House of Commons

Monday 7th February 2011 Commons Chamber

Monday 7 February 2011

The House met at half-past Two o’clock

Prayers

Monday 7th February 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 7th February 2011 Commons Chamber

The Secretary of State was asked—

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

1. What estimate he has made of the number of Sure Start children’s centres that will offer a full service in 2014-15.

[The Minister of State, Department for Education (Sarah Teather)]

The Government have ensured that there is enough money in the system to maintain the network of Sure Start children’s centres and have provided new investment for health visitors. Local authorities, in consultation with local communities, can determine the most effective way of delivering future services to meet local need. They have a duty to consult before opening, closing or significantly changing children’s centres and to make sufficient provision.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

I thank the Minister for that answer, but in my local authority area, Tameside, the early intervention grant that funds Sure Start faces a cut of 12%. Does she agree that such a cut could be a false economy, because one of Sure Start’s great benefits is that it saves the state further expenditure down the line by improving outcomes for young people through early intervention? What studies are her Department carrying out to estimate the likely future costs of cutting early intervention now?

[Sarah Teather]

We have provided a flexible grant because that is what local authorities said they wanted. Obviously, that includes money for Sure Start, but it also includes money for other things. Local authorities are the best people to make these decisions on the ground. Localism is the right way forward regardless of the circumstances, but when finances are tight there is a particular requirement on us to ensure that decisions are taken closest to where the impact is felt, because we are much more likely to get high-quality decisions in that way.

[Damian Hinds (East Hampshire) (Con)]

Does my hon. Friend agree that the early years provision plays a vital part in social mobility? How many two-year-olds does she expect will benefit from the programme to extend that to disadvantaged children?

[Sarah Teather]

I absolutely agree that the early years play a vital role in social mobility, which is precisely why the Government have chosen to prioritise funding in this way. Tomorrow, we will debate the Second Reading of the Education Bill, whose first clause provides the enabling powers for us to regulate so that we can help an extra 130,000 two-year-olds to experience high-quality early education by the end of the spending period.

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

Does the Minister agree that there is an inherent contradiction in a policy that announces that the Government will protect the original local Sure Start programmes in the most deprived areas, which I was proud to develop from 1997, while, with the so-called “localism programme”, saying, “It is entirely the fault of the local authorities,” which have been denied the money to maintain those programmes in the first place?

[Sarah Teather]

The right hon. Gentleman is right to be proud of the Sure Start children’s centres, which are an excellent programme. That is precisely why the Government have made sure that the money is there in the early intervention grant, and why we have built on that by providing extra money for health visitors, through the Department of Health, and more money for things such as the family-nurse partnerships, which we know work on the ground and are often delivered through children’s centres. I believe that localism is the right way forward. Good local councils are thinking creatively about, for example, how to ensure that they can cluster their centres and merge their back offices, and how to prioritise outcomes for children—it is outcomes that matter.

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

Does my hon. Friend envisage opening up the assets of these underused children’s centres to community groups to expand the big society?

[Sarah Teather]

In some areas, local authorities are very good at making full use of the assets, which are often fantastic buildings, but in other areas they are not as good. I hope that providing the flexible fund will mean that local authorities start to think more creatively about how they can join services together and perhaps provide support for older children. By providing that kind of flexibility we enable local authorities to make the right decisions for their areas.

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

Recent research by the Daycare Trust and 4Children shows that, despite promises made by the Prime Minister and his deputy, 250 children’s centres are expected to close within the year, with hundreds more at risk of closure or big cuts in the services they provide. Hundreds of thousands of parents across the country are deeply worried about this, but all we get from the Minister is glib indifference. I read this morning that the Secretary of State has announced that funding for music will be maintained, so, incidentally, the Government feel that that is worth ring-fencing whereas Sure Start is not. To paraphrase my right hon. Friend the Member for Birkenhead (Mr Field), does the Minister not think that parents deserve much more than having to listen to the Secretary of State playing his fiddle while Sure Start burns around him?

[Sarah Teather]

That was a long rant and I struggled slightly to find the question in it. The important thing to say about the survey that 4Children did is that it is about people’s concerns and not about decisions that have been taken—decisions have not yet been taken. We are saying to local authorities that we want them to focus on outcomes for children and families. We are trying to encourage them to do that by holding back some money for payment by results and we are developing that scheme with the sector at the moment. Good local authorities that make sensible restructuring decisions will be able to benefit from that, but if they make decisions that jeopardise outcomes for children, they will not be able to benefit from it.

[David Wright (Telford) (Lab)]

2. When he plans to inform colleges of the size of the discretionary learner support fund to replace the education maintenance allowance; and if he will make a statement.

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

We plan to allocate the new funding replacing the education maintenance allowance in line with the usual timetable for overall funding allocations for schools and colleges, which will be made in the spring.

[David Wright]

The real concern is about transitional arrangements. Will the Minister explain what discussions he has had with colleges about the transitional arrangements, particularly for students who have already started their course and want to continue receiving funding support while they carry on with it?

[Mr Hayes]

The hon. Gentleman is right that transitional arrangements are important. We are in discussions with colleges and their representative bodies to ensure that there is not the kind of problem that he identifies. We are determined to allocate these resources in the way that addresses disadvantage most cost-effectively and ensures that the worse-off are not still worse off as a result of the changes.

[Bob Russell (Colchester) (LD)]

The previous Labour Government left 3.9 million children living below the poverty line. Can the Minister give an assurance that when the children abandoned by Labour eventually arrive at further education colleges, they will all receive a discretionary learner support fund grant?

[Mr Hayes]

As I have said, we will ensure that those who are worse off are not disadvantaged by the system. Redistributing advantage and ensuring that there is a change in the prospects and opportunities for those who begin worse off is at the heart of all that this Government do. We are the champions of social justice—past, present and future.

[Mr Iain Wright (Hartlepool) (Lab)]

In last month’s debate on the education maintenance allowance, the Secretary of State pledged that any replacement scheme for EMA would cover the costs of transport and equipment and would support young people with special educational needs or learning disabilities as well as those with caring responsibilities, teenage parents and those who were eligible for free school meals when at school. Given that research from the House of Commons Library indicates that such pledges would have a first-year cost of £480 million and ongoing costs of £420 million a year, will the Minister confirm, on behalf of the Secretary of State, that this is the budget for EMA’s successor and that he stands by the pledges he made to the House?

[Mr Hayes]

The hon. Gentleman is far too experienced as a Minister to expect me to make that kind of on-the-hoof promise. Equally, he knows that we are determined to amend this scheme to allow it to be targeted using the discretion to do the kind of things that he highlighted. After all, his own shadow Secretary of State has said:

“I have never set my face against changes or savings to the EMA scheme.”—[Official Report, 19 January 2011; Vol. 521, c. 863.]

[John Stevenson (Carlisle) (Con)]

3. What plans he has to raise standards of the teaching profession; and if he will make a statement.

[The Secretary of State for Education (Michael Gove)]

There is nothing more important to a child’s education than the quality of their teachers, which is why I set out plans to raise the status and standards of the teaching profession in the White Paper “The Importance of Teaching”. We will focus on recruiting the best candidates to become teachers, we will improve their training and we will create more opportunities for all teachers to learn from the best.

[John Stevenson]

Will the Secretary of State reassure pupils and parents in my constituency of Carlisle that the quality of science and maths-based teaching will not suffer as the academies programme continues successfully to expand?

[Michael Gove]

I am delighted to be able to reassure my fellow Aberdonian that the quality of education that children in Carlisle enjoy will continue to improve. I have had the opportunity to visit some of the superb academy provision in his constituency. I know, and I am sure that every right hon. and hon. Member will be pleased to know, that we will guarantee an enhanced level of support for graduates who are scientists or mathematicians who wish to enter teaching in order to ensure that the subjects that will help to equip our children for the 21st century are given the boost they need.

[Kevin Brennan (Cardiff West) (Lab)]

I know the Secretary of State will want to acknowledge that, thanks to Labour’s reforms, we already have the best generation ever of teachers—that is according to Ofsted. He says in his White Paper that quality teacher training is vital, but he is allowing taxpayers’ money to be used to employ unqualified individuals to teach children in his so-called free schools. If having well-qualified teachers is vital for some schoolchildren, why is it not essential for all?

[Michael Gove]

We are making sure that all children have access to improved quality of teaching by ensuring that we reform initial teacher training in a way that builds—yes—on some of the successes that we have seen in the past. We are also ensuring that new teaching schools are established. Many of these will be free schools and many higher education institutions, including the university of Cumbria, which is represented by my hon. Friend the Member for Carlisle (John Stevenson), are playing a role in helping to improve teacher training. Thanks to the expansion of Teach First, which the previous Government—yes—supported, but not as generously as we are doing, there are more talented teachers everywhere. I was delighted to be able to share a platform and a room with the hon. Member for Hartlepool (Mr Wright) on Friday, when we signalled that Teach First was expanding into the north-east of England, something that was never accomplished under the previous Government, but which, under this reforming and progressive Government—

[Mr Speaker]

Order. The Secretary of State will resume his seat. We are moving on to the next question.

[Graham Evans (Weaver Vale) (Con)]

4. What plans he has to improve vocational education; and if he will make a statement.

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

The Government are keen to make significant improvements to vocational education, its organisation, funding and target audience—for example, through university technical colleges. Professor Alison Wolf has been commissioned to produce a report which will be published in spring 2011 and her findings will inform our determination to reinvigorate vocational education.

[Graham Evans]

How will the Government boost the number of apprentices and ensure that those who complete their training will get the status and recognition that they deserve?

[Mr Hayes]

It was Dr. Johnson who said that a lack of manual dexterity constitutes a form of ignorance. The Government are determined to boost the number of apprenticeships, which is why we have put in place funding for 75,000 more adult apprenticeships and 30,000 more apprenticeships for young people. Today, in The Times—I know you will have seen it, Mr Speaker; others may not have done—we have for the first time celebrated the achievements of those who achieved higher apprenticeships in 2010. This ensures that apprentices and all those who aspire to and achieve vocational qualifications get the status and recognition that they deserve.

[Mr Speaker]

I am grateful to the Minister.

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

Can the Minister tell the House what evidence—the operative word is “evidence”—supports his decision to limit the curriculum so severely and thereby exclude many thousands of young people from accessing the curriculum successfully?

[Mr Hayes]

The evidence is that we have commissioned a report on vocational learning, we have put in place funding for apprenticeships, and we are determined to ensure that the status of those vocational courses is maintained and grown. The evidence is simply the evidence of the Government’s commitment and record so far in office. That is good enough for me. It should be good enough for the hon. Lady.

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

5. What qualifications he expects to be required for pupils to gain entry to university technical colleges.

[The Minister of State, Department for Education (Mr Nick Gibb)]

University technical colleges will be 14-to-19 institutions, with 14 being the normal age of entry. We do not expect pupils to be required to have any qualifications to gain entry to a university technical college.

[Andrew Selous]

I share the hope that university technical colleges will indeed bring poverty-busting structural change, and I look forward to the establishment of one in Houghton Regis in my constituency. I hope my hon. Friend can reassure me that university technical colleges will not seek to exclude those who are not predicted to get brilliant GCSEs, who may well have just the right attitude to shine in a university technical college.

[Mr Gibb]

I am happy to provide that reassurance, and to pay tribute to my hon. Friend for his active support for the central Bedfordshire UTC proposals. UTCs will be required to adopt fair and open admission arrangements. They will give priority to the same statutory groups as maintained schools, children with a statement of special educational needs and children in care, and they will not be able to require that children have reached certain levels of attainment or that they have specific qualifications in order to qualify for admission. UTCs are for young people of all abilities.

[Mr Denis MacShane (Rotherham) (Lab)]

I welcome the proposal, because we have in this country almost a contempt for technical qualifications and for engineering. Turning that around will require giving orders to the professional organisations and increasing the role and status of people coming out of those courses. Perhaps we might have one or two members of the Cabinet who are thus qualified, even if their only engineering qualification is engineering their financial blind trust to hide where their money is.

[Mr Gibb]

The right hon. Gentleman is right to support this development. We intend to have 12 UTCs up and running by the end of the spending review period. He is also right to emphasise the importance of science, technology, engineering and maths, which the Government are committed to.

[Mr Graham Stuart (Beverley and Holderness) (Con)]

I share my hon. Friend’s enthusiasm for UTCs, but is he confident that the English baccalaureate will not have a cramping impact on the power of innovation in institutions such as UTCs, so that we can ensure the most appropriate education for all their pupils?

[Mr Gibb]

I am grateful to my hon. Friend for that question. The English baccalaureate is designed to leave ample time in the curriculum for other subjects, including vocational subjects. In the countries around the world that have the best technical education systems, core academic subjects are taught alongside, not instead of, technical or vocational subjects until their students reach the age of 15 or 16. Subjects such as modern languages are critical for the technical and vocational success of young people.

[Ann Coffey (Stockport) (Lab)]

6. What steps he plans to take to reduce the incidence of children going missing from children’s homes.

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

All local authorities are required to have procedures and processes in place to minimise the risk of children in care going missing. In April, we will bring in revised national minimum standards for children’s homes, which will strengthen the national guidance on this issue.

[Ann Coffey]

In Greater Manchester, more than half of all missing incidents involve children from children’s homes. According to a recent Barnardo’s report, many of those children are at risk from paedophile and criminal gangs. Will the Minister consider issuing statutory guidance to local safeguarding boards, asking them to monitor all incidents of children going missing and share that information with other agencies, such as Ofsted, so that action can be taken to reduce the number of children going missing and the risk to them?

[Tim Loughton]

The hon. Lady makes a good point and I pay tribute to her work as chair of the all-party group on runaway and missing children and adults. I am looking closely at the Barnardo’s report with the Under-Secretary of State for the Home Department, my hon. Friend the Member for Old Bexley and Sidcup (James Brokenshire). This is a serious issue, but, without being complacent, I should say that the incidence of children running away from children’s homes has been reducing over the past few years. The figures are calculated on the basis of those who are missing for more than 24 hours, but in fact most children return within 48 hours. It is something that I will continue to look at.

[Diana Johnson (Kingston upon Hull North) (Lab)]

7. What assessment he has made of the effect on music education in schools of reductions in his Department’s funding for music services.

[The Secretary of State for Education (Michael Gove)]

I am happy to inform the House that this morning we published Mr Darren Henley’s review on music education, and I am hugely grateful to him for his in-depth consideration of the issues and for the realistic and practical measures he has put forward. Following that report, I can now confirm that funding for music education in 2011-12 will be the same as it was in 2010-11—£82.5 million. That is not a cut; it is a very good settlement for music services, which is consistent with our broader strategies for school autonomy and deficit reduction.

[Diana Johnson]

I, too, pay tribute to the work of Darren Henley, who has at heart the need to ensure that young people get a good music education. Labour’s £332 million investment in school music helped children from poor and average backgrounds access good education in music. Will the Secretary of State confirm that the £82.5 million, although ring-fenced, is a real-terms cut? Local authorities are already slashing music services in their areas, so rather than blowing his own trumpet, should the Secretary of State not admit that this is really a cut, just like his cut to school sport?

[Michael Gove]

Once again, we have had a superb pun: we had trumpets from the Back Benches and fiddles from the Front Bench, but what a pity they are not singing from the same hymn sheet as Darren Henley, local authorities and all those who care about music. From Alfie Boe the tenor, to Julian Lloyd Webber the cello player, everyone in the world of music is saying that today is good news for all children who want to learn more about music, including your own, Mr Speaker.

[Mr Speaker]

I am very grateful.

[Richard Fuller (Bedford) (Con)]

Bedfordshire Orchestral Society has an enviable record of promoting music in schools, but it is reliant on funding from two local authorities. Even ahead of today’s good news from the Secretary of State, Bedford borough council has committed funding, so will my right hon. Friend join me in encouraging Central Bedfordshire council to do likewise?

[Michael Gove]

When Central Bedfordshire council hears that my hon. Friend and I are both on the case, I am sure that it will be only too happy to join in and become as one in harmony with us both.

[Toby Perkins (Chesterfield) (Lab)]

Once again, there is a chasm between rhetoric and reality: the big announcement is a cash freeze, which in real terms is a cut. It is another example of confused decision making. The right hon. Gentleman promises to increase access to music, but the cuts mean that 60% of schools, as surveyed by the National Association of Music Educators, are cutting music provision this year. Does he accept that, unless music is protected and ring-fenced not just for one year but into the future, all his rhetoric will lead to is less music provision in deprived areas?

[Michael Gove]

There is a huge chasm between rhetoric and reality: the chasm between the apocalyptic rhetoric that we heard from the Opposition Front Benchers and their sock puppets elsewhere, and the reality of increased funding for those areas that need it most, and new funding for the teach music first scheme, ensuring that some of our most talented musicians from leading music schools and conservatoires work in our most challenging schools to ensure that every child has an opportunity, which I, like the hon. Member for Kingston upon Hull North (Diana Johnson), believe should be extended to all. It is only under this Government, with this announcement on school music and our pupil premium, that we are at last ensuring that money goes to those children who need it most, instead of being wasted on the quangos and bureaucrats that characterised the past 13 wasted years.

[Lorraine Fullbrook (South Ribble) (Con)]

8. What steps he is taking to improve the quality of the work force in early years education.

[The Minister of State, Department for Education (Sarah Teather)]

The Government are committed to taking steps to improve and invest in the quality of the early education and child care work force. We continue to invest in the work force by making funding available via the new early intervention grant, and by committing to fund the early years professional status and new leaders in early years programmes in 2011-12. We will publish proposals to support further improvement in the quality of the work force in the spring.

[Lorraine Fullbrook]

Last week, when opening the Hesketh Bank children’s centre in my constituency, I saw at first hand how essential the excellent staff are in helping families and children in the local community. How will the new leaders programme and the early years professional status programme ensure that more talented and committed people work in early years education?

[Sarah Teather]

I am very pleased to hear about the excellent work of the children’s centre staff in Hesketh Bank. The two programmes to which my hon. Friend refers will focus specifically on professionalism in the early years work force. The early years professional status programme enables people who already work in the sector to have their experience acknowledged, their skills refreshed and their learning updated. The new leaders programme is based around the Teach First and Teach Next programmes and designed specifically to bring into the early years work force talented people, with the potential to be great leaders, who might not otherwise have thought about working in the sector.

[Meg Munn (Sheffield, Heeley) (Lab/Co-op)]

The Minister will be aware of several distressing cases recently of children in early years care being abused by staff. Will she commit, as part of that development, to ensure greater child protection training for early years workers, so that they not only know what is happening to children in the home, but can construct working practices that ensure such abuse cannot take place in the future?

[Sarah Teather]

I am grateful to the hon. Lady for raising that matter, which has been very distressing to follow. She will be aware that no prosecutions have yet taken place, but I have asked Dame Clare Tickell to undertake a review for the Government of the early years foundation stage, and one of the things she is looking at is child protection and welfare.

[Caroline Nokes (Romsey and Southampton North) (Con)]

9. Whether he plans to include religious education in the humanities section of the English baccalaureate.

[The Secretary of State for Education (Michael Gove)]

Religious education did not count towards the humanities element of the English baccalaureate in the 2010 performance tables, because it is already a compulsory subject. One intention of the English baccalaureate is to encourage wider take-up of geography and history in addition to, rather than instead of, compulsory RE.

[Caroline Nokes]

I thank the Secretary of State for that response, but does he think that the exclusion of religious education from the English baccalaureate might dramatically reduce the number of students studying the RE full course at GCSE and have a knock-on and detrimental effect on the number of candidates for religious education teacher training?

[Michael Gove]

I am very grateful to my hon. Friend for making her point. We all recognise that high-quality religious education is a characteristic of the very best schools—faith schools and non-faith schools. However, the decision to include geography and history in the humanities section of the English baccalaureate will mean that those subjects, which have seen a decline in the number of students pursuing them, will at last see an increase, alongside modern foreign languages. As the Minister of State, Department for Education, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb) pointed out, the English baccalaureate is intended to be a suite of core academic qualifications, which every child can be expected to follow alongside other qualifications, whether vocational, RE or others.

[Andy Burnham (Leigh) (Lab)]

Can the Secretary of State tell the House on what research or evidence he has based his selection of subjects in the new English baccalaureate?

[Michael Gove]

Yes. The research and evidence that I undertook was to look at what the highest performing education jurisdictions do. When the OECD published its table on how our country had been doing in education over the past 10 years, I was struck to see that under Labour’s stewardship we had slipped in the international league tables for English, for mathematics and for science. I was also struck by the fact that the numbers of students studying modern foreign languages, history and geography were declining. I was particularly struck by the fact that only last week the Russell group said that these are the subjects which the best universities expect of students if they are to go on and prosper and achieve the level of social mobility that sadly eluded us when the right hon. Gentleman was in government.

[Andy Burnham]

The Secretary of State mentions the OECD, so let me quote from last year’s PISA—programme for international student assessment—report, which says:

“Most successful school systems grant greater autonomy to individual schools to design curricula and assessment policies”.

That is in direct contradiction to what he has just said. I support the right of every child to take these five GCSEs, but it is a narrow selection, and not right for everybody, and the way in which he has introduced it is restricting student choice right now. Many feel that it is not a fair way to judge all children and all schools, suggesting that some are second best. So is he really saying to young people and employers today that dead languages are more important than business studies, engineering, information and communications technology, music and RE? Will he not listen to the call from the Chair of the Select Committee, made just a few moments ago, to allow a broader and more flexible English baccalaureate?

[Mr Speaker]

Order. I am sorry, but these questions are becoming excessively long. I hope that we can have a pithy response, and I am sure we will, from the Secretary of State.

[Michael Gove]

I am surprised that the right hon. Gentleman has the brass neck to quote the PISA figures when they show that on his watch the standard of education which was offered to young people in this country declined relative to our international competitors. Literacy, down; numeracy, down; science, down: fail, fail, fail. I am surprised that he has the brass neck to stand here and to say that working-class children should not study modern foreign languages, should not study science, should not study history and should not study geography. If it is good enough for the likes of him, why should it not be good enough for working-class children elsewhere? Why is he pulling up the drawbridge on social mobility? Why is he saying that they are only fit to be hewers of wood and drawers of water rather than university graduates like you and me, Mr Speaker? Rank hypocrisy!

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

While I entirely accept the Secretary of State’s point that RE is compulsory, it is not obligatory to sit the GCSE. Does he agree that the very many faith schools where RE is compulsory are thereby penalised in the calculation of their English baccalaureate achievement?

[Michael Gove]

I appreciate the care with which my hon. Friend puts his question. I also appreciate the fact that he has been a very strong advocate for faith schools in his own constituency, including St Mary’s, whose cause he has championed with particular eloquence. Many schools will want to offer RE as a GCSE, and indeed we would encourage them to do so, but the core element of the English baccalaureate relates to five subjects which we believe are the essential academic knowledge that students should be able to master. The news from the Russell group of universities last week that the subjects that we have chosen for the English baccalaureate are the subjects that they expect students to have if they are to go on to leading universities ensures that there is an appropriate match between schools and universities in advancing social mobility rather than seeing it decline, as happened over the past 13 years.

[Nick Smith (Blaenau Gwent) (Lab)]

10. What steps he is taking to ensure the provision of good quality youth services.

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

I should point out that the Department for Education does not have responsibility for the provision of youth services in Wales. However, we are working to modernise and improve the quality of services for young people in England with our stakeholders, including, of course, young people themselves. The early intervention grant is providing more than £2 billion per annum to local authorities’ funding for early intervention services, including for young people. We secured £134 million in capital funding for the remaining myplace projects. The Government are also launching the national citizen service programme, which over time will offer all 16-year-olds a shared opportunity for personal and social development, community service and engagement.

[Nick Smith]

Youth services around the country are anticipating crisis as councils are forced to pass on savage cuts, and the Government seem unwilling to protect these vital services. Will the Minister confirm that the youth service, which provides services week in, week out, has a distinct and specialist role and will not be replaced by the national citizen service programme?

[Tim Loughton]

I agree with the hon. Gentleman about the importance of good quality youth services, particularly those that are focused on the people who will get the most from them. To reiterate the point made by the Minister of State, my hon. Friend the Member for Brent Central (Sarah Teather), it is the duty of local authorities to chose how best to spend their funds. National citizen service funding is a separate funding stream that was negotiated with the Treasury, and it does not impact on the funding for youth services from the Department for Education.

[Nicky Morgan (Loughborough) (Con)]

11. What recent assessment he has made of school standards in Loughborough constituency.

[The Minister of State, Department for Education (Mr Nick Gibb)]

In 2010, at key stage 2, 72% of pupils in Loughborough achieved level 4 or above in English and maths combined, compared with 73% in England as a whole. In 2010, at key stage 4, 56% of pupils in maintained schools in Loughborough achieved five or more GCSEs at grade A* to C, including English and maths, compared with 55% in maintained schools in England as a whole.

[Nicky Morgan]

I thank the Minister for that reply. The GCSE results in Loughborough for the past few years have consistently been below the English average. Locally, many people attribute that to the fact that pupils change school at 14 in Leicestershire, which unsettles pupils and is difficult for teachers. Is he aware that many people in my constituency would like that system to change? Will the Department listen to head teachers on that issue?

[Mr Gibb]

I pay tribute to my hon. Friend’s work in Loughborough. When she and I visited Humphrey Perkins high school and Loughborough Church of England primary school together before the election, it was clear that she was passionate about education and raising standards. I know that there is a widely held view in Loughborough that changing school at 14 can have a negative impact on GCSE results at 16. Improving standards must be the driver for local restructuring. I know that that is my hon. Friend’s rationale for seeking to change the system in Loughborough. Lord Hill has a meeting with her and some teachers from Loughborough tomorrow—I mean literally tomorrow, not the parliamentary tomorrow—and I know that he will be keen to explore these issues in as helpful a way as possible.

[Richard Harrington (Watford) (Con)]

12. What steps he plans to take to strengthen the teaching of core subjects in schools.

[The Minister of State, Department for Education (Mr Nick Gibb)]

The White Paper “The Importance of Teaching” emphasises the importance of high quality teaching in the core subjects. We are introducing the English baccalaureate, which recognises achievement in the core subjects of English, maths, science, a humanity and a foreign language. It is intended to ensure that children receive a broad and balanced education, with time in the curriculum for vocational and creative subjects. We are taking steps to strengthen the teaching of reading through the use of systematic synthetic phonics.

[Richard Harrington]

I am sure the Minister is aware that in 2009, fewer than one in 25 children who were on free school meals took chemistry or physics, one in five took history, and fewer than 15% took geography or French. What plans does he have to ensure that children from poorer backgrounds get access to a proper academic education?

[Mr Gibb]

I share my hon. Friend’s concern. That is why we have introduced the English baccalaureate. We are concerned that the number of pupils who currently receive a broad education in core academic subjects is far too small. That is particularly the case for pupils in disadvantaged areas. The English baccalaureate is designed to recognise the success of pupils who gain GCSEs or International GCSEs at grades A* to C across a core of academic subjects: English, maths, a humanity, the sciences and a language. We want to encourage more people to study those core subjects and to give all pupils the opportunity to study them, regardless of the school.

[Kelvin Hopkins (Luton North) (Lab)]

Many youngsters achieve good grades in GCSE maths without ever having studied algebra. That puts them at a disadvantage when they want to pursue mathematics beyond GCSE. Should algebra not be a vital part of GCSE maths?

[Mr Gibb]

Yet again, the hon. Gentleman says something with which I wholeheartedly agree. He is passionate about raising standards in our schools, as are we. That is why we recently announced the setting up of a review of the national curriculum. An expert advisory panel of head teachers from around the country will consider English, maths and science as the first part of the review.

[Stuart Andrew (Pudsey) (Con)]

13. How many applications his Department has received to establish free schools for children with special educational needs.

[The Secretary of State for Education (Michael Gove)]

My Department has received a number of proposals from groups and individuals interested in establishing free schools wholly or mainly catering for children with special educational needs. We have received more than 240 applications overall.

[Stuart Andrew]

It has been a pleasure of mine to work with two groups that are hoping to take advantage of the policy. One of them, the Lighthouse project in Leeds, this weekend submitted an excellent application to open a school for young people suffering with autism spectrum disorders. It is eager to do so in the autumn, but after what it has heard from the Department, it is concerned that there may be some delays. It does not want to lose momentum. Will my right hon. Friend agree to meet me and representatives of that organisation to see what we can do to progress the application?

[Michael Gove]

I would be delighted to meet my hon. Friend and the Lighthouse group. I have to stress that it is important to ensure that all the issues surrounding the establishment of any new school are successfully navigated. Opening any free school in September 2011 is a challenging timetable. Under the last Government it would take between five and 10 years for a new school to open, so it is remarkable that so many may open within a year. I will look closely at the matter, but I suspect that given the complexity of some of the issues involved we may not be able to open in September 2011. However, let us discuss it and ensure that we can support—

[Mr Speaker]

Order. May I gently ask the Secretary of State to face the Chamber, so that I can be the full beneficiary of his eloquence?

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

Will the Secretary of State bear in mind the fact that successful special educational needs provision depends very much on integration with other schools? That was the finding of the former Select Committee on Children, Schools and Families. We very much support good SEN provision, but it must be integrated with the local schools that take other kinds of children.

[Michael Gove]

I absolutely recognise that when we are talking about children with special educational needs, there is such a broad and complex spectrum that one solution will not fit all children. I had the opportunity to visit Redcar community college on Thursday, and I saw there an imaginative proposal to co-locate Kirkleatham Hall special school with that college. That seems to be the right solution there, but different solutions will apply elsewhere. I am very grateful to the hon. Member for Redcar (Ian Swales) for his impassioned advocacy of those two schools.

[Dan Rogerson (North Cornwall) (LD)]

Further to the Secretary of State’s answer, is he open to suggestions for replacing provision offered by pupil referral units in some parts of the country? Outcomes at such units are variable across the country.

[Michael Gove]

My hon. Friend makes a very good point, and one thing that the Education Bill will do is make it easier to ensure that we can have high-quality provision for students who are excluded for whatever reason.

[Mrs Mary Glindon (North Tyneside) (Lab)]

14. Whom his Department plans to consult in its review of home-to-school travel; and when that review will be completed.

[The Secretary of State for Education (Michael Gove)]

My Department is reviewing home-to-school transport policy, which has remained largely unchanged since the Education Act 1944, when the social, economic and education landscape was very different. As part of our review, we are considering how best practice can be spread to all local authorities. We will make further announcements in due course.

[Mrs Glindon]

North Tyneside’s Tory-led council is currently reviewing its home-to-school travel policy to include a proposal to stop free and subsidised travel for children who travel more than 3 miles to school. As that will affect more than 400 pupils who travel from across the borough to St Thomas More RC high school, which is the only faith school in North Tyneside, will the Secretary of State please make a statement to support my constituents and their children against that unfair proposal?

[Michael Gove]

I am very grateful to the hon. Lady for raising that issue. It is important that we support the exercising of school choice, and that we support faith schools and the great schools of North Tyneside, such as Whitley Bay high school, whose headmaster I had the opportunity to talk to on Thursday when I visited the north-east. I will look into the specific situation that the hon. Lady mentioned, but of course one thing that all local authorities are dealing with is the drastic economic inheritance bequeathed by the last Labour Government.

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

Will the Secretary of State, who I know is a friend of North Yorkshire and a frequent visitor, look carefully at the proposals that North Yorkshire county council is coming up with for a similar review, bearing in mind that the distances that children have to travel cannot be covered by anything other than either bus or car?

[Michael Gove]

I am very well aware of the specific challenges that North Yorkshire has in helping to ensure that children can exercise school choice and go to the most appropriate local school. I know that it is one of the most successful local authorities in terms of both value for money and school performance, so I look forward to working with my hon. Friend and the local authority to come to the right outcome.

[Mr Philip Hollobone (Kettering) (Con)]

15. What steps he is taking to improve school discipline in (a) Kettering constituency, (b) Northamptonshire and (c) England.

[The Minister of State, Department for Education (Mr Nick Gibb)]

Raising standards of behaviour in our schools is a key priority for the coalition Government. It goes to the root of how we raise standards, and it lies at the heart of our determination to close the attainment gap between those from poor and wealthier backgrounds. The Education Bill, which we will debate tomorrow, sets out reforms to tackle poor behaviour, making it easier to impose no-notice detentions, extending search powers for items that disrupt teachers and making it easier for heads to expel violent and persistently disruptive pupils.

[Mr Hollobone]

Will my hon. Friend ensure that, under this Government, badly behaved pupils who do not want to learn cannot damage the education of hard-working pupils who do?

[Mr Gibb]

My hon. Friend makes a good point. It is not just the rights of the pupils who disrupt the class that are important—although they are—but those of the overwhelming majority of students in class, which we must also protect.

[Hugh Bayley (York Central) (Lab)]

16. What estimate he has made of the savings to accrue from terminating education maintenance allowance payments in September 2011 for students who are already part of the way through a two-year programme of study.

[The Secretary of State for Education (Michael Gove)]

The cost of continuing to pay EMA from September 2011 for a further year to all students currently receiving it is estimated at £300 million, excluding the costs of administration.

[Hugh Bayley]

York college tells me that, last September, on the Secretary of State’s watch, 650 students started two-year courses in the expectation of getting an education maintenance allowance for two years. To continue it would cost less than £500,000. Will the right hon. Gentleman reconsider?

[Michael Gove]

I am very grateful for the moderate and considered way in which the hon. Gentleman puts his point—I know how passionate he is about further education. [Interruption.]

[Mr Speaker]

Order. Hon. Gentlemen should not yell from a sedentary position. I want to hear the Secretary of State’s answer, and I hope that the House does, too.

[Michael Gove]

Thank you, Mr Speaker. It is ironic that we were just discussing poor behaviour and people in class disrupting those who want to learn. I am keen to work with the hon. Member for York Central (Hugh Bayley), and college principals in particular, to ensure that our new, enhanced learner support fund can help all those vulnerable young people who need support to stay in education and learning.

[George Eustice (Camborne and Redruth) (Con)]

When the Secretary of State assesses the size of the discretionary learner support to be made available to each college, will he consider at least making one of the criteria the number of second-year students who currently receive EMA, to assist colleges and students in the transition to the new system?

[Michael Gove]

That is a constructive suggestion, which I will consider as part of the review.

[Mr Andy Slaughter (Hammersmith) (Lab)]

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

[The Secretary of State for Education (Michael Gove)]

I am pleased to announce that, on 1 February, more than another 30 schools converted to academy status, meaning that there are now more than 440 academies. Tomorrow we will debate the Education Bill, which will give all Members an opportunity to consider the further advance of the movement, which gives all head teachers more autonomy, and promises all children the raising of standards. The Education Bill will also provide all Members with an opportunity to vote for measures that will ensure better discipline and higher standards in every school.

[Mr Slaughter]

The Schools Minister, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), is fond of saying that there is adequate money in the early intervention grant to fund the network of children’s centres. An education authority such as Hammersmith and Fulham is cutting by half in one year the children’s centre budget, closing nine out of 15 centres, including phase 1 centres in deprived areas, and sacking 50 staff—does that give the Secretary of State and the Minister pause for thought? If so, what will they do about education authorities that are wrecking children’s centres?

[The Minister of State, Department for Education (Sarah Teather)]

The hon. Gentleman has expressed his concern to me about the position in his area, and we discussed it last week. I will say what I said in answer to other hon. Members: good local authorities are restructuring with care, and looking at methods of clustering centres to merge back-office functions, because they know that that is the way to benefit from the Government’s work on payment by results.

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

T3. One of my local head teachers said to me last year that it can take up to a year to move a teacher who is not up to their particular responsibilities. Given that that could be a critical year for the children concerned, what steps can my right hon. Friend take to speed up that process?

[Michael Gove]

No one is served when people who should not be in the classroom continue there. It increases the burden on other professionals and deprives children of the highest quality education. We are reviewing the professional standards for all teachers to make it easier for head teachers to ensure that staff who underperform are given the support that they need to improve or to move on.

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

T6. Given that the cuts in EMA will affect more than 2,600 low-paid families in my constituency, is the Minister not ashamed of that policy? What will he do to increase the top-up learner funds to help at least some of those families?

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

I have made it clear that we are absolutely determined to ensure that the worst-off are not disadvantaged by the new arrangements. However, I believe that there is a strong case for greater discretion to target some of things that Opposition Front Benchers identified as salient in helping people to achieve their best.

[Mr Christopher Chope (Christchurch) (Con)]

T4. Does my right hon. Friend agree that one way of getting more capital into free schools would be to enable them to obtain it on the open market by allowing them the freedom to make a profit, as they can in Sweden? When will my right hon. Friend have the courage of his convictions and enable free schools to have the same freedoms as they have in Sweden?

