased to hear that yesterday I met the Bulgarian Minister who oversees the EU funds in Bulgaria. His entire job is administering those funds. He has been in place for about a year. For the reasons that my hon. Friend mentions, I was keen to talk to the Minister about Bulgaria’s perspective. He made the point, which I thought was right, that in the past people said to countries like Bulgaria, “You’re not spending the money that we are giving you.” His point was that those countries are keen to have it spent effectively, because that is in their interest.

Clearly, countries such as Bulgaria are at an early stage of putting in place the structures and processes. The Minister talked to me about the work that they are starting to do at national level and at regional level to enable better financial management of EU funds. That is a move in the right direction. The question for other member states is what we can do at pan-EU level to make that easier. We should get rid of unnecessary complexity and consider what we can do to help those member states to get along the road to stronger financial management faster. I believe they want to do so.

States such as Bulgaria understand that it is important for their relationship with other EU member states to be seen to be stronger financial controllers of the money that they are getting. They understand why that is important, not only in the medium or long term, but in the short term. The challenge for us is to ensure that we improve the framework within which they are working, and transparency is part of that.

I am aware that I have taken several interventions. In part, that is forcing me to jump to bits of my speech that I will come to shortly anyway. Perhaps I can make a little progress and talk to the House about what I think we need to do, some of the steps that we are taking, and what a better system of financial management at EU level would look like. I shall begin with a little more background to the European Court of Auditors report and go on to the discharge negotiation, of which this debate is an important part—in other words, how we get those accounts signed off.

On the report, it is fair to say that there are some improvements. We have had a positive statement of assurance on the reliability of the EU’s accounts, but as we can see and as we have already discussed tonight, everybody agrees that much more needs to be done. The pace of change is too slow, and we see no discernible trend in the right direction. We want to see financial management clearly supporting and controlling spend by the EU.

I shall set out the steps that the coalition has already taken to drive through improvements since we took office in May. It is worth reminding the House that the European Court of Auditors report relates to 2009, prior to the time that the coalition Government were in office. In October, when I was in Brussels having some of my meetings in relation to the EU budget, I took the opportunity to meet the Commissioner in charge of financial management in the EU, Commissioner Šemeta, to talk about our concerns and some of our ideas, and to push the case for transparency and sound financial management. I believe the Commissioner was receptive, and I think he understood that in his role, that needs to be a more fundamental priority than it has been for Commissioners in his position in the past. Since then, we have had a firm but constructive line throughout the negotiations among the member states. Let us not forget that they are responsible for management of 80% of EU funds spent.

The Government and other like-minded member states have pushed for concrete processes in several areas. First, at the pan-European level we must have further simplification of what are excessively complex rules that often hinder, rather than help, strong decision making that drives strong value for taxpayers’ money. We must push EU-level auditing toward a more risk-based and proportionate system. Simply checking through receipts in member states that are randomly selected really will not work in future. We need to move towards a system where the European Court of Auditors operates a risk-based approach, where the focus is on member states for which there seems to be evidence of poorer and weaker financial management, and where we understand exactly where the management is breaking down in those processes and control systems. We are keen to ensure that what we do at the level of the European Court of Auditors is done more effectively than it has been in the past, and I plan to meet the European Court of Auditors to discuss those issues.

We are also encouraging member states to take greater responsibility for the funds that they implement, which, as I have said, is the vast majority of the budget. In practice, that means that we are lobbying for member states’ annual summaries to be upgraded and published. The UK is currently one of only four member states that publish the sort of consolidated statement that we are debating today. We want more transparency, which we think will drive better financial management; it is not the only consideration, but a key one. The Government have pursued that agenda at the domestic level because we think that it is worth while, so we are pursuing it at the EU level. We need those annual summaries to be published and to contain more meaningful information so that people can use and interpret them.

[Kelvin Hopkins]

Is there not a vested interest in countries that are net recipients having a relaxed approach to the budgets? It is a bit of a slush fund for them to keep them on side. We are the ones who will be upset about it, because we are net contributors.

[Justine Greening]

I can see why the hon. Gentleman says that, and there is always a risk that that might be the case. Interestingly, when I met the Bulgarian Minister in charge of EU funds, that was precisely not his attitude, because clearly there is a debate about what will happen to structural and cohesion funds in future, given that new member states are now involved and want to see investment to help grow their economies. They also want value for money; they do not want billions of pounds handed over if it makes no difference on the ground. As member states, we need to drive that agenda and point out that it is unacceptable for a 16th audit report not to be given the statement of assurance. At the same time, we must have a positive agenda to work with member states to improve not only our own ability to control the finances and funds that come from the EU, but the ability of other member states to do so.

[Steve Baker (Wycombe) (Con)]

Does the Minister accept that even when the EU controls its money within its rules, it still manages to waste it? I am thinking in particular of a beautiful hotel I visited in Spain that was in the middle of nowhere—unless one was a skydiver, there was no reason to visit the local village. It seemed a total waste of public money.

[Justine Greening]

My hon. Friend demonstrates exactly why there is a far broader debate to be had on the EU budget and how the money is spent. Tonight we are debating whether the money has been spent in the way that member states agreed when they negotiated how and on what basis the investment would be split between different countries and what the priorities would be for our individual taxpayers.

The Government are determined to bear down on the size of the budget as a priority. We led the debate on limiting the EU 2011 budget in a way that other member states, at the time when we began to gather support, perhaps thought was ambitious. In fact, it worked. My hon. Friend will be aware that, as we go into the fundamental debate about the financial perspective and the longer-term budget, we will also set the parameters—with countries such as France and Germany, which, alongside us, are net contributors and, therefore, absolutely want to see that money spent effectively—within which that debate can take place.

Having led the debate on the amount, there is then a need to start leading the debate within that about priorities and ensuring, as my hon. Friend says, that we do not have wasteful spending on administration or, as the hon. Member for Luton North said, by individual member states. We have to drive out waste at the EU level. That is what we are trying to do at the national level, and it is unacceptable not to go through the same process at the EU level, too.

[Mr Douglas Carswell (Clacton) (Con)]

My hon. Friend talks a great talk about clamping down on the EU’s excesses, but will she please explain why our net contribution has gone up and will continue to go up, and why she is not reducing the amount that we contribute to the EU, when we are having to make reductions in Britain—at home?

[Justine Greening]

We are doing slightly more than talking a good talk. I share my hon. Friend’s concern that one key thing driving the budget up was the previous Government’s disastrous approach to negotiating the common agricultural policy, which saw us give away a huge chunk of our abatement and, over this Parliament, will cost the British taxpayer about £10 billion. That is totally unacceptable. He says that it is important we bear down on excesses, and I agree. That is one reason why we led the debate to stop the European Parliament’s proposal for a 6% rise in spending. We achieved that, and we are now trying to ensure that, when we go into the longer-term debate about the financial perspective over the next seven years, which starts in 2014, we begin to see real-terms reductions. Countries such as France and Germany are backing us up on that, and those are the first steps towards delivering what we want.

My hon. Friend is right that we need to go beyond words and start delivering, and that is absolutely what we want to do. For tonight, the key aspect is how we can ensure that, when we have “decisioned” the funds, the final building block, which is about financial management, is delivered professionally, robustly and with an integrity that companies would recognise. We have to move towards a better system than the one we have picked up.

We are also keen to see some quickly taken measures and short-term gains, such as a one-stop shop that provides better information to those member states implementing EU funds, and a published scorecard of recovery orders against member states. That sort of transparency will start to change the culture, but we have to question how we have reached the position of poor financial management in which we find ourselves. The answer is partly down to culture, which has to change and improve at the EU and member state levels.

Sound financial management is critical, and it brings us closer to our overarching aim, which is a budget that delivers value for money for British and EU citizens. As I am trying to get over, that is not a negative agenda, because securing better value for money is a positive thing to do. It is what we are doing; it is what taxpayers want to see us doing; and it is what all member states should want to do themselves. We believe that we have a positive agenda, and it is not just about picking or prioritising the right objectives. Last year, our excellent debate in the House about the EU budget was a good chance for Members to discuss those objectives. We should return to that over the coming months, but critically we have to ensure that, when we have “decisioned” EU money, it is spent and implemented effectively.

As I said, only yesterday I met Mr Donchev, the Bulgarian Minister overseeing the administration of EU funds in Bulgaria. I am pleased that alongside such meetings, including the meeting that I plan to have with the European Court of Auditors, and the work that we are doing with the European Commission and MEPs in the European Parliament, there is a sense that people are receptive to the need to improve financial management and want to see that happen.

