House of Commons

Wednesday 16th March 2011 Commons Chamber

Wednesday 16 March 2011

The House met at half-past Eleven o’clock

Prayers

Wednesday 16th March 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 16th March 2011 Commons Chamber

The Secretary of State was asked—

[Stuart Andrew (Pudsey) (Con)]

1. What recent discussions she has had with (a) ministerial colleagues and (b) the Welsh Assembly Government on big society initiatives in Wales.

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

My right hon. Friend the Secretary of State for Wales and I have discussed a wide range of issues concerning the big society in relation to Wales with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Ruislip, Northwood and Pinner (Mr Hurd), who has responsibility for civil society, and Carl Sargeant, the Minister for Social Justice and Local Government in the Welsh Assembly Government.

[Stuart Andrew]

I am grateful to the Minister for that reply. Will he comment on the important role that local authorities in Wales can play in encouraging the big society?

[Mr Jones]

Local authorities can do much to help roll out the big society. Smart and intelligent councils are already doing so by recognising that big society initiatives can complement services that they provide and vice versa. I recently visited Pembrokeshire, where many good neighbour schemes have been set up to provide help and support for individuals who would otherwise be isolated. Pembrokeshire county council has appointed a scheme co-ordinator who offers advice to groups that want to establish such schemes.

[Albert Owen (Ynys Môn) (Lab)]

On Saturday, I saw the big society in all its glory in Anglesey with the opening of the scouts and guides hall. That project brought together the public and private sectors and volunteers, but public funding was key. Will the Minister ensure that funding is given to the Welsh Assembly so that such schemes can carry on? Next Tuesday, he will be able to see the big society in all its glory on Anglesey day here in the House of Commons.

[Mr Jones]

As I said, I have held discussions with Carl Sargeant, who is the Minister responsible for such matters in the Welsh Assembly Government. We are taking that work forward. I am sure that the hon. Gentleman will be pleased to hear that the big society bank will be available for the whole of the United Kingdom. There is no reason why Welsh groups should not apply to it for funding.

[Jonathan Evans (Cardiff North) (Con)]

My hon. Friend will be aware that many people in Wales want to take advantage of the opportunities that the Government are offering, but that they may need mentoring. Will he appoint somebody in his Department, perhaps by seconding a civil servant, to assist people who have ideas to take forward the big society?

[Mr Jones]

All ideas are gratefully received. The Government will ensure that there is a network of big society facilitators throughout the country. As many as 5,000 will be appointed in due course.

[Hywel Williams (Arfon) (PC)]

The WCVA has reported that half the 750 charities in Wales state that they will see a drop in their income next year. Is not investment from the big society bank just a matter of jam tomorrow?

[Mr Jones]

There is no doubt that we are going through difficult economic times, as the hon. Gentleman knows. Unfortunately, third sector organisations are affected by that. I believe that the £200 million that will be available through the big society bank will be of immense benefit to third sector organisations in Wales.

[Owen Smith (Pontypridd) (Lab)]

The Welsh people are a shrewd lot, and they have quickly seen through the big society scam. Since £1.8 billion was cut from the Welsh Assembly budget, leaving councils with a shortfall of many millions of pounds, charities such as People First, which works with people with learning disabilities in the Rhondda Cynon Taff area, have been on the verge of closure. That is throwing more people on to the record unemployment numbers in Wales. As Dawn Price of People First put it to me:

“How can we take part in a Big Society when our funding is being so cruelly cut?”

[Mr Jones]

I realise that some Opposition Members have huge difficulty with the proposition that people should be allowed to organise their own lives in the way that best suits them, rather than such matters being delivered top-down by big Government. However, there are signs that it is slowly dawning on the Leader of the Opposition at least that the big society may be rather a good idea. When he launched Labour’s policy review recently, in which I think the right hon. Member for Neath (Mr Hain) played a part, he said:

“We have got to take that term ‘big society’ back off David Cameron”.

[Jonathan Lord (Woking) (Con)]

2. What assessment she has made of the outcome of the referendum on devolving primary law-making powers to the National Assembly for Wales.

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

4. What assessment she has made of the outcome of the referendum on devolving primary law-making powers to the National Assembly for Wales.

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

I welcome the clear yes result announced on 4 March. The vote in favour of primary law-making powers for the Assembly will enable the Welsh Assembly Government to get on with the job of delivering better public services in Wales.

[Jonathan Lord]

I thank the Secretary of State. I note that there are now 20 devolved areas of policy for the Welsh Assembly and that Scotland has had similar powers for many years. Has she had conversations with other Ministers about the commission that we have been promised, or preferably legislation, so that only English MPs can vote on English laws that affect English residents, and thereby maintain the parity—

[Mr Speaker]

Order. We are grateful to the hon. Gentleman, but we must move on.

[Mrs Gillan]

I think my hon. Friend is referring to what is known as the West Lothian question, or as we sometimes call it in Wales, the West Clwydian question. I have had words with the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), and as he informed the House on 15 December, the Government will make an announcement this year on plans to establish a commission to consider the West Lothian question.

[Simon Hart]

Can the Secretary of State provide a timetable for the introduction of a Calman-style inquiry, as per the coalition agreement, and will she undertake a full consultation on the matter?

[Mrs Gillan]

I am grateful to my hon. Friend. When we established the coalition Government, we committed in the coalition agreement to establishing a Calman-like process for the Assembly. I will announce further details on that in the coming months.

[Paul Murphy (Torfaen) (Lab)]

The Secretary of State has just said that there will be a commission on the so-called West Lothian question. Does she personally believe that Welsh Members of Parliament should have fewer voting rights in this place, particularly bearing in mind that her Government have cut the number of Welsh MPs by 25%?

[Mrs Gillan]

As the right hon. Gentleman knows, it is important that every vote is of an equal weight in this country. I am sure he would not want me to revisit arguments that have been well made and exhausted in the House.

When the commission is established, it will need to take into account the Government’s proposals for House of Lords reform, the changes to the way in which this House does business and the changes to the devolution settlement in considering potential solutions to the West Lothian question.

[Mr Peter Hain (Neath) (Lab)]

Will the Secretary of State join me in welcoming the resounding yes vote in the referendum on 3 March? As she knows, I legislated on behalf of a Labour Government for primary powers for the Assembly in 2006, and we are delighted at this historic day for Wales. I hope she is too.

[Mrs Gillan]

The shadow Secretary of State must have been asleep when I answered the question in the first place and said that I welcomed the yes vote. I said that specifically during the passage of the Government of Wales Act 2006, when I sat in his position. I am also delighted that, despite prevarication, it was a Conservative-led coalition Government who delivered that referendum for the people of Wales.

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

Does the Secretary of State accept that given the nature of the yes campaign, it is clear that the vast majority of people in Wales wish to remain part of the Union? As a proud Welshman and a proud Unionist, I believe as strongly as other Members that something must be done about the West Lothian question, to stop Welsh MPs voting on matters for which they have no responsibility.

[Mrs Gillan]

I, too, am a devoted Unionist, but I recognise that the yes vote does not mean that the Welsh devolution settlement will stand still. It is a living object, which is why we are establishing a Calman-like process to examine the future of the Welsh Assembly and how we are governed across the UK, specifically in Wales.

[Andrew Stephenson (Pendle) (Con)]

3. What recent discussions she has had with ministerial colleagues on expenditure on broadband projects in Wales.

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

My right hon. Friend the Secretary of State and I have regular meetings with ministerial colleagues on issues that affect Wales, including broadband projects. I am sure my hon. Friend will welcome, as I do, the announcement by my right hon. Friend the Chancellor of the Exchequer on 10 February that we are providing £10 million of funding to support the extension of superfast broadband to Pwllheli and the surrounding areas.

[Andrew Stephenson]

I thank my right hon. Friend. Does she agree that due to the remote and rural nature of many parts of Wales—like many parts of my constituency—it is vital for businesses in rural communities to have effective broadband?

[Mr Jones]

Yes, I agree that broadband is extremely important for rural communities. Indeed, it is arguably more important in the countryside than in our towns and cities. It enables people to run businesses from rural locations with no competitive disadvantage, and farmers in particular urgently need broadband to file their returns.

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

Although I appreciate and welcome the announcement of the broadband pilot, bizarrely made at Wrexham and not in the House, I represent the Pwllheli area among other parts of west Wales and I have no doubt that it was to due to pressure from the Deputy First Minister. Can the Minister tell me precisely which areas of my constituency will be included in the pilot and which will not?

[Mr Jones]

The right hon. Gentleman gives the pilot a rather strange welcome—a rather curmudgeonly one, I would suggest. As he knows, the rural area around Pwllheli is intended to be included in the pilot, from which we hope to gain important knowledge on the further roll-out of broadband across Wales.

[Mr Llwyd]

The economic renewal plan in Wales set out to provide high-speed links to all businesses by 2015 and all houses by 2020, and as the Minister knows, under the “Wi-fi Wales” initiative, there are plans to enable free wireless connection to all publicly owned buildings in Wales. What support will the Minister and the Secretary of State give to those plans? There is currently huge criticism of the Wales Office, but if they get stuck in on that, they might silence some of their critics.

[Mr Jones]

It is fairly clear that the right hon. Gentleman does not keep in touch with his colleagues in the Assembly, because very recently, my right hon. Friend the Secretary of State and I hosted a trilateral meeting between the Deputy First Minister and the Minister with responsibility for broadband via video link from the Wales Office in Gwydyr house. We are fully engaged in this process, and it is quite wrong for the right hon. Gentleman to suggest that we are not.

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

The Welsh Assembly Government have offered a grant to people in not-spots throughout Wales. Can communities get together to use such facilities to provide a community solution, rather than individuals finding their own solutions?