[Michael Gove]

It is always a pleasure to hear the radical proposals of my hon. Friend, whose stewardship of money when he was a councillor in Wandsworth and a Minister in a previous Conservative Government is a model to all. I shall look carefully at the case he makes, but the one thing that is clear is that we already know that our programme ensures that more new school places are being provided more cheaply than was the case under the previous Labour Government.

[Alison McGovern (Wirral South) (Lab)]

T7. Today is the first day of national apprenticeships week. We know that one of the most significant barriers to young people taking up apprenticeships is getting the right advice at school. In fact, there is now a confused situation, because the Government want to end Connexions and introduce an all-age service. Will the Minister explain what extra funds will be available to schools to procure advice for young people?

[Mr Hayes]

The hon. Lady is right to champion apprenticeships week. Indeed, she has personally championed apprenticeships in her constituency, and she knows that the Government are having ongoing discussions to see how we can help with that. It is critical that people get good, empirical, independent advice and guidance on vocational options such as apprenticeships. In the Education Bill, which the House is about to consider, we will make it a duty for schools to secure that independent, impartial advice on vocational learning.

[Dr Julian Huppert (Cambridge) (LD)]

T5. Cambridgeshire gets less school funding per pupil than almost anywhere in the country. If we received the per pupil average across England, we would have some £34 million more for education. Can the Secretary of State explain why pupils in Cambridgeshire deserve so much less money, and will he review that?

[Michael Gove]

They deserve to be treated like every other student. We are reviewing funding and will be publishing a paper in the spring to try to ensure greater equity in the allocation of schools funding.

[Bill Esterson (Sefton Central) (Lab)]

All 19 of the children’s centres in Sefton are under review. Does the Minister stand by her statement that local authorities have a legal duty to maintain a sufficient network of children’s centres? If she does, how many of Sefton council’s 19 children’s centres should it keep open to meet those legal duties?

[Sarah Teather]

The hon. Gentleman and I discussed this matter in detail when he introduced an Adjournment debate last week. I stand by my statement. Similarly, the council has a legal duty to consult before closing, opening or restructuring in its area. I am sure that it is in the middle of that consultation at the moment, and that parents will make their views very clear.

[Mr John Leech (Manchester, Withington) (LD)]

T8. Can the Secretary of State assure me that changes to education maintenance allowance will not leave college students disadvantaged compared with school sixth-formers, who will still be entitled to free school meals?

[Michael Gove]

That point is well made by my hon. Friend. We have an anomaly at the moment, whereby the position of those in colleges and those in schools is not the same. The whole thrust of our policy making has been to try to ensure a level playing field between schools and colleges. The point he makes with respect to EMA weighs heavily with my colleagues and me.

[Mrs Jenny Chapman (Darlington) (Lab)]

Staff at the Independent Safeguarding Authority in Darlington learned from The Daily Telegraph on Saturday that the vetting and barring scheme is to be significantly scaled back. What conversations has the Secretary of State had with the Home Secretary about the reduction of that scheme, which is likely to affect child protection?

[Michael Gove]

I had the opportunity to visit the hon. Lady’s constituency on Thursday, when I spoke to staff at Mowden Hall, the Department for Education headquarters in Darlington. I am pleased to say that I am the first Secretary of State to visit Darlington and Mowden Hall since the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett), which is indicative of this Government’s commitment to the north-east, which was sadly not shared by the previous Administration.

A response to the Government’s review of vetting and barring will be made. The House will be informed of the details first. The one thing that we know is that the bureaucratic burden on the voluntary sector will be lifted. We will not only have a more proportionate system, but more children will be kept safe. Above all, we will ensure that volunteers and those who do so much to help in our society are given the trust that they need in order to carry on doing the wonderful work that they do.

[Michael Fallon (Sevenoaks) (Con)]

T9. Will Ministers be prepared to look again at the rather puzzling exclusion of classical civilisation from the list of humanities scored in the English baccalaureate? Is classical civilisation not a humanity?

[Michael Gove]

I am tempted to reply, “Timeo danaos et dona ferentes,” which, broadly translated, means, “Beware of geeks bearing gifts.” However, my hon. Friend is an impassioned champion of both Latin and Greek and the wider application of the classics in state schools. Latin is now on offer in more state schools than independent, fee-paying schools, and Latin and Greek are included in the English baccalaureate, along with modern foreign languages. His impassioned advocacy of classical civilisation certainly weighs with me.

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

I recently met some of the 229 students at Lewisham college in receipt of education maintenance allowance who told me that they had spent hundreds of pounds on equipment, IT and books. The Minister knows that there is a difference between the aspiration to be at college and sustaining attendance over a two-year period. Will he guarantee that no student in that situation will be forced to discontinue their second year because of lack of financial assistance?

[Mr Hayes]

The right hon. Lady is a champion of Lewisham college, which I have visited twice—I have laid bricks at Lewisham college, by the way, although not with any great skill. I can assure her that the places of college students, as my right hon. Friend the Secretary of State has made clear, will not be put at risk by changes we make, and we will certainly take full account of representations from her and others on that point.

[Mark Menzies (Fylde) (Con)]

T10. When will the Minister announce further details of the learner support fund, including the amounts and time scales of such support to colleges across the country?

[Mr Hayes]

My hon. Friend makes a strong case for colleges. Perhaps it is time that I put on record the fact that this Government believe that further education colleges are the unheralded triumph of the English education system. Furthermore, we will continue to give them greater discretion, greater opportunity and greater freedoms in order to allow those with the tastes and talents to pursue vocational and other kinds of learning to fulfil their potential.

[Mr Dennis Skinner (Bolsover) (Lab)]

Has the Secretary of State had a look at the letter from the headmaster of Tibshelf school explaining the difficulties of having to deal with the split school site in Bolsover and North East Derbyshire? Has he also received a letter from the Derby building company Tomlinson and Sons which expected to build the school, or does he have the same disease as the Deputy Prime Minister and stop dealing with his Red Box after 3 o’clock?

[Michael Gove]

I am grateful for that well-crafted question from the eloquent, grammar-school-educated Member for Bolsover. I am well aware that Derbyshire county council, under many years of Labour rule, did not secure value for money for the taxpayer. I am pleased that the incredibly wasteful Building Schools for the Future scheme is being replaced with a more effective way of ensuring that money goes to the front line, and I look forward in due course to visiting Bolsover and North East Derbyshire with him and the hon. Member for North East Derbyshire (Natascha Engel) in order to salute what a coalition Government are doing for a generation betrayed by Labour.

[George Freeman (Mid Norfolk) (Con)]

I know that the Secretary of State is a strong supporter of our state boarding schools, such as Wymondham college in my constituency, which is doing excellent work pioneering special needs and academy schooling in the area. As he may know, Wymondham college was recently awarded academy status in order to pursue that work. Today, however, I received a letter from the college saying that the decision has been inexplicably reversed by officials in his Department. Will he agree to meet me and a delegation of Norfolk MPs to discuss the matter?

[Michael Gove]

I have to confess myself perplexed by what my hon. Friend tells me, but of course I would be delighted to meet him. I know what impassioned advocates he and my hon. Friend the Member for South West Norfolk (Elizabeth Truss) have been for Wymondham college.

[Natascha Engel]

(North East Derbyshire) (Lab): Children, parents and their teachers were delighted last month that the Government changed their minds about scrapping school sport partnerships. Unfortunately, however, the Secretary of State forgot to reinstate the money for them. I know that he is a very busy man and it was just an oversight, but will he take this opportunity to reassure the House that he will give school sport partnerships their money back?

[Michael Gove]

I am overjoyed that in all my meetings with Baroness Campbell, the head of the Youth Sport Trust, since the announcement, she has expressed her delight that the funding that we have made available will be sufficient to ensure that the good work continues. I am reassured by her enthusiasm for this proposal, and I hope that the hon. Lady will be reassured too.

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

As Ministers review policy for young people and the youth services, will they ensure that they engage with local authorities, young people themselves and the voluntary sector to ensure that no local authority withdraws youth services where, with a bit of imagination, alternatives are available?

[The Parliamentary Under-Secretary of State for Education (Tim Loughton)]

My right hon. Friend makes a very good point about the importance of youth services, particularly of local authorities speaking to the people for whom those youth services are intended—young people. Not only has my Department set up a group from the voluntary sector dealing with youth issues, but a group of young people representing many of those organisations will be meeting me shortly to discuss the impact of the current situation on the charities and services in their areas.

[Ms Karen Buck (Westminster North) (Lab)]

The Minister responsible for children’s centres repeats the claim that good local authorities will merge their back-room functions and protect front-line services. Flagship Conservative council Westminster is merging back-room functions with Hammersmith, yet we expect children’s centres to face a significant reduction in staff, in the range of services and in outreach facilities, which are anticipated to fall by 40%. Is Westminster a good council?

[Sarah Teather]

I repeat that we are encouraging local authorities to focus in particular on outcomes, rather than on inputs. That is why we are beginning the process of payment by results. Local authorities will need to ensure that their services are structured in such a way that they improve outcomes for the most vulnerable children and families, otherwise they will not benefit.

[Margot James (Stourbridge) (Con)]

Will my right hon. Friend investigate the activities of the Anti Academies Alliance, which is threatening a series of political strikes against any school seeking academy status?

[Michael Gove]

I am grateful to my hon. Friend for drawing the House’s attention to the activities of the Anti Academies Alliance, a group that is sponsored by, among others, the Socialist Workers party. There are a number of politically motivated strikes that some have been contemplating. I hope that Members in every part of the House will condemn any politically motivated strike action that makes children a political plaything. I also look forward to hearing from the Opposition Front Bench a clear and unequivocal condemnation of such activity.

EU Council and North Africa

Monday 7th February 2011 Commons Chamber

15:31

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I should like to make a statement on last week’s European Council and comment on today’s review by the Cabinet Secretary of the papers relating to the release of Abdelbaset al-Megrahi, which were published at 1pm today.

The Council discussed three principal issues: first, the continuing efforts to tackle instability in the eurozone; secondly, the role of energy and innovation in delivering a comprehensive growth strategy for the EU; and, thirdly, the situation in Egypt. Let me take each in turn.

Eurozone members are quite rightly looking at ways to resolve some of the underlying problems of the euro crisis, including by strengthening economic co-ordination arrangements. My job is to protect and promote Britain’s interests. As I have said before, it is in our interests that the eurozone sorts out its problems. A strong and stable eurozone is in Britain’s interests, but in my view there are three absolute essentials for Britain.

First, we should retain our national currency and our ability to set our own monetary policy, in the UK and for the UK. Secondly, we should ensure that we are not dragged into a new mechanism for bailing out eurozone countries in future. As I described when reporting back from the last European Council, we have achieved that. Thirdly, and most complex, although we should not prevent eurozone countries from coming together to deal with the problems that they face, we must ensure that this does not compromise the single market, which is an important British success story in Europe and should remain one of our key interests. There is a danger that, in developing stronger co-ordination, eurozone countries start affecting things that are more properly part of the single market for all EU members. I made sure that this point was recognised at the Council, and I secured specific assurances to protect the single market. The statement by the eurozone countries, which will be available to Members and which we all debated, makes that clear.

Extending the single market to energy has been a long-held objective of recent Governments of all parties. Achieving that could add up to 0.8% of European GDP and mean another 5 million jobs across Europe by 2020. If we make a 20% improvement on energy efficiency by 2020, that could significantly reduce the pressure on household bills. A single market in energy is good for jobs, competition and energy security, so practical co-operation and competition with the rest of Europe on this is firmly in our national interest. The Council agreed that

“the EU needs a fully functioning, interconnected and integrated internal energy market,”

and that

“the internal market in energy should be completed by 2014”.

We also agreed that

“major efforts are needed to modernise and expand Europe’s energy infrastructure and to interconnect networks across borders.”

Britain should strongly support that, not least as we plan for the North sea offshore super-grid. The conclusions on innovation are also completely in line with what Britain supports and has been trying to achieve. Innovation and energy policy should be part of the growth strategy that we are arguing for in Europe. We will publish our own proposals before the next European Council in March, which will specifically be discussing that subject.

Next, let me turn to Egypt. I was determined that the Council would not produce one of its heavily “caveated” and sometimes rather unclear statements, and I think the declaration that we agreed is strong. First, we agreed that the Egyptian authorities should

“meet the aspirations of the Egyptian people with political reform not repression”.

Secondly, it is clear that a transition is needed to broad-based democratic government, and the declaration is emphatic that

“this transition should start now.”

The European Council was also clear that this should involve the building blocks of free and open societies and democratic institutions, such as freedom of assembly, the rule of law, freedom of speech and free and fair elections.

I believe that there is a strong case—the European statement reflects this—that the EU needs to look hard at its role in that region. We have spent billons of euros of taxpayers’ money in Egypt and neighbouring countries, with carefully crafted association agreements and action plans. We have offered funds, access to our markets and other assistance in exchange for progress on the rule of law, democracy and human rights. In Egypt, however, there has been little or no progress on torture, the judiciary, democracy or ending the state of emergency that has now lasted for 30 years. I believe that it is time for Europe to take a more hard-headed approach whereby the conditions on which we give money are real and insisted upon. I reaffirmed that message in a call at lunchtime today to Vice-President Suleiman, and urged him to take bold and credible steps to show that the transition that they are talking about in Egypt is irreversible, urgent and real.

Finally, let me say a word about the release of the Lockerbie bomber, Abdelbaset al-Megrahi, and the report that has been released today by the Cabinet Secretary. I have not altered my view, which I expressed at the time, that releasing Mr Megrahi was a very bad decision. He was convicted of the biggest mass murder in British history and, in my view, he should have died in jail. It was a bad decision, and the last Government should have condemned it rather than going along with it.

I commissioned this report during my visit to Washington last year. At the time, there was renewed controversy around the decision, a congressional inquiry into it, and calls for a bigger UK inquiry. Concerns were also being put forward, quite forcefully, in America and elsewhere that the whole release might have come about as a result of pressure by BP on the British Government to pressure the Scottish Government to make it happen. I do not believe that that is true, and this report shows that it is not true. It was a decision taken by the Scottish Government—the wrong decision, but their decision none the less. But in view of the continuing speculation in the UK and the US, I thought it right that all the British Government paperwork should be re-examined to assess whether more should be published, and I asked the Cabinet Secretary to do just that.

That is what Sir Gus O’Donnell has now done. In order to address the concerns that were being expressed, he was asked to look at three specific areas. First, whether there was any new evidence that the British Government directly or indirectly pressured or lobbied the Scottish Government for the release of Megrahi; secondly, whether there was pressure placed on the Scottish Government by BP for the release of Megrahi; and, thirdly, whether the Libyans were told that there were linkages between BP’s investment and the release of Megrahi, either under the prisoner transfer agreement or on compassionate grounds.

The report and all the paperwork, running to 140 pages, have been placed in the Library of the House. All decisions on the declassification and publication of papers belonging to the previous Administration were of course taken independently by the Cabinet Secretary. Under the convention covering papers of a previous Administration, he has consulted the appropriate former Ministers and the former Prime Minister. Sir Gus was assisted by the former Information Commissioner, Richard Thomas, to provide an independent validation. He saw all the paperwork, redacted and un-redacted, and his job was to advise the Cabinet Secretary on whether his report and the documents now being published were consistent with the materials that were reviewed. He was also tasked with determining whether this was a fair and accurate account of events. He is content on both counts.

The Cabinet Secretary concludes that the former Government were clear that any decision on Mr Megrahi’s release or transfer under the prisoner transfer agreement was one for the Scottish Government alone to take. He finds that none of the material he reviewed contradicts anything contained within the former Foreign Secretary’s statement to the House in October 2009. He makes the same finding with respect to the current Foreign Secretary’s letter to Senator Kerry in July last year and with respect to statements made by the former Prime Minister on this matter. He notes that it is evident that the Libyans made explicit links between progress on UK commercial interests in Libya and the removal of any clause on the prisoner transfer agreement whose effect would be to exclude Megrahi from it. He notes that after Megrahi had been diagnosed with terminal cancer in September 2008, the then Government’s policy was based on an assessment that UK interests would be damaged if Megrahi were to die in a UK jail.

The Cabinet Secretary finds—and this is a key point:

“Policy was therefore developed that HMG should do all it could, whilst respecting devolved competences, to facilitate an appeal by the Libyans to the Scottish Government for Mr Megrahi’s transfer under the PTA or release on compassionate grounds. . . as the best outcome for managing the risks faced by the UK”.

One of the Foreign Office papers released today makes it plain that

“Facilitating direct contact between the Libyans and the Scottish Executive is a key part of our game plan on Megrahi”.

Another Foreign Office paper from January 2009 states:

“We now need to go further and work actively, but discreetly, to ensure that Megrahi is transferred back to Libya under the PTA or failing that released on compassionate grounds.”

Frankly, I believe this tells us something that was not made clear at the time. It goes further than the account that the former Prime Minister and the former Foreign Secretary gave, as we were not told about facilitating an appeal, facilitating contact or a game plan. Indeed, the Cabinet Secretary’s report says:

“Policy was therefore progressively developed that HMG should do all it could, whilst respecting devolved competences, to facilitate an appeal by the Libyans to the Scottish Government for Mr Megrahi’s transfer under the PTA or release on compassionate grounds. . . as the best outcome for managing the risks faced by the UK.”

Hon. Members will be able to study the paperwork and consider these issues for themselves. My view is clear: we have learned some new information, particularly about what we were told by Ministers, but I do not believe that these papers justify calls for a new inquiry. What they do provide is further evidence that this was, in my view, a flawed decision by the Scottish Executive, which we already knew; and I believe they point to some broader lessons from this affair.

It is clear from these papers that the last Government badly underestimated—in fact, failed seriously even to consider except as an issue to be managed—the reaction both in Britain and in the United States to the release of Mr Megrahi, above all among many of the families who lost loved ones. The key point that emerges to me from reading the paperwork is that insufficient consideration was given to the most basic question of all: was it really right for the British Government to “facilitate” an appeal by the Libyans to the Scottish Government in the case of an individual who was convicted of murdering 270 people, including 43 British citizens, 190 Americans and 19 other nationalities? That, for me, is the biggest lesson of this entire affair. For my part, I repeat: I believe it was profoundly wrong. The fact that, 18 months later, the Lockerbie bomber is living at liberty in Tripoli serves only to underline that. I commend this statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement. I want to start, because of their importance, with the European Council conclusions on Egypt. I believe that the Egyptian people are continuing to show enormous courage and consistency in their desire for fundamental and lasting change. As I said last week, we support the call for a clear, credible and transparent path towards transition as soon as possible.

May I join the Prime Minister and his fellow leaders of the European Union in condemning any attacks on peaceful demonstrators and urge the authorities to allow the people of Egypt to continue to exercise their right to free and peaceful protests? The Prime Minister spoke to Vice-President Suleiman today, so will he update the House on his view of the current talks between the Vice-President and the Opposition parties and tell us whether he thinks these might lay the ground for the transition? Will he also offer the latest thinking of the EU and allies on the difficult issue of the role of President Mubarak during the transition?

Does the Prime Minister agree that the transition must include not just the provision of free and fair elections but other democratic structures, from a free press and diverse political parties to an independent judiciary? Will he also take the opportunity to update us on the steps he has taken since last week to ensure the safety of British nationals in Egypt during the current turbulence?

Let me deal with the other matters discussed at last Friday’s European Council. On energy policy, we welcome the Council’s conclusions on the internal market in gas and electricity and on the North sea grid. We also welcome the Council’s plans for improvement of Europe’s energy infrastructure. Such action can make us more resilient in the face of potential supply disruptions, as we saw in 2008-09 during the dispute between Russia and Ukraine.

Let me ask the Prime Minister two questions about the way in which our policy at home relates to the discussions in Europe. First, we note the Council’s conclusions on the importance of renewable energy. May I ask the Prime Minister to update the House on the implementation of the renewable heat incentive, which is a crucial part of his renewable energy strategy? It was due to come into force in April this year, but has now been delayed. Can the Prime Minister tell us when it will be introduced?

Secondly, given that the financing of energy investment is a big issue across Europe, which the Council rightly flags up, may I ask the Prime Minister to update the House on progress in regard to the green investment bank? He has committed himself to building on our plans. Can he tell us whether he intends this to be a fully fledged bank, as many have argued that it should be?

I welcome the Council’s conclusions on the wider economy, including the eurozone. May I ask what discussions took place on the prospects for European growth next year? The summit has concluded that

“the overall economic outlook is improving”,

but I have to say that that is not how it will seem to many families in the United Kingdom. Did the Prime Minister share the recent experience of the United Kingdom with the Council, and did he warn his colleagues that cutting budget deficits too far and too fast could have damaging effects on growth and employment?

Let me now turn to the case of Mr Megrahi. The Lockerbie bombing was a terrible atrocity, destroying hundreds of lives and scarring the families left behind. The Cabinet Secretary, Sir Gus O’Donnell, has conducted a serious and thorough report on the papers relating to Mr Megrahi’s release, and we will study it in detail.

Sir Gus’s report makes three significant conclusions that pertain to Mr Megrahi’s eventual release. First, it concludes that the United Kingdom Government were worried about the impact on British interests of Mr Megrahi’s dying in jail. That is precisely what the former Foreign Secretary said in a statement to the House on 12 October 2009. Secondly, the report makes it clear that there is no evidence that

“UK interests played a part in Mr Megrahi’s release by the Scottish Government on compassionate grounds.”

Indeed, Sir Gus went on to conclude that

“the former Government took great effort not to communicate to the Scottish Government”

their view. Thirdly, he concluded:

“Mr Megrahi's release on compassionate grounds was a decision that Scottish Ministers alone could—and did—make.”

So the message of today’s report is that Mr Megrahi’s release was not influenced by the United Kingdom Government. Perhaps the Prime Minister will tell us whether he agrees with that.

Above all, what today’s report should remind us is that the bombing of Pan Am flight 103 must live in the memories of this country and the United States. We must take all possible steps to ensure that it never happens again.

[The Prime Minister]

I thank the right hon. Gentleman for his comments and questions. I think that he is right about the response of the United Kingdom, the European Union and the United States to events in Egypt. While, in my view, one can never be certain that every statement made by the European Union is being listened to that carefully, I believe that in regard to its statement that the Egyptian Government must choose reform and not repression, the recent behaviour of the army in Egypt has been encouraging.

The right hon. Gentleman asked whether the current talks would be good enough to lead to transition. That is an extremely difficult question to answer. The point that I made to Vice-President Suleiman was that the more that the Egyptian Government could do to demonstrate that, for instance, they were bringing some opposition leaders into a transitional Government, the more they would be able to convince people that they were trying to reform, change, and deal with the constitutional issues. We have advised them to try to get ahead of events rather than taking a series of incremental steps, which I do not think are doing enough to respond to the aspirations of the Egyptian people. As the right hon. Gentleman rightly said, the transition is not just about the date of an election; it is about those building blocks of democracy that I mentioned earlier.

All United Kingdom citizens who wanted to leave have been able to do so. We will continue to keep travel advice under review, including advice on travel to the Sinai peninsula.

The right hon. Gentleman asked two very good questions about the renewable heat incentive, which is an absolutely vital initiative that we are taking, and about the green investment bank. Both projects are moving ahead. The Government have published structural reform plans with dates for implementation, so one thing that others can do is hold us to account when things do not happen during the week in which they are meant to happen, and I am sure the right hon. Gentleman will do that.

On the economy, the right hon. Gentleman has mentioned sitting round the European Council table and talking about the impact of cutting budgets. My overwhelming impression was listening—we had to listen at some length—to reports from Greece, Portugal and Spain about their economies. Having seen what they have had to cut and the difficulties that they are in, the warning that I take from that is, “Do not go back into the danger zone, where those countries still are.”

On al-Megrahi, I set it out as best I could in my statement. It is clear to me that those who think that a conspiracy was cooked up between BP, the British Government and the Scots to release al-Megrahi are not right. It was a Scottish decision by the Scottish Government—in my view, it was mistaken. As I have said, we have learned something today about what we were told in this House by Ministers. When hon. Members look at what was said in this House and what we have seen in these papers, I think that they will agree with me—I am trying to be very reasonable about this—that we were not given a complete picture.

[Sir Malcolm Rifkind (Kensington) (Con)]

As the then Secretary of State for Scotland, I had to visit Lockerbie on the night of that disaster, when I saw the terrible consequences that flowed from it. I have always been appalled by the release of the convicted murderer. The Prime Minister has drawn attention to the Cabinet Secretary’s conclusion, in which the Cabinet Secretary states that the previous Government wished to do all within their power to facilitate the release of Mr Megrahi. Do not the documents released today show that, in pursuit of that objective, a Foreign Office Minister met his Libyan ministerial counterpart, offered to send details of how release on compassionate grounds might be obtained and wrote to his ministerial colleague on 18 October 2008? Does that not confirm that the previous Government were up to their neck in this shoddy business, that they were desperate to see the release of Mr Megrahi and that they must therefore share responsibility with the Scottish Government for one of the most foolish and shameful decisions of recent years?

[The Prime Minister]

As ever, my right hon. and learned Friend brings a mixture of experience and precision to this issue. We were told by the previous Government what they did not want, which was the death of al-Megrahi in a Scottish prison, but we were not told by the previous Government what they did want, which was the facilitation of his release. That comes over, time and again. The most powerful point that my right hon. and learned Friend makes is this: in the end, that man was convicted of the largest mass murder in British history, which should have been the thought coursing through ministerial veins and brains when Ministers wrote those memos and made those speeches.

[Mr Jack Straw (Blackburn) (Lab)]

I fully understand the Prime Minister’s concern and that of colleagues on both sides of the House about the timing and circumstances of the release of Mr Megrahi. However, having read the Cabinet Secretary’s report in full, which I have here, may I say that it was wrong of the Prime Minister to elide quotations from the Cabinet Secretary’s conclusions with his own gloss, implying that those were indeed the conclusions? As my right hon. Friend the Leader of the Opposition has spelt out, and contrary to the implication that the Prime Minister has given to the House, the Cabinet Secretary concluded that nothing in the material that he reviewed contradicts anything that my right hon. Friend the former Foreign Secretary told this House on 12 October in a detailed statement or anything that my right hon. Friend the former Prime Minister has said at any time on this issue. The conclusions back up the continued assertion made by the former Prime Minister, the former Foreign Secretary and me, as the Prime Minister has finally admitted through gritted teeth, that there was no pressure from BP on the Scottish Government, that we acted properly at all times and, moreover, that at no stage did we ever suggest to the Scottish Government what decision they should take.

On so-called facilitation, let me read to the House the very next sentence. It

“amounted to: proceeding with ratification of the PTA”,

which was in hand anyway,

“explaining to Libya in factual terms the process for application for transfer under a PTA…and informing the Scottish Government that there was no legal barrier to transfer under the PTA”.

That was all known before and does not contradict what my right hon. Friend the former Foreign Secretary said at the time.

[The Prime Minister]

Let me make two points gently to the right hon. Gentleman. First, although the Cabinet Secretary rightly, in my view, finds that nothing in this report contradicts what the then Foreign Secretary did say, my point is purely this: this is about what was not in that statement. That is because when we look at what is in the report, we find that it is very clear that there were all sorts of things—facilitations and game plans—that we were not made aware of.

I do not want, in any way, to misquote what Gus O’Donnell has done in a very good report. The conclusions in paragraph 34 state:

“Policy was therefore progressively developed that HMG should do all it could, whilst respecting devolved competences, to facilitate an appeal by the Libyans to the Scottish Government for Mr Megrahi’s transfer under the PTA or release on compassionate grounds… as the best outcome for managing the risks faced by the UK.”

All right hon. and hon. Members will be able to make up their mind whether what we were told by the previous Government was a full and complete picture. Everyone can make up their mind and I am pretty sure what a reasonable person will come to.

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

The emphasis in these matters has always been on Mr Megrahi’s condition, but, respectfully, it seems to me that other issues have to be taken into account as well. The first is the nature of the crime, the second is the consequences of the crime and the third is the sentence imposed by the court. Had the British Government at the time taken proper account of those factors, I doubt very much whether they would have reached the conclusion that they did and sought to “assist”, to put it neutrally, the Libyan Government. But, equally, if Mr MacAskill had taken proper account of the nature of the crime, the consequences of the crime and the sentence imposed, he would surely have found that those factors far outweighed any question of compassion.

[The Prime Minister]

The right hon. and learned Gentleman puts it extremely clearly. The fact is that al-Megrahi was allowed to go home and die with his relatives, but that is not a luxury he afforded to anyone who was on that jet, and you have to take into account the nature and the consequences of a crime when you think about your actions. As I say, when we get away from all the detail of the report and just stand back and think about the big picture—as I say, the lesson to be drawn is that we have to keep focusing on the big picture—which is the heinous crime that was committed, the lives that were taken and the families that were wrecked, we have to think that someone has to suffer the consequences of that.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Just because three of the most glittering stars in the parliamentary sky have asked very full questions, that does not, in any way, oblige right hon. and hon. Members to follow suit. On the whole, I would rather that they did not.

[Mr Ben Bradshaw (Exeter) (Lab)]

What discussions took place at the EU Council about events in Egypt lending added urgency to breaking the impasse in the middle east peace process? What is the Prime Minister personally doing to break that impasse?

[The Prime Minister]

I did have discussions with Baroness Ashton about this, it was also discussed around the table and I had a very good meeting with Hillary Clinton in Munich. Obviously, there are concerns that instability in Egypt will make progress on the middle east peace process more difficult, but I strongly believe that we should not take our eye off the ball and that we should keep the pressure up—that means pressure on both sides. It means pressure on Israel to make progress on issues such as settlements and pressure on the Palestinians to return to meaningful talks. Britain will play a very key role in this, and I commend Baroness Ashton for her work.

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

Trade between the United Kingdom and north African countries has historically been lamentable; we are way down the list on bilateral trade compared with our European partners. Will the Prime Minister do more to make sure that UK Trade & Investment plays a leading role in helping British companies to increase trade with countries such as Tunisia and Egypt to support democracy there?

[The Prime Minister]

My hon. Friend makes a good point and the Foreign Secretary will be going to Tunisia later today. We want to have good trading relationships with those countries, but that should never be bought at the price of trading off our values. We should have had a clearer red line about what was and was not appropriate, but Britain has to trade itself out of recession and links with fast-growing countries all over the world are absolutely what we are trying to put together.

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

Fine words have been said by the Prime Minister, the President of the United States and other western leaders about the very brave demonstrators in Egypt. Is it not possible that those demonstrators are asking—this is an interesting question—why the western powers have been so silent over the past 25 or 30 years about what has been happening in their country, including the authoritarian rule, the denial of liberty and the sadistic tortures that have been taking place in prisons? Those sorts of questions should be asked not only in Egypt but elsewhere.

[The Prime Minister]

The hon. Gentleman makes a good point. As I said in my statement, the EU has leverage over those countries in terms of the aid it gives and it should be tougher in asking for conditions in return for that aid. In terms of the situation we face today, I just do not accept that there is only, on the one hand, an Islamist regime or, on the other, standing up for the tough man—the dictator. We must encourage those countries not necessarily to have free elections just like that, at the flick of a switch, but to put in place the building blocks of genuinely free countries and open societies that will make sure that they have lasting democracies when they reach that goal.

[Richard Ottaway (Croydon South) (Con)]

The conclusion by Sir Gus O’Donnell that the previous Government did “all it could” to facilitate the release of Mr Megrahi is bad enough, but it is also inconsistent with the impression created by the previous Government. Has the Prime Minister made any assessment of the motive for such behaviour?

[The Prime Minister]

It is for Ministers to explain what they said and what they did not say. Clearly, they can rely on what is in the report about not being contradicted, but I think they have to look—and I hope they will do it fairly—and ask themselves, “Given that I was receiving memos about a game plan of facilitating contact and given that I was signing off those memos, shouldn’t I have really said to the House of Commons and elsewhere that it was not just that we didn’t want this man to die in a Scottish jail but that we were working actively with the Libyans to try to secure his release?” I think they should have said something more along those lines. I have genuinely tried to approach this by asking what is fair in terms of what we should have been told when those questions were asked.

[Chris Bryant (Rhondda) (Lab)]

I do not think that trade should ever be the sole determinant when it comes to our foreign policy, which is why I hope to persuade the Prime Minister to adopt more of his muscular liberalism, to coin a phrase, in relation to the Russian Federation. Sergei Magnitsky was tortured and murdered in a Russian jail when he was working for a British company in Russia. The United States Congress is now considering banning from the USA anyone who was involved either in the corruption he uncovered or in his torture and murder. Will the Prime Minister consider doing the same here and will he make sure that those views are expressed to Foreign Minister Lavrov when he visits next week?

[The Prime Minister]

The hon. Gentleman makes a good point and I am glad that the phrase “muscular liberalism” is catching on. That is exactly the approach we have taken with Russia and we do raise questions such as those that the hon. Gentleman asked when we hold meetings with President Medvedev, as I have done, or with Foreign Minister Lavrov, as my right hon. Friend the Foreign Secretary has done, and we will go on raising those issues. Some countries have not taken that approach, but we think it is the right approach.

[Mr Julian Brazier (Canterbury) (Con)]

Bearing in mind that several of the key moderate figures in Egypt have made pledges to have a referendum on the long-standing peace treaty with Israel, does my right hon. Friend, in pursuit of the excellent answer he gave to the right hon. Member for Exeter (Mr Bradshaw) earlier, agree that a key factor in determining whether we get a good outcome in Egypt will be whether the current Israeli Government are willing to stop building more settlements and be serious about coming to the peace table?

[The Prime Minister]

My hon. Friend makes a good point, but we should also be clear with reformers and opposition figures in Egypt that we see progress on the peace process as absolutely vital for the stability and prosperity of that region. This is where the European Union has some leverage because in those association agreements we should be making sure that just as there is money in return for progress on things we care about internally, they should also be about standing by agreements that have been entered into, including in the peace process.

[Angus Robertson (Moray) (SNP)]

I am grateful for an advance copy of the statement. The Prime Minister has long taken a different view from the Scottish Government or international observers such as Nelson Mandela on compassionate release. What is new, however, is that these official UK documents prove that as of autumn 2008, UK Labour Ministers supported Mr Megrahi being released to Libya, so they were saying one thing in public and the opposite in private. Is that not rank hypocrisy?

[The Prime Minister]

I have made my view clear and I tried to state it in a calm and reasonable way, because I do not believe that there was some conspiracy cooked up between a Scottish National party Government and a Labour Government. They find it hard enough to communicate with each other at the best of times. I see a few prominent Scottish MPs nodding. I think Ministers will want to look back at what they said and ask, “Could I have said more to give a complete picture?”

[Jo Swinson (East Dunbartonshire) (LD)]

I welcome the European Council’s strong position of support for the Egyptian people, particularly with regard to assistance with the transition to democracy. However, building new Government structures is not straightforward and should not be rushed, and that is why it needs to start now. Will the Prime Minister ensure that in providing assistance, the EU draws on the expertise of organisations such as the Westminster Foundation for Democracy and the Friedrich Naumann Foundation, both of which have a wealth of expertise in supporting fledgling democracies and working in Egypt?

[The Prime Minister]

The hon. Lady makes a good point about civil society organisations here that can work with civil society organisations in Egypt. The point that I would make about transition starting now is that precisely because the Egyptians say that there are all sorts of problems with amending their constitution and doing it quickly, they should be examining what they can do to build confidence among people on the streets of Cairo that they are genuinely changing. That is where I think considering including Opposition members in a transitional Government and giving some visible, clear and irreversible signs of what their intentions are would make a big difference.

[Mr Denis MacShane (Rotherham) (Lab)]

I think we heard two statements today, and they should have been separated. On al-Megrahi, does the Prime Minister recall that many of us had to hold our nose as IRA killers and terrorists were let out for the greater good of peace and stability? On his statement, can he say something about Tunisia? That is a small country, with only 10 million people, secular, highly educated, looking to Europe for help. May I ask him to ask the Foreign Office—he will probably be knocking at an open door—to see what we can do with economic and political investment in Tunisia to bring it, particularly as it is much smaller and more manageable than Egypt, closer to Europe?

[The Prime Minister]

The right hon. Gentleman makes a good point. That is one of the reasons why the Foreign Secretary is getting on an aeroplane this afternoon, going to Tunisia and talking to the Tunisians about helping to put in place the building blocks of a free and open society. One of the problems in these countries is the massive level of corruption. It was that which angered their populations so much, and we need to work with them. Going back to the issue of Libya and Northern Ireland, of course everyone had to hold their nose and talk to people we did not want to talk to and deal with people we did not want to deal with, but Governments were pretty frank about what we were doing and why we were doing it. That is my point.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

It is important that we do nothing to talk up the prospect of wider instability in north Africa and the Maghreb. Does my right hon. Friend share my dismay at less than forensic reports in the western press that seek to conflate inherently unstable countries such as Egypt and Tunisia with countries such as Morocco, which have a far more enlightened order economically, socially and politically?