I am keen and grateful for this House’s support for the Government in pursuing that agenda, because that is vital. It was important that we could go into the negotiations saying that as a Parliament we stood behind the motion on bearing down on the EU economy and our decision that a 6% rise was unacceptable. We can learn lessons from that. We as a Parliament need to stick together and show solidarity in tackling these issues. That is one step that we must take.

Even my hon. Friend the Member for Stone (Mr Cash), in his role as Chairman of the European Scrutiny Committee, has a role to play, together with his fellow-chairmen of scrutiny committees across Europe, in pushing this sort of issue to the top of the agenda. We have to be prepared to say in all channels that we must get an EU budget that becomes affordable, that is spent on the right priorities, and that is managed in the right way. His role is also vital in being able to back up some Governments while perhaps pressing those for whom this has been less of a priority to put it further up their list of priorities in future.

[Mr Cash]

This is not in any sense directed at my hon. Friend personally, but one of the big problems in implementing the Lisbon treaty is the increased functions of the EU. Increasing functions increases expenditure, and increasing expenditure has tended to increase the amount of irregularities. I am sure she will understand my concern about the manner in which we are Europeanising not only our own domestic economy, with European economic governance and all the other things that go with it, but inviting ourselves into the arena of a black hole where other member states do not understand the rules and do not much care about them either.

[Justine Greening]

My hon. Friend will know that Conservative Members, in particular, had a range of concerns about the Lisbon agenda.

[Mr Cash]

I did not mean the Lisbon agenda: I said the Lisbon treaty. I think that the Lisbon agenda has been an almighty disaster and that the 2020 strategy would fare no better. The Lisbon treaty is the instrument that increases the functions.

[Justine Greening]

Let me pick my words more carefully. My hon. Friend is right that Conservative Members had deep concerns about the content of the Lisbon treaty at the time. That is one reason why, as a party, we pushed to have a referendum before going into and signing off on the Lisbon treaty. It is a matter of deep regret that the previous Government chose not to give the British people their chance to have a say on the changes that were proposed via the Lisbon treaty.

The challenge in my role is to ensure that, in terms of where we are today, I stand up for our interests in Britain. One way we need to do that as a Government is to tackle some of the fundamental weaknesses in how the EU works, but my particular concern is financial management, not only at the EU level but at the member state level as funds are spent.

I am sure that other Members will rightly want to have their say on this, so before I finish let me quickly turn to the issue of fraud, which is of great concern to the Government and to hon. Members. I want to be absolutely clear that of course any level of fraud is completely unacceptable. We fully support the work of the Commission and of the European anti-fraud office, OLAF. I am pleased that the European Court of Auditors reports very low levels of fraud in the UK. In 2009, we had a rate of just 0.19 of 1% of spending, but it is still too high. The Government and I will focus on that as we look at how we can tackle this problem. We are therefore deeply concerned that, according to the latest OLAF report, the level of fraud seems to be increasing at the European Union level.

It would be wise for me to point out that the Commission’s figures have to be interpreted with care. As we know, fraud and irregularities are not the same thing. Irregularities make up the bulk of the available figures. To my mind, irregularities are also a serious concern, because they are payments that have been made outside the rules. We should not find that acceptable. The figures quoted by OLAF for suspected fraud are increasing. It is not possible to say that fraud is increasing, but there are indications that that may be the case. Even an increase in suspected fraud is unacceptable. The best way to tackle fraud, irregularities, waste and the lack of priorities is ultimately to have better systems, financial processes and financial controls, and a better regime for financial management in the first place.

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

My hon. Friend is right to identify those measures that need to be put in place. Is she aware of whether that is happening in the European Union?

[Justine Greening]

To my mind, that is the work that we need to ensure happens. I met Commissioner Šemeta in October 2002 to discuss his plan to improve financial management across the EU. The challenge for the Government, which I set out for him and to which he was receptive, is to make that stronger and better, and to make it more of a priority for the EU as a whole. As hon. Members have pointed out, there is a long way to go, but I assure the House that we are making a start.

[Mr Carswell]

My hon. Friend was right to highlight that a very bad financial deal was negotiated for the United Kingdom under the previous Administration. Does she therefore think it right that we should promote some of the senior Treasury officials who were responsible for those negotiations to senior positions in UKRep?

[Justine Greening]

Let us be clear that the responsibility for the catastrophic decision on the EU rebate is fairly and squarely political. I hope that the shadow Minister will tell the House why somebody in the Cabinet and the former Prime Minister, Tony Blair, thought it was a good idea to give up the equivalent of £10 billion in rebate over the course of this Parliament, in return for a common agricultural policy review that has taken years to come through and will ultimately be part of an overall budget review and a discussion on the financial perspective. In other words, they gave it up in return for a debate. That was a terrible deal for the UK taxpayer.

I assure my hon. Friend that I will take every opportunity I get, as I am sure he will, to make sure that people remember just how badly the previous Government dealt with this whole area, and just how badly they let down the UK people when it came to standing up for our interests in Brussels and having the judgment to make the right call on behalf of the UK taxpayer. That relates not just to the rebate, but to the Lisbon treaty.

[Mr Davidson]

I agree completely with what the hon. Lady said about the appalling deal that was reached by the previous Government. I and many of my colleagues took that view at the time.

Does the hon. Lady agree that the rising fraud figures should be approached with caution, because they are often an indication of rising detection rates, which are to be welcomed? Has she made a study of the matter that leads her to believe that some countries are starting to take it more seriously? I used to visit the EU when I was a member of the Public Accounts Committee. We were constantly asked to redefine the rules so that things would no longer be counted as fraud or irregularities because the goalposts had moved. I hope that she would not be amenable to such a settlement of these issues.

[Justine Greening]

The hon. Gentleman is right, and the discussion with the Bulgarian Finance Minister yesterday showed that statistics can take us only so far. There had been a debate about why Bulgaria had spent only a very small proportion of the funds that had been committed to it, but actually, if there is difficulty in spending those funds effectively, it is good for Bulgaria not to get through all of them until the problems are sorted out.

The hon. Gentleman may be right that there is now a better ability to detect suspected fraud, and he is right that there is substantive change to be made beyond this debate. We need to consider how individual member states can work within the rules to ensure that they are more effective and do not create dysfunctional decisions and systems at national level. The Court of Auditors needs to take a risk-based approach to examining how spend is managed, and it needs to work more proactively with member states so that improvements take place to address the problems that it uncovers. There is a clear agenda to be taken forward.

I look forward to hearing what hon. Members have to say. We have debated this matter on many occasions, which shows how important it is. When the UK Government and the UK people are having to take and bear the consequences of such difficult decisions, it would not be acceptable if we did not go through the same process at EU level with the same intensity. The Government are determined, and I am determined, to ensure that we lead that agenda at EU level. I hope that with the support of the House, we will be able to have some success in doing so.

20:04

[Kerry McCarthy (Bristol East) (Lab)]

I, too, welcome the fact that this debate is taking place on the Floor of the House rather than in European Committee B, as it has in previous years. It is somewhat ironic that although having it here enables many more Members to take part, it means that we have only an hour and a half to discuss the matter rather than the two and a half hours allowed in Committee.

The Minister was thorough in her explanation of the Government’s stance and very generous in taking interventions from Back Benchers. I am aware that at least half a dozen Back Benchers want to take part in the debate and that we are already 40 minutes into a 90-minute debate, so I shall be quite brief. Also, the Minister answered quite a few of the questions that I wanted to ask. There is always a problem in dealing with Court of Auditors reports because of the time lag involved. We are now debating the 2009 report in 2011, so it is useful that we have heard about what has happened in the intervening period.

It is, of course, disappointing that for the 16th year in succession, the Court of Auditors has been unable to provide a positive statement of assurance on payments from the EU budget because of weaknesses that it has identified in the procedures for financial control and management. In fact, it is not just disappointing; as the Minister said, it is entirely unacceptable that we are yet again in that position.

I welcome the fact that for the third year in a row, the Court has given an unqualified positive statement of assurance concerning the reliability of the EU accounts. It is important to stress that that has happened, but it is by no means satisfactory that the Court is not prepared to sign off on the payments, which means that considerable sums are not going where they should and money is being paid out wrongly, whether through fraud—as the Minister said, that is at quite a low level but is still a matter for concern—or through error. It is important that we continue to address the issue.