[Mr Jones]

Yes, indeed. The proposal is that hubs should be provided in communities, but the technology that may be used thereafter will not be specified, so wi-fi or other appropriate solutions can be used depending on the nature of the area.

[Karen Lumley (Redditch) (Con)]

5. What recent discussions she has had with ministerial colleagues on measures to attract inward investment to Wales.

[John Howell (Henley) (Con)]

7. What recent discussions she has had with ministerial colleagues on measures to attract inward investment to Wales.

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

Clearly, with so many of our companies in Wales having strong links with Japan, and given that some of our inward investment comes from there, I am sure the whole House would like to join me on behalf of Wales in sending our deepest condolences for the appalling tragedy.

I have regular discussions with ministerial colleagues on measures to attract inward investment to Wales. Last month I hosted a trilateral meeting between the First Minister, the Deputy First Minister and the UK Minister responsible for trade and investment to discuss how we can work together to bring much-needed investment to Wales. We will be meeting again shortly.

[Karen Lumley]

Does the Secretary of State agree that Wales has much to offer business, as the Welsh Affairs Committee heard yesterday from Sir Terry Matthews? Can she also tell us what she is doing to work with the Welsh Assembly to bring inward investment to Wales?

[Mrs Gillan]

Although it is too early to prejudge the outcome of the Committee’s inquiry on inward investment, a clear message on skills emerged in oral evidence last week. That message was consistent with the conclusions of the earlier cities report. Certainly, I will see how the UK Government can work with the Welsh Assembly Government to encourage more inward investment, because Wales is a great place to do business.

[John Howell]

In the last couple of weeks, a number of strong foreign trade and investment visits have been made to Wales, particularly from India and the US. Does the Secretary of State agree that those are vital for Wales, and that we should maximise the opportunities that they present?

[Mrs Gillan]

It is very easy to agree with my hon. Friend on that, because we need to maximise the opportunities that such visits present. Wales’s share of UK inward investment projects halved in the past decade from 6% to 3% and we need to act quickly to reverse that. It is therefore important to work across Government Departments in Whitehall, together with the Welsh Assembly Government, so that we have a cohesive programme for attracting inward investment.

[Kevin Brennan (Cardiff West) (Lab)]

With unemployment reaching a 17-year high this morning—up to 8.7% in Wales—where is the Secretary of State’s plan for growth?

[Mrs Gillan]

I am tired of Members talking Wales down. The message that has just gone out from the hon. Gentleman is not a positive one. The unemployment figures were announced this morning. Although I have given them a cautious welcome because the economic inactivity rate continues to fall, I want people to know that we have a willing and able work force and that Wales is open for business. It is about time the hon. Gentleman joined me in talking Wales up.

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

It emerged in the Welsh Affairs Committee’s visit to Germany that vital inward investment opportunities were not being taken up by UK Trade & Investment because of the abolition of regional development agencies in England. Does the Secretary of State accept that this may represent a major opportunity for Wales and if so, what is she doing about it?

[Mrs Gillan]

I had a particularly good meeting with the First Minister, the Deputy First Minister and the Minister responsible for trade. I am keen that we should have some joined-up government, because we have not been taking advantage of all the opportunities that exist. After the Assembly elections we shall have to take that forward with the new Welsh Assembly Government, and I know the current Welsh Assembly Government have been looking at rationalising their offices abroad and having a more comprehensive programme—one that is engaged with UKTI, the Department for Business, Innovation and Skills, the Foreign Office, and the Wales Office. Together, we will have a stronger presence.

[David Mowat (Warrington South) (Con)]

6. What recent representations she has received on the mechanism for calculating the block grant settlement for the Welsh Assembly.

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

My right hon. Friend and I receive regular representations in relation to the block grant settlement for the Welsh Assembly.

[David Mowat]

I thank the Minister for that reply. In 2009, the Holtham commission concluded that the Barnett formula was no longer fit for purpose and was in need of urgent reform. Does the Minister agree that the Barnett formula should be replaced with a mechanism based on need?

[Mr Jones]

It is fair to say that everyone recognises that the Barnett formula is nearing the end of its life. However, it is necessary to stabilise the public finances before we consider the formula. In the wake of the vote in the Welsh referendum, the coalition will establish a Calman-like process for the funding of the Welsh Assembly.

[Ian Lucas (Wrexham) (Lab)]

Earlier the Secretary of State said that the devolution settlement was a moving object. Will the commission to which the hon. Gentleman has just referred consider whether the Welsh Assembly should be given tax-varying powers?

[Mr Jones]

It is important that the Welsh Assembly should be accountable for its activities, and I can tell the hon. Gentleman that nothing is ruled out.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There are far too many private conversations taking place in the Chamber and they are very noisy. It is most discourteous. Let us have a bit of order.

[Mr Mark Williams (Ceredigion) (LD)]

8. What assessment she has made of the effect on the Welsh economy of recent trends in the cost of fuel.

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

Over the last few months I have made an assessment of the impact of the recession on rural areas, including the effects of rising fuel prices on businesses and families in Wales. We recognise that businesses, individuals and families are struggling with the rising cost of fuel, and we are looking at how we can help.

[Mr Williams]

Following on from the Minister’s assessment, what representations has he made on extending the Government’s fuel duty rebate for the islands of Scotland and Cornwall to large tracts of rural Wales, where sparsity, economic dependence and inadequate public transport make this a pressing issue?

[Mr Jones]

I agree that it is a pressing issue in large parts of rural Wales, such as my hon. Friend’s constituency. I can tell the House that I have written to the Chief Secretary to the Treasury to press for the extension of the pilot to rural areas in Wales.

[Mr David Hanson (Delyn) (Lab)]

In April last year the price of a litre of petrol in Flintshire was 116p. Can the Minister tell me what it is today and how much of the increase is due to the VAT that he imposed?

[Mr Jones]

I can tell the right hon. Gentleman that the last time I filled up in Colwyn bay the price was approximately 133p. He will be aware that my right hon. Friend the Chancellor has indicated that these are matters that will be considered in the Budget next week.

[Mr Peter Hain (Neath) (Lab)]

But is the Minister aware that the dramatic rise in petrol and diesel prices is crippling motorists in Wales, especially those on low or middle incomes? In many Welsh communities people have absolutely no choice but to drive, and with wages frozen or falling, inflation high and today unemployment in Wales surging up, they are getting desperate. Will the Government reverse the VAT rise on fuel? It is what business wants, what motorists are crying out for, and what Wales and the whole of Britain needs.

[Mr Jones]

Given that I come from a rural constituency, I am acutely aware of the points that the right hon. Gentleman makes. I would remind him that the escalator that is due to kick in next month is Labour’s escalator, and this is a matter that my right hon. Friend the Chancellor will be looking at.

[Neil Carmichael (Stroud) (Con)]

9. What recent discussions she has had with the Welsh Assembly Government on upland farming in Wales.

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

I have regular discussions with the Welsh Assembly Government on a range of issues affecting Wales, including the farming industry. My right hon. Friend the Secretary of State and I recognise how important the rural economy is to Wales and take a close interest in matters affecting it, including farming on the Welsh uplands.

[Neil Carmichael]

Does the Minister agree that the Welsh Assembly should work well with the Government to ensure that we have a clear strategy for upland and dairy farming, and that that objective would be more easily met through the introduction of an adjudicator to examine abuses of power in the retail sector?

[Mr Jones]

Yes, indeed; I agree that the Welsh Assembly Government should work closely with the Government here in Westminster. My hon. Friend will be aware that it is the Government’s intention to establish a groceries code adjudicator to oversee disputes between retailers and suppliers.

[Nick Smith (Blaenau Gwent) (Lab)]

Getting animals to market is important for upland farmers in Blaenau Gwent. Does the Minister agree that east-west road improvements are vital for boosting the heads of the valleys economy? Will he update us on the road improvements between Brynmawr and Abergavenny, and tell us when they will start?

[Mr Jones]

It would appear to me that those are matters for the Welsh Assembly Government, but if the hon. Gentleman would care to write to me, I will consider the matter further.

[Graham Evans (Weaver Vale) (Con)]

10. What recent discussions she has had with ministerial colleagues and Ministers in the Welsh Assembly Government on energy policy in Wales.

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

The Under-Secretary of State for Wales and I have regular discussions with ministerial colleagues and Welsh Assembly Government Ministers on a range of issues, including energy policy. Last week, I was pleased to call the first Welsh Grand Committee debate on energy since 2008, which gave right hon. and hon. Members a chance to debate in detail that issue, which is of vital importance to Wales.

[Graham Evans]

As a result of the last Government’s policy of burying their head in the sand when it came to energy, we are facing the real prospect of power cuts. Does the Secretary of State agree that building new power plants in Wales is essential for energy security, industry and job creation?

[Mrs Gillan]

Energy is certainly a key priority of this Government and we are working hard to ensure that the UK, including Wales, has an energy infrastructure that is fit for the 21st century.

[Paul Flynn (Newport West) (Lab)]

Does the Secretary of State agree that the exciting plans of the Welsh Assembly Government to generate enough electricity for every home in Wales from non-barrage marine sources offers Wales an energy future, like that of Ireland and Scotland, that will be nuclear free and renewables rich?

[Mrs Gillan]

I am not sure that I caught the drift of the hon. Gentleman’s question, but I have always welcomed the work that is being done to enable Wylfa A to continue to generate low-carbon electricity for a further two years until 2012. I was also delighted that Wylfa was chosen as the site for a potential new station in the future.

[Jenny Willott (Cardiff Central) (LD)]

This Government have put the environment at the heart of their energy policy. Last week, I attended the launch of Norman Electrical Ltd, a small business in my constituency that is working with households and businesses to invest in renewable technologies. Will the Secretary of State join me in welcoming such start-ups and do what she can, with colleagues, to help Wales to become central to the renewable technology sector in the UK?