[The Prime Minister]

My hon. Friend makes an important point. We should not assume that those countries are all the same. Genuine stability should be based on the progressive realisation of the goal of a more open society and the building blocks of the sort of civil society that we recognise. We cannot pretend, as neo-conservatives did, that we solve the problems in one go simply by holding an election. We should be clear, as people who believe in those rights at home, that we should be trying to achieve them progressively elsewhere.

[Mike Gapes (Ilford South) (Lab/Co-op)]

The Prime Minister referred, rightly, to the efforts and the work of Baroness Ashton. He also said that he had had discussions with Hillary Clinton. In that context, what is his understanding of the United States’ attitude to the changes going on in Egypt? Is it US policy to support Mr Wisner’s view that President Mubarak should stay, or to support the EU view that there should be an early transition?

[The Prime Minister]

That was a well-put question, which I will try not to glide around too diplomatically. The US and the UK are absolutely aligned on this; I spoke to President Obama over the weekend, and we are pushing for the same things. We want transition, we want it to be real and we want it to start now. We believe that it should include some of the things we have been discussing today, like bringing opposition figures into the Government, having dates for a road map for elections and making sure that they deal with some of the abuses of the past. In terms of what Mr Wisner said, I do not think that the way he put his words was a full reflection of the US Government’s view, as I think has been made clear.

[Robert Halfon (Harlow) (Con)]

Given my right hon. Friend’s important speech over the weekend, does he not agree that the previous Government’s facilitation of the release of al-Megrahi sent entirely the wrong signal to dictators, Islamists and terrorists right across the globe and represents a considerable setback to those who oppose such things? Will he take steps to ensure that as a United Kingdom we are never faced with such a situation again?

[The Prime Minister]

My hon. Friend makes a good point, which is that when this happened a very bad message was sent about what we stand for in the UK and our views in terms of the response to such a heinous crime. It is important to bear that in mind, and as I said in my statement, I do not think that enough thought was given to that, which in the end is the most precious of all judgments that Ministers should make.

[David Cairns (Inverclyde) (Lab)]

As the Minister of State in the Scotland Office at the time, and as Mr Megrahi’s constituency MP, I strongly agree with the Prime Minister that Mr Megrahi should have spent the rest of his natural life in prison. Does he agree with me that however ill-considered and ill-judged phrases such as “our game plan on Megrahi” may be—had anyone approached me with such a game plan, I would have told them where they could put it—it must not obscure the central fact that it was a decision that was taken, and could only ever have been taken, by Scottish Government Ministers? There was no collusion, no cover-up and no conspiracy, just a bad decision by the SNP.

[The Prime Minister]

I go a long way with the hon. Gentleman, who I think made the right judgment about the release of Megrahi. The problem, and this comes out in the report, is that memos submitted to Ministers in the Foreign Office included things like,

“Facilitating direct contact between the Libyans and the Scottish Executive is a key part of our game plan on Megrahi”,

and that submission was subsequently agreed by the Minister. That is the point. The language about facilitating contacts that was put into memos was subsequently agreed by Ministers, including the former Foreign Secretary, and we were not told about that in the House of Commons. That is an issue that needs to be addressed.

[Tony Baldry (Banbury) (Con)]

One fifth—20%—of the Egyptian population are Christians, mostly Copts and some Catholics. Does my right hon. Friend agree that pluralism and human rights need to be at the centre of any dialogue on the future of Egypt and that the litmus test for whether Egypt is going forward into the 21st century or backwards will be the treatment of minorities, such as Christians, in the weeks and months ahead?

[The Prime Minister]

My hon. Friend makes an extremely good point. When you consider how much money the EU has put into a country such as Egypt—something like €500 million over the last three years—those are exactly the sorts of things that we should be insisting on, which I think are tests of a civilised society.

[Sir Stuart Bell (Middlesbrough) (Lab)]

May I tell the Prime Minister that the 17 member states of the eurozone will be quite comfortable in dealing with safeguarding the euro into the future? He was right to refer to the single market in his speech in Davos last week, as 60% of our trade is with the European Union, but I urge him not to treat the EU as à la carte, only with trade; it must also cover the environment, immigration and energy security—that is to say, menu fixe.

[The Prime Minister]

I do not entirely agree with the hon. Gentleman: 50% of our trade is with the EU, and 44% with eurozone members. We want a healthy eurozone, but if a menu fixe means that we have to join everything, including the single currency, frankly, count me out.

[Mr Peter Bone (Wellingborough) (Con)]

Is it not terrific that we now have a Prime Minister who goes to Europe and puts Britain’s interests first? Would he clarify just one point? He said that we will not be dragged into a mechanism to bail out the eurozone countries, but that we could of course opt in to such a mechanism. Are we just ruling out a mechanism, or are we not going to join a mechanism that will help bail out the euro?

[The Prime Minister]

My hon. Friend asks a very good question that requires quite a complicated answer. Because of the previous Government’s decisions at the time of the general election, we are still at risk of the European financial mechanism, which was set up at that time and used in part to help Ireland, as it is decided by qualified majority voting. What we have achieved, in terms of the treaty change being proposed for the future, is to make sure that the UK cannot be pulled into a future mechanism for doing those things. That is the position we have managed to secure, and, as I say, in Europe once you have secured these things, you have to make sure that you damn well continue securing them for the future.

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

The Prime Minister said in his statement, “It is time for Europe to take a more hard-headed approach where the conditions on which we give money are real and insisted upon.” At the Security Conference in Munich, Baroness Ashton, when asked whether the European Union will continue to assist on conditionality for its aid, would not give a clear answer. Did the UK insist on that approach and Europe not agree, or did Baroness Ashton just fail to give us a precise answer?

[The Prime Minister]

What we discussed at the European Council was a specific declaration on Egypt, and I made sure that in that declaration there was some language about the association agreements that we entered into and making sure that they were real and tangible. I have the language in the folder before me; perhaps I can repeat it in a minute, because it does seem to me important. I am sure that Baroness Ashton, in looking at the conclusions that we reached, will recognise that we did all agree that that should be the case.

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

Could the Prime Minister tell us whether the EU Council took note that Morocco, which has embraced and is embracing a human rights and democracy agenda, has not suffered from outbreaks of civil unrest? Does he agree that we could do more to help that country and everyone in the region if we encouraged other nations in the area to take part in negotiations over a referendum on the future of Western Sahara?

[The Prime Minister]

My hon. Friend makes an extremely good point. In our relations with those countries, we want to look at all the things that will help to encourage stability, progress and peace rather than strife.

In terms of the association agreement with Egypt, the declaration on Egypt says very specifically that we agreed:

“The basis for the EU’s relationship with Egypt must be the principles set out in the Association Agreement and the commitments made.”

European leaders agreed that statement, and I think it is important for the future.

[Keith Vaz (Leicester East) (Lab)]

Were there any discussions at the European Council concerning Yemen? The Prime Minister will be aware of how important that country is in the fight against terrorism, and of the excellent talks between the Foreign Secretary and the Yemeni Foreign Secretary last week. Is the Prime Minister satisfied with the package of measures put forward by President Ali Abdullah Saleh? Is not the stability of Yemen absolutely vital in the area? If the Yemeni Government fall, al-Qaeda will be the winner.

[The Prime Minister]

The right hon. Gentleman makes an important point, which is that Yemen is vital to the security not just of that region, but frankly of our world, because there has been such a lot of al-Qaeda activity in that part of the Arabian peninsula. Yemen was mentioned at the European Council. In terms of the action that President Saleh has taken, clearly we want to see it in detail and see it put in place. There is something of wake-up call in Yemen because of the incredible stresses and problems that that country faces, and we need to work with it. I have met President Saleh and spoken to him on the telephone, and the Foreign Secretary has had meetings, as the right hon. Gentleman says. We need to help Yemen with its reform programme, not just so that it becomes more stable, but so that it is able to deal with the cancer of al-Qaeda which is in its own country.

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

Does my right hon. Friend the Prime Minister believe it to be a coincidence that, despite numerous assurances from the then Labour Government that Mr Ronnie Biggs would remain in prison until he died, the then Justice Secretary, the right hon. Member for Blackburn (Mr Straw), conducted a U-turn and released Mr Biggs on compassionate grounds—mysteriously just weeks before Mr Megrahi was released on the same grounds?

[The Prime Minister]

My hon. Friend is pulling me into territory where I should not go, but it does seem to be a pretty good medical record that people released from prison, normally on the brink of keeling over, then last for a very, very long time.

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

The Prime Minister mentioned that he wants to see a strong and secure eurozone. On a day when our papers are still full of stories about the predicament of British banks, which are vulnerable to loans that they made over recent years, and at the same time full of stories about bankers’ bonuses, can the Prime Minister tell us whether there was a discussion about the still perilous state of our banking system throughout Europe, and the fact that bankers’ bonuses are still paid out at such levels?

[The Prime Minister]

Of course we did discuss what lies at the heart of the eurozone crisis, part of which is about banks that were hopelessly over-leveraged, over-extended and all the rest of it. Here in the UK, we are having a serious conversation with the banks whereby we try to sort out what we want to see. I want to see them paying more tax, I want to see them doing more lending, particularly to small businesses, and I want to see a smaller bonus pool than last year. I am confident that we will be able to achieve those things in this country.

[Mr Edward Leigh (Gainsborough) (Con)]

I know that the Prime Minister has to use diplomatic language, but we all know that the truth is that if al-Megrahi had come from a non-oil rich, non-strategic country, he would still be in prison. So imagine the pain today of the mothers and fathers, the sons and daughters, of those killed on that flight. Can the Prime Minister somehow, on behalf of the British people, say sorry, apologise and articulate the view that never again will we appease murderous dictators in the interests of realpolitik?

[The Prime Minister]

My hon. Friend puts the point very powerfully. I would say to all those who lost loved ones in that appalling terrorist act that we are profoundly sorry for their loss and for how they have suffered. When one of them said, “I’m not able to spend Christmas at home with my loved ones in the way that this man is”, I think they spoke for everybody. We have to understand that when a crime like that is committed, it is not some un-violent sense of retribution just to say that that person should not be released from prison. They have basically committed a life sentence on all those families who are never going to see their loved ones again. Not to understand that is to fail in the duty of a Minister.

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

This further step towards our long-held goal of a single market for energy should open doors for areas like mine to forge ahead with offshore wind. Will the Prime Minister recognise and address legitimate concerns over the weakness of his policies for growth so that jobs are created here in the UK and small businesses can properly apply for and get jobs in the supply chain?

[The Prime Minister]

I do not accept what the hon. Gentleman says. At a European level, this is going to be helpful for the onshore and offshore wind industry and other renewable industries in this country. Also, here in the UK we have provided specific grants to ports to update their infrastructure so that large manufacturers can come here and manufacture wind turbines and provide offshore wind. I have spoken personally to companies that are coming to do that in parts of the UK. We will go on supporting the growth of this very important renewables sector.

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

The Prime Minister has highlighted some significant inconsistencies between what the previous Administration stated publicly and what was released by Sir Gus O’Donnell earlier today. Obviously, the focus should be on the victims of this horrendous crime, but what assessment has the Prime Minister made of the effects on the relationship with some parts of the US Administration?

[The Prime Minister]

The relationship is extremely good, and I think it will go on being good. I discussed this issue with Hillary Clinton when we met at the weekend. I think that the Administration have been grateful for the very strong and clear view that the Government have taken about the events surrounding the release of al-Megrahi and the fact that it was wrong. This point also goes back to what was said earlier. Of course, we want to have good relations not just with America but with Libya and with other countries, but we have to have some pretty clear lines in our minds about what is going to be part of that relationship and what is not. Frankly, I think it is perfectly possible to have good relations if we are clear about those things.

[David Rutley (Macclesfield) (Con)]

I was fortunate enough to work briefly with one of the victims of the Lockerbie bombing who was so tragically taken from us in 1988. I am sure that the families of these victims will be very interested to read the report that was issued today. Is my right hon. Friend aware of whether any previous Ministers from the former Government are planning to meet the groups of families who represent these victims to explain the policy that has so obviously come to light today?

[The Prime Minister]

I know that a number of victims’ families will obviously be interested in the report, and some will be seeking meetings either with the Government or with others. To be frank with my hon. Friend, not all the victims’ families take the same view about al-Megrahi and what happened and whether he was responsible, and all the rest of it. We have to be clear that he was convicted after a properly constituted and thorough trial. He then had an appeal, which was quashed. On that basis, the decisions that were made were clearly wrong decisions.

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

In the Cabinet Secretary’s report, he notes that the former Justice Secretary, the right hon. Member for Blackburn (Mr Straw),

“contemplated the merits of offering the Scottish Government a letter in support of a Libyan request”

to release al-Megrahi. Does the Prime Minister agree that that was an odd thing to contemplate if it was clear that there was a Government policy not to put any pressure on the Scottish Executive?

[The Prime Minister]

To be fair to the right hon. Member for Blackburn (Mr Straw), who is not here—although it is not my job to defend him—the report states that he considered making contact with the Scottish Executive and then decided not to. That piece of evidence suggests that there was not the great conspiracy that some people felt there might have been, in particular the American Senators I met who represent victims’ families. It is easy to understand why they thought that might have happened. They were looking at a country overseas, and were hearing what BP was saying, what the Government were doing and what the Scottish Executive were doing. However, I do not think that that is how the evidence stacks up. There was no conspiracy—it was a Scottish decision. As I said, the report highlights some issues about what we were told and how we were told it.

[Mr Philip Hollobone (Kettering) (Con)]

Greece is responsible for an extremely leaky part of the EU’s external border. Its asylum system was recently condemned as unfit. The problem for the UK is that should economic migrants make their way into the EU to claim asylum and end up in Britain, we cannot send them back to Greece. Was that issue discussed at the Council? How can we get the Greeks to secure their part of the EU frontier?

[The Prime Minister]

We did not discuss the EU migration issue at this Council, but we discuss it often. Greece and Italy tend to be voluble about it because they are often the door through which so many migrants come. I will make two points. First, we need to ensure that we can return people. The arrangements between Britain and France are extremely good. Secondly, one reason why we should not have a common immigration policy is that I do not want our population to be dependent on decisions made at the border of other countries. That is why I think we should keep this as an area of national competence.

Points of Order

Monday 7th February 2011 Commons Chamber

16:26

[Kevin Brennan (Cardiff West) (Lab)]

On a point of order, Mr Speaker. Will you confirm whether it is parliamentary to refer to right hon. or hon. Members as being guilty of “rank hypocrisy”? Obviously, if it is parliamentary, we might like to use it on a daily or even hourly basis to describe the Government’s policies. I gave notice to the Secretary of State for Education that I would raise this point of order. If it is an unparliamentary expression, can you require an apology and a withdrawal?

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order and for notice that he intended to raise it. At the outset, I say to the House that there was an enormous amount of noise in the Chamber when the Secretary of State was responding to a question and I did not hear clearly every word that he said. However, as the House would expect, I have had the record checked, and the words about which the hon. Gentleman complains appear in the draft Official Report at the end of the answer. It is indeed unparliamentary for any Member of the House to suggest that another Member is a hypocrite or has said something hypocritical. The term “rank hypocrisy”, when directed at what another Member has said, is unparliamentary and should be withdrawn. I hope that is clear.

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

On a point of order, Mr Speaker. I cannot remember, having been in this House for quite a few years, a statement by the Prime Minister on such a diverse selection of topics. I find it difficult to understand how Members can hold the Prime Minister accountable if he comes to the House with a potpourri of different aspects for which we are supposed to hold him accountable. Will it become a general process that we will not be able to tell what we will be asking the Prime Minister about?

[Mr Speaker]

The decision on whether to make a statement is a matter for the Government, the title of the statement is a matter for the Government and the content of the statement is a matter for the Government. I never have treated and never will treat anything said by the hon. Gentleman, or any other Member, with levity. He is raising a serious point, but I do not feel that it is a matter for the Chair today. I hope I can safely say to the hon. Gentleman, who has been in the House for 31 years—coming up to 32 years—without interruption, that the idea that anything causes him difficulty is hard to credit.

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

Further to that point of order, Mr Speaker. Given that we no longer have debates in Government time ahead of the European Council, is it not even more reprehensible that the European Council statement has got mixed up with another major issue that should have been in a separate statement?

[Mr Speaker]

I really do not think that that is a matter for the Chair. I note what the hon. Lady has said about debates before European Councils, which is an important observation. The Leader of the House is in his place and has heard it, and if the hon. Lady wishes to pursue it through the usual channels or with the Leader of the House she is, of course, absolutely justified in doing so.

Earlier, I had an indication that the hon. Member for Walsall North (Mr Winnick) wished to raise a point of order.

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

indicated dissent.

[Mr Speaker]

No, he does not wish to do so.

[Mr Peter Bone (Wellingborough) (Con)]

On a point of order, Mr Speaker. Would it not be strange if the Prime Minister came to the House and made a statement, and then when somebody asked him a question, he said, “I’m not answering that, because it’s outside the remit of what I came to the House for”? I should think that we should welcome the Prime Minister answering questions as widely as possible.

[Mr Speaker]

I am not sure that I should be the arbiter of that. The hon. Gentleman has raised an issue of what he considers to be “strangeness” and asked me to rule on it, but I think that is beyond the remit of the Chair, so we will leave it there for today.

Opposition Day

Monday 7th February 2011 Commons Chamber

[Un-allotted Half Day]

Fuel Costs

Monday 7th February 2011 Commons Chamber

[Mr Speaker]

I inform the House that I have selected the amendment in the name of the Prime Minister.

16:31

[Stewart Hosie (Dundee East) (SNP)]

I beg to move,

That this House notes that the oil price has reached $100 a barrel, and that diesel in the UK is the most expensive in Europe; further notes that the combination of the 1 January 2011 duty rise and the increase in value added tax is estimated to have added 3.5 pence to the cost of a litre of fuel; acknowledges the sharp rises in fuel prices over the past year and the resulting impact on headline inflation figures; recognises the financial pressure this places on hard-pressed families and businesses already struggling with high inflation and the impact of the recent rise in value added tax; condemns the Government’s continued dithering over the implementation of a fuel duty regulator (or stabiliser) as neither a sustainable or stable way to make tax policy; further recognises the specific additional fuel costs for those living in remote and rural parts of the UK; is concerned that diesel in such places is approaching £7 per gallon; condemns the Government for its failure to prioritise the implementation of a fuel duty derogation; and calls for the introduction of a fuel duty derogation to the most remote areas at the earliest opportunity.

The issue of high and spiking fuel prices is one of major concern around the country, as we can witness from the campaigns run by national and local newspapers and by campaign groups local and national the length and breadth of the country. Those campaigns—my favourite is the “fight for fairer fuel” run by The Courier—are not driving public opinion but reflecting it.

I was taken by the front page of the newspaper a week or so ago, which stated, “Osborne ‘may override 1p fuel duty increase’”. The Chancellor had clearly been listening to some of the concerns that had been expressed. The newspaper went on to report that when he was asked on a local radio station if he could do anything about fuel duty, he said:

“We can over-ride it, we are looking at that.”

He also seemed to confirm that Ministers were looking into a fuel duty stabiliser so that, as he said,

“the Government steps in to try to protect people from the effects”

of volatility at the pumps.

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

It is not just the Dundee Courier; the Stornoway Gazette is admirably drawing attention to rural fuel derogations in some areas of Europe, particularly Mediterranean islands that do not have the same fuel demands as the north of Scotland. The question has been raised why the matter is taking so long, why it is stalling in the European Commission and why the UK Government are not moving as efficiently and effectively as some European Governments in respect of their citizens’ needs.

[Stewart Hosie]

I will come to the rural fuel derogation in the second part of my comments, but in relation to the Stornoway Gazette, I am sure that there are many other such campaigns. My hon. Friend’s point reflects what I have just said—this is an issue of extreme concern in many parts of the country.

I was explaining that The Courier reported that the Chancellor had suggested that the Government were looking into a fuel duty stabiliser. I was about to say “so far, so good”, but unfortunately the next paragraph of the newspaper’s front page read:

“The Treasury later played down any suggestion that the Chancellor was announcing any intention to scrap the rise”.

The Government’s position is clear as mud.

Although the scrapping of a single rise would be extremely welcome, it is not what is fundamentally needed. We need a permanent fuel duty regulator and a stabiliser mechanism that is always in place to smooth out spikes when prices rise at the pump. It is not that the Government do not know that that is needed, because in the very same article, the Secretary of State for Business, Innovation and Skills is quoted as saying, I believe at a Press Gallery lunch:

“It is quite likely that we are going to get a nasty period of high fuel prices.”

I say to him that we are not going to get that; we already have a nasty period of very high fuel prices.

In January, diesel in Stornoway was £1.42 a litre—that is almost £6.50 a gallon. In Aviemore, in the Chief Secretary’s constituency, the price was £1.38 a litre, which is nearly £6.30 a gallon.

[Mr MacNeil]

Those prices almost seem cheap now. They have gone up to £1.45 and £1.46 a litre. At Benbecula airport today, I spoke to Rhoda Macauley, who lives in Daliburgh and has a 50 mile round trip to work at the check-in, and is seriously considering whether working is worth her while, such is the price of fuel.

[Stewart Hosie]

That does not surprise me. In previous debates, after we have experienced high spikes, several Members in the House and elsewhere have reflected their constituents’ views that they had almost reached the point when it was not worth going to work, particularly in rural areas with long distances to travel—I will deal with that later—because of the price of fuel. However, that applies not just in Stornoway, Aviemore or my hon. Friend’s constituency. In Dundee last week, I paid more than £1.33 a litre—more than £6 a gallon in the city. That is now not uncommon, and it is unsustainable. It is inflationary, decimates family budgets and puts untold pressure on many businesses and business sectors. It is having a catastrophic effect in remote and rural areas. That is why we call on the Tory part of the Government to keep its promise to consult on and deliver quickly a fuel duty stabiliser, and on the Liberal part of the Tory-led Government to keep its promise to deliver a fuel duty derogation for remote and rural areas.

I have said that the high fuel prices are bad for business. The Federation of Small Businesses has told me just how bad. According to its January poll of members, should fuel prices continue to rise, 62% of those polled said that they would be forced to increase their prices; one in 10 suggested that they may lay off staff; more than a quarter said that they could be forced to freeze wages; more than a third said that they would have to reduce investment; and 78% said that rises would put overall business profitability in jeopardy. When we are trying to grow our way out of recession and into sustainable recovery, that is the wrong thing to do.

[Mr Mike Weir (Angus) (SNP)]

I very much agree with my hon. Friend. However, is not the position even worse, given that people in many rural areas and constituencies such as mine have no alternative but to move goods by road? There is simply no other way of getting goods to our towns, which are not served, apart from the coast, by the railway line.

[Stewart Hosie]

My hon. Friend is absolutely right. In many parts of his constituency, goods must be moved by road. The days of rail terminals in Brechin or Forfar that would take freight are sadly long gone.

[Mr Weir]

I also point out that the idea that the goods can be moved by rail is flawed in any event because although, as my hon. Friend knows, a rail line goes through the coastal part of my constituency, there is no longer a goods terminal in Arbroath or Montrose, the two stations there. There is no alternative to road transport.

[Stewart Hosie]

My hon. Friend is right, and I am sure that hon. Members throughout the House will have examples of infrastructure that used to exist, but is no longer there, with the result that 100% dependence on roads is now the case.

[Hywel Williams (Arfon) (PC)]

Does my hon. Friend accept that the high prices also affect rural businesses, where petrol, diesel and other goods, such as groceries, are sold? Those businesses are hit by not only the price rise in fuel, but the cost of carrying goods to their shops. That is a dreadful burden for businesses in rural communities.

[Stewart Hosie]

That is absolutely right. The price is hugely inflationary in rural areas. It is also a problem in some of the poorer parts of our cities, where car ownership is remarkably low. It means that some people with modest means do not even have the ability to travel to a supermarket, where there may be discounted goods. Instead, they are forced to pay higher prices in certain urban centres. That should not happen.

[Sajid Javid (Bromsgrove) (Con)]

The hon. Gentleman is right to raise this issue and to talk about the impact of high fuel prices on hard-pressed families, but he will know that fuel duty raises about £30 billion for the Exchequer, and that a 1p increase in duty raises about £500 million. His case would be far more powerful if he could outline the public spending he wants to cut so that fuel duty can be cut, because that money must be made up somehow.

[Stewart Hosie]

The hon. Gentleman makes the same point that the Labour party used to make—something must be cut to fund the Scottish National party proposal. However, the SNP argues that when the price at the pump increases, there is a VAT windfall. In any circumstances, we know that there is likely to be a windfall in excess of £1 billion from the North sea. We believe that that should be used to temper duty increases and to lower the duty level, so that the yield anticipated by the Government does not decrease, and to smooth the effects of the spiking at the pumps.

[Sajid Javid]

rose—

[Stewart Hosie]

I shall move on a little. I have been generous, and I will give way again in a little while.

I was talking about the impact on business and the information provided by the FSB. As I said, 78% of its members who were surveyed in January said that the increase in duty would have an impact on them and put business profitability in jeopardy, which is the wrong thing to do when we are trying to grow our way out of recession. I would have thought that this Government would want to listen to the views of the FSB, not least because small businesses in the UK provide 90% of all our enterprises, and in Scotland they provide 50% of all jobs. They will be engines of recovery in this country.

John Walker, the UK chairman of the FSB, and Andy Willox, the FSB’s Scottish policy convenor, said:

“Scottish small businesses want to grow, innovate and create employment but the cost of fuel puts the brakes on their ability to drive the recovery…Every extra penny spent at the pumps is a penny not being spent elsewhere in the economy and our members are finding it hard to plan for the future, as well as survive the present, due to the spiralling cost of fuel.”

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

I am most grateful to the hon. Gentleman for allowing me to interject a little on the question of small and medium-sized business. I agree with his thrust that they are vital and that they will provide the jobs growth that the growth agenda requires. However, will he join me in expressing concern that the four increases in fuel duty are not as necessary as we were told they were by the then Government? Does he agree with that?

[Stewart Hosie]

I believe that the SNP opposed a number of the fuel duty increases. The hon. Gentleman may have been an honourable exception—I hope he was—but my memory tells me that Tory FrontBenchers abstained on some of those increases over the past few years when they were in opposition. He is generally right, but as I said, the debate is not about the cancellation or postponement of a single increase, however welcome that is, but about the implementation of a permanent stabilisation mechanism. Mr Willox said of that debate that:

“The FSB is right behind all moves to introduce a fuel duty stabiliser.”

[Robert Halfon (Harlow) (Con)]

I thank the hon. Gentleman for giving way on this very important subject. The Government pay around £7,000 per head per taxpayer in England, and yet they pay £8,500 for every Scottish taxpayer. Does he agree that if that subsidy were reduced, we would have more money across the country to cut fuel duty?

[Stewart Hosie]

I am always surprised when otherwise articulate, able and intelligent Members do not see the whole picture. When one looks at total tax and total income, rather than the mere, modest fragment of net identifiable expenditure, one sees a rather different story. Prior to the recession—independent figures stand this up—Scotland was about £50 billion in, £50 billion out. As the hon. Gentleman will recall, the UK ran a £0.5 trillion debt before the recession, so his argument is not particularly helpful, and nor does it really pertain to today’s motion.

Of course, some business sectors are hit rather harder than others. Some businesses have a little leeway in their pricing policy, but some have none. I was struck by the comments of Bill McIntosh, the general secretary of the Scottish Taxi Federation, who said:

“Taxi drivers”—

it is an important trade—

“are affected more than most by increases in fuel. Unlike other transport operators, taxi drivers can’t just raise their prices as fares are set by local authorities…The Scottish Taxi Federation welcomes and supports the proposal for a fuel stabiliser.”

That is important. The sector has a fixed pricing structure that it cannot adjust and rising input costs.

Many haulage firms—this is an extreme example—have already agreed long-term future contracts with a fixed price. There might be some variation, depending on the uplift in fuel, but it is unlikely, under the contractual arrangements, that they could be compensated for the very quickly and steeply rising input prices. In my view, the haulage sector suffers the largest single impact. According to the Road Haulage Association, operating costs have risen by 3.3% since last October. It tells me that fuel accounts for more than a third of the sector’s business costs, and that, in cash terms, an average rise is expected this year of £4,206 on the basis of increases over the past three months alone. That is quite extraordinary—an increase of £4,206 in the running costs per truck.

I suspect that that is why Phil Flanders, the Scottish and Northern Ireland director of the RHA, has said:

“The RHA…supports the SNP/Plaid Cymru motion to urge the Government to take immediate action to resolve the increasingly difficult situation that hauliers—and motorists—find themselves in due to the cost of fuel.”

He went on to say that it has always supported these

“proposals for a fuel duty regulator in order to bring stability to the costs of a haulage business where fuel”

in some places

“can account for around 40% of running costs…Whatever it is called—a stabiliser or a regulator”—

or a modulator—

“help is urgently needed for all hauliers and particularly those further from their market such as those in Scotland, Wales and Northern Ireland. Remote rural communities also deserve special help given the exorbitant price they have to pay.”

I will say more about that later. He continued:

“It cannot be stressed strongly enough that in the past year fuel prices have gone up by at least 14% and in the last 28 months there have been 8 fuel duty hikes amounting to a 25% increase. This is just simply unacceptable for the economy.”

I share that view entirely.

The Freight Transport Association has followed up that support and welcomes the effort

“to develop the fuel duty debate further. Lives and livelihoods up and down the country are suffering in the face of unsustainable and crippling fuel costs. For businesses still in the grip of tough trading conditions these costs severely restrict cash flow and a company’s ability to do business; sadly this can translate to job losses and the difference between solvency and insolvency.”

It says that when the price of fuel

“rises steeply it has an immediate impact on a company’s cash flow.”

Given how the banks are behaving, with credit tight and squeezed, cash flow is vital.

The FTA also says:

“As part of the Fair Fuel UK Campaign, the Freight Transport Association and the Road Haulage Association, along with backing from the RAC, are asking government principally to scrap the fuel duty rise planned in April and introduce a methodology for stabilising fuel prices.”

Indeed, Fair Fuel UK, which is supported by 20,000 road freight companies, the Royal Automobile Club, dozens of trade associations, other groups and tens of thousands of individual motorists, has said that it supports today’s attempt to raise this issue and its impact on the economy on the Floor of the House. It said that this

motion and debate will…add pressure to the Government to act”,

and act quickly, on what it calls a “fuel crisis”. There is no doubt that this is a crisis. It is also clear that there is not only an assessment of a real, immediate and serious problem, but a clear coalescing of those at the front line about the introduction of a stabiliser as the primary solution.

This is about not simply a fuel duty regulator or stabiliser, however, but the specific problems in remote areas.

[Mr Alan Reid (Argyll and Bute) (LD)]

The hon. Gentleman has outlined the problem, but he has not given the solution. He has spoken for 18 minutes, but has not told us how a stabiliser would work. I would like to hear how it would work, so will he please explain it to us?

[Stewart Hosie]

The hon. Gentleman has been here long enough to know that this is an Opposition day motion. If he waits until the Finance Bill, I am sure that both I and his hon. Friends will be happy to put forward detailed proposals and provisions, as we have all done on a number of previous occasions. Had he been listening to my response to an earlier intervention, when I explained how the proposal was due to work, he would know that we suggested it in 2005. We presented an amendment in 2008, and the then Conservative Opposition proposed something similar in July 2008. If he holds his horses, I suspect that we will have the detailed provisions for such a mechanism soon enough.

[Mr MacNeil]

Will my hon. Friend give way?

[Stewart Hosie]

I am going to make some ground.

This motion is not simply about the fuel duty regulator; it is about the problems in remote areas, where there is no choice but to drive. In a debate on introducing a rural fuel derogation in 2006, the argument was put as follows. The purpose of the proposal—on that occasion contained in a new clause—was to

“enable the Treasury to specify lower rates of duty on fuel to apply in remote rural areas. Hon. Members will know that article 19 of the European Union’s energy products directive allows member states to apply for a derogation to allow lower duty rates in specified areas. In October 2004, the French Government, with the support of UK Ministers and Ministers of other member states…did just that, following the example set by the Portuguese and the Greek Governments in previous years.”

The argument for applying such a measure in the United Kingdom rested on

“the very serious economic impact that higher fuel prices in rural areas have on areas such as the highlands and islands of Scotland. The truth is that people…in remote areas such as the highlands and islands are victims of a triple whammy. They pay higher fuel prices and have much longer distances to travel, with few or no alternatives to making those journeys by car. Unavoidably, they spend more on transport than others and therefore also contribute more to the Treasury. Motoring costs represent some 18 per cent. of total household expenditure in rural Scotland compared with 13 per cent. across the rest of Scotland.”—[Official Report, 4 July 2006; Vol. 448, c. 738-39.]

Those were not my words; they were the words of the current Chief Secretary to the Treasury. I am disappointed that he is not here to stand by his words and make a commitment to drive forward a rural fuel derogation at the earliest possible opportunity.

[Mr Reid]

rose—

[Stewart Hosie]

Before the hon. Gentleman gets to his feet, let me remind him that when the Liberal party last proposed a rural fuel derogation, we backed it. I suspect that some of his colleagues were less forthcoming in backing proposals that we had made, although there were some honourable exceptions who wanted to.

[Mr Reid]

Now that the Liberal Democrats are part of the Government, the hon. Gentleman should be pleased that the rural fuel derogation is going to happen. We tried for years and the Labour party knocked us back, but now that my right hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) is the Chief Secretary to the Treasury, the rural fuel derogation for the islands is going to happen.

[Stewart Hosie]

I am delighted to hear that the rural fuel derogation is going to happen. I cannot wait to hear that from a Minister, because the reports that I read earlier tended to indicate a little confusion in the Government’s ranks. I hope that that happens soon, for the following reasons.

In the final bit that I want to quote from the Chief Secretary’s speech in 2006, he said:

“Median earnings in the highlands and islands are some 85 per cent. of the UK figure, so the inequitable situation”

that he had described

“hits an already poorer region very hard.”

He said that, before coming to the Chamber, he had conducted

“a random survey of pump prices for a litre of unleaded petrol. In Aviemore in my constituency…the…price is 99.9p per litre. In Dalwhinnie, a little further south, it is 102p per litre. In Thurso, in the constituency of my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), it is 102p per litre. In Lerwick, in the constituency of my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael), it is 106.9p per litre. By comparison, at Asda in Leeds the price is 92.9p, while in Morrison’s in Camden in north London, it is 90.9p.”—[Official Report, 4 July 2006; Vol. 448, c. 739.]

In preparation for today, we were told by the AA that petrol cost £1.34 a litre in Portree and £1.42 a litre in Stornoway. With prices now more than 30p a litre more than four years ago, that means an increase of more than £1.30 a gallon—many hon. Members will remember when that was what a gallon of petrol itself cost. If the argument was correct then, when the price was between 90p and £1 a litre, it is even stronger today, when the price is £1.30 a gallon more.

[Mr MacNeil]

Does my hon. Friend remember just how full the Chamber used to be of Liberal Democrat Members when the prices were 30p a litre cheaper? Now, following the massive increase in prices and the real rural pain being felt as a result, where are they? I see two Liberal Democrats here today. Any more? Please stick your hands up! No, just two Liberal Democrats. Shocking!

[Stewart Hosie]

My hon. Friend makes his point in his own inimitable way. I have to say that I cannot remember a time when the House was ever full of Liberal Democrats, but I think I know what he means.

I want to raise three specific issues in relation to the vital importance of the rural fuel derogation. In urban, built-up areas, 95% of people live within 13 minutes of a bus stop with a service more than once an hour. That compares with less than half of residents in villages and hamlets. Before any Member gets up to make a point about that, let me say that I know that there are parts of every constituency in which there are no bus stops, no bus services and no choice but to use a car.

[Mr Weir]

I am following with interest what my hon. Friend is saying. Did he read the report in The Guardian this morning which suggested that many English local authorities were slashing their subsidies on bus routes, which will lead to the closure of those routes in many rural areas? Does he agree that that would make the situation very much worse in rural areas of England as well?

[Stewart Hosie]

I have not seen that report, but those developments will clearly make things difficult in areas that depend on those subsidies. I hope, in the light of the price of fuel, that local authorities and the Government will try to ensure that as many bus services as possible, particularly lifeline services, are maintained. The key point about living in remote and rural areas is that there are fewer alternatives available, and in some cases, no alternatives at all. The use of a car in those areas is vital.