The direction of travel is correct. In the 2003 budget, only 6% of payments were identified as being free from error, which improved to 47% in 2008. I understand that the figure is now around the 60% mark or more. That progress is far too slow and it is vital for progress to be made more rapidly, because apart from anything else, the failure to sign off the accounts year after year understandably undermines public confidence in the EU and public support for EU membership. Naturally, people want to know that the EU is spending money wisely and well, particularly in difficult economic times when there is belt tightening and concern about how money is spent in this country.

We need more transparency and accountability in EU spending. Crucial to that, as the Minister said, is simplifying the procedures and processes of the allocation of EU money. The Court of Auditors has identified complex rules and regulations and complicated or unclear eligibility criteria as key factors in the high level of error, particularly in respect of structural and cohesion funds. Dealing with that as an ongoing, iterative process must be a priority, and I welcome the fact that the Minister is making those points in an ongoing dialogue with people in the EU, including the Commissioner for financial management, and not simply making them on this annual occasion.

The Commission should try to ensure that future programmes are designed to allow more effective control and monitoring; that should not be an afterthought or something to be looked at when the programme is up and running and the time for scrutiny is upon us. There is also a need to consult member states more, because often it is implementation at member state level rather than at Commission level that leaves something to be desired. Member states must have effective monitoring and management arrangements too. In particular, they should ensure that their compliance systems for spending cohesion funds are every bit as rigorous as their compliance systems on other matters.

The UK took the initiative to enhance its reporting through the annual consolidated statement on the use of EU funds in the UK, which is audited by the National Audit Office and presented to Parliament. The Minister advised the House earlier that only four other member states have adopted that model. I would be grateful if the UK Government continued to press other EU Governments to adopt a similar model and to introduce that element of transparency and accountability to their processes.

Are the Government generally optimistic about future improvements in financial management? I appreciate that it is difficult to forecast such things, but when does the Minister believe we are likely to see a positive statement of assurance? Is next year a realistic goal to work towards, or are we still some way off meeting that objective? Can progress be monitored better within year, and can ongoing improvements be made, so that we do not have to wait for the annual report from the European Court of Auditors, when we are inevitably disappointed by the lack of progress?

I am very much aware of the time, but I should like to make a few comments on specific concerns in the report, in particular in respect of agriculture and cohesion funds. In agriculture, the court says that the single payment scheme and single area payment scheme, including specifically problems with ineligible land and over-declarations of land, are the most urgent issues. The court also identified the need to avoid, in co-operation with national authorities, the payment of ineligible grants for fisheries projects. Has the Minister discussed that with her colleagues in the Department for Environment, Food and Rural Affairs? Are they pursuing the matter at European level? If so, can she advise the House on what progress has been made?

Cohesion funds, which have already been flagged up as a great concern, account for 30% of EU expenditure, so we are talking about very significant sums of money. Uniquely, the rate of material error is above 5%, even if it declined from 11% last year. We are travelling in the right direction, but that rate is still clearly unacceptable.

I note that the auditors recommend that the Commission encourage the more rigorous application of corrective mechanisms by national authorities, to ensure that member states do not substitute ineligible expenditure with new expenditure. Will the Minister advise us on what progress is being made to ensure that the control system for the 2007-2013 programming period will be effective? What is being done about the application of procurement rules in member states, which is also identified as a key concern?

The Minister said that a scorecard of recovery orders would be useful. It is worrying that the overall rate of recovery from beneficiaries who receive EU cohesion funds incorrectly has fallen. It is clearly unacceptable. Does the Minister have any idea why the recovery rate is moving in the wrong direction, and may I urge her to flag that up as something that needs to be addressed as a matter of urgency?

I repeat the point that I made earlier. This needs to be an ongoing and iterative process, and we need to keep a very close eye on it. There is consensus across the House on the need to push this up the policy agenda and I am glad that the Minister is doing what she can to push other EU Governments to address the issue. We will do what we can to support her in those efforts.

20:15

[Mr William Cash (Stone) (Con)]

I do not need to speak for very long on this matter, for the simple reason that I have been making the same speech about different auditors’ reports for the last 26 years. I am afraid that nothing much has changed. The Economic Secretary is a very dedicated Minister and I have great enthusiasm for what she seeks to achieve. She puts the best possible face on the situation, but unfortunately nothing changes: plus ça change.

The reality is that the British taxpayer is, as the Minister has rightly admitted, under severe duress. We are having to cut back and implement austerity measures, but at the same time this report—which, for the 16th consecutive year, has not been signed off—demonstrates that there are serious errors and mistakes in the system. Those errors consist not merely in the manner in which the accounts have been presented, or in the fact that irregularities and fraud have been identified, but in the very system that has been created. Because of the nature of the problem and its range—and the fact that the documents relating to this debate run to 1,035 pages—it is impossible in 90 minutes to do more than give a general survey of where the whole problem lies.

I mentioned Bulgaria and Romania. The European Scrutiny Committee said that it was inappropriate for them to be brought into the accession procedure when they were, for all the reasons that we identified, which included the fraud that exists in those two countries. I am glad that the Economic Secretary has had a meeting with the Minister responsible for audit in Bulgaria, but I have to say that I do not think that the culture in that country will change very much because of a meeting. The cohesion funds—from the figures that I have already given—are clearly exploited and seriously misused. They represent a significant proportion of the problem. We have a serious problem that is deeply entrenched in the system.

As the Minister knows well, I proposed that we should not only reject the proposals put before us in a debate some months ago, but reject the increase in the budget, and I am glad that the House agreed to do just that. But that is only one side of the equation. The other is the vast sum of money being allocated for the purpose of running this failing European Union. I do not ask the Minister to agree with me on that point, because it would be politically incorrect to do so, but the reality is that it is a failing system. However, I do not need to rehearse the arguments that I have already given for why that is.

One of the elements at the heart of that is the responsibilities of what is called OLAF, the European anti-fraud office. I would like to refer to OLAF’s mission statement, which is on page 729 of this mammoth bundle of motion documents. I can barely hold it up, actually—but fortunately, my wrists are quite strong. The mission statement says:

“The mission of the European Anti-Fraud Office…is to protect the financial interests of the European Union, to fight fraud, corruption and any other irregular activity”.

Hon. Members should note the last words, especially when people talk about actual proven fraud. And by the way, with regard to the cohesion funds, the documents that the European Scrutiny Committee has examined note that the survey in question is only a sample survey—that is something that always fills me with considerable reservations—not a full audit of the kind that one might have expected from the National Audit Office. Indeed, I would go further and say that if we made it Government policy to insist that no standards lower than those of the NAO and the Comptroller and Auditor General should be applied to the European Union, we would really be getting somewhere. Frankly, if the NAO had the opportunity to have a go at these 1,035 pages, plus all the supporting documents, or if it had the opportunity at least to get entrenched in the system, as I have said many times in the past that it should, so that NAO standards and principles were applied to those audited accounts, we might just begin to see some relationship between costs and benefits.

The reality, however, is that vast sums of money—our net contributions and all the rest of it—are poured into that black hole, and it does not work. I am not going to enlarge on all the reasons, which worry me, for our slow economic growth, which in my opinion have something to do with the fact that what we have out there is a dead parrot. The European Union is a system that is incapable of growth—indeed, growth is liable to decrease, compared with that in China, India and the rest—and on top of all that, we have the problems of audit and irregularities that the report demonstrates.

The statement on OLAF’s mandate says:

“In pursuing this mission in an accountable, transparent and cost-effective manner, OLAF aims to provide a quality service to the citizens of Europe.”

OLAF’s mandate covers

“all EU expenditure and part of the revenue side of the budget. It includes the general budget, budgets administered by the Union or on its behalf, certain funds not covered by the budget but administered by EU agencies”—

perhaps that includes the External Action Service, which I hope we will look at in due course—

“and extends to all measures affecting the Union’s assets.”

That is a very big remit, and I have my reservations about that state of affairs.

The statement continues:

“OLAF’s status is hybrid in nature. It is part of the Commission”.

Would we have much confidence in the NAO if it were part of the Government? I very much doubt it. OLAF is supposed to be responsible for

“developing and monitoring the implementation of the EU’s anti-fraud policies. However it has a measure of budgetary and administrative autonomy, which reinforces the total independence with which OLAF conducts investigations.”

[Mr Nuttall]

Does my hon. Friend agree that one of the problems is that it apparently takes 25 months on average—more than two years—for OLAF to conduct its investigations, and that only 56% of cases have led to follow-up action?

[Mr Cash]

That is the problem. It is easy for us in this House to make scattergun criticisms of bureaucrats, civil servants and the rest of it, but the real problem is that if something does not work, we have to mend it—and there is no evidence of that happening.