[Mrs Gillan]

Yes, I join my hon. Friend in congratulating the company in her constituency. If all 26 million households in the United Kingdom take up our green deal over the next 20 years, employment in that sector could rise from its present level of 27,000 to something approaching 250,000, working all around the UK to make our housing stock fit for a low-carbon world.

[Jessica Morden (Newport East) (Lab)]

11. What recent estimate she has made of the number of jobs to be lost in the public sector in Wales as a result of the reductions in public expenditure in 2011-12.

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

A forecast of public sector job losses was published last year by the Office for Budgetary Responsibility. This was based on UK-wide macro-economic data, and no regional breakdown is available. My right hon. Friend the Secretary of State and I remain committed to working with ministerial colleagues to minimise the impact of the reductions in public expenditure that we are having to make on Welsh workers and their families.

[Jessica Morden]

The Government’s impact assessment relating to the closure of Newport passport office includes the statement that

“we will also pay £3m redundancy…which may create a short term boost in trade for the local economy.”

Is this the Government’s new alternative growth strategy?

[Mr Jones]

The line to which the hon. Lady refers is in every economic impact assessment that has been prepared in connection with the current process. That consultation will not be finished until Friday, and all options remain open.

[Mr Philip Hollobone (Kettering) (Con)]

12. What recent discussions she has had with the Secretary of State for Transport on electrification of the rail network in south Wales.

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

The statement made on St David’s Day by my right hon. Friend the Secretary of State for Transport was excellent news for all parts of south and west Wales. This £1 billion investment will deliver all the benefits and improvements of an electrified railway to Wales, with faster acceleration, greater comfort and cleaner and greener travel. The decision to extend electrification to south Wales recognises that improved rail infrastructure and lower journey times are vital components for delivering a successful economic recovery in Wales.

[Mr Hollobone]

What estimate has the Secretary of State made of the number of new jobs that will be created in Wales as a result of the electrification programme?

[Mrs Gillan]

I hope that the electrification of the rail line, which was launched and announced with full funding by this Government, will bring the much-needed inward investment into Wales, resulting in the many jobs that we need.

The Prime Minister was asked—

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Q1. If he will list his official engagements for Wednesday 16 March.

[The Prime Minister (Mr David Cameron)]

I am sure the whole House will wish to join me in paying tribute to Lance Corporal Stephen McKee, 1st Battalion the Royal Irish Regiment, who died last Wednesday. He was a highly respected, selfless and committed soldier who will be sorely missed by all those who served with him. Our deepest sympathy is with his family and friends.

From September, military repatriations will no longer pass through the town of Wootton Bassett. I know the whole House will wish to join me in paying tribute to the people of Wootton Bassett. Their deeply moving and dignified demonstrations of respect and mourning have shown the deep bond between the public and our armed forces. It is more than 100 years since the title “royal” was conferred on a town. I can today confirm that Her Majesty the Queen has agreed to confer the title “royal” on the town of Wootton Bassett as an enduring symbol of the nation’s admiration and gratitude to the people of that town. The town will become Royal Wootton Bassett later this year, in a move that I believe will be welcomed right across our country.

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

[Gregg McClymont]

May I associate Labour Members, and those of all parties, with the Prime Minister’s condolences to the family and all who knew that brave serviceman?

The previous Government put in place the overseas victims terrorism compensation scheme. When will British victims of overseas terrorism receive compensation?

[The Prime Minister]

The hon. Gentleman makes an important point. This is something that we are looking at, reviewing and want to get right. I remember the debates that took place at the time of the Bali bomb and recall that hon. Members on all sides of the House spoke about it. We will bring forward our proposals shortly.

[Sir Malcolm Rifkind (Kensington) (Con)]

The Prime Minister is to be commended for his leadership in trying to achieve a no-fly zone but, sadly, it is unlikely that it can be implemented in time to prevent a final onslaught in Libya. Does the Prime Minister agree that the best response to this urgent crisis would be for the international community, with the support of the Arab League, to urge the Egyptian Government to send a brigade of its army as a peacekeeping force into eastern Libya—to protect their own citizens, to stop Gaddafi in his tracks and to prevent a humanitarian disaster in Benghazi?

[The Prime Minister]

I have great respect for my right hon. and learned Friend, who speaks with great expertise on these issues. The points he made on Monday about the arms embargo were extremely important. We will, of course, look at any suggestion, but the problem at the moment is that there is no peace to keep. What I can report is that yesterday evening, after extensive discussion with Lebanon, France, the US and others, the UK tabled a new draft Security Council resolution in the UN. It includes a no-fly zone, banning all flights except humanitarian ones, an extension of the travel ban and the asset freeze and tougher enforcement of the arms embargo, particularly on the Libyan Government. Of course there are a wide range of views in the UN; I urge all to take the right steps so that we show some leadership on this issue and make sure that we can get rid of this regime.

[Edward Miliband (Doncaster North) (Lab)]

Let me begin by echoing the Prime Minister’s tribute to Lance Corporal Stephen McKee of 1st Battalion The Royal Irish Regiment. He showed exceptional courage and bravery, and our thoughts are with his family and friends. Let me also echo the Prime Minister’s remarks about the community of Wootton Bassett, and the very fitting award of the “royal” designation. It is a tribute, and a sign of the way in which that community has responded to our armed forces.

Following the Liberal Democrat conference at the weekend, is the Prime Minister planning any new amendments to his Health and Social Care Bill?

[The Prime Minister]

First of all, let us be clear about the fact that the reforms are about cutting bureaucracy and improving patient care. They were drawn up by us as a coalition to improve the NHS. Let me answer the right hon. Gentleman’s question very directly. We have already made some real strengthenings to the Bill. First, we have ruled out price competition in the NHS. Secondly, there is the issue raised by the Liberal Democrats, with which I completely agree: we must avoid cherry-picking by the private sector in the NHS. The right hon. Gentleman might care to reflect that under the Labour Government, the private sector was given £250 million for operations that were never carried out. Perhaps he would like to apologise for that cherry-picking, and support our anti-cherry-picking amendment.

[Edward Miliband]

Let us give the Prime Minister another go at answering the question that I asked. The question that I asked was this. Following the Liberal Democrat conference at the weekend, are any further amendments to be tabled to the Health and Social Care Bill—yes or no?

[The Prime Minister]

The problem with pre-scripted questions is that they do not give you the opportunity to respond to the first answer. I gave a very clear answer about price competition and about cherry-picking.

What I would say to the right hon. Gentleman is that he should not set his face against reform in the NHS. The fact is that we support extra money going into the NHS—money that the right hon. Gentleman does not support—but we recognise that with an ageing population, more expensive treatment and new drugs coming on stream, we need to reform the NHS, and that reform must accompany the extra money that is being provided. Why is the right hon. Gentleman setting his face against that?

[Edward Miliband]

The Prime Minister really must get away from these pre-scripted answers. [Laughter.] I will tell him why no one trusts what he says about the NHS. What used he to say about NHS reorganisations?

“There will be no more of those pointless re-organisations that aim for change but instead bring chaos…it’s profoundly disruptive and demoralising.”

I agree with what the Prime Minister used to say. Why doesn’t he?

[The Prime Minister]

We are not reorganising the bureaucracy of the NHS. [Interruption.] We are abolishing the bureaucracy of the NHS. Perhaps the right hon. Gentleman would like to listen to what the adviser to the Labour Government said about our NHS reforms. He said:

“most of these reforms are very much where”

the last Government

“and indeed I, would like to have gone if we had not encountered some of the road blocks that one did.”

We know that the roadblock was the last leader of the Labour party. What a pity it is that the current leader of the Labour party is “son of roadblock”.

[Edward Miliband]

I am proud of our record on the NHS. We have 100 new hospitals, more doctors and nurses than ever before, the shortest waiting times in history, and the highest level of patient satisfaction ever. But the Prime Minister is wrecking our record on the NHS, and what is his answer? The Bill creates a free-market free-for-all and threatens existing NHS services. Let me ask the Prime Minister a very specific question. Will he confirm that this Bill makes health care subject to European Union competition law, for the first time in history?

[The Prime Minister]

I have to say that the right hon. Gentleman is beginning to sound like the last leader of the Labour party. If he will not listen to the adviser to the Labour Government, perhaps he will listen to his own health spokesman, who said this:

“"No-one in the House of Commons knows more about”—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the Prime Minister, but the answers from the Prime Minister must be heard, and that is all there is to it.

[The Prime Minister]

Thank you, Mr Speaker. If I can take the trouble to read out the Opposition health spokesman’s speeches, the Opposition should at least have the decency to listen to them.

The Opposition health spokesman said this:

“No-one in the House of Commons knows more about the NHS than Andrew Lansley—except perhaps Stephen Dorrell. But Andrew Lansley spent six years in Opposition as shadow health secretary. No-one has visited more of the NHS. No-one has talked to more people…in the NHS.”

He went on to say:

“these plans are consistent, coherent and comprehensive. I would expect nothing less from Andrew Lansley.”

[Edward Miliband]

Talk about pre-scripted answers again! Why does the Prime Minister not answer the question? Does he even know whether the health service will now be subject to EU competition law? It will be. Let us look at the Health and Social Care Bill: chapter 2, “Competition”; clause 60, “Functions under the Competition Act 1998”; clause 66, “Reviews by the Competition Commission”; clause 68, “Co-operation with the Office of Fair Trading”. Can the Prime Minister explain to the British people what that has got to do with health care?

[The Prime Minister]

The Opposition are the party that rigged the system so there was cherry-picking by the NHS. The point I would make is this: at the last election Opposition Members all stood on a manifesto that said—[Interruption.] I am answering the question. This is what the Opposition said in their manifesto:

“Patients requiring elective care will have the right, in law, to choose from any provider who meets NHS standards of quality”.