[Hywel Williams]

The lowest wages in Wales are in Powys, in the middle of Wales. Powys also has the highest incidence of car ownership, with many families having to run two cars because of the lack of public transport.

[Stewart Hosie]

My hon. Friend touches on an important point. It has been mentioned already that car ownership is normally a sign of wealth and affluence, but in remote, rural and sparsely populated areas, people on almost every level of income, including those on low and modest wages, require a car. That results in their spending a disproportionate amount of their net disposable income on fuel.

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

A further point that the hon. Gentleman will recall from the many debates that we have had on this subject is that people in my constituency and elsewhere who earn below the average wage often cannot afford to buy good, modern cars. Their cars are therefore much more costly to run. That is part of the triple whammy that I remember talking about six or seven years ago.

[Stewart Hosie]

There are whammies after whammies, and the hon. Gentleman is right to say that the use of a car can be a necessity, and that people have to buy whatever they can afford. Also, if the roads are not quite as good as they ought to be in remote and rural areas, that can pose its own problems, especially in winter.

There are three key issues in this debate. The first is the lack of choice, which is very important. The second, which I hope urban Members will recognise, is the fact that the average mileage per year travelled simply to access essential services in rural areas is 8,794 miles. The comparator in urban areas is 5,200 miles. So the people in rural areas have no choice, and the distances that they have to travel are far greater. On top of that, the third factor is the price of fuel.

I am grateful to the BBC, which reported on 22 January that the RAC Foundation had found that some filling stations in Orkney were charging £1.50 a litre, which is £6.82 a gallon. An increase of only 4p or 5p per litre would result in the £7 gallon, which, because people have no choice, they would have to pay in order to travel the greater distances necessary in rural areas to access the services that most of us take for granted.

The time for talk and promises on fuel is over. There is now an absolute necessity for the Government—both bits of them—to deliver on their promises. We need to put the stabilisers on rocketing fuel prices now, before the brakes are slammed down on any chance of economic growth.

17:00

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

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

“notes the dramatic increase in the world oil price to over $100 per barrel; further notes that there has been a significant impact on fuel prices in the UK as a result; recognises the impact this has on households and business; notes that the previous administration’s rises in fuel duty that have taken effect during the past year have further increased prices; further notes that the Government inherited the largest deficit in UK peacetime history, that the previous administration had no credible plan to deal with the deficit, that the Government has been clear that everyone will make a contribution to tackle the deficit but that the most vulnerable will be protected, and that the Government is considering a fair fuel stabiliser that could support motorists and businesses when oil prices are high; further notes that the Government in addition is taking forward swiftly its commitment at EU level to introduce a pilot scheme that would deliver a discount of up to 5 pence per litre in duty in remote rural areas such as the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly; and further notes that the Chancellor will update the House on all fiscal matters at the time of the Budget.”

We have long recognised on this side of the House—both parties in the coalition Government—that the price of fuel has been a very difficult issue for motorists, businesses and families up and down the country. I know that it is a particular concern for people living in our rural communities, and no doubt many Scottish Members who hope to participate in the debate will make points on behalf of their constituents and echo the concerns set out by the hon. Member for Dundee East (Stewart Hosie). I am sure that other Members representing rural seats will also want to set out their concerns.

There is no doubt that rising oil prices and their impact as they feed through to the petrol pump have been a real concern. In fact, even before we came into office, both coalition parties had committed to looking at the issues surrounding the cost of the fuel, as the hon. Member for Dundee East has pointed out. Let us be clear, however, that the last Government chose completely to ignore this whole area. They believed that the challenges posed by these problems were too great. When we were talking about alternatives to help families, hauliers and motorists, they said that it was all too difficult and that the issues were way too complex.

Let me state at the outset that we would be interested to hear from the Opposition whether they stand by the fuel duty escalator—the one that they put in place before the election; it is a bit like reaching from the political grave into taxpayers’ pockets. Or do they believe that that policy was a mistake? Are we to be treated to the spectacle of Labour Members arguing not only against the Government’s measures across a whole range of areas, but against the measures they put in place before being booted out of office? We have taken a very different approach to fuel prices to that of the last Government.

[Mr Weir]

I am listening carefully to the hon. Lady and it is not my place to defend the Labour party, as we spent much of the last Parliament attacking the Labour Government and their fuel policy, which was disgraceful. It is interesting to see that so few Labour Members are here today. However, the Economic Secretary is now in government: what is she going to do and when is action going to come? The problem is getting worse by the day, and unless action is taken soon, it will be too late for many businesses in rural Scotland.

[Justine Greening]

I can assure the hon. Gentleman that I shall set out our approach to policy in this regard in the run-up to the Budget in my further comments, but we need to recognise that the fuel duty escalator was put in place by the last Government. They have, I believe, a blank piece of paper that is called their economic policy, and they owe the House the honesty of being transparent about whether they believe that putting that policy in place was the right or the wrong thing to do.

[Mr MacNeil]

Far be it for me to draw it to the hon. Lady’s attention, but since last May she has been in government. We want to know—in Lewis, in Harris, in North Uist, Benbecula, South Uist and Barra—what she is going to do about the price of fuel.

[Justine Greening]

The hon. Gentleman will be pleased, as I have looked at the Scottish National party website today and seen the letter he wrote to voters last April, in which he said that it was the SNP who first called for this “derogation” for fuel areas. I can assure him that I am getting on with that very policy.

[Mr MacNeil]

rose—

[Justine Greening]

Presumably, the hon. Gentleman wants to intervene again to welcome the efforts of the coalition Government.

[Mr MacNeil]

I will welcome those efforts when they bear some fruit. We had four years of shilly-shallying from Labour—and I do not want to hear any more shilly-shallying from any Government from the Treasury Dispatch Box.

[Justine Greening]

In that case, I can tell the hon. Gentleman how he can help. It would be helpful if his party wholeheartedly supported the Government’s proposal to the European Union and the European Commission as we go through the process of securing the derogation. I assure him that we will be more powerful if we adopt a cross-Government, cross-devolved-Administration approach.

[Stewart Hosie]

The Minister is asking the Scottish National party and our friends to support the Government’s efforts in Europe. Will she please tell us whether the Chief Secretary has finally managed to write to the European Commission asking for the derogation?

[Justine Greening]

The hon. Gentleman will be aware that the derogation will come about as the outcome of a process. He seems to be asking me whether we are getting on with that process, and how much progress we have made. I trust that if I explain what the process is, what we have done so far and what will happen next, he will have been given so much information that he will find it necessary to take a more considered approach.

Let me explain the timing involved in the process leading to European Union and Commission clearance. We must begin by undertaking informal talks with the Commission abut the implementation of the scheme. That will give us a better chance of presenting a proposal that it will agree is, as it were, right first time. As Members have pointed out, similar schemes exist in other countries. It is sensible for the Government to engage in a process that includes talking informally to the European Commission about those schemes, and about the ways in which our scheme may resemble or differ from them.

[Mr MacNeil]

Will the Minister tell us how long it has taken other Governments to proceed from the informal talks stage to implementation of a rural fuel derogation, and how long she thinks it will take this Government to do so? Time is of the essence.

[Justine Greening]

Obviously it will not be a short process involving a few weeks, but I think that the hon. Gentleman and his party know from their experience of the process involved in calling for the derogation that the route that we are taking can provide real support for motorists in rural areas.

[Robert Halfon]

rose—

[John Thurso]

rose—

[Justine Greening]

I will give way to my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso), because he tried to intervene earlier.

[John Thurso]

I think I heard the Minister quote from a letter from members of the SNP saying that they had thought of the derogation first. In fact, it was first raised in the House of Commons in 2000 by my predecessor in the constituency, now Lord Maclennan. I fleshed it out in a debate that I held in Westminster Hall in 2001, and I think I have raised it every year since then. Given that the matter was raised over a period of 12 years, is it not commendable that this Government have done more in six months than the last Government did in those 12 years?

[Justine Greening]

I agree with my hon. Friend. I too remember his party, before it joined the coalition Government, making the case for a rural fuel rebate.

I now give way to my hon. Friend the Member for Harlow (Robert Halfon), who tried to intervene earlier.

[Robert Halfon]

I welcome the debate, because hard-pressed constituents of mine, especially small businesses and families, are suffering hugely as a result of high fuel costs. May I make a special plea? National health service workers in my constituency who have to use their cars to visit patients receive tiny fuel allowances—in some cases, only 12p per mile—which remain the same regardless of the price of fuel. Will my hon. Friend consider changing the guidelines so that NHS workers need not suffer in that way?

[Justine Greening]

I shall ensure that I respond to my hon. Friend on that issue. A variety of concerns about the cost of motoring have been expressed in constituencies throughout the country in recent years.

I hope I can reassure Opposition Members that we are getting on with the process of requesting a derogation by trying to arrange some pilot schemes. I am sure they will be pleased to learn that, although we are still considering the exact scope of the pilots, we have announced our intention of including the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly, should we be given the necessary dispensation. I assure Members that we are pressing ahead as fast as we can, and we should appreciate their support in helping us to complete the process. I hope that they will be able to overcome any political barriers, do the right thing and back up the coalition Government as we go through this process over the coming months.

We recognise the importance of fuel prices to motorists and businesses. While we are looking at options in the run-up to the Budget, which I will discuss this afternoon, we can have one of two debates today: we can continue to argue about the problem and waste the opportunity presented by today’s debate by scoring points, or we can have a frank and open debate about how to reach the best solution and how we can find common ground. For instance, do we agree that the price of fuel and the affordability of motoring are important for motorists? The answer is yes. Do we agree that the unpredictable way in which the oil price fluctuates can create difficulties for households and businesses when it comes to budgeting? The answer is yes, although the Labour party never recognised that point in government, and I doubt whether it recognises that point in opposition—if it does, perhaps the hon. Member for Bristol East (Kerry McCarthy) will explain why it has suddenly changed its mind after having been booted out by the electorate.

[Kerry McCarthy (Bristol East) (Lab)]

I am pleased that the Economic Secretary wants to have a constructive debate this afternoon and does not want to engage in party political point scoring. Given that conciliatory approach, will she confirm that a Conservative Government were the first to introduce the fuel duty escalator at 3% in the March 1993 Budget, which they increased to 5% in the November 1993 Budget?

[Justine Greening]

The hon. Lady wants to go back into history. The previous Labour Government left a huge fiscal deficit, and we have to get to grips with those ginormous debts, so the position is entirely different. The previous Labour Government left not only debts and deficit, but tax rises that will unfold over the coming years. In opposition, the Lib Dems and the Conservatives discussed helping motorists, and we still want to see what we can do to help them. Given the state of the public finances when they were handed over to us, the Labour party in opposition should be thoroughly ashamed. We have waited in vain for an apology to the British people for the state of the public finances, and I suspect that we will have a long wait before we hear any of them say, “Sorry.”

The most depressing thing is that the main adviser to the former Chancellor and former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), is now shadow Chancellor. It is like returning the car keys to the man who crashed the car in the first place, which is the worst thing for the British electorate.

[Mr Stewart Jackson (Peterborough) (Con)]

The issue is not about going back into pre-history to discuss what a previous Conservative Government did 18 years ago. Her Majesty’s Opposition are not willing to make it clear where exactly the 20% public expenditure cuts would come from to pay for their opposition to tax rises. Is that not the real issue? We are paying £120 million a day in debt interest because of their debt legacy.

[Justine Greening]

My hon. Friend is right. We do not even know whether the Opposition think that going ahead with the fuel duty rise, which they planned, is a good idea. We know that they rejected calls from Opposition parties to look at alternatives when they were in power. Perhaps the hon. Member for Bristol East will explain her party’s position today.

My hon. Friend is also right to point out the difficult challenges that the current Government face. He has rightly pointed out that the level of deficit and debt that we have been left as a country costs the British taxpayer £120 million every single day. To put that in the context of a 1p a litre rise in fuel duty, which is worth £500 million, the British taxpayer will pay as much in debt interest over the course of four or five days as they will pay in fuel duty, if fuel duty is subject to a 1p a litre rise. That demonstrates two things, the first of which is the importance of tackling the deficit. Clearly, this country cannot continue to pay this expense of £120 million a day and it has to be tackled, because we are spending more on servicing our debt than on transport. The challenge for this country is that if we do not get this £500 million of real money from fuel duty, it has to come from somewhere else. The Government have made it clear that they want to try to protect key spending, for example, on the NHS—the Labour party did not want to do that—and schools.

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

Does the hon. Lady agree that it would be unfair for the disproportionate burden of that tax to fall on people in rural and remote areas?

[Justine Greening]

As I have said, the Government recognise the particular pressures that motoring costs put on people living in rural areas, which is one of the reasons why we want to try to get a derogation and undertake pilot schemes in some of those areas to see whether we can implement a rural fuel rebate. I hope that the hon. Lady acknowledges that we recognise those challenges.

[Naomi Long (Belfast East) (Alliance)]

Does the Minister recognise that this is about not only the significant issue of rurality but remoteness from the marketplace? In Northern Ireland, it can be incredibly difficult, even in urban constituencies such as mine, for those who wish to trade to reach the marketplace; added costs can be involved, reaching from Northern Ireland on to the UK mainland.

[Justine Greening]

The hon. Lady is right in that few Members in this House would not have their own particular reasons for raising the issue of the cost of motoring with government. This issue is clearly a real challenge, which is why the Conservative party acknowledged it in opposition and said that we wanted to examine how we could tackle some of the key issues.

The hon. Lady also referred to the impact of fuel duty on businesses. That is one of the reasons why our emergency Budget introduced a package of corporation tax reductions for companies, as she will recall. Small companies will now face a corporation tax rate of 20% whereas they were facing a rise to 22% under the previous Government. We also introduced reductions in national insurance, getting rid of the worst effects of the proposed jobs tax. We can support businesses in a number of ways to help them through a very challenging economic situation created by the previous Government.

[Mr Weir]

I reiterate a point that I made in last week’s debate about the Department for Business, Innovation and Skills: the Government keep saying that they have reduced corporation tax and although that is welcome for small companies, very many small businesses in our areas do not pay corporation tax. They are single traders or partnerships that pay income tax, so they are not being helped by these measures and being hammered by the VAT rises and the fuel cost rises.

[Justine Greening]

The hon. Gentleman will know that alongside those measures to support companies, particularly small ones, I could have mentioned the regional growth fund and the regional reduction in national insurance for new start-up companies creating new jobs. He will also be aware of the rise in the personal allowance, which has removed about 880,000 people from paying income tax altogether. We have also raised the threshold for national insurance, which means that employers no longer have to pay employer national insurance for thousands of employees. Across the board we are doing what we can, despite the challenging financial deficit left to us. We are doing what we can to make sure that we tackle the overriding priority of sorting out the deficit—that is what we have to do. For motorists, companies, families and unemployed people wanting to get back into the employment market and get a job, we have to get the economy back on its feet and public finances back on a sustainable footing. At the same time, we understand the pressures and challenges for motorists.

As things stand, there are alternatives for the devolved Administrations. I have to challenge hon. Members representing the Scottish National party in Scottish constituencies on whether they have considered using some of the devolved Administration budget to fund their own grant scheme to support motorists in their areas. They have taken different decisions on tuition fees to those taken in England and there is now additional scope for them to see this issue as a priority for their spending, as well as for the national Government to consider how we might be able to help in terms of tax policy.

[Mr MacNeil]

I want to ensure that the hon. Lady is aware of the importance of what the devolved Scottish Government—in what is an independent Parliament without the powers of independence—have done for the Outer Hebrides. We have introduced road equivalent tariff pilots, which have substantially reduced transportation costs, but the difficulty is that when the Scottish Government produce schemes that stimulate and grow the economy, the tax revenue goes not to our Government but down to Westminster. We are doing good work, but there is a double whammy: as we stimulate the economy, Westminster benefits, and then it comes and sticks on a fuel tax—thank you!

[Justine Greening]

I think the hon. Gentleman is taking the debate slightly wider than the wording in the motion. However, I will say to him that the measures we are taking are designed to get our economies in his part of the United Kingdom and the rest of it back on their feet. I hope that he welcomes the tax reductions we are bringing forward.

[Stewart Hosie]

Will the hon. Lady give way?

[Justine Greening]

I will give way one last time, and then I shall make a little progress. I have been generous in taking interventions.

[Stewart Hosie]

The hon. Lady has been very generous indeed. She asks us to welcome the actions that the Government have taken in terms of a deficit consolidation plan. I like and respect her, but I will never welcome a £1.3 billion cut to the Scottish budget this year and a £3.2 billion cut to the Scottish block over the next four years. That is the wrong thing to do in terms of stimulating economic growth and growing our way out of the recession. If we could focus on the fuel duty, that would be particularly helpful, unless of course she wants to devolve the duty to Scotland, in which case I would be absolutely delighted as we could take all the right decisions.

[Justine Greening]

I am sure that the hon. Gentleman will be aware of the Goodison review and that the Scotland Bill is passing through Parliament right now. We are making some changes on tax, and I think he will welcome those measures to strengthen the devolution settlement.[Official Report, 15 February 2011, Vol. 523, c. 3MC.]

I shall now, as I am sure the hon. Gentleman would like me to, address my comments to the measures we have been talking about and what we are considering. Only this Government have been looking at how best to help drivers, including those in Scotland and Wales. We have demonstrated our concerns about these issues both before and since coming into government. Indeed, one of the first things that the coalition Government did was to get the Office for Budget Responsibility to look at how oil prices affect the economy and feed into public finance.

This is a complex issue, and we have to make sure that whatever we do is not only fair but affordable. It would not be right of me to pre-empt the Chancellor or the Budget, but, as we promised in the June Budget, we are considering a range of options. We have already discussed the rural fuel duty rebate. The Government understand the challenges faced by people in rural areas in relation to fuel costs, which those of us in city and urban areas perhaps do not face. I know that those people cannot easily shop around nearby petrol stations to get the best deal in the way that other people can. I understand the arguments about the lack of public transport as an alternative and that the car is often the most realistic mode of transport. That is precisely way we are working towards getting a derogation so that we can get on with putting in place pilots to look at how a rural fuel rebate would work.

[Dr Whiteford]

Is it intended that at a future date the derogation pilots should extend to other rural and remote parts of Scotland not included in the current pilot scheme?

[Justine Greening]

We have yet to decide the exact scope of the pilots. I assume from her question that the hon. Lady would like her area to be included. No doubt she will write to me formally. I will take her comments on board. As I said, we are already working towards putting in place the pilots for a rural fuel duty rebate which will reduce the cost of fuel in the most remote areas of Britain. As with trying to tackle the feed-through of unpredictable oil prices to the pump prices, the previous Government rejected that outright, but the coalition Government are committed to getting it under way.

As my right hon. Friend the Chief Secretary announced in October, we wish to conduct a rural fuel duty pilot and look at how a rural fuel duty rebate could work in practice. We want to examine the underlying issues and see how that could be applied. The initial pilot could deliver a duty discount of up to 5p per litre on all petrol and diesel. That would save some drivers in rural areas upwards of £500 a year.

[Simon Hart (Carmarthen West and South Pembrokeshire) (Con)]

As part of the derogation, will my hon. Friend please make sure that the definition of “rural” is a great deal more scientific than it has been in previous attempts? Will she also make sure that the interests of Wales are not left out?

[Justine Greening]

My hon. Friend makes a relevant point. One of the reasons that our initial discussions with the European Commission are so important is that they are an opportunity to scope properly any rural fuel duty rebate, why we would introduce it, where it would apply and the basis on which it would take place. In other countries, specific arguments have been made for the particular areas where such rebates were allowed by the European Commission. The benefit of going through the process, as we are doing, is that it maximises the chance that any proposal that we make will be given the go-ahead.

[Mr Stewart Jackson]

I thank the Minister, who is being very generous. The House will forgive me if I do not join in the excitement of our Scottish colleagues at the largesse of my English taxpayers footing the bill for their constituents. Will my hon. Friend take representations from areas such as mine, which is a travel-to-work area and essentially urban, but where there are pockets of social deprivation and low wages, such as the fens? In future, will she and her colleagues perhaps consider that such areas also require some support and assistance from the Treasury with significant increases in fuel duty, which have an impact on working life there too?

[Justine Greening]

My hon. Friend, as ever, represents his constituents powerfully. The point I would make to him and to the House is that we have inherited a huge fiscal deficit and eye-watering levels of debt, and we have to get the public finances back on to a sustainable footing. We must make sure that the economy is back on a sustainable footing too, creating long-term jobs, and that the economy is balanced so that it is less exposed to the peaks and troughs of economic winds than it was, perhaps, over the past decade.

That is the best way to help people across our country so that they are less reliant on Government giving them this, that and the other, and so that they can be reliant on themselves and choose where they spend their money and what they spend it on, instead of being reliant on somebody from Whitehall telling them.

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

Does the Minister recall that when the fuel duty escalator first came in, it was meant to be a green tax? The environment was meant to benefit from the imposition of that year-on-year tax. As far as I know, it has not benefited the environment. It has just been a nice little earner, and now it is terribly heavy on rural dwellers and in the urban context as well. I, for one, appreciate the fact that Government are looking at the issue, and I hope they come up with a fair solution.

[Justine Greening]

There is undoubtedly an environmental aspect to how fuel duty changes over time, because people do change their driving behaviour. The hon. Gentleman’s point is that clearly we are all concerned about the affordability of motoring, which has been an issue in the past few years, and particularly today. In the long term, of course, the best move is to help people not to have cars that are so dependent on petrol and diesel and therefore prey to the fluctuations in the oil price market in the first place, but that is a debate for another day. That ties in to his earlier points about the environment.

Let me wrap up my remarks, because hon. Members wish to speak and I do not want to take up any more time. We are considering the exact scope of the rural fuel rebate scheme, and Members from Scotland will welcome the fact that the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly will certainly be included. It is not quite as simple as people suggest; there is complexity, so we are taking some time to work through it.

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

The Minister has taken a number of interventions, which we are grateful for. I have written to her about part of my constituency, the Isle of Arran, where fuel prices are often the highest in Scotland. There has been a great deal of debate about what criteria will be used to choose the pilots being considered. Arran already does badly as a result of the equivalent scheme brought in by the SNP Administration in Holyrood, so will she look at Arran when considering these issues and perhaps expand on the criteria that will be used, either today or at a future opportunity?

[Justine Greening]

I can only reiterate what I have just said, which is that we are considering the exact scope of the scheme, but it is helpful to hear some of the issues that Members have in their constituencies. We are pressing ahead and will need European approval.

[Kerry McCarthy]

Will the Minister give way?

[Justine Greening]

I will give way one last time.

[Kerry McCarthy]

The Minister is being very generous. I am slightly confused, because my understanding was that it was Conservative party policy to look at the fuel duty stabiliser and Liberal Democrat policy to look at the rebate and the rural derogation. She has spoken for more than half an hour and focused almost totally on the rural derogation, so will she, before concluding her remarks, tell us the current position on the fuel duty stabiliser?

[Justine Greening]

I think that I have been very clear on that. In opposition and in government, we have always recognised the impact on motorists of the unstable oil price, which feeds through to pump prices. In setting up a stabiliser, we need to ensure that it works as intended, so the first step was to ask the Office for Budget Responsibility to look at how oil prices feed into the economy and affect public finances. We have commissioned that work, as the hon. Lady will know, and now need to take on board its outcomes before looking at how it feeds into policy making. It would not be right to pre-empt the Budget. Indeed, when the hon. Member for Dundee East was asked for further details, he said that he needed some time, which indicates that this is a complex policy area—too complicated for the Labour party when it was in government.

In conclusion, we want to treat motorists fairly, but we must also act responsibly by ensuring that we tackle our record national debt and the financial deficit, which will not be easy. I will not hide from the House the fact that that is a difficult balance to strike, so difficult that the previous Government chose to ignore it completely. That is also the approach they have adopted for tackling the deficit, offering no credible alternatives to our policies and, in the case of fuel duty, no viable alternatives to their own policies, because it is their fuel duty escalator that is causing the problems.

Once again, it has been left to the coalition Government to clear up the mess left by the Labour Government and look at how we can reach a fair resolution on fuel duty, get our economy back on its feet and support our businesses, families and, in this case, motorists. I look forward to the rest of the debate and hope that we can have an open and honest discussion on the problems faced by motorists across the country and possible solutions. I look forward to hearing from Members in the run-up to this year’s Budget what they think is the best way forward.

16:19

[Kerry McCarthy (Bristol East) (Lab)]

I congratulate the hon. Member for Dundee East (Stewart Hosie) on making a powerful case on behalf of his constituents—along with the interventions from his colleagues—about the impact that people living in remote rural areas can feel as fuel prices go up. He did make a very powerful case on behalf of his constituents, and Labour Members do understand the impact that motorists are feeling as fuel prices go up. I might represent an urban seat, but as a Member of Parliament in the south-west I am very much aware of the issues that are faced.

[Stewart Hosie]

I thank the hon. Lady for saying that I made a powerful case, but Dundee East is very much an urban seat. It has a rural hinterland of course, but my constituency is half the city. I know where Bristol is; a wee bit of geography would be great.

[Kerry McCarthy]

The hon. Gentleman makes a valid point. He was speaking on behalf of his colleagues in the more remote parts of Scotland, obviously, rather than on behalf of his own constituents. I thought that perhaps his constituency stretched a little further than the city boundaries.

For Governments, when considering fuel duties there is always a difficult balance to be struck among the needs to raise revenue and balance the public finances; to address environmental concerns about increasing road traffic and emissions, to which there has not been much reference in this debate; and to ensure that the motorist and especially people who have to rely on their cars—people who do not have a choice because of where they live and the environment in which they live—are not disproportionately penalised. The previous Labour Government endeavoured to strike that balance, despite the points that the Economic Secretary to the Treasury made. That was why, for example, in years when fuel prices rose, Labour chose to put the fuel duty escalator on hold—to help motorists meet those rising costs. It is a tricky balance to strike, however, as today’s debate demonstrates, and there are no easy answers.

[Justine Greening]

To clarify matters, is the formal Labour party position that the fuel duty rise should now go on hold?

[Kerry McCarthy]

If I can adopt the mantra that the hon. Member for Dundee East first used and the Minister then picked up on, I should say that that is a matter for us to discuss when we get round to the Budget negotiations. Today, we are here to discuss the two main proposals to ameliorate the impact of rising fuel prices, particularly on rural areas. We are talking about rural areas, rather than about fuel duty prices across the board.

The dog that has not barked during this debate—the thing that was most noticeably missing from the Minister’s speech—is the fact that motorists are being hit hard by the increase in VAT to 20%, which has helped push petrol prices up to their current record levels.

[Stewart Hosie]

It suddenly strikes me that, when the Labour Government had their fiscal stimulus policy, they cut VAT by 2.5 percentage points and increased fuel duty by 2.5 percentage points to compensate, but that, when VAT went back to 17.5%, the fuel duty rise was maintained. Does Labour now regret not reducing fuel duty in line with the increase in VAT?

[Kerry McCarthy]

Those matters were also affected by fuel prices at the time, but it is not my position to apologise for, or to express an opinion on, what my predecessors did.

The VAT rise now is the important thing. VAT went up at the beginning of the year from 17.5% to 20%. According to the Library, the VAT rise increases the cost of a litre of petrol by about 2.6p, assuming that it is passed on in full. That compares with the fuel duty increase in January of 0.76p per litre, so the VAT rise to 20% is hitting the motorist harder and people in rural areas, who rely on their cars most and have to travel longer distances, particularly hard.

[Mr MacNeil]

Is there any tinge of regret among Labour Members that for at least four years the previous Government did absolutely nothing on a rural fuel derogation?

[Kerry McCarthy]

I will deal later in my speech, if I may, with the rural fuel derogation and the problems that we see in implementing it.

The VAT rise did not have to be imposed. It flew in the face of all the warm words that Conservative politicians uttered before the election about ending the war on motorists, helping hard-hit families and keeping fuel costs down, but now it has been done and motorists are paying the price.

Let me turn to the fuel duty stabiliser, or regulator, which the Minister glossed over very quickly.

[Mr MacNeil]

If we are talking about glossing over, I feel that the hon. Lady glossed over my question. Will she take this opportunity to apologise for her Government doing nothing for four years on the rural fuel derogation?

[Kerry McCarthy]

As I said, I am coming on to the derogation, but it is not my place to express such opinions.

In principle, on paper, the fuel duty stabiliser sounds like a fairly simple, reasonable proposition—as oil prices go up, fuel duty goes down, and as oil prices drop, fuel duty goes up, so the motorist pays more or less the same for fuel and the Exchequer gets more or less the same in revenue. However, economics are not that simple.

The idea of the regulator has been floated for some time. During the debate on the 2008 Finance Bill, the Scottish National party spokesman, the hon. Member for Dundee East, suggested that a statutory instrument should implement an automatic mechanism so that as additional income from VAT receipts came in, it could be used to offset fuel duty in direct proportion. However, the regulator was based on rises in oil prices, not on rises in VAT receipts. It was assumed that one would flow from other—the hon. Gentleman reiterated that assumption today—but that is not necessarily the case, as the Office for Budget Responsibility has said.

[Stewart Hosie]

Will the hon. Lady give way?

[Kerry McCarthy]

I would like to make some progress.

There are other concerns about the stabiliser. The then Liberal Democrat spokesman, who is now Secretary of State for Business, Innovation and Skills, said at the time of the 2008 Finance Bill debates that the idea of a fuel duty regulator was “unbelievably complicated and unpredictable”. He said that the Exchequer would have to predict the net windfall, and then:

“May I suggest that there might not be any net windfall at all?”—[Official Report, 16 July 2008; Vol. 479, c. 339.]

The OBR has now confirmed that.

Labour’s then Chief Secretary to the Treasury said:

“In the face of a world slowdown, to take any one tax in isolation and claim that there is a windfall available to spend is economically illiterate, irresponsible or just disingenuous.”—[Official Report, 16 July 2008; Vol. 479, c. 331.]

She was basically saying—this was echoed by the hon. Member for Taunton Deane (Mr Browne), who was the junior Liberal Democrat spokesman at the time—that we cannot consider these revenues in a silo. Yes, oil revenues might go up, which might provide a boost to the nation’s finances—although I stress the word “might”, because it does not necessarily follow that increased revenues come from increased oil prices—but other things might happen that affect revenue flows, and it is irresponsible not to look at everything in the round. Hypothecation can box us into a corner and hamper our choices, and that is a real problem in the case of the stabiliser.

[Justine Greening]

Was the Chief Secretary who referred to economic illiteracy the same Chief Secretary who left us, as an incoming Government, a note saying that there was no money left?

[Kerry McCarthy]

No, I was referring to my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper). The Minister may have got the hint when I said “She”.

If a stabiliser were introduced, there is the question of whether the cut in duty would be passed on to the consumer at the pump. That would be very difficult to achieve without further Government enforcement and interference. I am not sure how that would square with the Government’s purported dearly held belief in the free market and dislike for state interference in the operation of the free market.

[Mr Reid]

Yes, that issue must be considered, but the whole point of a pilot scheme is to enable us to work out whether the cuts are being passed on, which the Government would monitor. The hon. Lady’s argument is no case for not having a pilot scheme.

[Kerry McCarthy]

I thank the hon. Gentleman for that intervention, but I am talking about the fuel duty stabiliser. I appreciate his confusion, because that has not been discussed much in this debate. The rural derogation is a separate issue. I am talking about how a stabiliser would be enforced.

Despite the concerns about a fuel duty stabiliser that were raised during the 2008 Finance Bill debates and afterwards, and the obvious difficulties in implementing one, the Conservatives could not resist dangling the prospect of reduced petrol prices before motorists’ eyes. They published a consultation document in July 2008, which proposed the stabiliser:

“when fuel prices go up, fuel duty would fall. And when fuel prices go down, fuel duty would rise”.

That continued to be Conservative party policy until polling day. A week before polling day, the Prime Minister told voters on a visit to a Coca-Cola plant that

“we’d be helping with the cost of living by trying to give you a flatter and more constant rate for filling up your car”.

It was suggested by Conservative politicians in the media that it would be included in the new Government’s first Budget.

Before the election, this Government made all the right noises about tackling high petrol prices. They led the public to believe that they would take action to slash fuel duty and bring down the price of petrol at the pumps. Since then, they have done nothing. Actually, that is not quite true. They have done nothing to implement the fuel duty stabiliser, which they made such a song and dance about before the election, but they have hit the motorist by whacking up VAT to 20%. They have increased petrol prices, not cut them.

Even the Office for Budget Responsibility, set up by this Government to give independent, impartial advice, has said that the fuel duty stabiliser would not work. The underlying economics of the stabiliser contain a simple, basic assumption that when oil prices rise, the Government receive an unexpected windfall from taxes on North sea oil production. The OBR said that that is not the case, at least not in the long term. In “Assessment of the Effect of Oil Price Fluctuations on the Public Finances”, which was published on 14 September last year, the OBR reported that a temporary rise in the oil price would have a negligible effect on the UK public finances, and that a permanent rise would create a loss. The OBR said that it would be difficult for the Government to introduce a fair fuel stabiliser without a significant cost to the Exchequer:

“There is no improvement in the public finances to be used for stabilising the pump price in the case of a permanent shock.”

In fact, a permanent increase in fuel prices would have a negative impact on the public finances after a year, given the effects on demand, inflationary pressures, household income and consumer spending.

[Stewart Hosie]

The hon. Lady seems to be labouring under a misapprehension. The fuel duty regulator would temper spikes. If there is a structural change in the oil price, the baseline figure against which a trigger is measured has to be reset. We have all seen the OBR figures, but the OBR does not say that we should not have a short-term stabiliser to stop spikes; it says that there is no benefit in the long run, as she said. The regulator is designed to smooth out short-term spikes, not to stop structural changes in the oil price.

[Kerry McCarthy]

What I am saying is that a correlation between oil price movements and revenue has not been established by the OBR. In fact, it has said that that is not the case and that in the short term a temporary rise in the oil price would have a negligible impact on revenue. Therefore, the question is what money would be used to offset the stabiliser or regulatory mechanism that the hon. Gentleman’s party wants. If it does not come from the revenue, where does it come from?

[Stewart Hosie]

I remind the hon. Lady that the OBR’s press notice was clear that the temporary £10 rise would deliver an overall effect in year 1 of £100 million. That is not insignificant.

[Kerry McCarthy]

The new head of the OBR, Robert Chote, said in an interview about a week ago that its analysis

“suggested that a fair fuel stabiliser would be likely to make the public finances less stable rather than more stable”.

If a £10 increase in oil prices was passed through, the assumption is that it would add 7.4p per litre at the pump. To offset that would cost £3.7 billion, which is £1.3 billion more than the consequential rise in oil and gas revenues. It might have been a good idea for the Conservative party to carry out that sort of analysis before making promises that it could not keep. All the Economic Secretary has to say today is that the Government will consider the OBR’s report.

I also ask the Economic Secretary what conversations she has had with people in the industry about the impact of fuel prices. I have been contacted by the Retail Motor Industry Federation, which tells me that it has written to the Chancellor and Prime Minister four times about the matter recently, with no response at all. It has stated that the Government have

“made no attempt to engage with industry”

and that it wants the policy of a stabiliser to be dropped, because it would be

“costly and a huge administrative burden”.—[Interruption.]

Sorry, is the Economic Secretary saying that the RMI has not written to the Chancellor or the Prime Minister?

[Justine Greening]

The hon. Lady says that there has been no engagement, which is completely wrong. Only about three weeks ago, we held a workshop on tax policy in relation to travelling and the environment, at which a range of stakeholders from a variety of sectors of the travelling industry came to the Treasury to talk about their challenges. Many said that it was the first time they had been invited in for any kind of constructive discussion.

[Kerry McCarthy]

The Economic Secretary says that as though I were the one saying that there had been no engagement. I am not, it is the RMI that states that the Government have

“made no attempt to engage with industry”.

Perhaps she could place in the Library a copy of the response from either the Chancellor or the Prime Minister to the letter that the RMI says it has sent four times, and copy me in. That would confirm whether there has been an attempt to have a dialogue.

I turn to the other proposal under active consideration, the rural derogation. As we have heard, the Government are planning to pilot it in the inner and outer Hebrides, the Northern Isles and the Isles of Scilly, although from what the Economic Secretary said I am not sure whether those are the definite areas for the pilot or whether the matter is still under consideration. My understanding is that there would be a maximum 5p per litre discount on petrol and diesel sold in those areas.

Will the Economic Secretary elaborate on just how far the informal conversations with the European Union have gone? Have they been about just the pilot scheme, or have there been discussions about introducing the scheme to a significant proportion of the British isles at some time in the future?