I had an exchange with Lord Kinnock when he was responsible for these matters, and set up the new OLAF arrangements. He got a bit shirty with me in a Select Committee some years ago. People like Marta Andreasen were thrown out, and even before then, there was another chap whose name I cannot remember—

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

Paul van Buitenen.

[Mr Cash]

Exactly. The trouble is that the moment anyone starts to get to grips with what is going on, the steel shutters come down and people are thrown out of the European institutional arrangements simply for asking questions that would be regarded as completely normal in any proper democratic system. That is the essence of the problem.

As I have said, I could enlarge at great length on the contents of these 1,035 pages, and every word would be entirely relevant because they are so important. Huge sums of taxpayers’ money and resources are being churned into this failing quagmire. This is not just the ranting of a Eurosceptic; it is the reality of what affects the daily lives of the people of this country, and we seem to be prepared to go along with it.

[Mr Davidson]

Does the hon. Gentleman accept that part of the difficulty of conveying these issues to the electorate is that the sums involved are so enormous? It is difficult for people to understand sums of £10 million here and £100 million there. As the Chair of the European Scrutiny Committee, would he consider undertaking a piece of work that looked at the value for money provided by a European operation in this country? An example would be the European schools, some of which are situated here. Why does not he compare the cost of a European school with the cost of a normal school? It would make sense to people if they could see the extravagance that the European Union applies in such circumstances. That would bring it all home to people far more than any number of quotations involving zillions.

[Mr Cash]

I rather agree. It would be very nice for me to be able to make a comparison between the different kinds of school systems, but this is not only about schools; it is about everything that moves. The reality is that this all-pervasive, all-encompassing ectoplasm has managed to work its way into every nook and cranny of our lives. It slips under doors and through windows, and it is absorbing us to the point at which we are being totally Europeanised. Within that framework, our taxpayers’ money is being absorbed into the bloodstream of the European Union, and the monitoring and accounting are inadequate, which is what this European Court of Auditors report is all about.

[Mr Davidson]

I was making a much more specific point a moment ago. I was referring not to schools in Europe in general but to the schools that are run by or on behalf of the European institutions themselves, of which there is at least one in the United Kingdom. A comparison of that school with a similar-sized school elsewhere in the UK would be enormously informative to parents and everyone else. Such an exercise would help to overcome the difficulties that we have in explaining the magnitude of the sums involved.

[Mr Cash]

I certainly agree with the hon. Gentleman’s concern. If he would like to write to me about it, I would be more than happy to take the matter up in the European Scrutiny Committee if we have an opportunity to do so. We are going through a process of reinvigorated European scrutiny, as I hope he has noticed, and we are determined to get to the bottom of certain issues. This is one of them.

I do not want to take up too much time, because many others want to speak. I will simply make the general point that this is a failing system with a failed accountancy system, and the taxpayer is being badly affected by the way in which these matters are being conducted. There are always paragons of virtue, but this system falls so far below the threshold of what is required that the whole thing needs shaking up. In a nutshell, I would like to see principles of the same kind that apply to the National Audit Office applied to the European Union, so that the people there can be roasted when they get it wrong.

20:29

[Kelvin Hopkins (Luton North) (Lab)]

It is a pleasure to follow the hon. Member for Stone (Mr Cash), who does such an excellent job in chairing the European Scrutiny Committee, of which I have the honour to be a member and in which I do my best under his chairmanship.

The problem that we face has existed for many years. This is the 14th speech that I have made on these matters. I made the first 13 in European Standing Committees, and I am pleased to be able to make this one on the Floor of the House. Although we are given less time on the Floor of the House, there is a greater focus on debates here and they gain a higher status.

Although I may have said the same thing repeatedly for 14 years, at least the numbers change. Let me introduce a few facts to the debate. In agriculture, which I mentioned earlier, the number of reported irregularities increased by 43% in a single year. The number of irregularities relating to cohesion policy increased by about 20%, and the number of irregularities involving pre-accession funds by 35%. Those are significant figures.

My hon. Friend the Member for Bristol East (Kerry McCarthy) cited some of the positive conclusions of the report by the Court of Auditors. The big negative is that it was

“unable to give a positive Statement of Assurance on the legality and regularity of expenditure in the areas of agriculture and natural resources, cohesion, research, energy and transport, external aid, development and enlargement and education and citizenship”.

That is pretty much what the budget is about. There is not much left, really.

[Henry Smith]

Does the hon. Gentleman believe that, despite the best and, I believe, sincere efforts of Her Majesty’s Government, the Court of Auditors will ever be able to sign off an EU budget? I doubt it.

[Kelvin Hopkins]

The evidence that we have seen so far is not very encouraging, is it? I must say that I agree with the hon. Gentleman.

The hon. Member for Stone made the serious point that the Court of Auditors is not really a separate organisation in the sense that the National Audit Office is in Britain. I should like it to be much stricter. If it were stricter, it might reveal even more irregularities and fraud than it does now, and might bring the European Union into even greater negative focus.

At the end of our last presidency, I urged the Government—from the other side of the Chamber—to call for the abolition of the common agricultural policy, which is the main problem in relation to the budget. We were given endless assurances about reform of the CAP at that time. Apparently, at the end of our presidency, the then Prime Minister, Tony Blair, went to the European Union to call for its reform, if not its abolition, but what he came back with was no reform at all. As was pointed out by the Economic Secretary to the Treasury, he had given away a substantial proportion of our rebate. According to her, it amounted to some £10 billion over a five-year Parliament, or £2 billion a year, which is four times the sum that the Government plan to save by abolishing education maintenance allowance. Tony Blair gave that money away, and not one question was raised before he did it. Apparently he did it on the spur of the moment, hardly even checking with the then Chancellor of the Exchequer.

The Economic Secretary and others have mentioned the previous Government. I believe that the former Prime Minister, who is still a Member of Parliament—my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown)—was on our side, in a sense. He prevented us from joining the European single currency despite immense pressure from Tony Blair and others, and it could be said that by doing so he saved us from worse difficulties.

[Mr Davidson]

Does my hon. Friend accept that, at this moment, there are more Members on the Government Benches who are in favour of joining the euro than there are on our Benches?

[Kelvin Hopkins]

I do not see many Members on any Benches who are in favour of it at the moment, and I am greatly encouraged by that. I believe that we have a kind of common sense.

I should say to the Economic Secretary that I appreciate her sincerity. I believe that she will fight as hard as she can to support our interests, and the interests of the European Union as a whole as well. It is important for other countries as well as ours that we get these things right as much as we can. As the hon. Member for Stone has suggested, the Economic Secretary and everybody else faces serious inherent problems when considering these matters. It is the system.

The common agricultural policy is one of those problems. If it did not exist and member states simply managed their own agricultural industries, choosing to subsidise where they thought appropriate, not where someone else thought appropriate, the system would be much better. The CAP will cause more difficulty, because when it comes into full effect in respect of the new member states, it will cost much more than anybody anticipated. That is because wages have risen in those countries, so the cost of subsidising agriculture in them will be much higher. There are ongoing problems with the CAP and we ought seriously to suggest to the European Union that the CAP should be abolished, by being phased out or whatever. Let us give notice that we want it abolished—let us say within the next five years, in order to give France time to adjust. That would save a lot of problems, as a range of difficulties in the budget would disappear.

Other areas of the budget have problems, too. The suggestion that I have made several times in the Chamber and in Committee is that we should get rid of the budget in its current form, which is about fiscal transfers. It is about transferring income or money from the more wealthy nations to the poorer ones; it is a redistribution policy. It does not work very well because of the formulaic way in which it is done, with some countries unfairly contributing too much and other countries unfairly receiving too much.

Let us suppose that there were no such thing as the CAP and all the other budgetary arrangements, and the European Union simply transferred a substantial sum to countries that needed it from countries that could afford to pay. For example, we might contribute 0.5% of our gross domestic product and Romania might receive 1% of its GDP. A lump sum would be handed over to the Governments of the countries involved and they would then decide how to spend that largesse. That would be more accountable because those Governments would be accountable to their own electorates. At the moment, no direct accountability is involved and we cannot do much to control the budget spending, but the member states themselves, with their own democratic Parliaments and Governments, could control that spending. That could be done in Britain at least and one hopes that that would spread to other countries.

I have suggested many times that instead of having this complicated arrangement of special budgets for all sorts of different things, we should have a system of a simple payment each year from the more wealthy countries to the poorer countries, in proportion to their living standards. So the wealthiest nations would give according to their wealth and the poorer nations would receive according to their need.