They were in favour of competition in their manifesto. All that has changed is that they are just jumping on every bandwagon, supporting every union, blocking every reform and opposing the extra money being put into the NHS.

[Edward Miliband]

He just does not get it: he is threatening the fabric of the NHS. This Bill shows everything that people do not like about this Government: broken promises, arrogance, incompetence, and ignoring people who know something about the health service. Does this not show once again that, as the British Medical Association said yesterday and as the Liberal Democrats said on Saturday, you can’t trust the Tories on the NHS?

[The Prime Minister]

The right hon. Gentleman should remember that the BMA opposed foundation hospitals, GP fundholding and longer opening hours for GPs’ surgeries. Is it not typical that, just as he has to back every other trade union, and just as he has no ideas of his own, he just comes here and reads a BMA press release? How utterly feeble.

[Mr Speaker]

I call Gavin Williamson. [Interruption.] Order. Be quiet, Mr Simpson; such behaviour is bad for your health.

[Gavin Williamson (South Staffordshire) (Con)]

Q2. Thank you, Mr Speaker. Has the Prime Minister seen the recent comments of the Labour Chairman of the Public Accounts Committee? She said that over the last 10 years productivity in NHS hospitals had been in continuous decline, and that the taxpayer was getting less for each pound spent. Will the Prime Minister assure the House that that trend will be reversed?

[The Prime Minister]

My hon. Friend makes an excellent point. I would have thought Opposition Members would listen to the Labour-dominated Public Accounts Committee and its Labour leader, who said this:

“Over the last ten years, the productivity of NHS hospitals has been in almost continuous decline”

and

“the health service has improved as a result of this increase in spending. But the taxpayer has been getting less for each pound spent.”

That is what we have to look at, and the fact that we are not getting even the European average on cancer outcomes, and that people here are twice as likely to die from a heart attack as people in France. We have an ageing population and more expensive treatments, and the Opposition’s answer is to do absolutely nothing. How utterly, utterly feeble.

[Angus Robertson (Moray) (SNP)]

Today’s statistics show that unemployment has gone down in Scotland but has gone up in the rest of the UK. Will the Prime Minister ensure that the trend of lower unemployment in Scotland is not endangered by ridiculously high fuel prices and fuel duty, in what is still the largest oil-producing nation in the European Union?

[The Prime Minister]

I thank the hon. Gentleman for what he says. Clearly, today’s figures are a very mixed picture. The youth unemployment figures are disappointing, once again, but overall what is interesting is that employment is up and the number of claimants nationwide is actually down: the number of claimants has fallen by 32,000 since last year.

On fuel duty, the hon. Gentleman knows that we have a Budget coming up. I do not want to speculate as to what will be in it, but I know the pain that families and small businesses are feeling from the huge number of fuel duty increases put through by the previous Government. In their last Budget they put through seven fuel duty increases—one for before the election and six for afterwards. What a surprise that Labour did not even have the brass neck to raise that one today.

[Nigel Adams (Selby and Ainsty) (Con)]

Q3. Hundreds of residents across the Selby district are up in arms at the prospect of having a Traveller site imposed on their villages. Can the Prime Minister tell me what can be done—and when—to remove the top-down Traveller site targets currently imposed on local authorities?

[The Prime Minister]

I can tell my hon. Friend that we are abolishing the top-down Traveller pitch targets that were imposed on local authorities, and instead local councils will determine the right level of site provision in consultation with their local communities. It is also important that we recognise that one law should apply to everyone in terms of planning policy in this country, Travellers included.

[Mr Gordon Marsden (Blackpool South) (Lab)]

Q4. Blackpool has an above average number of residential homes for disabled people, including for hundreds of my constituents. May I therefore ask the Prime Minister why he still plans to scrap the disability living allowance mobility component in his Welfare Reform Bill, thus potentially marooning people in those homes? In his reply, will he not compare these people to patients in hospitals? They are in their homes, and they are not ill.

[The Prime Minister]

I would urge the hon. Gentleman to look very carefully at the Bill and at our plans, because what he will see is that we are putting the question of mobility into the reform of DLA, as we change that benefit and improve it. What we will do is avoid the double counting that has happened in the past, and sort out this issue, as I have said.

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

Earlier in the week, my right hon. Friend the Prime Minister received representations on the Government’s deficit reduction plans from, on the one hand, the credit rating agencies, and on the other hand, the Leader of the Opposition and others from the previous Administration who got us into this mess. Whose advice is the Prime Minister going to follow?

[The Prime Minister]

We should listen to the advice of Fitch, the credit rating agency, which this week reconfirmed our triple A credit rating status. I also think we should listen to the OECD, which is here today giving a presentation on the British economy and which strongly supports our deficit reduction plans. The point I would make is this: those people who think that there is some difference between deficit reduction and getting growth at the same time should look at the current interest rates in Ireland, in Greece and in Portugal. In Portugal, market interest rates are 7.5%. What is the genius plan of the Opposition? It is to halve the deficit in four years, which would get us in four years to where Portugal is today. What a brilliant plan!

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

Q5. Is the Prime Minister aware that Southern Cross, which runs 750 old people’s homes up and down the country, nine of which are in Coventry and Warwickshire, is in great difficulties? Some 31,000 old people could be affected by this, so will he talk to the Qatari parent company to see whether a solution can be found? This is a very serious situation.

[The Prime Minister]

I thank the hon. Gentleman for raising this point, and I will ask the Health Secretary or one of his Ministers to contact him urgently to discuss this. It is vital that we have good residential care provision in our country and that there is competition and choice in that residential care provision; many private providers provide an excellent service. I shall make sure that one of my Ministers gets in touch with the hon. Gentleman straight away.

[Jo Swinson (East Dunbartonshire) (LD)]

I welcome the UK’s strong leadership at the UN on Libya. Can the Prime Minister tell me what message he thinks it will send to every tyrannical dictator if, against the urgent desire of the Libyan people, against the wishes of the Arab League and against the UN principle of the responsibility to protect, the international community fails to stop Gaddafi crushing the spirit, the hopes and the lives of the Libyan people?

[The Prime Minister]

The hon. Lady makes a very important point. Every world leader has said that Gaddafi should go and that his regime is illegitimate. If at the end of this he is left in place, that will send a terrible message—not only to people in Libya, but, as she says, to others across the region who want to see greater democracy and greater openness in their societies. That is why it is right for Britain to play this leading role at the UN and elsewhere. I am not arguing that a no-fly zone is a simple solution to this problem—of course it is not—but I do think that it is one of the steps we need to take to isolate and pressurise that regime, and to say that we stand with people in Libya, who want to have greater democracy and greater freedom, such as we take for granted in this country.

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

Q6. Does the Prime Minister have any sense of the current mood of bewilderment and betrayal felt by rank and file police officers?

[The Prime Minister]

I strongly support the British police. They are the finest force in the world. What the police and other public servants know is that we were left a deep Budget deficit that we have to deal with. If we want to keep police officers on the streets, it is necessary to have the pay freeze that we are talking about. It is necessary to look, as Tom Winsor has done, at the allowances that they receive and to work out how we can make sure that we have well-paid, well-motivated police officers doing a great job in our country. Again, if the Labour party is just going to stand against every reform, every change and every improvement and say there is nothing we can do about any one of these problems, not only will it be irrelevant, but the British public will work out that it is irrelevant.

[Matthew Hancock (West Suffolk) (Con)]

Last night there was a violent double murder in Beck Row in Suffolk, which was the most serious in a series of incidents in the area. Will the Prime Minister assure me, and the residents of west Suffolk, that these crimes will be fully investigated, that their perpetrators will face justice and that everywhere in this country must be subject to the rule of law?

[The Prime Minister]

I can certainly give my hon. Friend that assurance. This is a very disturbing case, and I am sure that hon. Members will all have heard about it this morning on the news. I think the police will want to do everything they can to get to the bottom of this dreadful crime and to bring the perpetrators to justice.

[Lindsay Roy (Glenrothes) (Lab)]

Q7. People in all parts of the House appreciate that there is a mammoth crisis in Japan. Our hearts go out to the people there and we all want to do everything we can to help, including the UK. I appreciated the Prime Minister’s comments on Monday, but will he investigate reports that a British rescue team has recently been turned away from Japan?

[The Prime Minister]

I am grateful for the hon. Gentleman’s question, and I have asked for a briefing about this, so I can tell the House what happened. The official rescue team that was sent from the UK, in good time, arrived in good time and has already started work. There was also an extra, independent rescue team that did not have the correct documentation and encountered some problems, but we are doing everything we can to make sure it can get access.

[Stuart Andrew (Pudsey) (Con)]

Q8. This week tickets for the London Olympics went on sale. Does my right hon. Friend agree that if the people buying tickets saw an athlete cross the finishing line in first place only to end up on the bronze medal podium, they would demand a refund? Does he agree that that example highlights the absurdity of the alternative vote, and the reason why we need a no vote?

[The Prime Minister]

That was an ingenious way of weaving the alternative vote into a question in this House. Clearly there is support for the no campaign on both sides of the House, and I am sure that there are also those who support the yes campaign, so we should have this argument out in the country and make arguments like that. My hon. Friend mentioned the Olympics, and I hope that as many people as possible will be able to get to see the Olympics, which will be a fantastic festival of sport in our country.

[Nick Smith (Blaenau Gwent) (Lab)]

Q9. The Prime Minister stood on Ark Royal last year and said that he wanted a new military covenant written into the law of the land. The Royal British Legion has said that the proposals made by Defence Ministers in the Armed Forces Bill do not honour that pledge. Will the Prime Minister follow the legion’s advice, define the covenant in law and keep the promise he made to our brave armed forces?