Following on from the question that my hon. Friend the Member for North Ayrshire and Arran (Katy Clark) asked, will the Economic Secretary explain on what basis the islands in question were chosen for the pilot as opposed to other remote rural areas? Does she not think that it will be difficult to extrapolate from pilots carried out in island areas how such a scheme would work in remote mainland areas, particularly those from which it is not so far to travel to urban areas where petrol is in greater supply? Will she explain why the pilot scheme is to be so limited, rather than a larger pilot that could have more evidential benefit and be used to show how the scheme would work across the country?

We have a number of other concerns about the rural derogation. There is a long-standing principle that excise duties are charged on a universal basis, and it would set quite a precedent to depart from that practice. As has been said, the scheme would be difficult and expensive to administer, because at the moment duty is levied when oil leaves the refinery, not at the point of retail sale. That takes us back to the point that the hon. Member for Argyll and Bute (Mr Reid) made when I was talking about the stabiliser. How would the system be policed if there were to be differential duty at the point of sale? It sounds like a complex administrative system would be required.

[Justine Greening]

I am trying to follow the hon. Lady’s argument, but it is not clear to me. Will she confirm whether she supports the Government’s attempt to get a derogation in place by introducing pilots?

[Kerry McCarthy]

It is up to the Economic Secretary to answer the questions. We are certainly interested in the conversations that she is having with the EU, but we have major concerns about whether it is practical to take the proposal forward. We would like more information to be convinced that it will solve the problem.

The rural rebate proposal was, of course, a Liberal Democrat manifesto commitment, and it seems that the Government are now taking it up. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) referred to the fact that he has raised the matter on many occasions over the past 12 years, and when he was his party’s transport spokesman he proposed a duty differential based on the Scottish Government’s method of having eight categories to distinguish between urban, rural and remote areas. Again, that could become quite complex. It would be quite easy to calculate rebates in the case of geographically isolated, sparsely populated areas, but in southern Scotland, where there is more of a patchwork of those categories, it could be difficult.

[Dr Whiteford]

For clarity, will the hon. Lady tell us whether her party is saying no to a derogation and no to a stabiliser?

[Kerry McCarthy]

Again, it is for the Economic Secretary to tell us what her policy is on the stabiliser and so on. We are quite happy to discuss and consider proposals for tackling the problem of increased fuel prices in rural areas. However, when the OBR is telling us that the fuel duty stabiliser would cost the public purse huge amounts of money and be difficult to administer, and when real and valid concerns are being raised about whether rural derogation pilot could be transposed over to mainland Britain, we are right to ask questions and require answers before we decide whether we can support the proposal.

[Dr Whiteford]

rose—

[John Thurso]

rose—

[Kerry McCarthy]

I want to conclude now. I have taken quite a lot of interventions, and hon. Members will have the opportunity to pose as many questions as they like in their own speeches.

Finally, I ask the Economic Secretary to confirm several things. Has the Conservative party dropped the fuel duty stabiliser policy in the light of the OBR’s fairly clear and damning verdict on its practicability? Is the policy now restricted to the rural derogation, and what time scale does she think would be appropriate for its introduction? It will take some time to get it through the EU, and considerably longer to roll it out to the UK as a whole. In the meantime, is she actively considering the impact of the VAT increase on fuel prices? That is hitting people now, and not an issue for the future.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This has proved to be a popular debate, and nine Members have indicated that they wish to participate in the short space of time that we have left. To be as fair as we possibly can, and to try to get everybody in, we are going to introduce a seven-minute time limit, with the usual injury time for two interventions.

17:57

[David Morris (Morecambe and Lunesdale) (Con)]

I will keep it short, Mr Deputy Speaker.

We all know why we are having this debate today—the extortionate increases in fuel duty brought in mainly by the last Government, which were made worse by three increases introduced in the last Labour Budget that the new Government have to implement or find revenue from elsewhere.

My argument has always been that our top priority must be to cut the deficit, which my right hon. Friend the Chancellor is doing. We have a national and moral duty to do so. After that, we need to start considering ways to cut the burden of tax and get our country moving again—excuse the pun. When that process begins, fuel duty should be our top priority.

On Friday I was called by a haulier in my constituency, Mick Gorry, who claims that despite turning over £4.5 million from his 41 trucks in Morecambe, he made just £19,000 profit in the last financial year. To unpick that, we need to understand that of that £4.5 million turnover, £2.2 million was spent on fuel. As prices rise, it is easy to see how that small profit could disappear.

This is an Opposition day debate, but let us not delude ourselves: this problem was created by the last Labour Government, and we must work out how to clear it up. Mr Gorry is convinced that the solution to the essential user rebate is a fuel stabiliser. He makes the point, rightly in my view, that haulage costs are pushed up by prices in the shops, which in turn causes the risk of inflation, which we must avoid in an economic downturn. But let us not be unrealistic. As I said at the outset, our top priority is to cut the deficit. Thirteen years were spent telling everyone that we could pay for everything—we must never fall into that trap again. As a coalition supporter, I can look my constituents in the eye and tell them honestly that we do not have a bottomless pit of money, but that we can and will cut tax when the public finances are in a better position.

It benefits no one to have a bankrupt United Kingdom—everyone agrees about that. If we had continued down the old path, we would be in that position. My constituency looks to the House and the Government to show leadership on the matter. We showed ourselves at our best by being honest about the challenges and trying to find solutions. Without the reckless spending of the past, Mr Gorry would not be spending £2.2 million on fuel every year.

I support our Chancellor wholeheartedly. I support a proposed fuel stabiliser and any forthcoming rebates. I have yet to hear any detail from the Opposition about how they would try to get us out of the mess into which they got us.

18:00

[Paul Murphy (Torfaen) (Lab)]

I welcome the debate, and the hon. Member for Dundee East (Stewart Hosie) made a powerful speech. It is relevant that it arises on a Supply day motion from the Scottish National party and Plaid Cymru, because the issue is also of particular concern to Northern Ireland, and the hon. Member for Belfast East (Naomi Long) is in her place. All devolved Administrations have a voice to raise and a point to make about the fuel increases in their countries. Hon. Members will know that a joint ministerial Committee meeting took place last week in London, when the First Ministers of Wales, Scotland and Northern Ireland jointly asked the Government to ensure that there would be no increase in fuel prices in the Budget in April. I hope that that will be the case.

I share the concerns of my hon. Friend the Member for Bristol East (Kerry McCarthy) about some of the detail of the derogation for rural areas. I support the idea of a pilot, but it should include at least one part of Wales, and to confine it to islands would make such a study rather artificial. I appreciate that there are particular problems in rural parts of the United Kingdom and it is important to consider that, but confining the pilot to islands would be a mistake.

[Naomi Long]

Does the right hon. Gentleman agree that, if there were a pilot, it would be helpful if a part of Northern Ireland were included in it, given that there are specific problems due to the geographical separation between Northern Ireland and the rest of the United Kingdom?

[Paul Murphy]

Indeed. When I was Secretary of State for Northern Ireland, the point was always made to me that it is the only part of the United Kingdom that has a border with another country—the Republic of Ireland— and the problems of fuel prices in Northern Ireland are particularly acute. It would be a good idea to have a pilot there, too.

The Economic Secretary spent much of her time telling us that it was all the Labour Government’s fault, and then she said that she wanted to be conciliatory. If I may say so, she is slightly schizophrenic about what she wants. Let me emphasise to her that, for the 24 years that I have been in the House of Commons, whether in opposition or in government, the Treasury has always won its case. It has won it on the basis that it wanted the money from fuel—a Conservative Government as much as a Labour Government argued for fuel regulators. There is no point in trying to say that one side or the other is responsible because all Governments in the past three decades have done precisely that.

There is a difference now—and we will differ fundamentally about the reasons for it. Given that we are post banking crisis and have to deal with the deficit, of course the world has changed and we must therefore consider imaginatively ways in which to deal with the fuel prices that our businesses and our families have to pay. However, the Economic Secretary must recognise the point that my hon. Friend the Member for Bristol East made: the single, most devastating reason for fuel price rises in the past few months is the increase in VAT. It is as simple as that. Petrol and diesel are more expensive because VAT has gone up. As all Opposition parties have argued, we should rethink the VAT increase.

The effect of the fuel prices on small businesses in Wales is calamitous. The difference in Wales, as in Scotland, Northern Ireland and parts of England, is that so much of our economy is now based on the success of small and medium-sized businesses. If they are to suffer—it has been shown that they will if fuel prices increase—special attention should be paid to them. The Federation of Small Businesses in Wales has already said that it is disappointed with the Government’s treatment of fuel prices. The Economic Secretary is right to say that devolved Administrations have a part to play in that the Government and the devolved Administrations should work closely with small businesses to see how they can tackle the matter.

Small businesses also deal with other pressures. In south Wales, the Severn bridge is undoubtedly a problem for them. Someone who has a large vehicle such as a lorry and crosses from England to Wales has to pay £17 each time. That is a big disincentive to small businesses in Wales. Earlier, the Prime Minister rightly pointed out that he, like me and every hon. Member, wants banks in our countries to lend more regularly, more frequently and more effectively to small businesses.

The debate is important—so important that hon. Members from all parts of the United Kingdom are taking part in it to ensure that the Government’s mind is bent to trying to find a solution. I fear that the Economic Secretary was right when she said that the fuel stabiliser was a problem—doubtless the Government are looking at it—but there are serious issues, which could have a knock-on effect unless they are tackled effectively and carefully.

In the past couple of days, I went to my local Sainsbury’s petrol station to fill up. Like many supermarkets, it offers diesel and petrol at much cheaper rates than smaller, independent petrol stations. I paid just over £1.30 a litre for diesel. Compared with some of the prices, which we have heard today, in parts of rural Scotland and Wales, the price in my part of the world, although quite high, is lower.

It particularly struck me, when considering the reasons for taking part in the debate, that Shell was making £1.6 million an hour in profits. I know that that is not all on fuel. However it strikes me as incongruous that, when the citizens and businesses of our country have to face huge, inflationary rises because of increases in fuel duty, large oil companies are making those enormous profits. Perhaps the Government can consider that. They were supposed to look at how the banks share out their profits and pay their bonuses. They have not done well on that. Perhaps they should look at some oil companies, too.

Whatever the Government do, they should understand that there is real and justified concern from all Members about the fuel increases. I hope that they will listen.

18:07

[Mr Alan Reid (Argyll and Bute) (LD)]

Representing a sparsely populated rural constituency, I am only too aware of the severe impact of the high fuel price on motorists and local businesses. It is important to remember that, in remote areas, a car is an essential, not a luxury.

Let us consider the purpose of high fuel duty. Two arguments are often advanced: the green argument and the tax-raising argument. The green argument does not stack up in rural areas, because it is based on encouraging people out of their cars and on to public transport. That fails completely in the highland and islands of Scotland, where buses are few and far between. Indeed, there would be no point in rural councils in remote areas subsidising buses that run with only one or two passengers to try to reduce carbon emissions. Clearly, one or two people taking a car will cause far fewer carbon emissions than one or two people on a bus.

I represent many of the islands of the Inner Hebrides, and the price of fuel is far higher there than on the mainland. On the larger islands, such as Mull and Islay, the price of a litre of fuel is typically 15p higher than in a city. On the smaller islands, such as Coll and Colonsay, the price is often about 30p a litre higher. I was therefore delighted when the Government announced their intention to pursue a pilot scheme under which there would be a 5p fuel duty discount on many islands, including the Inner Hebrides. I realise that they must get EU permission to go ahead with that scheme, but since other EU countries operate a similar scheme for islands, I see no reason why permission will not be granted. It takes time to take such projects through the EU, and it is important that the Government get their proposals right, but I plead with them to take their proposals through as quickly as is humanly possible.

[Mr MacNeil]

When does the hon. Gentleman hope to see the rural fuel derogation in action on the Inner Hebrides?

[Mr Reid]

I hope that the scheme will be implemented as soon as possible, and that it can be extended to remote parts of the mainland once the pilot schemes are proven to be successful, as I am sure they will be.

Any argument that fuel duty must increase yet further in order to deter car use is complete nonsense. The high price of fuel already deters car use, and simply increasing the duty further will have no effect on the environment. As other hon. Members have said, increasing the duty will simply harm the rural economy.

I recognise that fuel duty brings in a lot of money for the Treasury, and that the Budget must be balanced. We face an enormous budget deficit, which was inherited from the previous Government, but I put it to the Chancellor that yet another fuel duty increase in the coming Budget will harm the economy, particularly in rural areas, and I urge him to find another way of raising that money. Fuel duty discriminates against rural areas in a way that no other tax does. Almost any other tax increase to replace an increase in fuel duty would therefore be an improvement.

We have debated the stabiliser previously, particularly during proceedings on the Finance Act 2009, when the hon. Member for Dundee East (Stewart Hosie) proposed one. The crucial decision is on the amount around which the price should be stabilised. The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Taunton Deane (Mr Browne), who was a Liberal Democrat Treasury spokesman at the time, pointed out that the proposal from the hon. Member for Dundee East would mean that the fuel duty would have been 4.5p higher if it had been introduced in the 2008 Budget. I am disappointed that in the intervening two years, the hon. Gentleman has not come forward with a detailed, workable proposal.

[Katy Clark]

I recall the debate and vote on that proposal. Parts of my constituency are similar to the hon. Gentleman’s constituency. Does he agree that the technical and practical problems of introducing a nationwide derogation would need to be looked at very seriously? When those on the Treasury Bench consider the detail, they might find that a nationwide scheme is impossible. Does he therefore agree that we need to consider introducing a scheme in specific communities in specific parts of the country, like the pilot scheme?

[Mr Reid]

Yes, I agree with the hon. Lady. I hope that a stabiliser formula for the whole country can be found and made to work, but I remain sceptical. It is important that the Government consider that idea, but it is also important that no idea is put into practice without careful consideration of all possible negative effects. Any rigid formula could have such unforeseen effects, such as the 4.5p increase that would have resulted in 2009. I am convinced that a rural fuel derogation could be made to work in a specific area. I have no argument whatever against a stabiliser pilot scheme, but I remain sceptical. It would be great if a stabiliser could be made to work—the Government ought to consider it—but we must be very careful. The way forward is definitely a rural fuel discount.

The Budget is only a few weeks away. It is important that the Chancellor exercises restraint and that he does not increase fuel duty in the Budget, when the fuel price is already so high. However, rather than having a rigid stabiliser formula, which could have unforeseen side effects, it is important that he acts sensibly.

Under the previous Labour Government’s policy in their last Budget—the fuel escalator—the tax on fuel would increase by more than 4p a litre in April. I hope that the Government do not follow Labour’s policy. That would be grim news for a rural economy that is already struggling under the burden of a high fuel price. I urge the Chancellor to heed the warnings he has received on the impact that another 4p per litre increase would have, and I plead with him to cancel the proposed fuel duty increase in the Budget.

18:15

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

I have listened with great interest to this afternoon’s debate. I intend to limit my remarks to aspects of it that relate most to the area that I represent. That part of rural Aberdeenshire and Banffshire has no railway stations and very limited public transport options—there are far fewer bus services than hon. Members will find in urban areas. This is therefore an urgent issue not just for individuals, but for businesses in remote and rural areas, and I am glad that Members on both sides of the House take it seriously.

It almost goes without saying that people who live in the more remote and rural parts of Scotland, Wales and other parts of the UK have to travel further to access the most basic amenities, whether post offices, shops, schools, places of work or doctors’ surgeries. Inevitably, they incur extra costs in doing so, yet as other hon. Members have pointed out, people in rural and remote areas pay higher prices. In parts of my constituency, they pay £1.36 per litre for fuel. That might not be quite as high a price as is paid in some of the island communities, but it is nevertheless well above the average.

[Albert Owen (Ynys Môn) (Lab)]

The hon. Lady is quite right to point out that those in peripheral or rural areas pay more because their need for the car is greater. In addition, those people need larger cars, and there is a big difference between the costs of petrol and diesel—many diesel vehicle owners are hit harder. We are talking not about Chelsea tractors, but essential means of transport in rural areas.

[Dr Whiteford]

I agree with the hon. Gentleman. I live in rural Aberdeenshire, and at this time of year, I fully appreciate the need for vehicles that are suitable for the roads on which they travel and the driving conditions.

There is a huge irony in this situation for people in my constituency, who have had an oil terminal on their doorstep for many years. People who live at the heart of Europe’s oil and gas industry pay among the highest prices for petrol and diesel in Europe. That irony is certainly not wasted on folk in my part of the world. Nearly 62% of what we pay at the pumps goes directly in tax and duty to the Treasury. My concern—this is the chief point that I want to make this evening—is that that is a disproportionate tax on people who live and work in rural and remote areas.

[Jim McGovern (Dundee West) (Lab)]

May I say that I am sorry, Madam Deputy Speaker, that I was not here at the beginning of the debate? I was in Dundee for the launch of the Scottish Affairs Committee inquiry into the video games industry. The hon. Lady is a member of that Committee, so I am sure she will understand.

Does the hon. Lady agree that while figures suggest that fuel duty puts 1p on the price of a litre of petrol or fuel, VAT puts somewhere in the region of 3p a litre on it? Should we not attack the coalition Government for increasing VAT instead of looking for fuel duty regulators? I see that she is being advised by her colleagues on that.

[Dr Whiteford]

Had the hon. Gentleman been here earlier, he would have heard that point addressed in previous contributions. Both VAT and duty have a part to play. The previous Government’s record on this was shameful in not allowing motorists to benefit from the falls in VAT at the beginning of the recession. The key point is that the disproportionate tax on rural parts of these islands does not only harm individual motorists, but inhibits our business growth and the development of our rural economies.

[Katy Clark]

I support what the hon. Lady says about islands and remote communities, and I support a fuel duty discount for such areas. However, the bigger picture is how much we tax fuel in this country, and Britain has decided to have a high level of tax on petrol, diesel and other fuels. Does she support that?

[Dr Whiteford]

We have heard a lot this afternoon about the need for the Treasury to balance its books, and about the role of tax in that, but the fundamental underlying question is: why should people have to pay more and disproportionate tax just because they do not have access to public transport or happen to live in a rural area? I am all for tax, so long as it is fair, proportionately applied, and people are not discriminated against for living and working in a rural area.

The impact is felt particularly by businesses. As other Members have said, goods and services have to be moved into and out of parts of rural Scotland by road, and in many areas we already have to overcome significant challenges arising from our distance from markets. The area I represent has strong food processing, farming and fishing sectors and a great deal of manufacturing. Companies in northern Scotland have to cover the extra costs they incur and the extra taxes they pay, in order to make viable business plans, but nobody else has to. We have come through difficult times but are still struggling to emerge from the recession, and the fluctuating price of oil causes great instability and uncertainty for business. Big and small businesses alike struggle with that. Big businesses can sometimes buy fuel while in greater debt, but small businesses, which are often the greater engine of growth in our communities, really struggle with the unpredictability caused by fluctuating prices.

In conclusion, I urge the Government to honour their commitments before the election. I cannot over-emphasise the urgency and immediacy of this issue in rural Scotland. I urge them to consider the matter seriously. We have heard a lot about the derogation. I hope that not just island communities will be included in that, but that, notwithstanding the difficulties, other rural and remote parts will be included too. I also hope that much more attention will be given to the stabiliser, which, ultimately, will create fairness in the system and proportionality in the taxation on fuel.

18:23

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

This has been an interesting debate for a number of reasons. However, I begin by apologising to the hon. Member for Dundee East (Stewart Hosie) for missing the opening part of his remarks in introducing the debate.

The issue of fuel costs touches not only those living in regions that the devolved Administrations are largely responsible for governing, but many rural constituencies across the country, and certainly my constituents and members of the public across Lincolnshire. The reason is that it costs—and has done for a long time—a great deal of money to run a car, given the current fuel prices. However, a car is not a luxury to my constituents and people living not only in Wales, Scotland and Northern Ireland but in rural parts of England. In those places, a car is a necessity. Owing to the state of public transport, people cannot live their lives without at least one car—certainly, they could not do so without great difficulty.

Much of my constituency is made up of rural areas dotted with small villages and farms, which means that I live in a beautiful part of the country. However, it also means that it takes a great deal of time to get to the doctor’s, the supermarket or anywhere else that one needs to get to in order to live one’s ordinary life. Public transport has got worse over the past few years, and will continue to get worse owing to the state of the deficit left by the previous Government and the need for this Government to deal with it. That will not be conducive to better public transport over the next few years, and will exacerbate the problems caused by high fuel prices.

I would like to echo a point made by the Economic Secretary. The Labour Government left us with the worst possible fiscal position. The simple fact is that we are paying debt interest of £120 million a day in circumstances where 1p on fuel raises only £500 million. It does not take a very good mathematician to work out that were we not paying that debt, we would not need the level of fuel duty or VAT that we do—with all that that has meant for the current fuel crisis. I heard no apology in the remarks of the hon. Member for Bristol East (Kerry McCarthy) or explanation of why we have been left with this debt legacy and of what it means, in the context of this debate, for my constituents and others all over rural Britain who are paying the price for the previous Government’s failure, inter alia, through the cost of fuel.

[Guy Opperman (Hexham) (Con)]

Does my hon. and learned Friend think that it was right for the leader of the Labour party to indicate that he would not have implemented the previous two fuel rises in the current circumstances?

[Stephen Phillips]

I have not seen the comments made by the right hon. Member for Doncaster North (Edward Miliband). However, he was at the heart of the previous Administration, with all that that meant for the legacy inherited by this Government. Whatever opportunism Labour Members pursued—we saw it last week during the forestry debate from a party that sold off 25,000 acres of forest without any guarantees of rights of public access—we understand that it is the duty of the Opposition to oppose. However, I do not understand many of his policies, and I do not expect that I understand this one any better than any of the others.

We have heard about two mechanisms that might serve to address some of the difficulties associated with current high fuel prices. The first is the derogation. The Government have done more to take that forward during the few short months they have been in office than the previous Government did during the entire time they were in office. I congratulate my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) and his predecessor who have done so much work on this matter. It is gratifying that we at last have a Government who are beginning to take this issue seriously and to negotiate on it in Europe. I hope that in due course we will see this derogation.

On behalf of my constituents, I would like to hear from the Exchequer Secretary that the pilot, whatever that might be, is rolled out not just in the remote rural areas referred to in the amendment—the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly—but in areas of England affected by high fuel prices.

[Heather Wheeler (South Derbyshire) (Con)]

Could my hon. and learned Friend expand on the rural areas in England suffering with high fuel prices? It would be helpful for the Exchequer Secretary. Certainly in South Derbyshire we are seeing prices as high as £1.36 a litre. We are suffering too, and if that could be borne in mind when he sums up, it would be superb.

[Stephen Phillips]

I am sure that my hon. Friend the Minister will take into account the views from Derbyshire. I do not want to take up too much time dealing with that, however, because there are a number of other people who want to contribute to the debate.

What I want to hear from the Government Front Bench is that the pilot will be rolled out not just in island communities in Scotland or elsewhere, but in England. There are areas, such as the constituency that I represent, where it costs people an enormous amount just to live their ordinary lives, which is effectively a piece of discrimination via the tax system. We deserve the piloting of such a break, in just the same way as those areas of the United Kingdom where the pilot will take place deserve it.

This is not the subject of today’s debate, but a lot of my postbag is taken up with correspondence from constituents expressing concern about the Barnett formula and the way it effectively sends a subsidy—they would say at their expense—to Wales, Scotland and Northern Ireland. That is one of the issues that this Government will have to grapple with, at the same time as explaining to my constituents why the derogation will mean that there may be lower prices in other parts of the United Kingdom.

I have not yet dealt with the other limb to what is proposed—it is something that I understand the Government are looking at, and they must consider it carefully—namely, the fuel duty stabiliser. The fuel duty stabiliser, which we talked about in the election, is designed to smooth out, as the hon. Member for Banff and Buchan (Dr Whiteford) said, the spikes in prices that harm our constituents so much. To those who have read it, it is clear that the Office for Budget Responsibility report indicated that, although difficult, introducing the fuel duty stabiliser would not make that much difference to the revenue going to the Exchequer.

I did not understand the position of the hon. Member for Bristol East on that issue, as on so many other things. I am sure that in due course there will be some intolerant tweets about what I am saying about her across the Chamber, as that is her general way of dealing with me. I did not understand her or her party’s position on the fuel duty stabiliser, because she was unable properly to tell the House what it was, and I certainly did not understand her party’s position on the derogation from Europe. If the Opposition are to oppose in a responsible way, as the Leader of the Opposition has said, it would help if the Government and Members in all parts of the House knew what the Opposition’s position was, because at the moment, on this issue as on so many others, we do not.

Let me say a word about the question before the House. The difficulty with the motion, as the Government’s proposed amendment recognises, is that it does not take into account the concerns of constituencies other than those in the devolved Administrations. The motion is focused, no doubt for perfectly good political and tactical reasons, on those constituencies, not ours. It is for that reason, among many others, that I will not be supporting it, although I will of course support the amendment that my hon. Friend the Economic Secretary moved.

18:33

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

I shall try to be brief to allow my hon. Friend the Member for Angus (Mr Weir) to get in.

Simply put, fuel in my constituency costs a ridiculous amount, at £1.45 a litre. What we want, in essence, is to pay the same tax as elsewhere. We are only looking for fairness. A rural fuel derogation would not achieve fairness, but it would take us to the foothills of fairness and would be a big step in the right direction, reducing the price from £1.45 a litre to £1.40. I have sympathy with those in South Derbyshire; I only wish I was enjoying the prices that they are currently burdened with. We have to remember that, at the back of this debate, we want to look at fuel distribution throughout the country, which is often a difficulty to do with refineries—part of the excuse that some of the companies use as well.

Remoteness is often blamed, but I discovered recently that while we pay £1.44 a litre, those in the Faroe islands pay 94p a litre for diesel and £1.10 for petrol. For those who do not know, the Faroe islands are halfway between the Hebrides and Iceland, where petrol and diesel are £1.10 a litre. We do not need to go too far back to remember the difficult economic situation that Iceland faced. It has a big debt, although its deficit is not in the same situation as the UK’s, but it clearly understands that high fuel costs choke recovery. Iceland is not making that mistake; indeed, in the last quarter, Icelandic GDP grew far more than the UK’s. The Government here can talk of the deficit, but if they carry on like this, they will choke the recovery and will not see revenues flowing into their coffers, as they should and would like to.

The price is painful for us. As I left Benbecula this morning, the fuel concerns of Mr Alec MacIntosh, who works at Benbecula airport, were ringing in my ear, and small wonder, as he had just bought some fuel at £1.46 a litre. I think that his week’s wages had just about gone in filling up his vehicle. Those at Stornoway airport attacked my other eardrum on the issue. There is scarcely a place I can go without people seeing me as a telegraph to relay to the Treasury the pain that people are feeling. That pain is real, and I hope that that is taken on board. Indeed, it is not just pain; it is anger, because people know that more tax is flooding from my constituency to London than from just about any other constituency. We have the highest fuel poverty in the UK, and small wonder. The islands really need a rural fuel derogation, and they need it quickly. The hon. Member for North Ayrshire and Arran (Katy Clark) spoke earlier, and I have sympathy with those on Arran, too. Indeed, I saw the MSP for Arran, Kenny Gibson, on the television vociferously calling for a rural fuel derogation.

The high cost has an impact on a whole raft of other budgets. Local councils are haemorrhaging cash because they can run their vehicles only by paying higher fuel costs—again, the money goes directly to the Treasury—as are our health boards, and our police, fire, coastguard and ambulance services. They are all having to deal with budgetary cuts every time they fill up their vehicles, because of the cost of fuel. Businesses are losing too, and less money is circulating locally. Indeed, so vexed was one constituent of mine—Erica MacDonald—that she started a petition a few months ago and came to the Treasury. She is now wondering whether the EU’s rural development policy—€96 billion over a number of years—can be used. I do not think that it can, but such is the level of research being done by individual voters in rural and island Scotland, who are looking for solutions and hoping that the Treasury will listen to some of them.

Talking of solutions, we certainly listened to the Labour party earlier. We heard a repetition of what I would call the Pontius Pilate approach. The Labour party seemingly has no view on a rural fuel derogation or a fuel duty stabiliser, and no other plans or suggestions. Indeed, if those on the Labour Front Bench have a concrete plan or suggestion, I would ask them to tell us what it is. We definitely heard no apology for the years we spent in this place listening to the previous Government’s excuses for doing absolutely nothing, leaving places such as the Outer Hebrides with shockingly high fuel costs.

[Stewart Hosie]

My hon. Friend talks about the dearth of opinion on the Labour Front Bench. Might that be a consequence of the Labour leader saying recently that Labour found it difficult to implement a fuel duty regulator when in power, when in fact Labour voted against every single attempt to introduce one?

[Mr MacNeil]

Absolutely. Labour was against a fuel duty regulator, a rural fuel derogation and anything else that would have helped people in the Hebrides.

[Mr Reid]

What the hon. Gentleman is saying about the previous Labour Government is perfectly correct, but does he not have it within himself to congratulate the coalition Government? He knows that, time after time, I, along with my hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) and other Liberal Democrats, put forward proposals in debates on Finance Bills for rural fuel derogations, and the Labour party rejected them. This Government are going to implement that. Will he not have the decency to recognise that and congratulate the Government?

[Mr MacNeil]

I certainly do have the decency to recognise that. I am very pleased that that announcement was made in the autumn. In fact, I think I text messaged the Chief Secretary to the Treasury to say how delighted I was. My only fear is that Liberal Members have lost the fierce urgency that they used to have in opposition, and are not really looking for a date on which we will see a rural fuel derogation. By Christmas we had heard that nothing formal had happened—that was one of the lines that came out. We want things to happen, and we genuinely need them to happen. The coalition agreement mentioned the rural fuel derogation. It did not mention the VAT rise, but hey, that was put in place quite quickly—by new year—yet we have not seen the rural fuel derogation.

The European Commission has been blamed, so I wrote to the Commission asking for the timetable, to see whether things are indeed being held back. However, the European Commission being the European Commission, it probably does not feel very accountable to democratically elected citizens in the member states of the EU. That is a matter for the European Commission. I hope that it is listening and will respond quickly, because we need action now. I need to know from the Government whether the formal stage has started. Just when will we see a rural fuel derogation? How long has it taken to get a rural fuel derogation in other countries? Those are the questions that I am being asked when I go back to the Hebrides, and I need answers from the Treasury now.

The rural fuel derogation is not at all like Christmas, because Christmas has come and gone, but where is the rural fuel derogation? I acknowledge that progress has been made, and I am pleased to see that. There are good intentions behind it, but thus far, it has been as effective only as the progress made by Labour. I hope that, in a year’s time, the situation will be very different. I hope that we will not have to debate the issue again in a year’s time, but I fear that we will. The Labour Government were famous for the ridiculous, obstinate answers that they gave us over the years—they were against giving any help at all to the islands—and my worry is that the Liberals have really lost the urgency of now. They should remember that there are elections in May, and that if there has been no action by then, the voting will hurt them.

18:40

[George Freeman (Mid Norfolk) (Con)]

I am grateful for this opportunity to speak in the debate, and I congratulate the hon. Member for Dundee East (Stewart Hosie) and his colleagues on raising this matter. I, for one, could listen to their wonderful brogue all afternoon.

[Stewart Hosie]

May I just say to the hon. Gentleman that I do not have a brogue or an accent? It is he who has the accent.

[George Freeman]

We can debate that another day.

The hon. Gentleman and his colleagues spoke eloquently about the needs of the rural economy, and I know that he will want to send his best wishes to one of the most exciting businesses in Norfolk, the English Whisky Co., which is doing great trade. As in so many debates, most of the suggestions that he and his colleagues made would lead to an increase in expenditure by the Exchequer, and, representing an English constituency, I find myself thinking, “English tax for Scottish voters.” His points on the rural economy were good ones, however, and I want to touch on the impact of fuel prices on that economy and offer some thoughts on how the Government might like to tackle the issue.

Fuel costs hit rural areas particularly hard, not only in Scotland but in England and Wales. In my constituency, where I am lucky enough to have four towns, 110 villages and a 130 mile boundary, the rurality is extreme. Fuel currently costs 130p a litre, which means that the average family are paying £70-odd to fill up their car. That is not a matter to be taken lightly. Families are hit particularly hard, especially those on low incomes who, it has been pointed out, tend to drive older, less efficient cars. Another group that is hit hard by high fuel costs is one by which the coalition has set so much store—namely, the people who are working hard to get out of welfare and into work. Small businesses are also affected, especially those in remote rural areas. They are crucial to the revitalisation of the rural economy.

The public sector is also affected by fuel costs. Many rural councils are hit very hard by their dependence on fuel, and this is another area in which rural councils in England have received particularly unfair treatment. Farmers are also hard hit, especially those growing commodity crops such as sugar beet and potatoes that require long-distance haulage. Hauliers are affected too, especially smaller, self-employed hauliers, who tell me that they are hit by the unfairness of the lack of a level playing field on which to compete with their European competitors.

[Rory Stewart (Penrith and The Border) (Con)]

May I make a plea to my hon. Friend to include a mention of dairy and livestock farmers, as they are also hit very hard by fuel prices in Cumbria?

[George Freeman]

My hon. Friend makes an excellent point.

On the wider economy, fuel inflation in rural areas not only affects rural communities but hinders our national economic growth. This goes to the heart of two of the coalition’s laudable objectives: the rebalancing of the economy and promotion of economic growth outside the City of London and our main metropolitan centres; and the attempts to help those sectors of the economy that do more than operate in the service, retail and housing industries—namely, the sectors that make things, transport things and sell things. Those sectors are hit particularly hard and we need to do all that we can to help them.

The reality that those on the Opposition Benches—particularly the Labour Benches—do not want to face is the fact that we have inherited a chronic legacy in our public finances that is costing £120 million a day in interest, which represents £20,000 of debt for every man, woman and child in the country. If we had not tackled the debt crisis, the interest payments would have been heading towards £70 billion a year. I repeat these figures because they need repeating to those on the Labour Benches. It ill behoves a serious party of government to come to the House, as those on the Labour Front Bench did today, and show no recognition of its part in causing this fiscal crisis. Labour Members have made no serious analysis of the rural economy and rural communities—[Interruption.] I wish that they would listen to what I am saying, rather than talking over it. They had no positive suggestions for how we might tackle the problem.

Fuel inflation risks strangling the economic recovery in our most marginal rural communities, but we cannot afford to do what we would like to do to address that. I therefore urge the Government, in accepting the constraints under which they are operating, to look carefully at the options.

[Claire Perry (Devizes) (Con)]

Does my hon. Friend agree that we need a sustainable solution, one that will work in bad times as well as good, rather than a knee-jerk reaction to what is clearly a problem for many rural constituencies, including my own?

[George Freeman]

My hon. Friend makes an excellent point. It is vital that we should not go for some short-term gimmick, and that we make a sustainable, serious commitment to helping rural communities and the rural economy.

My constituents and many in other rural constituencies have been encouraged by the Prime Minister’s continued espousal of the benefits of a fair fuel stabiliser. I defer to Ministers and experts in the Treasury on determining the right mechanism for that. We have a duty to make some gesture towards ameliorating this problem, and my plea to the Ministers and Treasury experts is that, whatever mechanism we go for, we focus on two groups in most urgent need: the rural small businesses on which we rely for economic growth and for the jobs in the rural economy on which we all ultimately depend; and the very lowest-paid employees who are struggling to get on and make something of their lives by earning a living. In my constituency, the average income is £17,500, and such people are hit hardest by this serious problem. I urge Ministers to do all that they can in the forthcoming Budget.

18:47

[Mr Mike Weir (Angus) (SNP)]

There has been a change since the general election. We spent the last Parliament trying to persuade the Labour Government to do something about this problem, and they steadfastly refused to do so. Now, we hear warm words from the new Government, but unfortunately we have yet to see any real action. That is the problem. Those on both Front Benches talked about the practicalities of this or that measure, and how they would have to look into them further, and I could hear the sound of things being thrown furiously at television screens up and down the country by people who are suffering now because of high fuel prices. It will be no good if it takes a year for any action to be taken, because, in that time, many of the businesses that are suffering now will no longer be in operation. That is important to the local economies of the areas concerned.

The Minister and others have talked about the need to pay down the deficit and to encourage growth. That is all true, but the growth in rural areas comes through small and medium-sized enterprises—the very businesses that are suffering most, as a result not only of fuel duty but of higher VAT and all the other factors affecting the economy. High fuel costs are strangling small businesses which have to transport goods into and out of their businesses by road, as there is no alternative. People have talked about transporting goods by rail, but in many areas such as my own, there is no realistic prospect of that happening. I have a rail line in my constituency; it goes up the whole of the east coast. Unfortunately, however, there are no freight depots on it. It is therefore impossible to use it for those purposes, and those businesses have to use the roads.