[Henry Smith]

Does the hon. Gentleman think that the concept of zero-based budgeting would be helpful?

[Kelvin Hopkins]

The hon. Gentleman would have to explain the position to me, because I am not an accountant, but if there were no budget and no European Union at all, that would solve the problem entirely. Given that we are generous by nature and would want to help our fellow European countries to develop, some sort of transfer might be helpful and the European Union would be a way of doing it. So I am not against the idea of wealthy countries contributing to poorer countries, but the current cumbersome approach, which invites corruption and irregularity, is not the way to do it and does not work out fairly. I have made my suggestion a number of times and I hope that, in time, our Government at least will take it seriously. Perhaps we will be able to debate that in the European Councils themselves and discuss completely changing the method by which these fiscal transfers take place. I have made my point and I have spoken for long enough.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Before I call the next speaker, may I remind hon. Members that at 8.54 pm I am going to call the Minister to do a three-minute wind-up? There are three speakers to come. The first will be Chris Heaton-Harris.

20:39

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

Thank you, Mr Deputy Speaker. I just hope that my maths is better than that of the European Commission, so that I know how long to speak for. There is one thing that everybody seems to know about Europe, which is that the European Commission’s accounts are not being signed off—this is the 16th year running that that has happened. What most people do not know and what never gets reported is that after the Court of Auditors gives its opinion, a very long process starts, which lasts at least nine months and gives MEPs and the Council of Ministers the power to look into every euro and cent that the Commission has spent in the previous year.

The plain fact is that the Court has no power over the European budget. I shall say that again: the headlines we read every year about accounts not being signed off refer to an institution that has no power over the institution it is checking. The European Parliament and Council, by contrast, have genuine power. If either of them refused to grant discharge—to sign off the accounts—or even if they questioned strongly the measures that the Commission had taken, the Commission would, although not compelled to resign, be under considerable pressure to sort out the problems within its accounts and accounting systems once and for all. There is a ton of jargon around the budget discharge process, but the process itself deserves a lot more scrutiny from the press, public and parliamentarians alike.

The Court of Auditors seems almost embarrassed about its refusal to sign off the Commission’s accounts and give that positive statement. It is amazingly difficult to find that information in the Court’s own report. As soon as the Court publishes its report, a debate is held in the plenary session of the European Parliament, the Committee on Budgetary Control considers the report, various questions are asked and eventually the European Parliament and the Council of Ministers decide whether to refuse or grant discharge.

The European Parliament has never decided not to grant discharge, so for the past 16 years the Court has refused to sign off the accounts and the Council and the European Parliament have refused to take the Court’s advice. They have just said, “Carry on chaps; it’s all going pretty well.” Let me give a political example. Back in April 2008, when I was still a Member of the European Parliament, Labour MEPs voted, as usual, as they always have, to let that farce carry on, whereas Conservatives MEPs voted against it. We numbered over half the entire opposition in the European Parliament and the discharge was given by 582 votes to 49.

Concurrently, there is also a debate in the European Council among member state Finance Ministers, and the results of that discussion are reported back to the European Parliament, which is why lucky people such as me know about them. That debate rarely lasts longer than a few hours and very few countries seem to care. Rarely does anyone question why money cannot be accounted for correctly, and the purpose of that meeting is pretty much to rubber stamp the accounts. To give credit to the Dutch Government, a few years ago they decided to take a stand against the waste of their citizens’ hard-earned cash and they have been finding a few friends more recently. However, I am very wary that what the Minister has said is very similar to what her Labour predecessors have said. This year, the discussion and the vote take place on 15 February.

Alas, the same cannot be said of the British Government as of the Dutch Government. In all the time that the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was the Chancellor of the Exchequer, neither he nor his Department ever raised any questions about the state of the Commission’s accounts in those meetings. He nodded through the accounts like everyone else. The amount of money that is estimated to go missing each year is between £3 billion and £8 billion, which roughly corresponds to the UK’s net contribution to the EU every year.

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

If these vast sums of irregular, fraudulent or wasteful expenditure were being talked about in relation to the UK, the Chamber would be packed with people on both sides who would be outraged. Would the hon. Gentleman care to speculate on why more Members on both sides of the House are not more concerned about this ongoing waste, fraud and irregularity? Why does he think that the accounts are just passed on the nod?

[Chris Heaton-Harris]

I shall come back to that in a moment, but I think it is because the money is spent so far away in such a disjointed fashion. It goes up through a system: it goes through our taxes, goes to the European Commission and is spent by third parties. It is all very confused and distant and I think that people are just bored by the fact that the accounts are not being signed off. It is a huge shame.

The Court of Auditors bowed to political pressure a long time ago and no longer gives a figure on the percentage of money it thinks is being spent incorrectly or wastefully, so for years now we have not had any solid figures with which to work. As a former Dutch member of the Court of Auditors, who retired recently, said:

“There was a practice of watering down if not completely removing criticism...All these abuses never came out in the open because of the Kremlin-style information we provided. But it didn’t enhance our reputation one bit...I had to threaten to resign as head of the investigation and to inform the outside world”

to get some of this information out. We have some real problems.

The accounts are pretty poor. People compare the problems with those accounts with the problems that the Department for Work and Pensions has with its accounts, but EU accounts involve perhaps between 2% and 5% going missing each year through fraud and irregularities, if not a lot more, while the Department for Work and Pensions qualifies about 1% and deals with millions upon millions of transactions. The European Commission simply does not.

What is our money being spent on? We would all be excited to know. Last year, Open Europe brought a number of things to the public’s attention: €411,000 for a dog fitness and rehabilitation centre that was never built, €16,000 to Tyrolean farmers to boost their connection with the landscape and €7.5 million of EU funding for a PR campaign for more EU funding for a region of Spain.

In a time of tight budgetary constraint, the Government should make it a proper priority to use our financial clout to sort out the problem once and for all. I believe that we should threaten to withhold even a small part of our contribution until we see some action that protects UK taxpayers’ hard-earned cash.

20:45

[Steve Baker (Wycombe) (Con)]

It is a huge privilege and tremendous pleasure to speak in support of the Government in relation to the European Union. My only regret is that my Whip is not here to see the day.

I pay tribute to my hon. Friend the Member for Stone (Mr Cash) and the hon. Member for Luton North (Kelvin Hopkins), who have seen this farce go on for year after sorry year with these accounts failing to be signed off. I also pay tribute to the Minister, with whom I spoke briefly before the debate. She obviously brings to this matter great sincerity, professionalism and obvious expertise, and she has my full confidence in bringing the right approach to it. Having confirmed the information, I know that this is a boilerplate motion, and I say to her that it fails robustly and resolutely to condemn fraud and error in the EU. In fact, now that I know that these are not necessarily her chosen words, I might say that the motion is dreary jibberish and seems wholly futile.

A total of £11.8 billion went into this budget and only 8.3% of EU spending was given a clean bill of health. Apparently, the rest was materially affected by error. In other words, 91.7% of this public money was given out inappropriately.

I want to share with the House three instances in which public money was given out within the rules. According to Open Europe, an EU subsidy of €500,000 was given to two Swedish fishermen to scrap their fishing vessel. The subsidy was given by the Commission and the Swedish Government as part of the EU’s effort to reduce the size of Europe’s fishing fleet to address the region’s huge problems with overfishing. The subsidy was enough to pay off the fishermen’s debts and left them with a substantial amount of money to spare, according to their accounts.

Instead of winding down the business, the two fishermen bought a new boat with this EU money—taxpayers’ money—and continued just as before. Extraordinarily, the owners were open with their plans all along and did not break any rules. That is because their new boat is less than 10 metres long, which means that different rules apply and they can continue to fish in the North sea. “We said exactly what we were going to do when we applied for the scrapping subsidy,” one of the fishermen said.

We mentioned sums that are too large to imagine. A total of €8.5 billion was spent failing to improve infrastructure in Sicily. Given the lack of time, I shall not trouble the House with too much of the detail. Suffice it to say that €700 million was spent to improve water supply throughout the island, but the percentage of families who experienced patchy “stop-and-flow” supply of water increased from 33% in 2000 to 38.7% in 2008. I point out the fact that Sicily has a population of only 5 million people. The subsidy amounted to £1,700 per head—clearly not enough to rebuild Sicily, but enough, I would have thought, to rebuild its infrastructure.