[The Prime Minister]

I am having discussions with the Royal British Legion about this. It seems to me that the right thing to do is to reference the covenant clearly in law, but to have a debate in the House every year about the covenant and make sure we can update and improve it, because it is not a static document. It needs to take into account changing health and education needs, and to make sure that it is the very best it can be for our armed service personnel.

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

Q15. Does my right hon. Friend support the following statement:“The reason I've never supported AV is that it would have given”—Labour—“an even bigger majority in 1997, and it would have given the Tories an even bigger majority in 1983, and…1987 as well…If…we want reform…to rebuild public trust and confidence in politics…AV doesn’t deliver that.”Is he as surprised as I was to learn that those are the words of the right hon. Member for Exeter (Mr Bradshaw), who is the director of Labour’s Yes to AV campaign?

[The Prime Minister]

What can I add to that brilliant piece of judgment?

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

Q10. I draw the attention of the House to the interest that I have previously declared. There are very few people outside the House—or, I suspect, inside it—who think that Northern Rock would have got into as much trouble if it had still been a mutual building society. Given the considerable scepticism about whether the coalition really wants to change the culture in the banking industry, will the Prime Minister now insist that his City Minister requests a serious and detailed assessment of the case for remutualisation of Northern Rock?

[The Prime Minister]

We are prepared to consider all options, and the City Minister will do that. I would make two points. First, we think that mutualisation should go much further than just the banking industry, and are considering options for mutualisation within the public sector to give members of staff in public sector organisations far more control over the organisations that they are in. On banking, it is about looking at not just mutualisation but the whole issue of responsibility and trying to link in again the idea of taking deposits and making loans, as building societies used to.

[Robert Halfon (Harlow) (Con)]

Q11. Given the Lockerbie bomb and Gaddafi’s continuing murder of his own people, does the Prime Minister think it was wrong for British universities to sign deals with Libya, and wrong for the previous Government to help facilitate some of those contracts? Will he take steps to learn the lessons and ensure that that never happens again?

[The Prime Minister]

I think that there are lessons to be learned. As I have said, I think that it was right to respond to what Libya did in terms of weapons of mass destruction, but I do not think that the way in which that response was handled was right. Too much credulity was shown, particularly over issues such as that of Abdelbaset al-Megrahi, the man who was convicted of the biggest mass murder in British history. Universities will also want to ask themselves, as they are doing, some pretty searching questions about what they did.

[Kelvin Hopkins (Luton North) (Lab)]

Q12. The Nobel prize-winning economist Paul Krugman has said that the Government’s economic policy is going in precisely the wrong direction. Does the Prime Minister really wish to be remembered as a reincarnation of President Herbert Hoover, whose policies led directly to the great depression of the 1930s, and to leave the future open to our leader to be a new Roosevelt and lead us away from that?

[The Prime Minister]

As a job application, that was at the greasy end of the spectrum, I think. I prefer to listen to the head of the OECD, who is in London today, and who has said:

“I think dealing with the deficit is the best way to prepare the ground for growth in the future.”

When it comes to the question of who supports this Government’s policy, we have the OECD, the International Monetary Fund, the Federation of Small Businesses, the CBI and the Bank of England. When the shadow Chancellor was asked recently, “Who supports your economic policy?”, there was a long pause and he finally replied, “The Guardian.” I will keep my supporters, and you can keep yours.

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

The people of Wootton Bassett have sought neither thanks nor praise for what they have done on so many hundreds of occasions over the years, but they will be deeply honoured and very pleased by the great honour that Her Majesty has shown them. Will the Prime Minister now lead the people of Carterton, in his constituency, in filling their place?

[The Prime Minister]

First, may I say to my hon. Friend what an honour it is for me to be able to make the announcement about Royal Wootton Bassett, and how I enjoyed meeting him, the mayor of Wootton Bassett and others connected with the town? Let me make it absolutely clear: they did not ask for any recognition or any form of preferment. They believed that they were honourably and honestly doing a job that the whole country wanted to see done. Now that the route will be different, we need to consider the issues raised by my hon. Friend. Already, quite a demonstration of solidarity and support takes place outside the John Radcliffe hospital, but I will certainly bear in mind what he says.

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

Q13. Following the emphatic yes vote in the referendum on law-making powers, a series of UK Government Ministers have proposed a Calman-like process for Wales. Will the Prime Minister confirm that reform of the Barnett formula, as advocated by the independent Holtham commission, will be a cornerstone of any wider changes to how the Welsh Government are funded?

[The Prime Minister]

We are looking at a Calman-like process for Wales; we think that is right, and we will make some announcements and proposals. Let me just say that because the spending reductions in Wales are less than the spending reductions in England, we will find at the end of this Parliament that the difference in spending per head in Wales will be even greater than it is today, so I do not accept the contention that somehow people in Wales are being unfairly targeted with cuts; they are not. They are getting a better deal than some other parts of the United Kingdom.

[Simon Wright (Norwich South) (LD)]

Q14. A report published today by the End Child Poverty campaign shows that when Labour left office, it left 30% of Norwich’s children living in poverty—the worst figure in the east of England. Does the Prime Minister agree that such a complex problem demands a cross-Government response to tackle the causes of poverty and deliver greater social mobility?

[The Prime Minister]

The hon. Gentleman is entirely right, and if we think of combating child poverty simply in terms of moving people a little bit above or below the line we will never deal with the underlying causes of child poverty, which are worklessness, family breakdown, and other problems linked to it. I am determined that we will try our hardest, with expertise from across the House of Commons—the hon. Member for Nottingham North (Mr Allen) is involved in this work, as is the right hon. Member for Birkenhead (Mr Field)—making sure that we really look at life chances, as well as poverty itself.

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

Earlier this month I joined my constituents and many others from across the east end in commemorating the 68th anniversary of the 1943 Bethnal Green tube disaster. It was one of the worst civilian disasters of the second world war: 173 people were killed and 90 injured, while seeking shelter. Does the Prime Minister agree that there should be a fitting permanent memorial to those who perished, and will he lend his support to the Stairway to Heaven memorial campaign?

[The Prime Minister]

I will certainly look very carefully at what the hon. Lady says. She speaks very powerfully on behalf of her constituents about something that, yes, happened many years ago, but people will still have strong family memories of what happened at that time. I will look carefully at what she says and see what support my office and I can give.

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

Does the Prime Minister agree that nuclear power stations in the UK, such as Dungeness in my constituency, have an excellent safety record, and that new nuclear power will be an important part of our energy needs in future?

[The Prime Minister]

I do think that nuclear power should be part of the mix in future, as it is part of the mix right now. Obviously, I am sure that everyone watching the dreadful events in Japan will want to make sure that we learn any lessons. Of course there are big differences: we do not have those reactor designs in the UK, nor do we plan to, and we are not in a similar seismically important and significant area. Nevertheless, I am sure that there will be lessons to learn, and that is why my right hon. Friend the Secretary of State for Energy and Climate Change has asked the head of nuclear inspections and safety to learn the lessons, and to make sure that we do so in our country.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

This week marks the 70th anniversary of the Clydebank blitz, in which 528 people lost their lives. Hundreds more were seriously injured, and 35,000 people were made homeless. Clydebank suffered the worst devastation and loss of life in Scotland during the second world war. Will the Prime Minister join me in paying tribute to all those who lost their lives, all those who still carry their injuries with them today and, crucially, the people who rebuilt Clydebank after those terrible events 70 years ago?

[The Prime Minister]

I will certainly join the hon. Lady in paying tribute to those people. It is important, as we reach the 60th and 70th anniversaries of these events, that we recognise that many people who lived through them are coming to the end of their lives. It may well be our last opportunity to commemorate what happened and to remember those who died. It is particularly important, as we come up to these anniversaries, that we get that right.

bill presented

London Olympic Games and Paralympic Games (Amendment) Bill

Presentation and First Reading (Standing Order No. 57)

Mr Secretary Hunt, supported by the Prime Minister, the Deputy Prime Minister, Mrs Secretary May, Mr Secretary Pickles, Mr Secretary Hammond, Mrs Theresa Villiers, Hugh Robertson and Norman Baker, presented a Bill to amend the London Olympic Games and Paralympic Games Act 2006.

Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 165) with explanatory notes (Bill 165-EN).

[Mr Speaker]

I ask Members who are leaving the Chamber to do so quickly and quietly, so that I can hear and respond to points of order.

Police Station (Wombourne, South Staffordshire)

Wednesday 16th March 2011 Commons Chamber

Gavin Williamson (South Staffordshire) (Con)

- Hansard - - Excerpts

It is a pleasure to present this petition, which has been signed by 1,256 people who support my campaign to keep a police station in Wombourne.

The petition states:

The Petition of residents of the South Staffordshire constituency, and others,

Declares that the police station in Wombourne is being considered for closure; and further declares that Wombourne has a population of 14,000 who depend upon the service that it provides.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that the police station or a new alternative station is opened in the village of Wombourne to serve its residents and those in the local area.

And your Petitioners, as in duty bound, will ever pray.

[P000902]

Points of Order

Wednesday 16th March 2011 Commons Chamber

12:34

[Ian Mearns (Gateshead) (Lab)]

Following the point of order made by my hon. Friend the Member for Hartlepool (Mr Wright) yesterday, and the response from the Deputy Leader of the House later in the day, I received a letter from the Minister of State, Department for Education, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb) outlining the reasons for the delay in answering questions. However, I find it a little incredible that a whole Department and its IT tracking device should find it more difficult to track the 563 unanswered questions than I do as an individual Member of Parliament. That seems to contradict somewhat the evidence given to the Education Committee a number of weeks ago by Lord Hill, who said that the Department was aware of delays in answering questions.

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order. I would say two things. First, it would be unwise for me to speculate on the technology of the matter and what has or has not happened, for the simple reason that I am in no position at this stage to know. Secondly, notwithstanding the hon. Gentleman’s understandable frustration, which he has put on the record and which he might wish to share with his constituents, I think it fair to record that the Deputy Leader of the House looked into the matter extremely expeditiously yesterday and offered a gracious apology to right hon. and hon. Members. I will leave it there for today.