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

The hon. Gentleman is making a powerful case. Does he agree that those same areas are also being hard hit by the rise in domestic oil prices? Are they not facing a double whammy in that regard?

[Mr Weir]

Indeed; I will come to that point later if I have time.

It is not only the businesses but their employees and the other people who live in the rural areas who are suffering in many ways. My constituency comprises small towns and villages, and many people have to travel to get to work. They have to use their cars to do so.

[Guy Opperman]

rose—

[Jim McGovern]

rose—

[Mr Weir]

I will not give way at the moment.

Many of my constituents have to travel to work, and they have no alternative to their car. There are bus services, but if we look at how people work today—many work split shifts and might have one or two jobs to make ends meet—we see that it is very difficult for them to get to their workplaces by bus. This places a great deal of pressure on family budgets. If we are talking about creating work and getting people back into it, we must make it easier for people to travel.

[Jim McGovern]

Will the hon. Gentleman give way on that point?

[Mr Weir]

I want to finish the point; I will give way to the hon. Gentleman in a moment.

As I mentioned in an intervention, The Guardian this morning features an article saying that bus routes are about to be slashed, and I understand that the rural bus rebate given to local authorities is also going to go. All that will cut back even further people’s ability to get to work by bus. I will now give way to the hon. Member for Dundee West (Jim McGovern) before he jumps up again.

[Jim McGovern]

I thank the hon. Gentleman for giving way. I must say first that I was disappointed that the hon. Member for Banff and Buchan (Dr Whiteford) criticised me for repeating a point and for not having been here earlier. I did explain why I was not here, but my main point is for the hon. Member for Angus (Mr Weir). I am sure he is aware that Stagecoach, a company owned by Brian Souter and one of the biggest donors to the Scottish National party, has said that the fuel price increases will help its business.

[Mr Weir]

The hon. Gentleman is bringing irrelevancies into this; we are talking about the real problems that rural areas face, and I am sorry that he does not understand that.

There is another problem with cars. The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) made the point that many people in rural areas have old vehicles and cannot afford to buy new ones. That brings several problems. Those vehicles are not only less reliable, but use more petrol than modern vehicles do and cost more to maintain and more to run in road tax and other things. People are suffering seriously by having to travel to work by car.

The right hon. Member for Torfaen (Paul Murphy) talked about what the devolved Administrations could do. The devolved Scottish Administration have introduced a business bonus to help with the costs of running small businesses. The right hon. Gentleman mentioned the ending of the Severn bridge toll. There is a huge cost in fuel for transportation, which is really hitting small businesses.

The hon. Member for Argyll and Bute (Mr Reid) mentioned the green argument, and I would like to address some of the related issues. Strangely enough, I agreed with a lot of what he had to say—I shall surely not make a habit of it!—but it seems to me that there is nothing green about strangling local economies in rural areas. Some say that people can move on to drive electric cars. I would like to see an electric car that would take me around my Angus constituency, never mind Argyll or Caithness and Sutherland, but the range is simply not available.

[Jim McGovern]

Does the hon. Gentleman have time to give way again?

[Mr Weir]

No, I do not.

There are real problems with fuel prices and they are strangling business in rural areas. They are an attack not only on the business itself, but on the family budget.

The hon. Member for Alyn and Deeside (Mark Tami), who is no longer in his place, mentioned home fuel oil. I appreciate that it is taxed differently from petrol, so it is a different issue, but he is quite correct to say that throughout rural Scotland, the escalating price of home fuel oil—used in many hard-to-treat homes that are otherwise unable to get central heating or any heating at all—is a huge problem, which is also hitting many people. These costs are devastating the rural economy.

The right hon. Member for Torfaen also mentioned supermarkets giving discounts on petrol, but in some ways that is a somewhat insidious practice. The Minister talked about people going to petrol stations, but in many rural areas such stations have ceased to exist. One of the hidden costs of living in rural areas is that people often have to travel many miles to fill up their vehicles with petrol in the first place. Cars cannot be driven right until the orange light comes on; if they are, they are unlikely to get to a petrol station for a fill-up and will be stranded somewhere along the line. If supermarkets offer discounts, people travel long distances to get there to fill up their cars, which has a knock-on effect on business in rural areas.

The key point is that the fuel issue is at the centre of the rural economy. Unless we sort this problem out, there will be no rural economy. We will not see a recovery of businesses that are strangled by rising fuel prices. Businesses will not survive for much longer if the price continues to rise as it has recently.

I think it was the hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) who talked about the Barnett formula. Frankly, that is completely irrelevant to this argument. If we had a fuel duty stabiliser, it would apply throughout the country. [Interruption.] The hon. and learned Gentleman is thinking about the derogation, which is a completely different matter: we are talking about two different systems here.

We have pushed for a fuel duty stabiliser to give certainty about the price, to allow hauliers, for example, to be able to quote in advance for a contract and know what the fuel prices are going to be. This will also allow people to look at their family budgets and know what they have to spend to get to work on a weekly or monthly basis. We need to remember that our constituents are not getting pay rises—in some cases, they are getting pay cuts—so they cannot cope with these rising prices, which impact directly on family budgets. For all those reasons, we need action now. It is all very well to talk about the problem and to look at the practicalities, but if this drags on into next year, I am afraid that many businesses will fail to survive.

18:56

[John Thurso (Caithness, Sutherland and Easter Ross) (LD)]

There are two issues in the debate, which I would like to try to disaggregate. One is the high premium paid in rural areas and the specific circumstances that apply to it. The other is the general high cost of fuel in the country. Let me deal with the two separately.

Briefly, the derogation for rural areas exists because there is a premium to be paid in those areas. Many Members have provided the arguments, so I will not go over them all again. However, I would point out that it exists not simply because there is a premium. I have researched the issue over many years, so I can tell hon. Members that I have often found that a certain petrol station in Sloane avenue is in the top three or four for prices. That shows that it is not simply a matter of high prices; the problem is that there is high price, a premium and a lack of public transport, coupled with the other deprivation typically seen in the more remote rural areas. It is not high prices alone, but the combination of all those factors that counts.

Secondly, as a number of hon. Members mentioned, I wrote a paper on this subject and it dealt with all the elements that cause worry—imperfectly, I am sure, but the hon. Member for Wallasey (Ms Eagle), who was the Exchequer Secretary at the time, took it seriously and her officials looked at it, so it was reasonable enough. I would like to think that the imperfections contained in that scheme are currently being ironed out and that we will shortly know what the Government intend to put forward.

I want to deal more fully with the other question of the generally high price of fuel. I commend to anyone who has not yet had a chance to read it the note produced for this debate by the Library. Among other things, it contains some very interesting facts. For example, it points out that for a number of years, the cost of motoring has actually gone down in this country in real terms, whereas the cost of public transport has by comparison gone up. One of my successors as Liberal Democrat transport spokesman often used to point that out.

It is also interesting to look at the percentage of tax take. The total has varied from a high of about 89% at one point in the ’90s down to the high mid-50s and now back up to 63%. The tax take in real terms today is about equivalent to that of 1997-98. We need to get our facts right and look at the issue in perspective.

We need to take account of some of the external factors. They must include the fluctuation in the oil price, which has once more hit $100 a barrel. A number of economists believe that that is merely a resumption of the upward trend that existed before the recession. It is entirely possible that the price will rise further, in which event we shall have to deal with the consequences of a high fuel price for our economy.

I congratulate the Government on giving thought to the introduction of a fuel stabiliser, although I have some doubts about the practicalities. There is only one thing worse than a stabiliser that works, and that is a stabiliser that does not work, so if we are to have one, let us ensure that it works. However, we might consider how the Government could, as it were, be removed from the equation. There are a number of possibilities, and I should like my hon. Friend the Minister to investigate them.

The first possibility involves VAT. When the last Government reduced it to 15% they also increased duty by 2p, and that remained when VAT rose again. Thus a relationship was established between VAT and duty. I suggest that the reverse should apply: that VAT on fuel should be 5%, in line with VAT on heating fuel, and that the duty should be altered to an amount that the Government considered appropriate. That would remove the variability that comes from the market. It would not affect the Treasury, and it would not have some of the deficiencies of the stabiliser. It is an imperfect mechanism, but it would be of some small comfort to know that when the price at the pump rose, it would be largely a result of what the oil companies were doing rather than what the Government were doing.

[Albert Owen]

I agree with the principle of a stabiliser. However, the Government talk of having “inherited” the duty increase. In 1997, the Labour Government inherited a Conservative proposal to raise VAT on domestic fuel and then “disinherited” it. Is the hon. Gentleman suggesting, as I am, that the Conservatives should “disinherit” the duty increase? That would help people in his area and in mine.

[John Thurso]

I am, in fact, presenting the Minister with a novel suggestion which I hope he will consider in the Treasury, and which might benefit us all.

Let me make another point about the current regime. I happened to note that if the escalator were introduced, it would be based on the retail prices index. Perhaps the Minister would consider basing it on the consumer prices index, which would be in line with the rest of Government thinking.

Finally, let me express a view on an issue that I studied in some detail when I was my party’s transport spokesman. I believe that the whole way in which we tax fuel is wrong. In my opinion we should not tax it at all, but should adopt a proper method of variable road user charging. Through that mechanism, we could both raise the amount of money that we wish to raise and incorporate all the fairness that we seek. It would require those who are most able to find alternatives, and who use the most congested roads, to pay the most, while allowing those with the most need—most of whom live in the least congested areas—to pay the least, and it has been suggested by most academics in the field of transport.

I have a funny feeling, Madam Deputy Speaker, that when I first raised the issue of road user charging in a Westminster Hall debate in 2001, it was you who responded from the Dispatch Box. I hope that the Government will seriously consider introducing such a system, because it would enable us to escape from the groundhog day of the fuel duty debate which comes round at least once a year, and adopt a sensible method of charging for road use that would be both green and economically efficient.

19:04

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

Diolch, Madam Deputy Speaker. I am delighted to have the opportunity to close the debate on behalf of the Plaid Cymru and SNP group. Our combined parties have campaigned on this issue for a number of years, not least in tabling amendments to Finance Bills in 2005 and 2008. It is somewhat disappointing that, in our first Opposition day debate of the Session, we must once again highlight the need for Government intervention to stabilise fuel prices.

Fuel prices are driven by the global price of oil and by domestic taxation. In the case of global oil prices, the trajectory is likely to go in only one direction, as oil is a finite resource. It is already being traded at over $100 a barrel. As the world economy recovers, the price will rise further as a result of increasing demand, especially from the emerging countries and, in particular, China. Volatility will only be exacerbated as we reach peak oil. Oil prices will also inevitably increase as a result of the long-term deflationary policies of the United States Government. Oil is traded in dollars, and a weakening dollar pushes up oil prices as producer countries try to make up for the shortfall of a currency whose value lessens. I echo the call of the French President, Mr Sarkozy, for a long-term agreement between oil-producing and consumer countries to offer more stability on prices.

Fuel prices are obviously influenced by domestic taxation, and it is with that element that we are concerned today. Duty on fuel in the UK represents about 65% of the price of fuel at the pump, if my sums are correct. Clearly, the higher the price of wholesale oil, the higher the tax receipts raked in by the Treasury. As is shown by an excellent House of Commons Library research paper, petrol duty in the UK is the second highest in the European Union, and the duty on diesel is by far the highest. While most other countries impose different levels of duty on road petrol and diesel, the UK’s rates are exactly the same, which means that the UK’s diesel prices are far higher than those of our European partners.

There are three general reasons for the need for a mechanism to stabilise fuel prices via control of duty. First, the volatility of fuel prices has far-reaching social and economic consequences, and we therefore need a mechanism to dampen the peaks and troughs. Secondly—as we have heard in a number of notable speeches today—surges in prices have a disproportionate effect on some sectors of the economy, some sections of society, and some geographical parts of the state. Thirdly, green taxes must be linked to clear environmental criteria, because otherwise the public will believe they are just another cash cow and there will be a loss of support for environmental taxation. That would be a disaster, in view of the challenges that we face as a nation and, of course, throughout the world.

Let me stress that we are not arguing for the introduction of something new and untested. Many OECD countries have mechanisms to regulate the price of fuel. France has a fuel regulator, and Canada even has a regional fuel stabiliser. If we were to adopt a similar system in the United Kingdom, I should like to advance a special case for south-west Wales.

In adopting our policy following the Finance Act 2008, the Conservative party’s 2010 general election manifesto stated:

“We will consult on the introduction of a ‘Fair Fuel Stabiliser’. This would cut fuel duty when oil prices rise, and vice versa. It would ensure families and businesses and the whole British economy are less exposed to volatile oil markets, and that there is a more stable environment for low carbon investment.”

I could not agree more, and I look forward to the support of hon. Members who stood for election on the basis of that manifesto commitment when the House divides later this evening.

We have had a very interesting debate, featuring many positive and informative contributions. The hon. Member for Dundee East (Stewart Hosie), in his usual ultra-detailed opening remarks, made a comprehensive case for the need for a stabilising mechanism. I urge those who missed the beginning of the debate to read his speech, and I hope one day to be able to rival his knowledge of these matters. He made the specific point that rising fuel costs constituted a significant economic headwind. Given the recent deliberations about the Government’s lack of a growth strategy, I humbly suggest that that is one idea that they should fully embrace.

The Minister defended the Government’s position admirably by blaming the previous Administration, but while we welcomed her comments about the rural derogation pilot and look forward to further progress, her suggestion that the devolved Governments could intervene to reduce the burden on families was somewhat weak. Much as I should like the Welsh Parliament to have the taxation powers that would enable it to intervene, this is a matter for the United Kingdom Government. They need to take the necessary responsibility and introduce proposals of their own, rather than blaming the previous Administration and placing the onus on the devolved Governments without giving them any power. That seems to have developed into a growing theme in recent months.

The hon. Member for Bristol East (Kerry McCarthy) confirmed that the Labour party opposes any stabilising mechanism. I am sure that colleagues who will fight Welsh Assembly elections and Scottish parliamentary elections in a few months’ time will remind electors of Labour’s policy.

The hon. Member for Morecambe and Lunesdale (David Morris) noted the problems that small companies—notably the haulage industry—face in his constituency.

As usual, the right hon. Member for Torfaen (Paul Murphy) spoke with great authority. He concentrated on the importance of small and medium-sized enterprises to the Welsh economy. I echo his views and look forward to his support in the Lobby later.

The hon. Member for Argyll and Bute (Mr Reid) highlighted the specific problems faced by communities in the Scottish islands, and I thank him for his contribution.

My hon. Friend the Member for Banff and Buchan (Dr Whiteford) made a strong case for the food processing industry in her constituency. She discussed the added burden that that industry faces as a result of spikes in the price of oil.

The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) made a staunch defence of the Government’s position. We would welcome a derogation pilot in England, as he suggested, because if it worked in remote parts of England it would work in Wales and mainland Scotland, too.

[Albert Owen]

The hon. and learned Member for Sleaford and North Hykeham (Stephen Phillips) is not in his seat, but he said that only areas with devolved Administrations have been proposed for the pilot. The Isles of Scilly are, as we all know, in England. Wales has been left out, but surely the Isle of Anglesey would be the ideal place to experiment with such a derogation.

[Jonathan Edwards]

The hon. Gentleman makes a strong point. I am sure that the Assembly Member for his area, who is a member of my party, agrees with his comments.

My hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) discussed how fuel prices in his constituency have reached the £1.50 a litre mark. Having visited his beautiful constituency last week as a member of the Welsh Affairs Committee, I can inform my hon. Friend that his effort on that issue is appreciated.

The hon. Member for Mid Norfolk (George Freeman) highlighted how the rising fuel price hinders economic growth, especially outside south-east England and in those sectors of the economy that the UK Government are depending on, if they are serious about their stated aim of rebalancing the economy.

My hon. Friend the Member for Angus (Mr Weir) highlighted the huge problems caused to small businesses in his constituency. He pointed out the impact on disposable income for working families in his valid contribution.

The hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) made an informative speech. He made a powerful argument about changing the VAT rate for fuel, and I hope that Ministers will consider his ideas.

In their joint economic declaration last week, the devolved Administrations specifically called on the UK Government to take action to counteract rising fuel and transport costs. The Governments of Wales, Scotland and Northern Ireland all highlighted how rising fuel costs form a significant economic headwind that undermines efforts to rebuild after the recent downturn. The declaration called for the postponement of the proposed duty increase planned for April this year. I am sure that all the Celtic Governments support the need for a fuel duty stabiliser.

In closing, I want to refer to those bodies that have contacted us to support our motion. We have received overwhelming support from many diverse organisations, such as the Farmers Union of Wales, NFU Cymru, the Freight Transport Association, the Road Haulage Association, the Federation of Small Businesses and the Countryside Association. That diversity reflects our point that ordinary families, businesses and workers across the UK acutely feel the effects of volatile fuel prices, although rising fuel duty will inevitably hit rural communities hardest.

Gareth Vaughan, president of the FUW, has written to say how “grossly unfair” it is that we in the UK pay more than any other country for our fuel, because of the “extortionate level of tax” imposed by the UK Government. He added that

“bearing in mind that there is a difference of as much as five pence per litre between rural and city garages in Wales already, the added fuel duty coupled with rising oil prices will be devastating to rural communities all over the UK.”

Jack Semple, director of policy at the Road Haulage Association, has stated:

“The Road Haulage Association welcomes Plaid’s and the SNP’s support for a fuel duty stabiliser”

since

“the volatility of fuel prices is a major issue for hauliers and, increasingly, for their customers.”

John Walker, the FSB’s national chairman, has also endorsed our approach, reminding us that

“Every extra penny spent at the pumps is a penny not being spent elsewhere in the economy…Small businesses want to grow...and create employment but the cost of fuel puts the brakes on their ability to drive the recovery.”

Finally, the FTA has stated:

“Lives and livelihoods up and down the country are suffering in the face of unsustainable and crippling fuel costs. This cost is unsustainable and...as part of the Fair Fuel UK Campaign, the Freight Transport Association and the Road Haulage Association, along with backing from the RAC, are asking government principally to scrap the fuel duty rise planned in April and introduce a methodology for stabilising fuel prices.”

It is not only organisations and individuals outside this place who have backed our campaign. In introducing his plans for a fuel stabiliser in 2008, the then shadow Chancellor—the current Chancellor—described the stabiliser as

“a common sense plan to help families, bring stability to the public finances and help the environment by making the price of carbon less volatile”.

In the light of those comments, people across the UK will ask why his Government oppose our motion today.

19:15

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

This has been an interesting debate, and I thank all hon. Members who have contributed. Fuel prices are undoubtedly of significant concern to hon. Members and the wider population.

It is fair to say that the issue is not new. My hon. Friend the Member for Caithness, Sutherland and Easter Ross (John Thurso) has referred to this debate being like “Groundhog Day”. He is a long-standing participant in debates on this subject, and he is influential in setting out the arguments for a rural derogation, to which I shall turn later. He also set out further proposals that may influence this debate in the years to come.

At the moment, there is a particular concern about fuel prices. We have heard today from hon. Members from all parties and from all parts of the United Kingdom about the difficulties that their constituents face because of rising fuel prices. It appears to cost more every time that people fill up the car, and the public understandably want us to do something about that.

[Mr Binley]

I have a message for the Economic Secretary from hauliers in my constituency, such as Wrefords and Butts. They understand what the Government need to do to put the deficit right, but they urge him to do something that was in our manifesto, namely bring forward a stabiliser. They do not understand why we have not done it already.

[Mr Gauke]

I will turn to the stabiliser in a moment. My hon. Friend has touched on a point that my hon. Friend the Member for Morecambe and Lunesdale (David Morris) and my hon. and learned Friend the Member for Sleaford and North Hykeham (Stephen Phillips) also raised, which is the deficit that we face. It is only by coming up with a credible plan to balance the books that we have managed to create the confidence needed for a recovery. To get there, we have had to make some tough decisions, such as raising certain taxes, including VAT, and cutting public expenditure in the teeth of opposition from the Labour party to all our plans.

One of the few things that we inherited that would reduce the deficit were the previous Government’s plans to increase fuel duty. We heard quite a lot from the Opposition spokesperson, the hon. Member for Bristol East (Kerry McCarthy), about VAT. It is worth pointing out that the Labour Budgets of 2009 and 2010 involved the following increases in fuel duty: in September 2009, there was a 2p increase; in 2010, there was a 2.76p increase; and there are 1p increases in 2011, 2012, 2013 and 2014. In total, the increase is about 9p a litre. We cannot dismiss those increases without knowing how we can fund any shortfall.

As the Prime Minister said over the weekend, we

“would love to see tax reductions…but when you’re borrowing 11% of your GDP, it’s not possible.”

So although I sympathise with the points made by hon. Members from all parts of the House, our decisions on tax must be viewed in that context, where every penny we increase fuel duty by raises an additional £500 million and if we cut fuel duty, that money will have to come from somewhere else.

[Dr Whiteford]

I ask the Minister the question that I have asked repeatedly in this debate: why should people who live in rural areas pay a disproportionate share of fuel taxation?

[Mr Gauke]

The two particular areas we have debated today are the fuel stabiliser and the rural fuel duty rebate, which this House has debated on a number of occasions and is clearly of close interest to a number of hon. Members. The Government have made no secret of the fact that we are considering such a rebate. People in rural areas do face particular challenges on petrol and diesel, as fuel prices there tend to be more expensive because of relatively high transport costs—a number of hon. Members have made that point. A lack of alternatives means that people in rural communities have little or no choice but to use the car, which is why we have announced our intention to introduce a rural fuel duty pilot. It will deliver a duty discount of up to 5p a litre on all petrol and diesel which, as the Economic Secretary said at the start of today’s debate, would save some drivers in rural areas upwards of £500 a year.

[Mr MacNeil]

The hon. Gentleman knows that I really welcome the rural fuel derogation and hope it comes soon. Will he give us any idea of when that might be?

[Mr Gauke]

As the Economic Secretary stated, the Government are engaged in informal conversations with the European Commission and we hope to be able to bring together our representations in a formal submission to take this forward, but this matter is not as simple as the hon. Gentleman might like it to be. We are considering the exact scope of the scheme, although the inner and outer Hebrides, the Northern Isles and the Isles of Scilly will certainly be included. I say to him, and to other hon. Members such as my hon. and learned Friend the Member for Sleaford and North Hykeham and my hon. Friend the Member for South Derbyshire (Heather Wheeler), that we can go ahead only when we have got clearance from the European Union. It is important to set out proposals that will achieve that clearance and we can then obtain the unanimous support of the 27 EU member states, which is what we require. Productive discussions are ongoing and we will of course update the House whenever we have any further progress. I hope that we will be able to provide a further update at the time of the Budget. Hon. Members should note, as, to be fair, the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) did, that at least this Government are trying to make progress on this area. The hon. Member for Bristol East did not even make it clear today whether she supports our even trying to do something on this issue, and that is a remarkable position.

The fuel stabiliser proposal was raised by a number of hon. Members, and the hon. Member for Dundee East (Stewart Hosie), in particular, has taken a close interest in it for many years. There is an argument that higher oil prices will automatically lead to higher tax revenues. The Conservative manifesto said that the Office for Budget Responsibility would seek to review this policy to see what we could do in this area. We did ask the OBR to examine how the oil price affects our economy in order to determine how the Government could share the burden of high oil prices and see whether a fair fuel stabiliser could work in practice. The OBR’s assessment was that increases in tax revenue received from oil and gas production can be easily offset by things such as higher inflation, which would lead to higher benefit payments and a further drain on the Exchequer. The reality, as set out by the OBR, is that there is no sudden windfall for the Exchequer as a consequence of higher oil prices. None the less, we recognise the strains that this situation causes and we continue to examine a range of options, including the fair fuel stabiliser. It is right that we must ensure that whatever we do is not only fair, but affordable.

This Government understand the problems people are facing and are taking every action possible to help those most in need, but we also know that we have to act responsibly and ensure that we tackle the record national debt. The increases in fuel duty result from the previous Government’s proposals. Some people argue that we could abandon those proposals, but it is not clear whether that is the position of the Labour party. We need to strike a difficult balance, but our priorities are clear. We must get the economy back on its feet and we must have a private sector leading the recovery and creating new jobs. In contrast to our predecessors, we are seeking to address the genuine concerns that exist about rising fuel prices and we are determined to settle on a proposal that is fair, sustainable and fiscally responsible.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

19:26

Division 191

Ayes: 14

---

Labour: 6
Scottish National Party: 5
Plaid Cymru: 2
Alliance: 1

Noes: 303

---

Conservative: 251
Liberal Democrat: 51

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

19:40

Division 192

Ayes: 297

---

Conservative: 245
Liberal Democrat: 51

Noes: 135

---

Labour: 125
Scottish National Party: 5
Plaid Cymru: 2
Alliance: 1
Independent: 1

The Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).

Resolved,

That this House notes the dramatic increase in the world oil price to over $100 per barrel; further notes that there has been a significant impact on fuel prices in the UK as a result; recognises the impact this has on households and business; notes that the previous administration’s rises in fuel duty that have taken effect during the past year have further increased prices; further notes that the Government inherited the largest deficit in UK peacetime history, that the previous administration had no credible plan to deal with the deficit, that the Government has been clear that everyone will make a contribution to tackle the deficit but that the most vulnerable will be protected, and that the Government is considering a fair fuel stabiliser that could support motorists and businesses when oil prices are high; further notes that the Government in addition is taking forward swiftly its commitment at EU level to introduce a pilot scheme that would deliver a discount of up to 5 pence per litre in duty in remote rural areas such as the Inner and Outer Hebrides, the Northern Isles and the Isles of Scilly; and further notes that the Chancellor will update the House on all fiscal matters at the time of the Budget.

[The Secretary of State for Education (Michael Gove)]

On a point of order, Mr Speaker. I am grateful to you for your ruling earlier this afternoon that the phrase “rank hypocrisy” is unparliamentary language. I should therefore like to withdraw the phrase, which I used earlier today, and apologise to the right hon. Member for Leigh (Andy Burnham), who may have felt that it was directed at him. Under no circumstances would I wish to accuse him of any activity that was in any way covered by the use of unparliamentary language.

[Mr Speaker]

I am extremely grateful to the Secretary of State and thank him, on behalf of the House, for the apology he has given. As far as I am concerned, that is the end of the matter.

[Ms Angela Eagle (Wallasey) (Lab)]

On a point of order, Mr Speaker. Rumours are rife in the Press Gallery, and more widely, that the Government are planning to announce the result of their talks with the banks on bonuses and lending, otherwise known as Project Merlin, to TV stations and via a press release this evening. Do you agree with me that if the Government are doing private deals with the banks, they should have the courage to come to the House, that the House should be the first to hear about it and that announcing the outcome behind the backs of Members of this House would be totally unacceptable?

[Mr Speaker]

I am grateful to the hon. Lady for both her point of order and her advance notice of it. The Procedure Committee published its report on ministerial statements only last week, reaffirming the principle that important statements should be made first to this House. As a former Minister, and indeed an experienced parliamentarian, she will be aware of her options for taking up the matter. The Table Office will be open until the rising of the House, and it will not have escaped her notice that the Leader of the House is in his place and has heard what she has said.

Registration of Members’ Financial Interests

Monday 7th February 2011 Commons Chamber

19:53

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

I beg to move,

That—

(1) this House agrees with the recommendations in the Tenth Report of the Committee on Standards and Privileges, on Registration of income from employment (HC 749); and

(2) accordingly the resolution of the House of 30 April 2009 relating to the Registration of Members’ Financial Interests be amended, by leaving out paragraph (2) and inserting:—

“(2) That such a payment shall be registered

(a) where its value exceeds one tenth of 1 per cent. of the current

Parliamentary salary; or

(b) where the total value of payments from the same person, organisation or company in a calendar year exceeds 1 per cent. of the current Parliamentary salary.”

Hon. Members will recall that the Leader of the House is one of my predecessors as Chair of the Standards and Privileges Committee. I know that he will be as pleased as I am that time has been found to take forward two sets of proposals in which he played an important part in a former life, particularly as one of them was agreed in the 2008-09 Session.

The more recent of the two reports seeks to make a simple but welcome change to the rule requiring Members to register each payment they receive for work carried out outside the House. As we note in the report, it might not have been the intention of the House when it agreed the original resolution in April 2009 to require Members to register bottles of wine or bunches of flowers, but that has been the effect. The problem is that when a Member receives a bottle of wine, a bunch of flowers or maybe even a ballpoint pen as a thank you for giving a speech or hosting an event, it might be intended as a gift, but it has the characteristics of a payment. A gift is given in its own right, without the expectation of anything in return. Where something is given in return for a service rendered, however, it is a payment, and therein lies the difficulty. As we state in our report, the Committee considered whether it might be possible to draw a line between the circumstances in which the bottle of wine or bunch of flowers is clearly a gift, and those in which it is clearly a payment. We concluded that, wherever such a line is drawn, the distinction is unlikely to be sufficiently clear and so the risk that Members would unintentionally fall foul of the rule would remain.

The Committee therefore favours a threshold, but to preserve confidence in the register we propose that it should be set at quite a low level. The level we propose is 0.1% of a Member’s salary for individual payments, which is £66, and 1% of a Member’s salary for the cumulative total of payments from the same source in the same year, which is £660, which we think is proportionate. By linking it to Members’ pay, the House will ensure that we do not have to keep resetting it.

I want to emphasise that we do not take issue with the intention behind the resolution of April 2009, which was that the public should be able to know how much MPs are paid for other employment and who pays them. We simply want to make the rules more workable and to catch only the sorts of payments that are relevant to the central purpose of the register, which is to show whether a Member has received a material benefit that might reasonably be thought by others to influence his or her actions, speeches or votes.

There are, of course, other recommendations that we could have made, two of which are particularly worth mentioning. The first is the requirement to register the hours worked. I know that that requirement has not been universally popular in the House, but any proposal to amend it would require proper consideration. I will of course listen to any comments made in today’s debate and discuss them with my colleagues in the Committee. The second requirement, which is mentioned in the report, relates to the threshold that applies for gifts. The threshold is currently 1% of the salary, or £660, and was set in 2001. I think that the Committee needs to consider whether that remains the right level and I intend to invite it to do so later in the Session.

[Nicholas Soames (Mid Sussex) (Con)]

I should declare an interest, as I speak quite a lot for colleagues, although so far I have never been given anything—I am not sure what to make of that. The right hon. Gentleman is not only Chair of the Committee, but a long-standing member of it, so he has considerable experience of these matters. On a serious point, does he not agree that if we all lose sight of common sense when it comes to declaring interests, we really will run out of road. We really must return to some form of understanding that, although codification of these matters is now deemed necessary, because of events that we all deeply regret, it does nothing for the standards of this House or for what it might think of itself if we have to codify the value of a gift given to a Member who makes a speech on behalf of a colleague.

[Mr Barron]

I will not say whether I agree or disagree with the hon. Gentleman. I have said that I will bring all points made in the debate to the Committee’s attention, and we will decide on that basis whether to look into these matters.

[Mr Speaker]

Order. Just before the right hon. Gentleman continues, I note that he has referred to matters that are in motion 3. I make no complaint about that, but it leads me to think that, for the purposes of his speech, he is conflating the two separate motions. As I say, I make no complaint about that. No request was made that the motions be taken together, but if it is for the convenience of the House, the Chair is very happy that they be taken together. [Hon. Members: “Aye.”] I get the impression that that is the position. I am grateful. So we shall also consider the following:

That—

(1) this House agrees with the recommendations in the Eighth Report of the Committee on Standards and Privileges of Session 2008-09, on All-Party Groups (HC 920); and

(2) accordingly the resolution of the House of 17 December 1985, as amended on 10 March 1989 and 29 July 1998, be further amended by leaving out paragraph 3 and inserting:—

“3. Groups whose membership:

• is open to all Members of the House of Commons and House of Lords, and

• includes at least 20 Members (each of whom must be a Member of the House of Commons or House of Lords), comprising: at least 10 Members who are from the same political party as the Government, and at least 10 who are not from the Government’s party (of whom at least six must be from the main opposition party), and

• includes at least one officer who is a Member of the House of Commons be required to register the following information on the Register of All-Party Groups:

(a) The full title of the group. If persons other than Members of the Commons or Lords are allowed full membership (i.e. voting rights) the term ‘Associate Parliamentary Group’ must be included in the group’s title. If such persons are not allowed full membership the term ‘All-Party Parliamentary Group’ must be included instead. The rest of the group’s title should simply reflect the group’s subject so that the latter is obvious from its title alone.

(b) A brief summary of the group’s main purpose.

(c) The names of the group’s officers. At least one officer must be an MP; each of the other officers must be a Member of the House of Commons or House of Lords.

(d) The names of exactly 20 qualifying Members (each of whom must be a Member of the House of Commons or Lords), comprising: 10 Members who are from the same political party as the Government, and 10 who are not from the Government’s party (of which at least six must be from the main opposition party).

(e) The contact details of the group’s registered contact, who must be both an officer of the group and a Member of the House of Commons, and is the person ultimately responsible for the group’s compliance with the rules of the House.

(f) Any relevant gainful occupation of staff to the group who hold a parliamentary pass (relevant gainful occupation means any occupation that is advantaged by the privileged access afforded by the pass).

(g) The source and extent of any financial benefit (e.g. donations) and the source and nature of any non-financial material benefit (e.g. provision of goods or services) received by the group from a single source outside Parliament, if the value of the benefit equals or exceeds the financial threshold for registration (currently £1,500) in a calendar year. Once the group has made that initial registration, any further donation received from the same source in the same calendar year should be registered if its value exceeds £500.

(h) The website address of any organisation registered as the group’s secretariat.

(i) If a consultancy is registered as the group’s secretariat, the names and website of the consultancy plus the name of any client of theirs who is specifically paying the consultancy to act as the secretariat must also be registered. The consultancy must either publish on its website its full client list or agree to provide such a list on request, otherwise it is not allowed to act as the group’s secretariat.

(ii) If a charity or not-for-profit organisation is registered as the group’s secretariat, the former’s name and website must also be registered. The charity or not-for-profit organisation must agree to make available on request a list citing any commercial company which has donated either as a single sum or cumulatively more than £5,000 in the course of the 12 months prior to the month in which the request is made, otherwise it is not allowed to act as the group’s secretariat.

(i) The address of the group’s website, if it has its own website.

(j) The date of the group’s inaugural election of officers and of any Annual General Meeting held thereafter.

(k) Affiliation to the Inter-Parliamentary Union and Commonwealth Parliamentary Association, if the group is affiliated to either or both.”

I call Mr Kevin Barron, dealing with the two motions.

[Mr Barron]

I now turn to the report on all-party groups, published in July 2009. The proposals set out in the report are a package, most of them originally recommended by the previous Parliamentary Commissioner for Standards, Sir Philip Mawer, to whom I pay tribute. In summary, the proposed changes will require each group to register the website address of any organisation acting as its secretariat, where the secretarial assistance is more than £1,500 a year; in the case of a charity providing such support, require the charity to make available on request a list of commercial donors who have donated more than £5,000 to it in the previous 12 months; in the case of a consultancy providing such support, require the consultancy to publish on its website its full client list or provide such a list on request; require groups to register their website address; require groups to include on their website details of their sponsors and providers of secretarial services; and require each group to nominate an MP, who must also be an officer of the group, to act as the main point of contact for the group and also as the person who is ultimately responsible for ensuring its compliance with the rules.

In my view, those are sensible tidying-up changes that will increase public confidence in the Register of All-party Groups. The Committee’s report also proposes tightening the rules for the registration of all-party groups by aligning them with those for inclusion on the separate approved list maintained by the Commissioner’s office. This means that groups will no longer qualify for inclusion on the register unless they comply with the more extensive requirements of the approved list, such as the need to provide the names of 20 qualifying Members.

Taken as a whole, the changes should improve the scheme’s operations, providing clearer rules for those running the groups and those compiling the register, and greater transparency and ease of use for those who wish to consult the register.

[Mr Edward Leigh (Gainsborough) (Con)]

I am just interested in knowing the right hon. Gentleman’s general approach. Does he not realise that we had the least corrupt system of any Parliament, perhaps in the world? The more rules and regulations we bring in, the more the registry office will be snowed under. The absurd rule that it has to register every payment is, frankly, ridiculous; it cannot cope at present. The more rules we have, the more people will break them and the more corruption will be driven underground. We should have a general approach, because the public want to know broadly what we earn when that might affect our behaviour—in other words, a fairly large sum. That is where we should be—with as deregulatory an approach as possible.

[Mr Barron]

As I said earlier, I shall invite the Committee to look into those matters to see whether any changes ought to be made.