Finally, an example that I hesitate to bring to the House in the present circumstances—€2.5 million was spent on an Austrian nomadic contemporary dance troupe. My hon. Friends know that I am a great fan of Austria, but I am not sure that my hard-pressed taxpayers in Micklefield, Oakridge and Castlefield, and indeed in Disraeli, where they are particularly hard pressed, should be paying tax in order to fund a group that travels around Europe meeting and dancing with other dance troupes to contribute to the development of dance. I am sure none of us would condemn the funding of culture, but nomadic contemporary dance troupes should fund themselves.

This is the 16th time that the statement has not been signed off. We should condemn this showcase of fraud, incompetence and, where not fraudulent or incompetent, inappropriate spending. We are told that we cannot withhold our money. What a preposterous situation we have reached when our constituents are being taxed and we cannot withhold money from these ridiculous projects. I hope that next year the Government will bring before the House a motion that much more strongly condemns such waste and fraud. Unless we deal with the problem, the next important question on the EU will be simple—in or out?

20:52

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

In the time available, I shall try to speak without hesitation, deviation or repetition. I want to deal with one point, EuropeAid, and draw a conclusion from it.

EuropeAid was found not to be perfect by the European Court of Auditors. The ECA noted a high frequency of non-quantifiable errors due to the lack of formalised and structured demonstration of compliance with payment conditions. It found poorly documented and ineffective checks. EuropeAid was terrified by the mighty power of the Court of Auditors coming down before it, so what did it say it would do? It said that it would have a little more training and disseminate a financial management toolkit.

If I were a fraudster, I would be quaking in my boots at a financial management toolkit. That comes to the nub of the problem. Bodies such as EuropeAid could not give a brass farthing. The European Union is fundamentally corrupt because it is undemocratic. There is no check on it from electors. What can the electors of North East Somerset do? They can send me here to rail against it and try to stir the Minister, but the Minister needs no stirring. She is valiantly defending British interests. The shadow Minister, the hon. Member for Bristol East (Kerry McCarthy), my neighbour, is in agreement.

But what do the Government face with our European partners? When we look across the channel, we see countries that have been corrupt for generations—for decades. With the Roman empire, we can go back to the tax collectors at the time of Christ who were corrupt. There is institutionalised corruption within Europe. It is an empire that has an emperor, and the emperor has no clothes. We know that. We see the corpulent emperor in his fat rotundity gorging on the money of the British people. I urge Her Majesty’s Government to go along with my hon. Friend the Member for Wycombe (Steve Baker) and say enough is enough. They should say as the great lady said—“It’s our money, and you can’t have it unless you can prove that you are spending it honestly.”

20:53

[Justine Greening]

May I say how much I appreciate the contributions made by all hon. Members across the House this evening? They were made with passion and frustration at the continued unacceptable situation of the European Court of Auditors persistently not being able to sign off the statement of assurance that we want signed off to give us the kind of confidence that my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) was just speaking about. I can tell hon. Members that I share their frustration. My task is to channel that deep frustration into positive steps to address some of our concerns.

In the short time that is left, I shall try to respond to Members on some of the points that they have raised. The hon. Member for Bristol East (Kerry McCarthy) is absolutely right to say that the procurement rules need to be simplified. The recovery rate is moving in the wrong direction, but we want to see it start moving in the right direction.

My hon. Friend the Member for Stone (Mr Cash) is absolutely right to talk about the need for improved standards. We want to work with other member states to improve the ability of the European Court of Auditor to perform its role. I absolutely agree with the hon. Member for Luton North (Kelvin Hopkins) on his frustration with the poor value for money that the common agricultural policy represents. The Government are making the case, as the previous Government started to make, that the fund must become better value for money for taxpayers. His other point about flexibility for member states to make their own decisions on how they spend the money and meet their own priorities was quite right.

My hon. Friend the Member for Daventry (Chris Heaton-Harris) is right that one part of the debate that we did not have tonight, and which I thought might have come up more, was the discharge process. He is right to point out that we have not used that process to challenge the poor financial management. I think that previous Governments have just signed that off and said that there was no need for discussion. That is not the position of this Government. We will start using the discharge process and having a discussion at the senior level, because we do not believe that we can afford not to.

[Steve Baker]

I welcome the Minister’s remarks, but given the figures that my hon. Friend the Member for Daventry (Chris Heaton-Harris) quoted on the European Parliament’s voting record, does she not agree that it seems rather futile to expect that the European Parliament might fail to discharge?

[Justine Greening]

Clearly, the European Parliament will take its decisions. I am talking about our role within the European Council and the discussions that we will have as a member state there. I can assure Members that we are talking with other member states about why we find this position unacceptable and to see what support there is for having that proper debate at the European Council meeting on 15 February so that we can resolve some of those outstanding questions and ensure that financial management becomes a priority in a way that it has not been in the past.

Question put and agreed to.

Resolved,

That this House takes note of the Unnumbered Explanatory Memorandum dated 25 November 2010 submitted by HM Treasury on the implementation of the 2009 EU budget, the Unnumbered Explanatory Memorandum dated 24 November 2010 submitted by the Department for International Development on the activities funded by the Eighth, Ninth and Tenth European Development Funds in the financial year 2009, European Union Document No. 12393/10 and Addenda 1 and 2 on Protection of the European Union’s financial interests, European Union Document No. 13075/10 and Addendum, relating to an annual report to the discharge authority on internal audits carried out in 2009, the Unnumbered Explanatory Memorandum dated 22 October 2010 submitted by HM Treasury on the European Anti-Fraud Office’s tenth activity report for the period 1 January to 31 December 2009, and European Union Document No. 16662/10 and Addenda 1 and 2, Commission Report to the European Parliament and the Council on the follow-up to 2008 Discharge; and supports the Government’s continued engagement with its EU partners to improve financial management of the EU budget.

Business without Debate

Wednesday 2nd February 2011 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Financial Services and Markets

That the draft Investment Bank Special Administration Regulations 2011, which were laid before this House on 10 January, be approved.—(Mr Goodwill.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Financial Services and Markets

That the draft Investment Bank (Amendment of Definition) Order 2011, which was laid before this House on 10 January, be approved.—(Mr Goodwill.)

Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Financial Stabilisation Mechanism

That this House takes note of European Union Documents No. 9606/10, relating to a Council Regulation establishing a European financial stabilisation mechanism, No. 12119/10, relating to a draft amending budget No. 7 to the General Budget 2010-Statement of expenditure by Section-Section III-Commission, and No. 17361/10, Commission Communication on the European Financial Stabilisation Mechanism; supports the Government’s view that whilst it is in the interests of all Member States to support a stable and fully functioning euro area, financial assistance for euro area Member States should primarily be provided by other euro area Member States; and supports the Government’s position that the United Kingdom should not be required to contribute to the European Stability Mechanism that will permanently replace both the European Financial Stability Mechanism and the European Financial Stability Facility. —(Mr Goodwill.)

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 9 February (Standing Order No. 41(A).

Business of the House

Wednesday 2nd February 2011 Commons Chamber

Ordered,

That, at the sitting on Wednesday 9 February, notwithstanding the provisions of Standing Order No. 16 (Proceedings under an Act or on European Union documents), the Speaker shall put the Questions necessary to dispose of proceedings on the Motion in the name of Secretary Theresa May relating to Police Grant Report not later than three hours after the commencement of proceedings on the Motion, and shall put the Questions necessary to dispose of proceedings on the Motions in the name of Secretary Eric Pickles relating to Local Government Finance not later than six hours after the commencement of proceedings relating to Police Grant Report; proceedings may continue after the moment of interruption; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Mr Goodwill.)

Hospice Care

Wednesday 2nd February 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Goodwill.)

20:58

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

It is a pleasure to have secured this debate on palliative care and the hospice movement, particularly at a time when the coalition Government are taking the Health and Social Care Bill through the House. It is a great opportunity to talk about this important area of medicine and care, particularly because I do not think that it is always given as much attention as it deserves.

Palliative and hospice care is something that all Members are aware of, because we all have constituents who are suffering with terminal or progressive illness and we all want them to die with the most dignity that can be provided, in the most comfortable and supportive surroundings, and we all want to ensure that their families are looked after holistically. That is why hospices are so valuable to all of us and to all our constituents.

Notably, the previous Government and the new coalition Government have paid a lot of attention to cancer care, but the hospice movement is about not just cancer but a raft of progressive and terminal illnesses, such as heart disease, lung disease, chronic obstructive pulmonary disease and motor neurone disease. The movement is not just for older people, either; it looks after younger people and, indeed, children with terminal illnesses.