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

On a point of order, Mr Speaker. During questions last week to the Secretary of State for Health, the hon. Member for Manchester Central (Tony Lloyd) attacked the Government’s health policy and the role of private provision by claiming

“that at the Christie hospital in Manchester 150 jobs have been transferred from the NHS to the private contractor on that site.—[Official Report, 8 March 2011; Vol. 524, c. 757.]

That is simply not true. I have had written confirmation from the Christie that it is untrue. There has been no transfer of staff from the NHS to the new private partnership. I made the hon. Gentleman aware that I intended to raise the matter as a point of order. May I seek your guidance on whether it would be appropriate for him to apologise to the House for misleading Parliament, and to the Christie for making a false statement about its commitment and outstanding contribution to the NHS?

[Mr Speaker]

I am grateful to the hon. Gentleman for his attempted point of order. If an hon. Member makes a mistake, it is for the hon. Member concerned to decide whether it is necessary to correct what he or she has said and, if so, to decide how and when to do so. Meanwhile, the hon. Gentleman, who is quite an experienced hand, has offered his verdict clearly. It is on the record and I suspect that he may choose to share it with others. It is open to him to do so, but I cannot get involved beyond that.

[Tony Lloyd (Manchester Central) (Lab)]

Further to that point of order, Mr Speaker.

[Mr Speaker]

It is very proper that the hon. Gentleman accused should have a chance to respond.

[Tony Lloyd]

Let me say to the House and far wider that if, inadvertently, I misled the House or anybody else on the issue, of course I unreservedly withdraw that claim. Let me make it clear that I would never claim something dishonest about the Christie hospital—not that it was going to close when it was not, and not that staff were being transferred when they were not. If I was wrong, I withdraw those remarks.

[Mr Speaker]

I am grateful to the hon. Gentleman. As far as I am concerned, certainly for today, that concludes that matter.

[Paul Flynn (Newport West) (Lab)]

On a point of order, Mr Speaker. As confidence in the safety of nuclear power has been shaken worldwide, and as no nuclear power station has ever been built on time or on budget, should not the House have an opportunity of considering the nature of the review, so that we can include costs and timetable in the likelihood of building new nuclear power stations in this country?

[Mr Speaker]

First, the hon. Gentleman may well choose to approach the Backbench Business Committee in pursuit of time to debate the issue. Secondly, I am reminded again by the efforts of the hon. Gentleman why he is the author of that well-thumbed tome, “How to be a Backbencher”. We will leave it there for today.

Special Urban Development Zones

Wednesday 16th March 2011 Commons Chamber

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

12:38

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

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to create Special Urban Development Zones; to set out the criteria on which such Zones must be designated, including criteria relating to Housing Market Renewal Initiative status and areas of multiple deprivation; and for connected purposes.

My aim in introducing the Bill is simple—to see areas blighted by entrenched multiple deprivation given the targeted attention they so desperately and urgently need, and to try to give Members on the Government Benches—the few who are here—some comfort or reassurance. I am not talking about yet another bureaucratic layer for its own sake, or about a new network of talking shops. The public do not set much store by what we in Liverpool would call Mickey Mouse gimmicks. I am talking about intensive intervention capable of delivering meaningful, measurable and tangible results that link in with and complement the soon to be introduced enterprise zones, local enterprise partnerships and other such Government initiatives. For some of our more blighted areas, this is long overdue. For those who live their daily lives in such conditions, the proposals are a matter of the utmost urgency. I propose the introduction of specified development zones and their roll-out out across the whole country. I will use the example of north Liverpool, for purely illustrative purposes, to explain my motivation and serve as justification for the Bill.

I should first explain that my interest in the north of the city is not purely political, although my constituency covers a large portion of it—or at least, it will until it is realigned by the Deputy Prime Minister’s spurious measure of an arbitrary, arithmetical norm. For me, the Bill’s proposals are personal, as they will be to other representatives of disadvantaged constituencies. I have lived in Walton all my married life and witnessed with anguish and frustration the social and economic stagnation in certain wards. I am determined to see something done about it.

Let me start by reminding right hon. and hon. Members of the bigger picture. In recent months, I have had cause on several occasions to recite some of the grim statistics that place Liverpool in the top five or so places nationally of every possible index of deprivation, and the city is at the very top of that unenviable league table when the indices are combined. On those occasions, I have been disappointed by the indifferent, even mocking, responses from some Members on the Government Benches. Some of that I attribute simply to ignorant or baseless prejudice, but some of it has to do with people becoming immune and insensitive when repeatedly exposed to hard-grained, albeit abstract, facts. To borrow from an infamous aphorism, the poverty of one is a tragedy; the poverty of many a mere statistic.

Whatever the case, Liverpool’s socio-economic problems are common knowledge, but what many outsiders will not know is that in north Liverpool they are disproportionately concentrated and the consequences correspondingly magnified. A complex and historical mix of issues, such as low educational attainment, a low skills base, high welfare dependency, poor housing, low or unskilled employment, which is often casual, and poverty of aspiration have made for a potent, self-perpetuating, cyclical cocktail of disadvantage and marginalisation.

In recent times, against the odds, Liverpool has come on in leaps and bounds, which is to be commended and celebrated. Many Members, even on the Labour Benches, will be astonished at our city’s transformation and urban renaissance when the party has its conference there later in the year, just as the Lib Dems were when they visited.

It remains, however, a tale of two cities in one, a sub sub-regional north-south divide. The wealth, opportunity and aspiration so evident in the centre and elsewhere have not filtered through to north Liverpool. That has long been the case. In the 19th century, well-healed visitors to the city wrote with pity and horror about its poor, most of whom were clustered, even then, in the inner north. The Victorian street urchins and the notorious back-to-back dwellings are long gone, but the causes and effects of poverty that characterised large swathes of the city’s underclass in those northern suburbs persist today. That is unconscionable.

I blame no particular Administration or party. Over the years various well-intentioned local, regional and national initiatives have aimed at reviving the area, but they foundered, overwhelmed by the scale of the difficulties they face or bogged down by conflicting or competing priorities. The soon-to-be defunct housing market renewal initiative essentially recognised what we need to do and made some progress, but ultimately it was neither sufficiently focused nor sufficiently geographically specific to meet north Liverpool’s needs. In any case, it tackled only one of a plethora of problems.

It is time to get to grips with the situation once and for all. The difficulties in the north of the city might have become entrenched, but I refuse to accept that they are insurmountable. As my predecessor, Peter Kilfoyle, argued consistently in this place and in Liverpool, the plight of north Liverpool powerfully demonstrates why we need a fresh, full-spectrum approach to deprivation hot spots, both to tackle the root causes and to address the effects.

Through this Bill, I envisage the creation of designated special urban development zones, intelligently configured according to multiple deprivation indices and housing market renewal intervention status. Each SUDZ would comprise an operational framework consisting of three elements: first, a clear and holistic strategy with realistic and measurable objectives: a focused strategy, unashamedly biased in favour of the interests of the zone; and a strategy devised, developed and monitored with a single purpose in mind—the whole-scale and sustainable regeneration of the area in question.

Secondly, there would be funding—yes, funding—or at least additional resources and/or tax incentives. It is all very well banging on about austerity measures, but, as I have pointed out repeatedly in this place, any economy that grows while concentrations of deprivation throughout the country are simply left to fester and rot is an utterly false, foolish and precarious economy. It is also morally reprehensible.

Thirdly, there would be a dedicated delivery vehicle: an independent, stand-alone authority that was suitably equipped and sufficiently robust to work with partners on an equal footing, and with the ways and means—in other words, the clout—to get things done.

I have used north Liverpool as a case in point. It is what I know best; it is my priority; and in my view its regeneration ought to be high on the to-do list of any competent, right-minded Government. But there are many north Liverpools, dotted throughout the country, facing equal hardship and equally deserving of the action I suggest. I propose this Bill on their behalf, too.

Were the Bill to be enacted, it would signal a clear commitment by this allegedly progressive Government to tackling poverty and inequality. Inaction borne of apathy, indifference or something more cynical is no longer an option, and I therefore beg leave to bring in the Bill.

[Mr Speaker]

The question is that the hon. Member have leave to bring in his Bill.

[Gordon Birtwistle (Burnley) (LD)]

Mr Speaker, am I allowed to comment?

[Mr Speaker]

If the hon. Gentleman wishes to oppose the Bill, he can.

[Gordon Birtwistle]

I do not wish to oppose the Bill. What I—

[Hon. Members]

Sit down.

[Mr Speaker]

Order. I am grateful to the hon. Gentleman for his courtesy, but he cannot make a comment on the Bill. He is either opposing it or not.

Question put and agreed to.

Ordered,

That Steve Rotheram, Mrs Louise Ellman, Stephen Twigg, Luciana Berger, Graham Jones, Bill Esterson, Catherine McKinnell, Mr Joe Benton, Mr Dave Watts, Ian Murray, Thomas Docherty and Tom Greatrex present the Bill.

Steve Rotheram accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 17 June and to be printed (Bill 163).

Opposition Day

Wednesday 16th March 2011 Commons Chamber

[13th allotted day]

Fuel Prices and the Cost of Living

Wednesday 16th March 2011 Commons Chamber

[Mr Speaker]

The first of the two debates is on fuel prices and the cost of living. I inform the House that, in the first debate, I have selected the amendment in the name of the Prime Minister.

As colleagues will be aware, in the light of the level of interest in participating in the two debates, I have imposed a six-minute limit on Back Benchers’ speeches in each of the two debates. There is, of course, no formal time limit on Front Benchers’ speeches, but in view of the interest I appeal to Front Benchers to exercise a certain self-denying ordinance.