I just spoke about the Committee report of July 2009 on making all-party groups more transparent, so that we know exactly who runs those organisations and what moneys go into them. That seems to be an obvious thing for us to do. The report has been waiting for our attention since July 2009, and I hope that the House will commend both reports, so that they can go ahead and make us better at what we do. We might want to look at the issues that were raised in the two interventions, and if we do, we will ask the House and individual Members for their view. On that basis, I commend the reports to the House.

20:03

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

I congratulate the right hon. Member for Rother Valley (Mr Barron) on securing this debate about two modest but important improvements to the rules on the registration of Members’ financial interests and on the registration of all-party groups. I also congratulate my right hon. Friend the Leader of the House, as the new rules relating to all-party groups were produced under his chairmanship of the Standards and Privileges Committee back in July 2009.

The Committee’s proposal to reintroduce a sensible de minimis threshold for the registration of income from employment will remedy a problem that arose with the rule changes that the House agreed to on 30 April 2009. Under those new rules, Members are required to register every single payment they receive for remunerated employment of any kind, however small its value. The problem is that, for the House’s purposes, “remunerated employment” means any benefit of any kind which a Member might receive in exchange for providing a service.

The test is not whether there is a formal employment relationship in law, or whether there is some kind of contractual obligation on either side, but whether the Member would have received the benefit if he or she had not provided some kind of service. This includes any small gift to a Member who addresses a school assembly, opens a village fete or makes, as the hon. Member for Mid Sussex (Nicholas Soames) said, a speech at a constituency function. I am very sad to hear that he has never received any sort of thank you—not even a meal, from the sound of it. I find it extraordinary that he should go so unrewarded for his labours, but nevertheless any gift—

[The Vice-Chamberlain of Her Majesty's Household (Mr Mark Francois)]

A gift would be cheaper!

[Mr Heath]

The right hon. Gentleman says from a sedentary position that “a gift would be cheaper” than providing a meal. I cannot believe that in the case of the hon. Member for Mid Sussex.

Anyway, any small gift received under those circumstances must be registered, and that has led to a large number of registrations of things that most of us would regard as gifts—tokens of thanks for some small service. For example, my hon. Friend the Member for East Dunbartonshire (Jo Swinson) has been commendably thorough in her registrations, which include a Scottish Bible Society cloth bag worth £2.95, some branded pens and pencils from a local recycling company worth £5 and a Girlguiding centenary pencil to the value of 35p. No one will honestly feel that her judgment has been clouded by the generosity of those gifts, but nevertheless she has complied with the strict requirements that the House places on us all.

My examples would not be complete if I did not mention that my right hon. Friend the Leader of the House has registered a gift of a pair of hand-knitted, yellow socks, which I am very sad to see he is not wearing today. He was given them when he opened a wool shop in his constituency, and I understand that the owners even went to the trouble of contacting his office to establish his shoe size.

[Stephen Pound (Ealing North) (Lab)]

I am quite awed by the thoroughness of many right hon. and hon. Members, but will the hon. Gentleman help me? I do not drink wine—I tried it once and did not much care for it—but when I addressed The Spectator dinner just before Christmas the organisers sent me half a dozen bottles of wine. I have not the faintest idea how much they are worth, so how does one find the price if not of a Scottish Bible Society bio-recyclable-degradable bag, then of things like a bottle of wine? Can the hon. Gentleman give some advice or assistance to those of us who are innocents in the area?

[Mr Heath]

The rather straightforward and dull response to the hon. Gentleman is, consult the registrar if in doubt. The registrar has an omniscience that transcends any normal Member, in that they know the value of all things. They will I am sure be able to find out the value of that wine gift, which I suspect, being from The Spectator, is a rather fine half case of wine. I am sure he fully deserved to be paid in such kind.

[Nicholas Soames]

The hon. Gentleman is himself beginning to stray—I am sure without realising it—into an area where common sense has completely departed. Surely it is important that common sense is exercised in all such matters, but it is absolutely impossible to codify the situation without it looking completely ridiculous.

[Mr Heath]

It is because there is a danger of the situation looking completely ridiculous that the right hon. Member for Rother Valley and his Committee have come up with the proposed changes. There clearly is a gradation. If the hon. Member for Ealing North (Stephen Pound) were, in response to his speaking at an event for The Spectator, given several cases of Chateau d’quem, it might well be considered that that would have an effect on his judgment, whether he consumed them or not—but a half bottle of Newcastle Brown Ale might not be considered to have the same effect.

There is a need for common sense. That is precisely why the right hon. Gentleman has come forward with the proposal for a sensible de minimis requirement worth about the £65 mark. Most people can judge whether what they have received is likely to be in that region. Judging from my experience, I am very rarely given a token that comes to anything like that value. I think that if I were given something of more than that value, it would suggest that I was involved in paid employment of some kind—doing it for some remuneration—and that it should be declared. One must use a level of common sense.

I do not want this debate to become merely an insight into the life of a constituency MP. The purpose of the register is to provide information about any material benefit that a Member receives and which might reasonably be thought by others to influence his or her conduct in the House. The trivial nature of these registrations and the effort and expense involved in registering them does nothing, I would suggest, to contribute to the purpose of the register. I welcome the Committee’s proposal to introduce a sensible de minimis threshold of 0.1% of a Member’s salary, which currently works out at about £65. That is a sensible compromise between ensuring clarity and accountability while not over-encumbering the register with things that are frankly of little or no concern to any reasonable member of the public.

Turning to the rules on all-party groups, this motion implements recommendations made by the Committee in July 2009. I will not repeat the details of the rule changes, which the right hon. Member for Rother Valley has already outlined to the House. The Government welcome these proposed changes. The House will be aware of the valuable work that is done by all-party groups on a vast range of issues—for example, the armed forces, the BBC, beer and cider, clean water, underground space and shipbuilding. There can scarcely be a country in the world, nor—as the right hon. Member for Saffron Walden (Sir Alan Haselhurst) told a debate in Westminster Hall last week—a condition of the human body that is not covered by an all-party group. As the House will be aware, some groups are campaigning bodies, some are concerned with building relationships with other countries, and some are essentially social groups. The examples that I have here suggest that the parliamentary choir and the rugby club might fall into the latter group, although I have my doubts as to whether they do not also, to an extent, have a campaigning purpose.

I would not wish for one moment to frustrate the work of these groups or to place unnecessary obstacles in their way. However, it is important for the House to have robust registration requirements in place in order to protect its reputation, the reputations of hon. Members, and those of the groups themselves.

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

Although the recommendations are entirely worthy and should be supported, the one issue that remains—the right hon. Member for Rother Valley (Mr Barron) may be able to reflect on it when he winds up—is that groups often appear to be overlapping or duplicating, and we are always spawning more groups than we can manage properly to attend or service. Might it be possible, informally if not formally, for the registrar to ensure, when somebody seeks to register a group, that the activity is not already covered somewhere else, so that we do not end up duplicating activities?

[Mr Heath]

I am grateful to my right hon. Friend for that comment. He is absolutely right to say that there is a degree of overlap and proliferation among all-party groups. It would certainly be helpful if the registrar were able to give guidance on where there is any likely overlap. I would not be happy for the registrar to be in a position to veto the formation of a new all-party group that might have a different view or complexion as regards a particular matter, but knowing that somebody already deals with a specific subject might be helpful at an early stage in a group’s formation in order to prevent duplication.

[Mr Denis MacShane (Rotherham) (Lab)]

I declare an interest in that I am chairman of the all-party group on Georgia, having been asked to take it over from my good friend Bruce George, the former right hon. Member for Walsall. Apart from that, I am not really active in any of these groups. Several colleagues are, however, and they have to overlap; otherwise, the group dies because if it does not have its officers it ceases to exist. Yet they are pilloried in the press as junketeers and all the rest of it. Is there any mechanism that allows them to send a statement to these reptiles that in fact an all-party group for no-man’s land somewhere can be of importance—that these groups can help our ambassadors, chambers of commerce and investment? How do we push back this endless sneering that any involvement with any country outside Britain is something that no right hon. or hon. Member should take part in?

[Mr Heath]

I am grateful to the right hon. Gentleman for making that point. All-party groups that deal with overseas countries are often of huge value in increasing understanding and maintaining contacts with parliamentarians in those countries and, indeed, their civil societies. He mentioned that Members are often members of several different groups. That, to me, is not duplication. It is not an obstacle; it is simply showing a breadth of interest. My right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) was referring to the situation where more than one all-party group has an overlapping interest, which is not quite the same thing.

All-party groups, particularly some of the overseas groups, are of value. But—and there is a but—there is a need for transparency in the way that they operate and the degree to which they may or may not provide benefit to Members. First, many, but by no means all, groups provide a forum for commercial interests and campaign groups to lobby hon. Members. There is absolutely nothing wrong with that in a free society, and lobbying is one of the routes by which hon. Members can come to a better understanding of some of the policy issues that confront us in this House. However, the public rightly expect to know who is lobbying whom, and on whose behalf and with what outcome. That is the crucial aspect. That is why the Government are working towards increasing transparency and openness in the activity of lobbyists by introducing a statutory register. These proposals also contribute to that objective.

Secondly, as the right hon. Member for Rotherham (Mr MacShane) said, Members receive hospitality, including in some cases overseas travel, through some of the groups. Of course, Members are still under a duty to register any registrable interest personally, but there is a legitimate public interest in the publication of full details about the groups under whose auspices such benefits may be received.

Finally, although all-party groups are independent of the House, they carry something of its brand. They can use the word “parliamentary” in their titles, and they have access to the facilities of the House. I am sure that in the public mind, the distinction between an all-party group and a Committee of this House is unclear, at best. The House therefore has a legitimate interest in ensuring that the groups observe the highest standards of transparency.

I should like finally to touch on an issue of drafting. The motion refers to Members who are from the same political party as the Government and those who are not from the Government’s party—singular. I have been advised by the Clerks that this is already being interpreted in motions relating to all-party groups, as it is in other resolutions of the House, as meaning all those parties making up the Government in the situation of a coalition. This is the advice that has been given to Members since the start of the Parliament by those operating the system, and it is working without any problem to date. While it would have been possible to amend the motion so that it reflected more accurately the current position of the coalition Government, it would have put it at odds with other resolutions in use around the House. For that reason, the motion is not being amended and is being put to the House in a form consistent with other resolutions of the House.

On behalf of the Government, I thank the right hon. Member for Rother Valley and other members of the Standards and Privileges Committee for their work. I am pleased to support the motions and commend them to the House.

20:18

[Helen Jones (Warrington North) (Lab)]

I begin by thanking members of the Standards and Privileges Committee, both past and present, for the work they have done to bring these two motions before the House. We have heard from Members about the need for common sense in our procedures. The motions are an attempt to introduce some consistency and common sense into our registration procedures. It is very easy for the House to set out general principles, but it is often quite tricky to bring forward the motions that put those principles into practice. In this case, the Committee has done a good job, and I support the proposals.

One of the motions deals with the registration of all-party groups. I must declare an interest as the chair of the all-party group on stroke and as secretary of the parliamentary friends of CAFOD—the Catholic Fund for Overseas Development—group.

It is interesting to look back on how the Committee’s consideration of these matters arose. Originally, there was a report on lobbying and all-party groups by the Parliamentary Commissioner for Standards. The Committee rightly looked at his recommendations to work out how they could be put into practice and which it was most sensible to put into practice. Having looked back at the original suggestions, I am bound to say that some of them were unworkable.

The Committee has attempted to make the way in which assistance to groups is registered transparent and to prevent the register from increasing to such a volume that it is unusable or that it requires corrections every other day. Hence, it suggests that we stick to the current principle that benefits worth less than £1,500 in a calendar year are not registrable. The onus is put on consultancies that work with all-party groups to be transparent about their clients, either through a published list on their website or by making such a list available to people who ask for it. It also places requirements on charities.

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

Perhaps this is a question that I should have asked the Deputy Leader of the House. How does the hon. Lady envisage the £1,500 limit working for people who give pro bono advice to parliamentary groups? Will they have to compute a value for that advice, or will it be taken on face value that it is not charged and therefore is not declarable?

[Helen Jones]

The hon. Gentleman raises an interesting question. It is quite easy to put a value on secretarial support and staff time. Pro bono advice is a more difficult area, and I cannot give him an answer on that off the top of my head. He is right to raise it, and it needs to be discussed, perhaps by the Standards and Privileges Committee and the Registrar of Members’ Interests.

I am grateful to the Committee for considering how charities should operate in this regard, and for making it clear that it does not want to put an insupportable burden on charities that work with all-party parliamentary groups. The Committee does ask charities to make available lists of commercial companies that have donated more than £5,000. That is a sensible proposal.

As we have heard, there are proposals on making websites available. There are also recommendations to align the rules relating to the Register of All-party Groups with the rules relating to the approved list, so that only groups that meet the criteria for inclusion on the approved list should be permitted to register. The Opposition believe that those suggestions are sensible and proportionate. They meet the requirement of transparency, while not imposing unnecessary burdens, particularly on charities.

The House tried in 2009 to deal with the registration of income from employment, when it decided that all income from other employment should be registered, whether or not it exceeded 1% of the parliamentary salary in any year. The then Standards and Privileges Committee said that the rule would probably have to be reviewed in this Parliament. In particular, it suggested that there be consideration of a de minimis rule. Members who were in the House at the time will remember that there was a debate on whether, for instance, a bottle of wine given to someone after a speaking engagement would become registrable as remuneration for employment. The then Chair of the Committee thought that it would, and the Minister replying thought that it would be counted as a gift or hospitality and therefore would be subject to the de minimis rule for gifts. That difference was not over the intention of the rule, but about how it would be interpreted in practice.

It is clear that the advice given to Members has led to the registration of things such as pots of honey and bunches of flowers. I do not believe that such things would be regarded by any of our constituents as remuneration for employment. Frankly, if anyone is working for a pot of honey, I dread to think how many employment laws are being broken in the process. I will not even try to enumerate them, because it is so long since I practised law.

I also think that the registration of such things is perceived as an insult to those who gave them, who simply thought that they were making a generous gesture or rewarding hospitality; they did not in any sense think that they were rewarding a Member of Parliament. It has been common for my constituents to load me with flowers—I am sure that other hon. Members are given flowers wherever they go. My constituents do not believe that they are paying my wages in doing so. They believe that they are making a kind and thoughtful gesture. That is how it should be dealt with.

The Committee has recommended that registration should apply only to payments of more than 0.1% of the parliamentary salary and of more than 1% of the parliamentary salary for multiple payments from a single source. There are Members who think that the registration threshold is still too low. I suggest that we will have to consider that in the future. I understand why the Committee made this recommendation.

[Geoffrey Clifton-Brown]

I am grateful to the hon. Lady; she is being very generous in giving way, and I do not want to prolong this debate. I have a feeling that the threshold may be too low, particularly as parliamentary salaries are likely to be frozen or have very small increases in the coming years, whereas the inflation on gifts will be 4% or 5%. The fiscal drag of bringing registration into the system will become greater and greater. If we are not careful, it will lead to the situation that she described of the register becoming too full to be used.

[Helen Jones]

The hon. Gentleman makes a valid point.

I understand why the Committee made these recommendations: they are simple, easy to operate and do not need constant updating. I suggest that the House needs to let the rules bed in and then see how they are working. We have to get to a situation where what we register is what can reasonably be thought to influence hon. Members. I argue strongly that if anyone in this House can be influenced by the gift of a pencil, a pot of honey or a bag, they probably should not be here. I do not think that any of our constituents believes that we can be influenced by such things. We can look again at the operation of the rules over time, but for the moment, they are the sensible way forward. I thank the Committee for its work and I commend the motions to the House.

20:27

[Robert Halfon (Harlow) (Con)]

The report by the Standards and Privileges Committee on all-party parliamentary groups makes three reasonable suggestions that I support. First, a list of commercial companies that donate more than £5,000 to an APPG should be available on request. However, I see the case for a lower threshold—possibly £500—to ensure that APPGs are as transparent as possible. Secondly, a charity that supports an APPG should have its website listed on the Register of All-party Groups so that people can access relevant information. Thirdly, publications by APPGs should carry the names of their authors and the organisations that provide secretariat services to the group, plus the names of any relevant client or sponsor. Parliament should be transparent and I believe that these reforms will help us to move in that direction. However, I am concerned about which organisations can become an APPG’s secretariat and the parliamentary access that it affords.

Last week at business questions, I asked the Leader of the House for an urgent statement on iEngage, an extremist group that seeks to influence Government and discredit moderate Muslims. It has been appointed secretariat to the new APPG for Islamophobia. It defends mosques that host terrorist preachers, schools that teach anti-Semitism and homophobia, individuals such as Daud Abdullah who have pressed for terrorist attacks on the British Navy, and the invitation of hate preachers to Britain. When those revelations emerged, the elected chair of the APPG, my hon. Friend the Member for Keighley (Kris Hopkins), and the vice-chair Lord Janner, stood down in protest.

[Sir Peter Bottomley (Worthing West) (Con)]

I am sorry to trouble my hon. Friend, but perhaps I can give him notice that I will make a passing comment on that matter if you call me to speak later in the debate, Mr Deputy Speaker. There may be more than one side to this.

[Robert Halfon]

I look forward to it, and I had a feeling that that was the case from the e-mail that my hon. Friend sent me. Because he is counter-intuitive on so many issues, I urge him to be counter-intuitive on this one and not to go along with the tide of taking the soft way on Islamism.

I received a letter from the Serjeant at Arms today informing me that iEngage has not yet been issued with a parliamentary pass. I am grateful to her and her office for their prompt and professional response on the matter, but at the same time, there is still some confusion in the House records, as the register of APPGs on the parliamentary website on Friday 4 February, last week—I have it here—was still indicating that iEngage’s head of research, Shenaz Bunglawala, had been granted a Commons pass in her capacity as the secretariat to the all-party group on Islamophobia.

[Simon Hughes]

To follow up on what the hon. Member for Worthing West (Sir Peter Bottomley) said, I am sure that the hon. Member for Harlow (Robert Halfon) has done his research and understands that I remain an officer of that group. I will therefore seek to catch your eye, Mr Deputy Speaker, because it is important that the latter’s comments, which are his opinion, are not necessarily regarded as factually and objectively accurate. I am very happy to engage in the debate, but there are certainly at least two sides to the story, if not more.

[Robert Halfon]

My later remarks will show that I am not just giving an opinion, I am giving hard facts. I urge my right hon. Friend, who is a progressive individual, to look at the organisation in question properly and support progressive Islamic groups that do not hold the views that iEngage holds. We should judge organisations by the company they keep. Just as he would condemn somebody who spent their time supporting fascism, even if they did not commit fascist acts, he should not support Islamist groups that support extremism.

[Stephen Pound]

I am listening with great interest and, I have to say, with very little knowledge of the circumstances that the hon. Gentleman describes. The subject to which he is speaking seems so important that I ask him whether it would not be more appropriately addressed in a full and separate debate of the House rather than in the context of the motions before us.

[Robert Halfon]

I did ask my right hon. Friend the Leader of the House for a debate and a statement last week, and he suggested that I bring the matter up in this debate. As this matter is about the secretariat of an APPG, I think the current debate is the right forum for bringing it up.

The online records on the parliamentary website state that iEngage

“acts as the group’s secretariat”,

a role that involves taking minutes of its meetings and heavily influencing its reports and speaker programme. The Serjeant at Arms has clarified to me in absolute terms that no pass has been issued. In an e-mail to me a few hours ago, she stated:

“We have spoken to the ex-Chairman and ex-Deputy Chairman of the APPG. It was iENGAGE who claimed they had a Parliamentary pass, but there is no evidence whatsoever to support this claim. As I said before, no application has been made and no pass issued for anyone connected to iENGAGE.”

[Mr MacShane]

I think it is appropriate for this matter to be discussed in the debate, because it is a great worry to many people that an organisation with a very clear ideological purpose should be seeking to infiltrate the House of Commons and act as a secretariat. My Muslim constituents are worried about that. I do not know Mrs Bunglawala, but I have certainly heard Mr Bunglawala say at a meeting that he cannot condemn the lapidation—stoning to death—of women, because thus it is written in the Koran. He is entitled to that point of view, but I do not think it should be propagated. As the Prime Minister rightly says, and as I have been saying for some time, we have to keep ultra-Islamist ideologues out of our campuses and keep them from poisoning young minds. If there is even a hint of suspicion—and there is more than that—that it is now the secretariat of an all-party group, it is quite appropriate for the matter to be raised tonight.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I think that we are in danger of straying into security matters. I would like us to try to keep to the motion. I know that it is broad, but we are in danger of going down an avenue that could possibly lead to security matters about who is and who is not issued with a pass. I would therefore appreciate it if we stuck to the general motion.

[Robert Halfon]

I will do my best, Mr Deputy Speaker. I thank the right hon. Member for Rotherham (Mr MacShane) for his remarks. As he does so often on the issue that we are considering, he hits the nail on the head. The Prime Minister’s comments at the weekend fit very much with his line of thinking.

I oppose Islamophobia in all its forms as vehemently as I oppose anti-Semitism, chauvinism or any bigotry. I was recently on an all-party group delegation to northern Iraq in the predominantly Muslim state of Kurdistan, which is a beacon for the prosperity and security that can be achieved when Christians, Muslims and Jews live harmoniously together. I am an active member of the APPG on Kurdistan and secretary of the APPG on Azerbaijan because I want to support progressive Muslim nations.

However, the problem with iEngage and its aggressive approach is that the views that it publishes and defends and the well documented history of its officers and trustees undermine any attempt to tackle anti-Muslim bigotry. Indeed, iEngage supports precisely the sort of extremist groups that fuel prejudice and anti-Muslim hatred, and grossly misrepresent Islam.

Shortly after my request for an urgent statement on iEngage, I was attacked online in what appeared to be a co-ordinated effort. That included a verbal assault from Inayat Bunglawala, who until recently was iEngage’s head of policy and research.

[Mr Deputy Speaker]

Order. I understand that the hon. Gentleman wants to get things on the record, but we are dealing with a motion, and I think that we are straying away from the relevant points to which we should be sticking, and getting into issues about individual groups. The motion is about the future of all-party groups, and I am not sure where the connection is. I understand that the hon. Gentleman wants to make his points, but we are in danger of straying way off where we should be.

[Robert Halfon]

On a point of order, Mr Deputy Speaker. I had originally planned to make a point of order about the subject this afternoon, but the Speaker’s Office asked me whether I still wanted to do that, given that I would be raising the matter tonight, and I said no. The Speaker’s Office was therefore well aware that I intended to raise the issue, and because it is about an APPG and its secretariat, I feel that it is relevant to tonight’s debate.

[Mr Deputy Speaker]

Comments must relate to the motion. I understand the advice that has rightly been given, but speeches must relate to the motion.

[Sir Peter Bottomley]

Further to that point of order, Mr Deputy Speaker. For us to stick to the terms of the motion, passing references to individual matters may be fine, but if we are induced—rather than “provoked”—into going into such issues in detail, the debate will change its character and its usefulness. If the advice to my hon. Friend the Member for Harlow (Robert Halfon) was that he could mention the subject, that is fine, but to go on at great length will lead to the rest of us trying to do the same thing.

[Mr Deputy Speaker]

That is quite right. Hon. Members could start raising other issues, and I am therefore frightened that the debate will not be the one that we should hold, and that we will be drawn into other subjects. The hon. Gentleman has mentioned the issue that he needed to raise, but the debate must not stray from the motion.

[Robert Halfon]

I need to raise the issue because we are discussing APPGs under the motion.

[Mr Deputy Speaker]

Order. You may wish to raise the issue, but you cannot. We must stick to the motion. I am trying to be as helpful as I can, but we are being tested. Please, if you can relate the matter directly to the motion, do that, then we can continue, rather than drawing other Members into a subject that we should not be discussing tonight.

[Simon Hughes]

On a point of order, Mr Deputy Speaker. I remain an officer of the group, and there is an issue about who should comprise the secretariat. There will be a meeting for colleagues in both Houses to discuss the matter, which will be reviewed. I hope that that will be an appropriate forum for discussing the way in which the group will be looked after, and that we can take the subject away from the wider debate to an appropriate place for people who have an interest.

[Mr Deputy Speaker]

I welcome the point of clarification, which certainly clarifies matters to the House. I thank the right hon. Gentleman.

[Robert Halfon]

rose—

[John Mann (Bassetlaw) (Lab)]

Is not one of the key issues that the hon. Gentleman highlights the dilemma of whether a group of Members of Parliament, as an APPG, appoints a secretariat, and the danger that, in some instances, a secretariat—particularly a professional one—can essentially scout around for Members of Parliament to create the all-party group that the secretariat wishes to run? Should not Members of Parliament appoint a secretariat, not the other way around?

[Robert Halfon]

Yes. The hon. Gentleman is exactly right. There should be proper security procedures and vetting for organisations that become secretariats of all-party groups.

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) said that what I said was just my opinion. If I am not allowed to continue in that vein, I cannot answer his query and those of others on why I said what I have said. I need to give evidence to show why I am so worried that the proper procedures have not been adhered to in relation to secretariats of that particular group. I therefore hope you will allow me, Mr Deputy Speaker, to elaborate a little bit.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am not going to be tempted down that avenue. We have said that we have a debate before us, and I want to make sure that everybody is aware that we stick to it. The motions are about the new rules and the future of groups. We are talking about an issue that has happened, and I believe that that discussion ought to take place in another forum—the appropriate forum. The detail that we are getting down to is not for here, tonight. This debate is not about that.

[Mr MacShane]

On a point of order, Mr Deputy Speaker. The motion is widely drafted. It states:

“If a charity or not-for-profit organisation is registered as the group’s secretariat, the former’s name and website must also be registered.”

It also states that such an organisation must announce what it is and tell us about the details of its website. One cannot argue a general case without adducing evidence and examples, and the hon. Member for Harlow (Robert Halfon) is doing exactly that. There really is no point in debating these things—

[Mr Deputy Speaker]

Order. That is not a point of order. I have got to say that the debate must relate to the motion before us, but it is not at the moment. As much as advice might be given from right hon. and hon. Members, I am making the ruling. The debate must be related to the motion before us—that is the end of that. If the hon. Member for Harlow wishes to continue on the motion before us or to relate the two motions together, that is fine.

[Robert Halfon]

In conclusion, although I support all-party parliamentary groups, I call on members of the all-party group on Islamophobia to think seriously about their choice of secretariat and the message that that sends. I ask the Standards and Privileges Committee and the Serjeant at Arms to consider how the House might vet the secretariat of APPGs—perhaps by a special committee—before they are placed on the approved list, especially when there are security concerns.

20:39

[Chris Bryant (Rhondda) (Lab)]

I commend the hon. Member for Harlow (Robert Halfon) for bringing an important matter to the attention of the House. I am sure that many will want to pursue the issues that he raised in many different places, not least the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). I want to correct the hon. Gentleman on just one word that he used. He referred inadvertently to the all-party parliamentary group “for” Islamophobia, but I think it is the all-party group “on” Islamophobia. Sometimes even prepositions are important.

I confess that motion 2 is on the Order Paper perhaps because several right hon. and hon. Members think that I got the matter wrong when I was a Minister. I see the Leader of the House winking at me now, possibly because he agrees that I got it wrong. I commend my right hon. Friend the Member for Rother Valley (Mr Barron) for his stewardship of the Standards and Privileges Committee. The hon. Member for Worthing West (Sir Peter Bottomley) said earlier how important it is that my right hon. Friend is not only a long-standing Member of the House but a long-standing member of that Committee, and that that is an important element in his work. For that matter, he was also the Chair of another Select Committee.

The answer that we have come up with in the motion is, I believe, the wrong answer. I do not intend to press it to a Division, but I believe that we have the wrong answer, and I shall explain why. There is no great problem with the rules as they are currently drafted. The Leader of the House and the Deputy Leader of the House disagree with me, as they did when I was a Minister, but I believe that they have presented the nature of the problem wrongly.

The Deputy Leader of the House was absolutely right about the entry of the hon. Member for East Dunbartonshire (Jo Swinson). There was no need for her to record the receipt of Girlguiding centenary merchandise, flower festival flowers and all the rest of it. Nor was it necessary for the Leader of the House himself to record that he was presented with a bottle of 2008 Beaujolais Villages valued at approximately £10—incidentally, it can be bought in most places in Rhondda for about £6.50—after he spoke at Bishop Wordsworth’s Church of England grammar school for boys for 45 minutes. If that was honestly the advice that hon. Members were given by the registrar, I think it was inappropriate advice.

A distinction should be made to identify clearly those cases in which a reasonable person would think that somebody was being given remuneration for providing a service, and in none of those cases would it seem to a reasonable person that somebody was being remunerated. I would use this rule: if I had not been given that bottle of wine, pen or whatever, would I still have made the speech? Would I still have opened the Girlguiding centre or whatever? The honest truth is yes, I would. It would not have made the blindest difference to me. That is the rule that a reasonable person would follow. I know the registrar, I have always followed her advice and I respect her enormously, but she might have used a legalistic understanding of the rules that would not in all honesty be followed by any of our constituents.

Let us imagine for the moment that the registrar is right and that all those cases should have been registered. Has it done any great harm that they have been registered? I do not believe it has done any harm to anybody. There is a greater sense of transparency, and I do not think that that is a problem. However, let us say for argument’s sake that we should not make a distinction between gifts and remuneration. There is an argument for that. It could be argued that any gift we receive for doing something—after speaking at a meal, for example—whether to the value of £400, £500 or whatever should be considered in exactly the same way. However, that is not the proposition before us this evening. The proposition is that a gift should be registered if it has a value in excess of 1% of salary, and that remuneration should be registered if it has a value in excess of one tenth of 1%. [Interruption.] I think that the Chairman of the Standards and Privileges Committee is disagreeing with me. If he wants to intervene, I am happy to give way—but he does not. I can see an argument for not making a distinction at all and for having exactly the same level for gifts and remuneration. However, I cannot see an argument for introducing a new concept at £65.

[Simon Hughes]

The hon. Gentleman might have just answered my point. To people reading and listening, talking in money terms is as relevant as percentages and tenths of percentages. Out there, people just want to know how much money we are getting or what the monetary value is.

[Chris Bryant]

That is another good point. To be honest, I think it makes more sense to have a fixed amount. The old rule used to be £125 for registration. At the moment, the limit is zero, but if the motion is passed tonight, it will move to something in the region of £65 or £66. I would prefer the number to be fixed, so that it is perfectly intelligible to every member of the public.

We all use a layer of common sense. I am chair of the all-party group on Russia. As hon. Members might know, I have adopted a very hawkish attitude towards the Russian Federation. I believe that there are many abuses in Russia and, as chair of the all-party group, I have tried to advance that argument. Now, I must confess that I was given a bottle of vodka by the Russian embassy at Christmas. I did not believe it to be a remuneration for the questions I had asked or the tenor of the debate I had conducted in the House, so I did not even bother to ask the registrar whether I should have registered that bottle of vodka. I have always been a bit suspicious about some gifts so, as it happens, I have not even opened that bottle of vodka, which is still sitting precisely where I put it when it arrived. I suspect that I will probably not get any more bottles of vodka from the Russian embassy.

If one pursued the Deputy Leader of the House’s logic, one could argue that if a Member is invited to dinner by an embassy and, somehow or other, they speak at that dinner—whether or not they are actually the speaker at the dinner—that is remuneration. However, I just do not think that that meets the common-sense test. I honestly believe that the proposition before us this evening is the wrong proposition. I can see an argument for perfect equality between gifts and remuneration, but I cannot see the argument for what is before us this evening.

Finally, on all-party groups, I agree with the hon. Member for Harlow in that when I became the chair of the all-party group on Russia, a large number of people suddenly started ringing me offering to work in the secretariat. I am sure that some did so with perfectly good intentions; I am also sure that some did so with not-so-pure intentions, because they wanted to grind an axe in relation to Britain’s attitude towards Russia. The more that all-party groups can assert some genuine independence, the better. That is why the hon. Gentleman is absolutely right that it is important to look at the process for providing an all-party group with a secretariat.

20:51

[Mr Robert Syms (Poole) (Con)]

If an example were needed of why we need these rule changes, it is that we are having a short debate today in which a number of Members have already disagreed about what the existing rules actually are. A de minimis level is sensible, because it takes one beyond what is arguable. Members of Parliament do not want to go to bed at night wondering whether they should or should not have declared something, whether it be a box of chocolates or a pencil sharpener. The fact that the level is £65 makes things fairly clear. It also removes some of the burden placed on the registrar and her staff, who are put under quite a lot of pressure by this House because of the rules that have had to be applied. Indeed, if we are not careful, we will fill the Register of Members’ Financial Interests with a lot of extraneous rubbish and people will not be able to see the wood for the trees. De minimis levels are therefore sensible. I hope that what the right hon. Member for Rother Valley (Mr Barron) has brought to the House today will be the first of a number of such thoughts on a number of issues that we have to clear up, because we have gone from having too liberal a position to making a rod for our own backs and creating difficulties for the registrar. I welcome this resolution and commend the Standards and Privileges Committee for bringing it to the House.

The issue of all-party groups is one that ought to receive a lot more scrutiny. We all know of examples of all-party groups that are run by particular organisations. Sometimes public affairs companies are employed by charities or other organisations to run a group. I am a member of a number of all-party groups, including some that I do not think I have ever joined, but which claim me. I think that we are all in the same situation. Sometimes people say, “You haven’t been to the all-party group meeting,” and I wonder which one it is, when I joined it and how I can get out. It is a little bit like joining the mafia, Mr Deputy Speaker: once you give a half-hearted “Well, possibly” to somebody, you get put on a list and you are there for evermore. If I sat down and honestly listed all the all-party groups of which I think I am a member and all those of which I actually am a member, I am perfectly sure that they would be very different lists.

One thought for the Chairman of the Committee is this. Having to put in writing the fact that we were going to join an all-party group might be one way of testing the numbers joining such organisations. Realistically, we know that Members put friends, colleagues, neighbours or anybody they can find in a weak moment on to all-party groups, but the attendance for some of them is very poor. What the motion says about declarations is perfectly right. They should be transparent. We should see who is behind all-party groups and their grand titles, but if we are going to take them seriously, we should have some way of registering the real interest of Members of Parliament. If, God forbid, we made it mandatory to publish which members of an all-party group had attended its meetings, nobody would join them, because none of us has any time to go to any of them. Whenever I get the all-party “Whip” and I read about all the all-party groups, I think that anybody who was a member of even half of them would not have time to do anything else if they went to all the meetings. So there has been some inflation in that area. Certain organisations use the authority of an all-party group to produce campaigns. My hon. Friend the Member for Harlow (Robert Halfon) made a serious point, and I hope that the Chair of the Committee will take that back. Perhaps an Adjournment debate would be a legitimate forum in which colleagues could pursue that issue.

We know that all-party groups have grown rapidly, and that they now exist for all body parts and all parts of the globe, as the Deputy Leader of the House said. There ought to be a much stronger test for an all-party group. We ought to be able to see who its members are, and the resolution before the House will mean that any provision of secretarial support, finance or back-up—whether in the form of champagne receptions or anything else—should find its way into the register so that we know what is going on. I welcome what has happened, and I hope that this is the start of a process whereby we can get some common sense back into the rules.

20:55

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

I welcome this short debate, and I thank the right hon. Member for Rother Valley (Mr Barron) for his work and that of his Committee. I also thank the Leader of the House, who started the work on this subject earlier. I support both the motions. I made my first point during an intervention on the hon. Member for Rhondda (Chris Bryant). It was that, in due course, we might want to talk about payments in sums rather than percentages, for the sake of greater transparency. I am happy that we are starting where we are, however. The proposal will create a reasonable division between the more substantial gift and the single gift—the bottle of wine, the pair of socks—given as what the hon. Member for Warrington North (Helen Jones) described as a courteous thank you. I had visions of her making a kind of royal procession round Warrington with her arms full of flowers—all, I am sure, gratefully given and received. Also, we should not over-regulate. There is a balance to be struck, and we seem to be going in the right direction.

I want to make two further points, about all-party groups. The first follows the theme pursued by my hon. Friend the Member for Poole (Mr Syms). I, too, have always felt that there was a danger that these groups could proliferate. We can sign up 20 people relatively easily, but getting them to come to meetings is a wholly different ball game. Of course it is right that there should be an all-party group with an interest in Russia. It is a very important country for us to take an interest in, and elections are held to decide who the officers of that group will be. For example, I am a member of various all-party groups, and I have served as an officer in many of them. I am a member of the all-party parliamentary group on Ukraine, which is next to Russia. It is a very big, important country—the second largest European country—and we have a duty to take an interest in such a developing democracy. It is relevant not only to democratic issues but to energy issues and the like. There are all kinds of different all-party groups.