[Henry Smith (Crawley) (Con)]

I am grateful to my hon. Friend for securing this important Adjournment debate. Last Friday I visited the Chestnut Tree House children’s hospice, which serves my constituents and those throughout Sussex, and its concern is that hospice at home and section 64 funding should not be lost in the health reforms. Does he agree that that is important?

[Dr Poulter]

My hon. Friend is absolutely right. He talks about a children’s hospice, but hospice care, and the valuable service that it provides to people with terminal and progressive illnesses, is particularly pertinent to adults. It is also important to children, however, because there is nothing more distressing than a very sick child whom we know is going to die.

I shall explain why we need to invest in hospices and palliative care. The UK population is ageing significantly, and we will have to look after a lot more people with more than one terminal and progressive illness. By 2033, the number of people aged 85 and over is projected to more than double to 3.3 million, and it is predicted that 8.7 million people will be 75 years or older. There is an ever-increasing strain on the palliative services that help to support people with co-morbidities, or several illnesses, and we need to recognise that and invest properly in those services. It is often through the hospice movement that such people are properly looked after and their families properly supported during the terminal illness.

Hospice charities have many concerns, because in the past the top level of government paid insufficient attention to the role that hospices play in easing the burden on the NHS, as well as in providing a vital service for local communities. We are of course in a time of economic belt-tightening, but given the Government’s investment in the big society, there is a unique case for supporting hospices and the valuable services that they provide, alongside their role as a provider of NHS services and a key provider of support for families in the community.

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

On the point about invaluable support services, does my hon. Friend agree that hospices, such as Children’s Hospice South West, which aims to build a new hospice in Cornwall to add to those it has in Devon, offer vital support to families through respite care for the children whom they look after who, sadly, have terminal illnesses?

[Dr Poulter]

My hon. Friend is absolutely right, and I am delighted to hear that a new hospice is emerging in her part of the country. I am sure that it will provide a valuable service. I shall focus most of my comments on the provision of adult care, but she is absolutely right to talk about children’s hospices, because a sick child—especially one with a terminal illness—needs a lot of support and care, as do their families in particular, during their illness. I am delighted that the communities in her part of the world are investing in that service.

I shall now discuss the hospice movement’s background, because it teases out the key areas of support that hospices provide. We all probably know that St Christopher’s hospice in Penge, south London, is likely to be identified as the first modern hospice, and I am delighted that in my constituency we have a hospice, St Elizabeth’s hospice, which provides a key service, supporting most of central and eastern Suffolk. St Elizabeth hospice delivers a number of services. It has 18 in-patient beds, some of which are for respite care, to which my hon. Friend the Member for Truro and Falmouth (Sarah Newton) alluded. These provide care to give families time off when dealing with a relative who has a terminal illness, and look after people in the very last days of their life.

However, hospices do more than that. One thing that is often forgotten when we talk about the hospice movement is the very valuable outreach service that they provide to their communities. People will want to have as good a death as possible, and part of that is about supporting them in being able to die, where possible, in their own homes in as comfortable an environment as possible. What St Elizabeth hospice does very well, as do many others, is invest in those outreach services to ensure that people can die comfortably at home.

[Stuart Andrew (Pudsey) (Con)]

It was my privilege to spend 12 years of my life working in the hospice movement, particularly on the fundraising side, in adults’ and in children’s hospices. My hon. Friend raises the very important point that there is an ongoing national review of palliative care. Does he agree that it is very important that that takes account of the full range of services that hospices offer, whether for children or for adults, because it is that range of services that the families and the patients value so dearly in the hospice movement?

[Dr Poulter]

I am grateful to my hon. Friend for contributing to the debate given his experience. He is absolutely right. In end-of-life care, different solutions work for different families, and the whole point is to ensure that people and their families are supported in the way that suits them. Some people may choose to die in the comfortable surroundings of a hospice; many may want to be cared for and looked after in their own homes. I am sure that as part of the review we will see a greater understanding of that, and particularly of what is provided in the vital outreach services looking after people in their own homes.

My hon. Friend is also right to raise the issue of funding for hospices. St Elizabeth hospice and St Christopher’s hospice receive only about a third of their income from the NHS or primary care trusts; the other two thirds are raised directly through able volunteers and their charity activities. The national end-of-life care strategy published in 2008 was rightly accompanied by the provision of £286 million over two years to be spent to support the operation of hospices. I have to say that there were concerns about how that money was being spent. It is right that a review of hospice and palliative care is being carried out under the new Government. In a recent debate in the Lords, the Parliamentary Under-Secretary, Earl Howe, said:

“A huge amount of money is being spent on end-of-life and palliative care. We know that it is often not used as it should be.”—[Official Report, House of Lords, 15 December 2010; Vol. 723, c. 694.]

The palliative care funding review aims to address that issue by identifying a per patient funding model for adult and child palliative care services across health and social care. An interim report was to be published in December that looked particularly at supporting the role of the outreach services in palliative care. That is a very good thing. The per patient tariff is obviously a complex issue involving how much it would cost to look after somebody at home and how much it would cost to look after them in the hospice setting. How, in the Minister’s view, will the per patient tariff apply at this stage to looking after people at home as opposed to in the hospice? Does he think that some allowance will be made for the additional cost, particularly in rural areas, of looking after people with terminal illnesses at home as part of an outreach service?

There is a great need throughout hospitals and throughout the hospice movement to have more specialist palliative care services. GPs and PCTs tend to associate those services only with cancer, and at the moment they generally tend to be accessed by people with cancer. I hope that one thing that may come out of the palliative care review—perhaps the Minister can comment on this—is a greater move towards Department of Health support, through the dying days of PCTs, for a greater emphasis on hospices being able to reach out to people with other illnesses such as motor neurone disease, heart disease, chronic obstructive pulmonary disease and other terminal illnesses, so that we ensure that GPs and local health care providers are more in tune with that. Hospices want to do that and I am sure that the families of patients with those terminal illnesses would receive great support and benefit from such care.

Hospices, and indeed the sector, face a number of challenges. I will raise two. First, as I have suggested, there is a need to improve relationships between hospices and primary care trusts. A good thing that I think will happen as a result of the Government’s health care reforms is that when local GPs, who understand the needs of the local communities, are in charge of health care, they will forge better relationships with hospices, and in particular their outreach services, than there are at the moment. Far too often in talking to hospices over the past two or three weeks I have found that they do not feel that there is a proper corridor or dialogue with primary care trusts. I hope that the Minister will agree that the Government’s health care reforms will better recognise the valuable roles that hospices play in local communities.

Secondly and importantly, hospices often operate under a great burden of red tape, because they fall between a number of stools. They are involved with the Charity Commission because of their charitable role, the Care Quality Commission, Monitor, local authorities, the NHS commissioning board, and possibly other public health regulators. Meeting all those requirements places a great financial burden on hospices, perhaps more so than for other NHS providers or charities that have more discrete accountability. That needs to change. Given that they are charities and organisations that do not have a great deal of public funding, their having to answer to and be accountable to so many bodies through their administration is counter-productive and draws money away from patients. I would be grateful if the Minister outlined how the Government can reduce the administrative burden so that more of the money that hospices have goes to patients, rather than being wasted on administration and bureaucracy.

To conclude, there are a number of areas to applaud. The Government policy is GP-led and there will be locally sourced knowledge, which will much better recognise the needs of local hospices. The per patient funding will be patient-centric, which can only be a good thing. The health care reforms will provide greater transparency in the delivery of funding. Of course, that all ties in with the big society.

I am grateful to the House for having this debate. I have asked a few questions and am sure that the Minister will answer them. I want hospices to have a viable and strong future in which they have more support from public bodies, but are set free from the administrative burden that holds them back and prevents them from spending money on patients. I look forward to the Minister’s response.

21:13

[The Minister of State, Department of Health (Paul Burstow)]

I congratulate my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) on securing this debate and on laying out the issues so clearly. We must draw attention regularly and repeatedly to the contribution that hospices make to our society. As he rightly said, they are in the vanguard of the big society. He was right to paint the picture of the factors that drive us to focus on the role of hospices, such as the demographic pressures that he described.

My hon. Friend talked with eloquence about the difference that St Elizabeth hospice makes to his constituency and his constituents. I join him in paying a warm tribute to that hospice and to the others that have been mentioned. Recently, I have had the privilege of visiting my local hospice, St Raphael’s, and St Ann’s hospice in Cheadle Hulme. I share his and other hon. Members’ admiration for the tremendous care and compassion that is provided by staff in those places.