12:49

[Ms Angela Eagle (Wallasey) (Lab)]

I beg to move,

That this House recognises that rising world oil, food and commodity prices are increasing the cost of living and adding to the squeeze on families on low and middle incomes across Britain; believes this has been compounded by the Government’s decision to increase VAT to 20 per cent., which will cost a family with children an annual average of £450, has helped to push up the consumer prices index annual inflation to 4 per cent. and, according to the House of Commons Library, is adding £1.35 to the cost of filling up a vehicle with a 50 litre tank; notes that the AA announced last week that the cost of unleaded petrol has now reached an average of £6 a gallon and that the fuel duty stabiliser promised in the 2010 Conservative Party manifesto has not yet been announced or implemented; further notes that the previous administration regularly postponed planned fuel duty rises when world oil prices were increasing sharply, as they are now; and demands that the Government takes immediate steps to reverse January’s VAT rise on road fuels, using the extra £800 million from the bank levy and securing the appropriate EU derogation, in order to provide relief to hard-pressed motorists and, at the time of the Budget, looks again at the annual duty rise due in April.

It is a great pleasure to follow my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), whose ten-minute rule Bill seeks to address an issue that is close to the hearts of all of us from Merseyside.

Times are increasingly tough for millions of ordinary hard-working people and families in our country. Since May last year, we have seen this Government embark on a reckless gamble with our future prosperity. Public expenditure is being cut too deep and too fast, and up and down the country millions of people are really beginning to feel the pinch. Families are facing the biggest squeeze in their living standards for 80 years, and some economists are warning that it could get still worse. Real wages are static, even falling. With recruitment freezes, job losses and rising unemployment, people are right to be worried about the future.

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

Will the hon. Lady help the House? Over the past 13 years, in every aspect of Government policy, the Labour Government were deliberately and decisively anti-motorist. Does the motion before the House today represent a seismic shift in policy, or is it, as we suspect, a transient spat of opportunism?

[Ms Eagle]

I am rather sorry that I gave way so early in my remarks to that kind of comment. I do not recognise the right hon. Gentleman’s caricature of our policies for motorists. Perhaps he has been reading too much of the Daily Express. [Interruption.] Well, I am a motorist as well. He should realise that motorists are not confined to the Conservative Benches.

[Robert Halfon (Harlow) (Con)]

rose—

[Ms Eagle]

I will give way to the hon. Gentleman, but after that I should like to get some more remarks in.

[Robert Halfon]

I find the Labour motion astonishing, because over the past few years the hon. Lady’s party crucified Harlow’s motorists by putting up fuel duty by 6% a year and increasing it more than 12 times—and it was going to introduce another tax.

[Ms Eagle]

I will come to the details of the motion later. Perhaps the hon. Gentleman will do us the honour of staying in the Chamber and listening to that.

Taxes such as VAT are rising, and the Chancellor’s huge cuts in benefits and services are only just starting to bite. The Government are doing all this while the world economy is still very fragile after the international banking crisis. Global commodity prices are soaring, and these price increases are hitting people and businesses in Britain hard.

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

Does my hon. Friend agree that this problem tends to have a worse effect in rural areas than in some towns? A lot of people in rural areas rely on oil as a fuel, so they are being hit by a double whammy.

[Ms Eagle]

I am pleased that the competition authorities have launched an investigation into what has been going on with heating oil. My hon. Friend is right to point out that transport in rural areas is a particular issue.

People who are already financially stretched by this Government’s slash-and-burn approach now find themselves trying to cope with sudden sharp increases in the price of essentials such as food, energy and fuel. Recent OECD figures put UK food inflation at 6.3%. That is higher than the consumer prices index, higher than the retail prices index, and higher than in most of the rest of Europe. In my constituency, parents are now worried about the rising cost of providing balanced meals for their children.

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

Does the hon. Lady agree that the fuel duty escalator is an important tool to send a clear message that oil prices are going to have to continue to rise, not only for geopolitical reasons but because of peak oil and climate change, and that a way of ensuring that the poorest are not hardest hit would be to scrap the recent VAT increase in totality and replace it with a crackdown on things such as tax evasion and tax avoidance?

[Ms Eagle]

The hon. Lady is right that there has to be a balance between the environmental aspects of taxes on fuel and living standards. However, I find, all too often, that on the green side of the argument the social justice aspects of imposing environmental tax rises are not thought about enough, and such measures tend to hit hardest people whom we are least able to help. She needs to help all of us, when we are thinking about this, by bearing in mind the effects on poverty of environmental taxes.

[Mr Dennis Skinner (Bolsover) (Lab)]

The fuel duty escalator was introduced by the former Tory Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr Clarke). One of the first things that the Labour Government did on assuming office was to make sure that we did not pursue that policy. [Interruption.] Oh, yes. That is why, on several occasions in our 13 years, the Labour Chancellor of the Exchequer got rid of the fuel duty increase. That is the truth.

[Ms Eagle]

My hon. Friend fingered the right hon. and learned Member for Rushcliffe, but in fact the fuel duty escalator was introduced in 1993 by a person who is now in the other place, Lord Lamont—

[Charlie Elphicke (Dover) (Con)]

rose—

[Brandon Lewis (Great Yarmouth) (Con)]

rose—

[Ms Eagle]

Let me finish my sentence. It is absolutely the case that it was Conservative Chancellors of the Exchequer who first introduced the fuel duty escalator.

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

And it escalated.

[Ms Eagle]

It did escalate. It is also true that it escalated for one year when we came into government, but we had six years when we did not increase fuel duty at all—not even in real terms. Fuel duty escalators need to be applied sensitively.

[Charlie Elphicke]

rose—

[Ms Eagle]

I am more than happy to give way to the hon. Gentleman.

[Charlie Elphicke]

I thank the hon. Lady for her kindness and generosity in allowing me to intervene. To clear up the addling of some minds in the House regarding the history of this matter, will she confirm that in 1997 duty was 36.86p and today it is 57.19p?

[Ms Eagle]

One has to remember that the price of petrol at the election was £1.20 a litre, at a time when the Conservatives were promising to cut 10p off the price of a litre because petrol prices were too high. It is now £1.32 a litre.

[Brandon Lewis]

rose—

[Claire Perry (Devizes) (Con)]

rose—

[Matthew Hancock (West Suffolk) (Con)]

rose—

[Ms Eagle]

I give way to the hon. Member for Great Yarmouth (Brandon Lewis), because he stood first.

[Brandon Lewis]

I thank the hon. Lady for being so generous in giving way. Will she confirm that, despite what has been said, my hon. Friend the Member for Dover (Charlie Elphicke) is right: there were 12 fuel duty rises under the Labour Government, and six more were set to come into force before they left office and would have done in the next few years?

[Ms Eagle]

As I said, we had six years when we did not even increase the price of fuel by inflation, so there were real-terms price falls. The number of increases in all sorts of duties tends to expand the more one is in government. We will see what this Government do in the Budget next week.

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

The difference in our approach is that we are looking to help people across all parts of the economy. Surely the people at the Freight Transport Association who have been campaigning solely for a fuel duty rise not to be imposed, which would benefit them, should realise that they must build an alliance with other people by campaigning for the striking down of the increase in VAT to 20%, which is hurting everyone, including not only themselves as the people who deliver goods, but the people who have to purchase those goods.

[Ms Eagle]

It is clear that increases in fuel duty have knock-on effects on petrol prices, and that fuel prices in general have complex knock-on effects in an economy. The Government have to think about that as they approach the Budget.

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

Will the hon. Lady give way?

[Ms Eagle]

No. I have given way a few times, and I am going to get on with my remarks.

It is absolutely clear that increased fuel duty costs are eating further and further into already stretched household budgets, making the squeeze on living standards even worse. Businesses are suffering from problems caused by inflating commodity costs, tighter margins and restricted access to credit from the banks. Many are anxious about how they will get by in the next few years, and the continuing rise in the price of fuel is adding to that worry.

[Claire Perry]

Will the hon. Lady give way?

[Ms Eagle]

I will get on with my remarks and give way to the hon. Lady shortly.

The cost of oil has been rising on world markets as a result of underlying increases in demand from Asia and uncertainty because of the unrest in the middle east. Just a week ago, petrol prices hit a new high at the pumps. The average price for unleaded fuel is, a week later, still £1.32 a litre. That means that the cost of fuel has risen 7p a litre since the beginning of the year. The AA pointed out that the £6 gallon has arrived for the first time, and that prices for diesel have soared even higher, currently averaging £1.38 a litre.

[Gordon Birtwistle (Burnley) (LD)]

I am grateful to the hon. Lady for giving way—[Interruption.] May I refer to an e-mail that I received—[Interruption.]

[Mr Speaker]

Order. That is not an orderly way in which to conduct the debate. An hon. Member should not stand up in the Chamber with an electronic device and read from an e-mail as a means of debating. That is the current position—such matters are always subject to review, but I assure the hon. Gentleman that that is the position at the moment, and we will leave it there.

[Gordon Birtwistle]

I apologise.

[Mr Speaker]

I am grateful to the hon. Gentleman,

[Ms Eagle]

That is nought out of two for the hon. Gentleman. Perhaps the next time he tries to intervene, he will manage to be in order.

[Gordon Birtwistle]

rose—

[Ms Eagle]

I am not willing to give way to the hon. Gentleman. [Interruption.] He can show me the e-mail afterwards.

The Conservative-led Government’s decisions to raise VAT to 20% may have been expertly disguised before the election so that the voters were kept in the dark about it, but we all know about it now. Increased VAT has added an average of £450 a year in extra cost to a family with children and has pushed the headline CPI figure to 4%, which is double the Bank of England’s target.