Secondly, on the subject raised by the hon. Memberfor Harlow (Robert Halfon), we have had an all-party group to deal with anti-Semitism for many years, and rightly so, because it is a plague and a scourge on our country. It is therefore unsurprising that there is now a newly formed group on Islamophobia. The hon. Member for Rhondda rightly pointed out that it is a group “on” Islamophobia, not a group “for” it. Islamophobia is also a scourge. The Prime Minister spoke about it only this weekend in his speech in Munich. Whatever we might think about the tenor and balance of that speech, this is a real issue in many of our constituencies. I see the shadow Leader of the House, the right hon. Member for Leeds Central (Hilary Benn), nodding. His city, as well as mine, has seen faith-based prejudices that are directed at other faiths, and there are other prejudices that we also need to counter.

All the proposals in the motion are reasonable.

“The contact details of the group’s registered contact”

should be made public, so that there can be an accountable person.

“Any relevant gainful occupation of staff to the group who hold a parliamentary pass”

should be publicised, so that if any pass holder is paid by someone else, we would know who they are.

“The source and extent of any financial benefit (e.g. donations) and the source and nature of any non-financial material benefit (e.g. provision of goods or services) received by the group from a single source outside Parliament”

above a certain amount will have to be publicised, so that people will know exactly where the servicing is funded from. That is absolutely right. The hon. Member for Rhondda made the perfectly good point that, because these groups have a certain status, and because they can use parliamentary logos such as the portcullis, there is an interest in being associated with them. The Chairman of the Committee also knows that very well.

Lastly, the website address should be publicised. The rules are much more explicit than in the past, so if a consultancy or a for-profit organisation is acting as the secretariat, we must know what the consultancy is and what it does—it must supply the information. Similarly, if it is a charity or a not-for-profit organisation, the rules are explicit that it

“must agree to make available on request a list citing any commercial company which has donated either as a single sum or cumulatively more than £5,000 in the course of the 12 months prior to the month in which the request is made”.

We will have a much better system: I do not think it will be perfect, but it will be much better.

Given your clear rulings earlier, Mr Deputy Speaker, I hope I have already made a helpful intervention to calm the House. A group has been set up—properly—on Islamophobia. In a meeting at which I was not present, a secretariat was appointed. I had agreed to be elected as an officer; other officers have now resigned. The secretariat has been a controversial issue and there are campaigns on both sides of the argument. My office has been in touch with that of my hon. Friend the Member for Harlow to ask for information to back up what he is saying, although I have not yet received it. I will be happy to receive it. There will be a meeting for all colleagues who wish to come. I have no prejudice in favour or against a particular organisation being the secretariat, and I now regard it as my duty to try to proceed carefully and with consensus, but I am not going to allow myself to be bullied into having or not having a particular organisation because it might have some views that are difficult for others to accept.

All parties are debating how to manage organisations that deal in these difficult areas of faith-based issues, which apply in your constituency, Mr Deputy Speaker, as in mine. Some people think we should go to meetings or events with people whose views we may disagree with or who might have more extreme views than we would normally tolerate. I have been to some such events. I attended a Global Peace and Unity event last year in order to speak on behalf of my party, and a Minister attended to speak on behalf of the Government. The co-chairman of the Conservative party was asked not to go, because it was not thought that a Conservative representative would be appropriate. These sort of debates will carry on.

We have to take advice and to act in the best interests of Parliament and the wider community. All I hope I can do is to assure those who take an interest in our proceedings that agreement to tonight’s motions will lead to better procedures. All-party groups will not lack controversy, just as our debates on the Floor of the House do not lack it. It is right that there is a place for controversial issues to be discussed, but I hope that they will be discussed on the basis of facts and an understanding of the severity of some of the issues dealt with by all-party groups. I hope that this debate has pointed people in the right direction. I hope that the last group I mentioned will know where it will go next—legitimately, properly and appropriately. More generally, I hope that people will understand that we have processes for these issues and that the processes are good ones.

Finally, my understanding, like that of many colleagues who have been involved with these matters, is that all pass holders are security checked for this House. Whatever their status, all staff and anybody who comes in must be checked, and not just by the House authorities, as the matter is then referred outside. That provides the protection. I assume that any colleague who has any worries about any pass holder in any organisation will follow the appropriate procedures, which are well known to Members. The inquiries must be made. Passes have been removed if people have held them inappropriately; and people have been prevented from being here if it is inappropriate for them to work here. We have to assume that the authorities continue to do a good job. We have not had problems regularly in the past. I trust the authorities to be vigilant; that is what we pay them to do. I think they serve us well in doing that.

21:03

[Sir Peter Bottomley (Worthing West) (Con)]

It is a pleasure to follow my hon. Friend the Member for Harlow (Robert Halfon), the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) and others. I am not certain that security vetting solves all problems. The number of people who have been assassinated by their own bodyguards suggests that there might be a weakness in that.

[Chris Bryant]

It is worth bearing it in mind that the person working as the secretary for the all-party parliamentary group on Russia, prior to my becoming the chairman, is supposedly being thrown out of the country by the Government, yet managed to get a security pass here.

[Sir Peter Bottomley]

I recall that about 25 years ago, the London representative of the Palestine Liberation Organisation was assassinated for being too moderate. Many people who take part in public affairs are at risk, which is one of the risks that an open society faces in peacetime just as it does at times of war.

Let me say to the right hon. Member for Rother Valley (Mr Barron) that, although I do not intend to try to divide the House on the first motion, I think it would be better to specify 0.2% or 0.3% of the parliamentary salary. A long time ago, when I was a Minister, I visited a country in south-east Asia and was presented with a tin bowl. I saw the same bowl in a shop priced at the equivalent of £130 in local currency, so I gave it to my private secretary. At the airport on my way home, I saw it again priced at £65, so I asked for it back. [Laughter.]

There will be boundary problems of that kind whatever limit is set, but my general view is that a limit of £130 or £180 would be better, and that it would be even better to make the limit the same as that applying to gifts presented to Ministers. As for the question of Members’ including on their websites gifts whose value was below the minimum, the registrar could advise us if we tried to include details that were not required according to the interpretation of the rules.

In view of your ruling, Mr Deputy Speaker, I shall not add to what has already been said about the motion on all-party groups. If it is possible for me to attend the meeting of the all-party group that has been mentioned, I will happily do so.

Let me, in passing, pay tribute to some people in my constituency. When I was involved with students from the Three Faiths Forum, I was delighted that the senior Jewish woman in my constituency was willing to meet us, as were representatives of the local Islamic society and mosque, the Salvation Army and the Worthing Churches Homeless Projects. It was immensely valuable that people were able to share that experience, and learn along with members of other faiths and people with different views. I also pay tribute to members of my local mosque, who have been pleased to attend the holocaust memorial event in Worthing. I hope that its organisers will at some stage focus on the massacre at Srebrenica. It should be borne in mind that the most recent modern massacre in Europe was a massacre of Muslims, both secular and otherwise, by people claiming membership of other religions.

I have no strong views on the issue of all-party groups, but there seems to have been a bit of “creep”. Paragraph 13(b) on page 5 of the “All-Party Groups” report by the Committee on Standards and Privileges, the eighth report of Session 2008-09, HC 920, states that in future such groups should have to

“register any commercial company with a direct interest in the work of the APG which contributes materially (say more than £5,000 or 5%, whichever is the lower) to meeting the central costs of the charity.”

According to the motion,

“The charity or not-for-profit organisation must agree to make available on request a list citing any commercial company which has donated either as a single sum or cumulatively more than £5,000”.

Perhaps the Minister who replies to the debate will tell us whether the movement from the requirement for a “direct interest” to no qualification was deliberate, and, if it was not, whether it could be considered when the resolutions are before the House.

Let us suppose that, for instance, the Army Benevolent Fund were to provide the secretariat for an issue-based all-party group. I am not saying that it should do so. Given that it has raised millions of pounds for our armed forces, I think that it would be going too far to have to list every commercial company that has given it money for that purpose, whether by gift aid or otherwise. At one stage I was chairman of the Church of England children’s society. A fair amount of money was donated to us by commercial companies for events and other purposes. I think that we might be putting a burden on some charities and not-for-profit causes if the resolution followed the motion—which will obviously be accepted—rather than the committee’s report.

Let me return briefly to the issue of earnings as opposed to gifts. For a number of years I have tried to avoid having any outside earnings. I failed in the current year, because I wrote an obituary for a friend and, rather to my surprise, received a cheque from the newspaper that kindly published it. I have given the money away, but it clearly constituted earnings, and I think that I am obliged to declare it. I believe that the sum was £300. A long time ago, between 1979 and 1984, I was personnel director of a fairly major commodities trading company. I should have been very prepared to declare the salary that I received for that.

On another occasion, I was an adviser to the International Fund for Animal Welfare. I gave it advice that it did not take and did not want, but its founder asked whether I would do more work for it, which I did, although it did not take any notice of what I said. That relationship came to an end in time.

What is clearly employment or something done for the purposes of an organisation for which one is paid should be declared, and what one is doing outside ought to be. However, I have a warning. Let us suppose that Peter Thurnham, who was a colleague at one stage in this House and who bought two machine tools when he was unemployed and set up an engineering business, entered the House of Commons when the business was on its feet. How would he calculate the time that he was putting into the business? That seems to be a very difficult thing to do. When James Callaghan was a farmer after being Prime Minister, how much time did he put into it? When Michael Foot was writing his biography of the founder of the health service, how much time did he put into it? If I, for example, had to put in the number of hours that I spent on the obituary, I would have to guess. It is obvious that we have to be prepared to put down rough and ready figures, which will not be easy.

The key point is to back a system where people will feel embarrassed if they know that they are doing something wrong, rather than having an enormous box-ticking exercise. I hope that when we ask the Committee on Standards and Privileges to review the matter and it conducts a consultation, more people will agree that 0.1% is too low and could be at least doubled or trebled without disadvantage to the House or to the interests of the public.

21:11

[Mr Kevin Barron]

The vast majority of hon. Members who have spoken agree that these motions should go through tonight and that we should alter the arrangements.

The hon. Member for Worthing West (Sir Peter Bottomley) raised the issue of the limit of 0.1% of a Member’s salary. We have tried to find a seer in public life to tell us what the approximate worth of a gift should be. Some local authorities have a level as low as £25, and some have no levels at all. It seems to us that £66—some people interpret the figure as £65—is about right. We will reconsider the matter, if we feel that it is not working in future.

On all-party groups, it would clearly be a matter for the House to consider the provision, if it is a burden on some all-party groups. The aim is to find out who is behind the secretariats of all-party groups and not necessarily their motivations, which is a point that has been raised tonight. We need the situation to be transparent if a commercial organisation is effectively funding all-party groups. I am not saying that that would necessarily be wrong—I am not sure whether the House would say that that is necessarily wrong—but it is right that we know exactly who the secretariat are and how they operate.

The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) discussed duplication and overlap. I once considered setting up an all-party group on all-party groups to see how many members we could get to join. I chair all-party groups, which are an effective aid to legislation. This House should practise a wider democracy, and people with knowledge about individual issues come and talk to us on a regular basis—there is nothing wrong with that in my view. However, the situation needs to be transparent, so it is clear what has motivated them to do that and what is motivating us to make arguments on the Floor of the House.

The hon. Member for The Cotswolds (Geoffrey Clifton-Brown) raised the issue of pro bono advice to an all-party group rather than secretarial support. As my hon. Friend the Member for Warrington North (Helen Jones) said from the Front Bench, we need to consider that matter, but it should not take us away from making improvements tonight.

My hon. Friend the Member for Rhondda (Chris Bryant) said that any reasonable person knows the difference between a gift and remuneration, but, as Members of Parliament, we do not always deal with reasonable people. I have had 27 years in this place and on the odd occasion I have dealt with people who are not reasonable. [Interruption.] I was talking not only about people outside here, but some in here too. The Committee has said:

“A Member who chooses to treat as a gift the bottle of wine he or she receives after making a speech exposes him- or herself to an allegation that he or she has failed to register a payment received for a service provided.”

That is the reality of the situation. It might be that people have seen someone receive a bouquet of flowers, a declaration has not been made and nobody has made a complaint, but an unreasonable person might think that that is open to investigation and might write in, and that would start an investigation. We are trying to stop that happening and that is what we are going to do.

[Sir Peter Bottomley]

I am aware that I slightly bounced the right hon. Gentleman with my question about paragraph 13(b). If he is not able to say tonight whether the reference to

“a direct interest in the work of the APG”

was taken out deliberately, could he ask someone to let me know whether it was deliberate or whether it was just one of those things?

[Mr Barron]

I will make sure that the hon. Gentleman gets that information.

The Committee also said:

“The trivial nature of some of these payments and the disproportionate effort involved in recording and then registering them has called into question the utility of the rule. The February 2010 edition of the Register contained over 100 more pages than the June 2008 edition.”

The figures were 264 pages as opposed to 157. If what we have heard is correct, it is clear that the many hon. Members who have not registered bouquets of flowers, pots of honey and so on could eventually find that they are outwith the register. Given those circumstances, we need to address this area.

[Chris Bryant]

The main change was that previously we had to register remuneration in our capacity as a Member of Parliament and we did not have to register things all the way down. We have introduced much greater transparency, which has meant that we now know about earnings of hon. Members that have nothing to do with their membership of the House.

[Mr Barron]

I accept that, although I believe that my hon. Friend said that he saw no real difference between gifts and remuneration. It seems to me that if I make a speech to a company and am given a £500 gift, it is more likely that that is remuneration, it is declarable and should be declared in the Register of Members’ Financial Interests. As I said in my opening speech, this is a grey area and we are trying to make things as clear as we can. Both these motions will help the House and I hope that the House will support them.

Question put and agreed to.

Resolved,

That—

(1) this House agrees with the recommendations in the Tenth Report of the Committee on Standards and Privileges, on Registration of income from employment (HC 749);

and

(2) accordingly the resolution of the House of 30 April 2009 relating to the Registration of Members’ Financial Interests be amended, by leaving out paragraph (2) and inserting:—

“(2) That such a payment shall be registered

(a) where its value exceeds one tenth of 1 per cent. of the current Parliamentary salary; or

(b) where the total value of payments from the same person, organisation or company in a calendar year exceeds 1 per cent. of the current Parliamentary salary.”

All-party groups

Resolved,

That—

(1) this House agrees with the recommendations in the Eighth Report of the Committee on Standards and Privileges of Session 2008-09, on All-Party Groups (HC 920); and

(2) accordingly the resolution of the House of 17 December 1985, as amended on 10 March 1989 and 29 July 1998, be further amended by leaving out paragraph 3 and inserting:—

“3. Groups whose membership:

• is open to all Members of the House of Commons and House of Lords, and

• includes at least 20 Members (each of whom must be a Member of the House of Commons or House of Lords), comprising: at least 10 Members who are from the same political party as the Government, and at least 10 who are not from the Government’s party (of whom at least six must be from the main opposition party), and

• includes at least one officer who is a Member of the House of Commons be required to register the following information on the Register of All-Party Groups:

(a) The full title of the group. If persons other than Members of the Commons or Lords are allowed full membership (i.e. voting rights) the term ‘Associate Parliamentary Group’ must be included in the group’s title. If such persons are not allowed full membership the term ‘All-Party Parliamentary Group’ must be included instead. The rest of the group’s title should simply reflect the group’s subject so that the latter is obvious from its title alone.

(b) A brief summary of the group’s main purpose.

(c) The names of the group’s officers. At least one officer must be an MP; each of the other officers must be a Member of the House of Commons or House of Lords.

(d) The names of exactly 20 qualifying Members (each of whom must be a Member of the House of Commons or Lords), comprising: 10 Members who are from the same political party as the Government, and 10 who are not from the Government’s party (of which at least six must be from the main opposition party).

(e) The contact details of the group’s registered contact, who must be both an officer of the group and a Member of the House of Commons, and is the person ultimately responsible for the group’s compliance with the rules of the House.

(f) Any relevant gainful occupation of staff to the group who hold a parliamentary pass (relevant gainful occupation means any occupation that is advantaged by the privileged access afforded by the pass).

(g) The source and extent of any financial benefit (e.g. donations) and the source and nature of any non-financial material benefit (e.g. provision of goods or services) received by the group from a single source outside Parliament, if the value of the benefit equals or exceeds the financial threshold for registration (currently £1,500) in a calendar year. Once the group has made that initial registration, any further donation received from the same source in the same calendar year should be registered if its value exceeds £500.

(h) The website address of any organisation registered as the group’s secretariat.

(i) If a consultancy is registered as the group’s secretariat, the names and website of the consultancy plus the name of any client of theirs who is specifically paying the consultancy to act as the secretariat must also be registered. The consultancy must either publish on its website its full client list or agree to provide such a list on request, otherwise it is not allowed to act as the group’s secretariat.

(ii) If a charity or not-for-profit organisation is registered as the group’s secretariat, the former’s name and website must also be registered. The charity or not-for-profit organisation must agree to make available on request a list citing any commercial company which has donated either as a single sum or cumulatively more than £5,000 in the course of the 12 months prior to the month in which the request is made, otherwise it is not allowed to act as the group’s secretariat.

(i) The address of the group’s website, if it has its own website.

(j) The date of the group’s inaugural election of officers and of any Annual General Meeting held thereafter.

(k) Affiliation to the Inter-Parliamentary Union and Commonwealth Parliamentary Association, if the group is affiliated to either or both.”—(Mr Barron.)

Business without debate

Monday 7th February 2011 Commons Chamber

COMMUNITIES AND LOCAL GOVERNMENT

Ordered,

That Clive Efford be discharged from the Communities and Local Government Committee and Steve Rotheram be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Supermarket Acquisitions (Tyne and Wear)

Monday 7th February 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Angela Watkinson.)

21:18

[Mr David Anderson (Blaydon) (Lab)]

The title of this debate says that it is about supermarkets, but it is really about people. It is about the town of Birtley, where I live, which is in the south-east of my constituency. The town has a long history of being resilient and has dealt with hard knocks. Its situation is post-industrial, like many other towns in northern England, and it has gone through tough times with the loss of its brickworks and the running down of its chemical factory, and it is also a former coal mining area and there was a lot of engineering in the town. Birtley has kept strong and has developed. The town has a lot of high-tech engineering; a big car sales place; three separate bodies selling caravans and motor homes; an aluminium processing factory; and a cable factory. The key to the town is the shopping area, which is on what was the old great north road—the old A1.

That shopping area has developed over many years since there was a huge Co-operative store there. After that store ceased operating long ago, its role was taken over by two supermarkets—a medium-sized one and a smaller one—the ownership of which changed over the years. Until two years ago, the medium-sized one was operated by Somerfield and the smaller one was operated by a company called Netto, which has a number of supermarkets across the north of England and has about 1% of the supermarket share in this country. Between them they helped to support a huge array of small retail businesses—one-man, two-man and three-man businesses such as hairdressers, greengrocers, butchers, bakers, newsagents, pharmacies, opticians, a shop selling cards and pictures, a post office, a number of banks, a launderette, a huge array of fast-food outlets, coffee shops, travel agents, estate agents, florists, a pet shop, a carpet store, a general dealer and public houses. If I have missed any of the businesses there, I apologise to the good people of Birtley. The key point is that all those operations were quite small and that what really drew people to Birtley was the supermarkets, particularly the one run by Somerfield.

Two years ago, we got the news that Somerfield was going to be taken over by Co-op and we thought that that was good news, but then we heard, sadly, that our store was not going to be taken over by Co-op. In these situations, the Office of Fair Trading usually has a role to play in ensuring that a huge takeover by a big group does not allow the creation of a monopoly. The Somerfield store in Birtley was not identified by the OFT as being one that Co-op had to get rid of. However, Co-op did have to get rid of 25 stores and it decided, in its wisdom, to divest itself of 38 stores. I found this hard to believe, but it put them up for sale as a package, telling potential buyers that they must buy all 38 or none.

When we in Birtley heard that Morrisons was buying the 38 stores, we were quite pleased because it has a good reputation in the north-east as a successful operator with good-quality stores that have a lot of fresh food and a good deal of business. So we thought it would be really good for the area—until 27 April, two years ago, when Morrisons took over. On that same day, it announced that the Birtley store was not going to open and the staff in the store were moved to other stores in the Morrisons network. It did that because—I found this hard to grasp—it had bought the store as part of the package of 38 without actually seeing it. However, it had run the store 20 years previously. Further down the line, I met the manager who made the final decision and he told me that he had been the manager of that same store 20 years before and that hardly any money had been spent on its infrastructure, so it was little wonder that it needed major refurbishment.

The people of Birtley went from being very happy that a good-quality supermarket was coming in, which could only be good for the town centre, to the current situation in which that building has stood empty for two years, deteriorating and sticking out like a sore thumb on the middle of our main street. The really sad part of what has happened is the impact on local businesses. Many people have had to stop doing all their shopping in Birtley because the town cannot support that kind of shopping any more. People used to go to Somerfield for 70-80% of what they wanted and then use the hairdressers, post office and other stores. Everybody was making a living then, but Somerfield’s closure had a negative impact on the town. Many businesses closed, many people moved out of town, and those who stayed have been hit hard. Netto upped its game. I give credit to the people working there—they have done really well in filling the gap, but the Netto offer is not what Somerfield was or what, sadly, Morrisons could have been.

About 12 months ago we had some good news. Asda, which is one of the biggest stores in the country, was going to buy the Netto chain. We thought that was tremendous because, even though we still had the Somerfield store standing empty, we believed that Asda could come into Birtley, give us a real lift and recreate some of the business that had gone when Somerfield went. That would lift the town up again, business would come back, and more people would come and shop in Birtley. We saw Asda as a premier league team. I mean no disrespect to Netto, but if Netto was a football team, it certainly would not be in the premier league, despite the great work that it has done.

We found out late last month that the Office of Fair Trading, in its wisdom, had decided yet again that Asda would not be allowed to take over the number of stores that it wanted to take over, in the same way as the OFT had decided previously that the Co-op would not be allowed to do that. The issue for me, and the reason that I am holding the debate tonight, is that that decision was made public on 29 September last year. It was announced in an internal press release, which was only brought to my notice through the local council some three weeks ago.

There are many people who could have been informed. I will discuss with the Minister later how we can improve this so that people learn from the mistakes that were made. We have a very positive community partnership in Birtley, which is run by some great people, such as Dean and Jean Cox and Peter Cowie. We have committed local councillors and an enormous number of businesses looking every day at what is going to happen in the town. We have a strong economic development team in Gateshead council, who have worked night and day to try to make sure that Birtley can survive and improve. The team did tremendous work with Morrisons to try to improve the offer on a site that had not yet been developed. The chief executives of the council had a hands-on approach to what was going on in Birtley.

I would have been massively interested if, four months ago, I had been made aware of what was going on. If any of the people who have collared me in the past three weeks had known about that four months ago, they would have come and said to me, “David, what’s happening?” and none more so than my wife. She shops in Birtley all the time. She does not drive so she has to get a bus 3 miles to another town, then come back and wait for the groceries to be delivered. That is not an effective way of doing business. People like her need shops on the doorstep that work for the community.

As I said, we got a copy of the press release last week and contacted the OFT. I have read the press release and the information that has been sent since. It seems to me that the OFT runs a system based on those in the know telling other people in the know about the business that they know. They decide on closures by projecting the cost of a box of cornflakes in two shops a few miles apart. If a store 2 miles away is going to sell 1,000 boxes of cornflakes a week at 10p less than the store where we live, the nearer one will have to close.

The OFT and the businesses concerned fail to connect the dots between the real life of people on the ground, who are directly affected by such decisions—older people, people without transport, people who are less able to travel, those with disabilities, those who like the security of their own place. I have a good old friend who was severely affected when the supermarket that she went to every day of her life was, in effect, taken away. She became seriously unwell and disoriented by what was going on. She was not eating properly and went through some real problems, which thankfully have now been resolved.

When I found out about the OFT decision, around 28 January, my office made contact with the OFT, which sent me a number of documents about the process. I shall refer to them now and try to speak a little more slowly, for the sake of Hansard. In a letter dated 20 January, Timothy Geer, who was the officer in charge at the OFT, wrote:

“In September 2010 the Office for Fair Trading (OFT) announced that it was minded to refer the acquisition by ASDA stores Limited… to the Competition Commission… unless Asda gave suitable undertakings to address our competition concerns. While the OFT concluded that the acquisition would not give rise to competition concerns at a national level, we were concerned that competition could be substantially reduced in around one in four of the local areas where there are overlapping stores.”

To me, that means that the OFT realised back in September that there was a problem, not at a national level, but in certain areas. It should have flagged up that situation so that it could be addressed.

The OFT’s letter goes on to explain the methodology used to reach that decision. I will read the paragraph about what it did before deciding whether to go ahead with the transfer:

“The local areas in which the OFT found cause for concern were identified following the application of two tests. First, we applied a fascia counting test. If the merger reduced the number of relevant supermarket operators (by fascia) to three or fewer in the local area, the area moved to the next stage of testing. This next stage comprised Asda hiring a professional market research firm to undertake consumer surveys at the relevant Netto and Asda stores in order to gauge how close local rivalry was between them.”

I have spoken with many people at the Netto store in Birtley and no one, not the manager or the staff, are aware of any survey being done at that store, which is what the OFT’s letter mentions. It continues:

“The OFT then coupled this information with profit margin data and used an analytical method called the ‘illustrative price rise’ to identify those areas in which a realistic prospect of a substantial lessening of competition arose. More information on these methods can be found in Annexe A of our report.”

I read Annexe A, and I only wish that our good colleague Sir Patrick Cormack, the former Member for South Staffordshire, were here today, because he would have a wonderful time with the paragraphs that I am going to read out. The OFT has what it calls a stage 1 filter for deciding whether the process should go ahead. Paragraph A.4 of annexe A states:

“To identify overlaps, the filter used a ‘maximum reach’ isochrone”—

I do not have a dictionary to find out what an isochrone is, but perhaps the Minister knows.

“The ‘maximum reach’ isochrones, centred on the Netto stores, were based on that used in CGL/Somerfield ”.

Therefore, in the process that happened two years earlier in Birtley, the OFT had used the same process, so again I make the point that it ought to have been aware of the impact on us. The annexe states that those isochrones

“offered a conservative approach to capturing overlaps between the parties (and bearing in mind the asymmetric constraints imposed of each other by the merger parties)… A local area was deemed to be unlikely to present competition concerns if at least three other (non-merging) fascia were present in the primary isochrone. What is more, an asymmetric constraints approach was adopted.”

I hope that the Minister is keeping up with this. Paragraph A.9 states:

“In addition to the primary isochrone filtering (centred on the Netto stores), the stage one filtering exercise also replicated the primary isochrone filtering but re-centred on census output areas where Asda measured whether 10 per cent or more of the local population would see a reduction in fascias as a result of the proposed merger. Census output areas allow for the stage 1 analysis to be carried out at as fine a level of detail as practicable.”

I think that that is a pretty fine example I have given. I could go on, but I will not, because there is just more and more gobbledegook.

As I read that, I was reminded of another thing related to Birtley. One of the things the town takes great pride in is being a centre for English folk music. There is a folk club in the town that was pulled together back in the late ’50s and early ’60s by a man called Jack Elliot, and anyone who knows anything about English folk music will have heard of the Elliots of Birtley. That tradition continues today, personified by his daughter, Doreen Henderson, who every Wednesday night in the Birtley Catholic club still hosts the folk club, where everyone is welcome. You would be more than welcome, Mr Speaker—I know that you can do a song or two—and the Minister would be welcome too. One of the people who came through that same culture was a gentleman called Alex Glasgow, who sang a song in the 1970s called “Standing at the Door”. These are the words that came to my mind when I read those paragraphs that I have just related: “Nowadays we have a craze, to follow clever Keynesian ways, while computers measure economic growth, we’ve got experts running round, writing theories on the pound, caring little whether we can buy a loaf.” That says it all: people at a high level are discussing issues about computer modelling and facts and figures without any real cognisance of what is happening on the ground. That would be bad enough if we had not been hit two years ago with something that really tore the heart out of our town, and we are determined not to let that be repeated over the next few months.

The OFT made a decision last September, but it should have been much more up-front and proactive with people on the ground. We believe that the conclusion was flawed, because the relationship between the ASDA store, which would have been in Birtley, and the one that the OFT compared it with, which is about 3 miles away in Washington, bears no resemblance to fact. The one in Washington is a huge superstore; the one in Birtley would have been very small—effectively like a Tesco Extra, which Members might be aware of.

The OFT has not given any consideration to the viability of Birtley as a community, particularly given the underlying problems of Morrisons’ decision two years ago not to acquire and open a store on the Somerfield site. The procedure that was supposed to protect the public and consumer interest has done exactly the opposite.

I have a number of requests that I hope the Minister can respond to positively. I know that there might be limits to what he is allowed to do with the OFT, but will he, if at all possible, ask it to review the decision and go and do a real survey on the ground? I am more than happy to make myself available, and I am sure that local people, business people, the community partnership, the council leadership, the office of the council and local councillors will be there to help the OFT see the error of its ways, but it is massively important to confirm that, whatever happens, that store on the Netto site will remain open. Perhaps it will not do so under ASDA or Netto ownership, but if the store is allowed to close, it will really put those other businesses, which are struggling now, in real jeopardy.

Going forward, can I suggest that the Minister sits down with his colleagues in the OFT and asks them to re-evaluate how they do their work? This is a real-life situation where, if there had been a dialogue, we might have come to a different conclusion. If nothing else, they should have spoken to people much earlier, because, if we had not been made aware of the consultation in time, we would not have been able to respond to it. The consultation closed on 2 February; we did not find out about the decision until around about 18 or 19 January. If we had been able to get involved earlier, we might have had a different situation, and many people, who had many sleepless nights, might have been much more reassured.

I am particularly proud to have this debate this week, because a year ago this week a very close friend of mine, Ian Caddy, was given the MBE by the Queen. Ian was the man who drove the community partnership in Birtley, and on 12 February last year I was proud to be with him at Buckingham palace, when he was awarded that medal. He walked up to Her Majesty and stood there, ramrod straight like the serviceman he was, and she gave him that medal. He actually invited her to Birtley to see the community partnership; we did not invite her to the folk club, but she is more than welcome as well.

I say this, because three weeks later Ian Caddy died of cancer. He knew he was dying, and he was there that day not as Ian Caddy MBE, but as Ian Caddy the people’s representative at the court of Queen Elizabeth. In his memory, I hope we can resolve the matter tonight and help the people of Birtley to get on with their lives.

21:39

[The Minister of State, Department for Business, Innovation and Skills (Mr Mark Prisk)]

Let me begin by congratulating the hon. Member for Blaydon (Mr Anderson) on securing the debate. I am replying on behalf of the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), who sadly is unable to attend.

The hon. Gentleman rightly set out his concerns about the way in which competition policy set at a national level can have a genuine impact on local high streets and their communities. His concerns and those of his constituents have been heightened by the fact that not just one store but two are involved in this problem. Birtley had already lost its local Somerfield store, which closed back in the spring of 2009 following, as he said, the acquisition by Morrisons. I gather that recently there have been more positive discussions about that site, and I will turn to that in a moment. Nevertheless, I entirely understand that local people and local small businesses will have felt that their town is suffering. He described that very well and put across his constituents’ concerns accurately and vigorously.

Open competition is good for the economy and for consumers. At the same time, however, arms of government, at whatever level, have a responsibility to take careful note of the effects of their policies, and how they consult, on local communities. It is not just a question of a simple national identity. The hon. Gentleman accurately parodied some of the nonsense that occurs in some official documents, which does not relate to most people’s real-world existence. I certainly understand that the loss of a local supermarket greatly affects a local town and community. Clearly, it will mean that that community attracts fewer customers, and that is bad for the small shops and for the other traders. It can also be a problem, as the hon. Gentleman accurately described, for older people who do not have their own form of transport. For them it means that they have to travel further just to get the basics, and the costs rise on each occasion.

To establish the facts in this instance, my officials have been in direct contact with the Office of Fair Trading. The OFT’s role is to examine and adjudicate on mergers to ensure that they do not substantially reduce competition, which would harm the ability of consumers to shop around. That is an important role. It, together with the Competition Commission, which investigates mergers that have prompted concern, is of course fully independent. I should emphasise that Ministers can play no role in this whatsoever and have no powers to make any decision where a live case is in hand. That is probably right, because otherwise there is a danger that decisions will not be based on the evidence or will not necessarily be perceived as being free from political interference.

On this particular case, Asda announced in 2010 that it had struck a deal to acquire 194 Netto stores in this country. The OFT then acted on its legal duty to investigate the proposed merger. In September 2010, as the hon. Gentleman pointed out, the OFT announced its findings—that in 47 areas, Netto was the main competition to Asda and that in those areas consumers’ interests would be harmed by the proposed merger. As a result of that, the OFT has a legal duty to refer the merger to the Competition Commission for a full six-month investigation unless a solution can be found. But in this case, Asda has offered to sell the Netto stores in those 47 areas, including the one in Birtley. It is true that Asda does not need to have found a buyer before the OFT will accept that undertaking, but—this is in direct answer to one of the points that the hon. Gentleman raised—it is legally obliged to keep the Netto store open until a purchaser is found. Any purchaser must also convince the OFT that it will operate a grocery retail shop capable of mounting local competition, and Asda must ensure that it makes real efforts to ensure that workers will keep their jobs afterwards. Those matters relate to the substance of the issue with regard to the OFT and Asda. I hope that that provides the hon. Gentleman and his constituents with some reassurance.

The hon. Gentleman rightly went on to question how the consultation process really worked. The OFT has advised me that it did indeed commission a research company to survey about 12,000 Asda and Netto shoppers throughout the UK, and it tells me that that included Birtley. However, the House will have noted, you will have noted, Mr Speaker, and I have noted that that is not the experience of the hon. Gentleman. I trust that the OFT will have noted that that is his view. When we get into some of the complex language and processes that often deter people from being able to get involved in these surveys, it is important that officials, at whatever level, understand the need to check not only that they have followed due process but that they have thought carefully about whether what they are doing has been explained carefully to the people they are affecting. I trust that that will be made clear to the officials involved.

[Mr Anderson]

I was in no way having a go at the OFT, but this matter is of serious importance in Birtley. People in Birtley may well have been surveyed, but what information were they given when that happened? Things would have been different had they been told that the store might not reopen. That is the key issue. That is why I said that perhaps we could discuss whether there is a different way of doing things that is in everybody’s interests.

[Mr Prisk]

Absolutely; that leads to the point that I was about to come to. I understand that the OFT is now talking to the hon. Gentleman, which is good. However, he is right to say that we should always be prepared to listen and learn on these issues. That is why I am pleased to tell him and the House that the Government are preparing to look carefully and consult broadly and thoroughly to improve the efficiency of the regime and the robustness of the decision making. I hope that the hon. Gentleman will ensure that his views are known, and I am sure that he will. This instance is a good one, from which all of us can listen and learn.

I will briefly record Morrisons’ acquisition of 38 stores from the Co-operative Group in 2009, which included Somerfield stores such as the one in Birtley. Based on the representations I have received from Morrisons, I understand that the company took ownership of the site in April 2009. As the hon. Gentleman pointed out, it undertook a review after the purchase of the store’s commercial potential. Three months later, Morrisons concluded that the store was not viable as a Morrisons-branded outlet. Instead, it decided to seek a purchaser or tenant for the store, and it was marketed for sale or to let in July 2009.

In August 2010, with the property still on the market, Morrisons reached an agreement with Gateshead council to market the store jointly with the council’s land to the rear of the site as a combined development opportunity. In October 2010, the joint site was advertised in the press. I believe that it is still being marketed, either for sale or to let. Encouragingly, I understand that that has recently led to a number of offers, including from other food retailers. Morrisons and Gateshead council are now considering the feasibility of those bids. The company has reasserted its commitment to work not only with the council, but with the hon. Gentleman to find a viable solution. I hope that that progresses well and that it will be felt that the town centre has a more positive future than has been the case over the past 18 months.

We all recognise that there have to be strong rules over free and fair competition. That is the role of the OFT and the Competition Commission. However, as this debate has shown, central Government agencies must have clear regard to the impact that that policy has on local high streets and local people. The hon. Gentleman has rightly raised the concerns of his constituents about the effect on Birtley. I restate that Asda is legally obliged to keep the Netto store open until a buyer is found, and that purchaser must convince the OFT that it will operate a grocery outlet capable of competing with neighbouring stores. Although I appreciate that the situation is far from perfect, I hope that those two statements from the OFT will give some comfort to the hon. Gentleman and his constituents, whom he has so ably represented this evening.

Question put and agreed to.

21:48

House adjourned.