We want to ensure that these institutions grow and flourish as part of a more personalised approach to end-of-life care. How can we do that? First, we need to get the funding right to ensure that hospices can plan for the future with confidence. Secondly, we need to be much clearer about the role that hospices can potentially play in end-of-life care, and have that role recognised in the commissioning and shaping of local services. Thirdly, we need to establish end-of-life care as a clear priority for improvement across the NHS, using levers such as the outcomes framework, the operating framework and the forthcoming quality standard.

I know that my hon. Friend the Member for Central Suffolk and North Ipswich and others have concerns about funding. He will know from his recent visit that St Elizabeth hospice has recently undertaken a refurbishment programme. It had to raise a lot of money to pay for that work, but I am pleased to be able to say that part of the cost was funded from a £40 million capital grant scheme that we are making available this financial year. One of the coalition Government’s first actions was to confirm that funding, as an early indication of our commitment to hospice care. Well over a hundred hospices, such as St Elizabeth, are receiving funding from that grant to help them improve their facilities.

My hon. Friend will know that that is part of a much larger sum that we have made available to support the end-of-life care strategy for adults. In the current financial year, £198 million was made available to help improve the quality and range of services for people in the final stages of life. That was an indicative amount set by the previous Government, and there have been doubts, expressed not least by the Public Accounts Committee, about whether the new money for the implementation of the strategy was being used for its intended purpose. The big question is how to ensure that the funding gets through.

Some argue, although the argument has not been advanced tonight, that ring-fencing is the answer. I actually believe that it would be likely to be a retrograde step. It would give the NHS less flexibility, less discretion and less scope to meet local people’s needs at precisely the time when we need the NHS to have a more personalised approach. Ring-fencing can act as a cap rather than a guarantee, putting an artificial ceiling on the amount that an area can spend on end-of-life care rather than encouraging that amount to be commensurate with need.

Ongoing and increasing funding for end-of-life care will be part of the baseline for primary care trusts, and for the GP consortia that replace them. However, the local NHS will get freedom and responsibility in choosing how it spends the taxpayers’ resources committed to health care. That is the key refreshing change that the Government’s reforms will bring about. In return, we expect much greater transparency and accountability for the decisions that are made.

By monitoring how the new end-of-life care funding has been spent, we are doing what we can to shed light on PCTs’ decisions and on the variations in spending that occur. Last year, for instance, just 20% of the money going to PCTs was allocated to hospices. We are repeating the monitoring process for this year and conducting a survey of total PCT expenditure on specialist palliative care, including that provided by hospices. Together, that will give a clearer picture than ever of how different parts of the NHS make use of local hospices in delivering care. That is an essential component of the picture that we need to build to ensure that good commissioning takes place.

End-of-life care will also be given greater visibility in performance structures in the NHS. We have already published the NHS operating framework for the coming year, 2011-12, which emphasises the need for greater choice in end-of-life care. That care also figures prominently in the outcomes framework for the NHS, which will ensure that commissioners and providers give the matter priority. In fact, last month we published a set of performance indicators to work alongside the outcomes framework. For end-of-life care, PCTs are currently planning against the indicator measuring the percentage of deaths that take place in someone’s usual place of residence—their own home or their care home. That will provide a real incentive, real traction and a real opportunity for hospices and other providers to work with commissioners to improve outcomes.

Finally, as I have mentioned, the quality standard that the National Institute for Health and Clinical Excellence is working on will give clinicians, hospices and health managers a clear and shared idea of what best practice looks like. NICE tells me that it expects the standard to be published by November this year.

[Mr Steve Brine (Winchester) (Con)]

Naomi House children’s hospice in my constituency is a fantastically run hospice that raises an enormous amount of money to continue its hospice-at-home service, which recently restarted. It receives about 12% of its direct care costs from the Department of Health, but was told a couple of years ago that that would come to an end this year, and it is not having much luck in securing ongoing funding from the primary care trust, NHS Hampshire. What advice would the Minister give to that hospice for the interim period before GP consortia in west Hampshire are up and running?

[Paul Burstow]

Hospices need to continue to work to demonstrate the huge benefits of their provision to commissioners. If the hon. Gentleman writes to me, I will pay close attention to what is happening in that regard.

My hon. Friend the Member for Central Suffolk and North Ipswich rightly mentioned the difference that GP consortia will make. GPs are the best people to bring together the provision that I have talked about, along with the new local health and wellbeing boards. The advent of GP consortia will change the relationship—quite fundamentally, and in the right way—between hospices and GPs. It will make it natural for doctors to talk to each other and solve problems together, and to draw on different sources of support to help patients get what they need. It is encouraging to note that three of the GP pathfinders—Westminster, Bristol and Somerset—are specifically looking at how they can improve end-of-life care under the new arrangements. That is a sign of GPs’ interest in such care, and the potential for GP-led commissioning to bring about change and to address that challenge.

There is a new opportunity for collaboration and innovation, but hospices must not sit back—they must actively engage. We need them to be proactive in understanding and engaging with the new systems and structures as they settle into place over the next two years. They need to be proactive in talking with their local GPs and building up the relationships and mutual connections that will be essential to how the system works, and proactive in working with local authorities, which will play an increasingly important role in shaping and integrating care through the health and wellbeing boards. Ensuring that health and social care are commissioned and planned together is critical in the delivery of good end-of-life care.

Hospices also need to be proactive in broadening their horizons and innovating to support a wider range of people. As my hon. Friend rightly said, hospices are not just about cancer. We want people to be able to die in their own homes, where they would choose to be, and we need a more flexible and dynamic approach from both the NHS and hospices in that regard.

As my hon. Friend rightly pointed out—this is a key point—contrary to popular perception, only a small number of people actually die in a hospice. A great many more people benefit from their work in other ways. People could, for instance, receive day therapy in a hospice, or, as is the case with the local hospice in my constituency, they can get help from hospice staff working in the community, which was referred to by a number of hon. Members. Children’s hospices, meanwhile, could get more involved in the long-term treatment of children rather than just end-of-life care.

We need to innovate in those partnerships. We need commissioners to make imaginative use of hospices as part of their end-of-life, palliative care plans. Hospices must also have the ambition to explore new ways of offering their skills and services to NHS commissioners. My hon. Friend is right that we need to reach out beyond cancer services—it is essential that services diversify. St Christopher’s in London, which he mentioned, is doing excellent work with people with dementia who need end-of-life care. We need to focus much more on that to deliver the national dementia strategy.

I want more hospices to play a role in supporting people with other degenerative conditions—not just dementia, but conditions of the sort my hon. Friend rightly highlighted. We make that point explicitly in the national dementia strategy, as I said, and we want to reinforce it through the end-of-life care strategy.

The levers and the incentives are in place to enable hospices to secure NHS funding in the years ahead. But in the longer term we know that a new funding model is needed. We made it clear in the coalition agreement that we want to introduce a per-patient funding system that is built around a much clearer understanding of what level of care should be available through the NHS and that is fairer and more sustainable for all providers, including hospices, because it moves us away from the vagaries of grants—we have just heard about the problems those cause to the children’s hospice in the constituency of my hon. Friend the Member for Winchester (Mr Brine)—and gives them certainty of a set level of funding per person.

The debate about this subject has been going on for some time and is well developed. I encourage hon. Members who have spoken to contribute to that work. In July, the Secretary of State for Health appointed Tom Hughes-Hallett, the chief executive of Marie Curie Cancer Care, to chair an independent review covering both adult and children’s services. That review will look at the issues raised in this debate to ensure that we have services that reach out beyond the confines of the hospice and address the wider cost issues in rural communities. An interim report was published at the end of last year, which sets out a definition of dedicated palliative care and provides initial thoughts on how a new national funding system could be built.

[Stuart Andrew]

Will the review take account of not only the similarities between children’s and adult’s hospices, but the differences? Respite care is a fundamental part of the care that children’s hospices provide.

[Paul Burstow]

I can give my hon. Friend that undertaking. Understanding of and sensitivity to those differences will be reflected in how the review is put together. I will also ensure that this debate is brought to the attention of those doing this work.

Hospices play a strong and distinguished part in our communities. We absolutely want them to have a bright future. Yes, there will be challenges, not least because the financial environment will affect hospices just as it will affect other parts of the health system, and I can understand the concern that that creates. But through the operating framework for the NHS, the funding review and the wider improvements that we are making in terms of GP-led commissioning, we are creating the right conditions for a vibrant hospice movement for the future. That will mean that institutions like the ones my hon. Friend the Member for Central Suffolk and North Ipswich mentioned can continue to make a significant and valued contribution in the years ahead.

Question put and agreed to.

21:27

House adjourned.