[Gordon Birtwistle]

rose—

[Ms Eagle]

I will not give way to the hon. Gentleman.

As we all know, VAT applies to petrol. The Library calculated that the Conservative Government’s 2.5% increase in VAT has added nearly 3p to the cost of a litre of petrol when people are least able to absorb that extra cost.

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

Perhaps the hon. Lady will confirm and clarify her party’s position on—I think—fuel duty. I am not sure because on ITV’s “Daybreak” the shadow Chancellor said: “We’re saying today, as well as the duty thing, which I’ll think you’ll freeze”—I presume that he was not saying that explicitly to Christine Bleakley—“I think you should reverse the VAT rise.” Specifically on the “duty thing”, is the shadow Chancellor talking about freezing the 1p rise, the RIP rise—[Hon. Members: “RIP?”] Sorry, I mean the RPI plus one rise. Which is it? [Interruption.] I might have made a slip, but I was thinking about the Opposition and their policy.

[Mr Speaker]

Order. Before we continue, may I appeal to Members, including Ministers and other Front Benchers who are intervening, to do that economically? I remind the House that the Chair’s responsibility is to seek to protect the rights of Back-Bench Members who wish to speak. I put it to Front Benchers that Back Benchers will be not inconsiderably irritated if long speeches from the Front Bench stop them getting in.

[Ms Eagle]

I was trying to help hon. Members by giving way. Obviously, that extends the time that one’s remarks take, but I think that some exchange helps the debate.

I hoped that the Chief Secretary would be here today, but we have the Economic Secretary instead. Why will the Chief Secretary not turn up to one of his own debates? Where is he? Why has he not come to tell us about what he has been doing on all those issues?

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

The hon. Lady will recall that when she was a Treasury Minister, she received a delegation of highlands and islands Members of Parliament, including the Chief Secretary, and that we asked for a fuel duty derogation for remote rural areas. We had tea and sympathy, but no action. The Chief Secretary is now implementing that policy. Does the Labour party now support reduced fuel duty for the islands?

[Ms Eagle]

We want to do something that helps everyone in the country, not one third of 1%.

As we all know, VAT applies to petrol. As I said , the Library has calculated that the 2.5% increase in VAT has added nearly 3p to the cost of a litre of petrol when people are least able to absorb that extra cost. We all know that an extra fuel duty increase of 1p above inflation is factored into the Chancellor’s Budget arithmetic and due to be implemented next month. Taken with rising inflation, those changes could put 5p a litre on to fuel duty rates. The combination of sharp rises in world oil prices, ongoing uncertainty in the middle east and the self-inflicted rise in VAT is creating real hardship for many people. It causes higher inflation, lowers consumer spending power, which is already weak, and reduces both consumer and business confidence, thereby putting any prospect of growth at risk. The economy shrank by a shock 0.6% in the last quarter of 2010. People are getting increasingly desperate for some relief from the Conservative Government, but there is precious little sign of it.

[Several hon. Members]

rose—

[Ms Eagle]

I am trying to get on with my remarks, as the Speaker wishes me to do.

What help has been put in place to tackle rising fuel prices since the Government took power last May? The Business Secretary was reported as telling the Press Gallery over lunch recently:

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

Top marks for observation, but most people would think that, at an average of £1.32 a litre, we already have a nasty period of high fuel prices. However, the Minister of State for International Development does not seem to think that they are high. As a former oil trader, he was unable to resist the urge to speculate. His irresponsible guesswork succeeded in generating front-page headlines in The Sunday Times on 6 March, when he announced that he thought that the record price of $147 a barrel for oil reached at the height of the oil price spike in 2008 would be smashed. He said:

“I’ve been saying in Government for two months that if this does go wrong, £1.30 at the pump could look like a luxury, $200 a barrel is on the cards”.

His words of wisdom, which were hardly calculated to bring calm to the international oil markets, were reported around the globe. His headline-grabbing antics succeeded only in making a bad situation worse, and, I would imagine, swift removal from No. 11 Downing street’s Christmas card list.

Meanwhile, total incoherence was breaking out in the oddly named “quad”, which, for those who do not know, consists of the Prime Minister, the Deputy Prime Minister, the Chancellor of the Exchequer and the Chief Secretary. Apparently, they are meant to be the ones who actually run the Government, and it seems that they are falling out over the Conservative manifesto promise to introduce a so-called fuel duty stabiliser, which would cut duty when prices were high but raise the tax when prices fall.

[Several hon. Members]

rose—

[Ms Eagle]

I will not give way. I am trying to get on. [Interruption.] I hope that the hon. Member for Devizes (Claire Perry) will stay in order. I have said that I want to get on with my remarks because the Speaker is trying to protect Back-Bench business, and I have given way a lot. She should now be patient if she wishes to contribute to the debate.

The fuel duty stabiliser relies on the view that increasing oil prices provide the Treasury with a windfall from North sea oil revenues that can be distributed to hard-hit fuel users. Where is the fuel duty stabiliser? In April last year—conveniently before the general election—the Prime Minister, after a huge song and dance on the issue, which we saw on the front pages, suggested that a Conservative Government would cut the cost of petrol by 10p a litre if oil prices remained high. At that time, petrol cost 12p a litre less than it does now. The Daily Telegraph reported that the Tory fuel duty stabiliser

“is expected to be launched within months if Mr Cameron is successful.”

As oil prices soar, voters who remember that promise are still waiting.

Since then, the Prime Minister has dropped lots of little hints about his pet policy, without actually doing anything about it. Every time he mentions it, he is quickly slapped down by the Chief Secretary. That happened in January just after a prime ministerial fuel price hint. Speaking on the BBC’s “Politics Show”, the Chief Secretary said of the stabiliser mechanism:

“It’s a complicated idea and it’s difficult to see precisely how we achieve it”.

Of course, that did not stop the Conservatives dangling the idea cynically before the electorate last April. In the same BBC interview, the Chief Secretary rejected calls to scrap the 1p rise in fuel duty that is due to be introduced this April, saying—

[Several hon. Members]

rose—

[Ms Eagle]

No, let me finish. The Chief Secretary rejected calls to scrap the 1p increase, saying that he was not prepared to “sacrifice income willy-nilly” to help motorists. That is the Chief Secretary who is not at this debate. Perhaps Conservative Members should be asking him their questions. He proceeded to champion the fuel derogation for remote islands, which will help just a third of 1% of Great Britain’s almost 34 million registered vehicles and 60 million people. To be fair to him, he has battled for 10 months to get that policy up and running and, showing the energy and drive for which he is famous, he has managed to get around to asking the EU for permission to think about doing it. That is a perfect example of a policy from this Government: it generates a satisfyingly large amount of headlines, helps virtually nobody and costs almost nothing.

Meanwhile, the Chancellor asked the Office for Budget Responsibility to undertake an assessment of the effect of oil price fluctuations on the public finances, in order to design a stabiliser mechanism. It produced that assessment last September.

[Brandon Lewis]

rose—

[Charlie Elphicke]

rose—

[Sajid Javid (Bromsgrove) (Con)]

rose—

[Ms Eagle]

I have given way to the hon. Member for Great Yarmouth (Brandon Lewis) already.

The Office for Budget Responsibility produced the assessment last September, and it failed to make the numbers stack up for the policy. It calculated that the overall effect on the public finances of a temporary oil price rise would be close to zero, and that a permanent rise would create a loss to the public finances. In other words, there is no windfall for the Treasury to redistribute using a so-called fuel duty stabiliser mechanism.

No one appears to have told the Prime Minister about that and he clearly has not bothered to read the OBR report, because at Prime Minister’s questions a couple of weeks ago, he promised a fuel duty stabiliser in the Budget:

“we will look at the fact that extra revenue comes to the Treasury when there is a higher oil price, and see if we can share some of the benefit of that with the motorist.”—[Official Report, 2 March 2011; Vol. 524, c. 300.]

The Daily Telegraph called that statement “misleading and economically illiterate”. I could not have put it better myself.

[Brandon Lewis]

rose—

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

rose—

[Ms Eagle]

I have given way to the hon. Member for Great Yarmouth.

That statement shows that this Government are run by a Prime Minister who does not do detail and who appears to be at odds with his own Chief Secretary. The OBR has shown that a temporary rise in oil prices generates a £100 million surplus in the first year for the Treasury, but that that turns rapidly to a net revenue loss of £700 million the year after. What the Government gain from higher oil tax revenues, they lose from the effects of higher prices on consumption and the requirement to spend more on indexing pensions and benefits. A permanent rise causes permanent losses to the public finances. The Prime Minister has to stop pretending that there is a windfall in rising oil prices that he can share out, because it simply does not exist. [Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the hon. Lady. I say to the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) that loud conversations in the middle of a speech are discourteous and must not happen. That is not a proper way to conduct debate. I am not having it, and that is the end of it.

[Ms Eagle]

I was saying that the Office for Budget Responsibility has given the lie to the view that a fuel duty stabiliser mechanism can be financed by the windfall that rising oil prices give the Government by revealing that that surplus does not exist.

The Secretary of State for Business, Innovation and Skills was caught recently saying that the Liberal Democrats are in a “constant battle” inside the Government, especially over tax proposals. They are obviously in a battle over the fuel duty stabiliser. In debates on the 2008 Finance Bill, he said that fuel duty stabilisers were “unbelievably complicated and unpredictable”. He also said:

“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 since confirmed that there is not. The Liberal Democrat bit of the Government is saying one thing and its Tory masters another. Together, there is total inaction on fuel prices.

The Institute for Fiscal Studies has concluded that introducing a fuel duty stabiliser would inject more uncertainty into the public finances rather than less. Analysis by the Policy Studies Institute found that if a stabiliser had existed for the 12 months to last December, when the price of petrol rose by 13p a litre, it would have cost the Exchequer a staggering £6 billion. The Government’s flagship policy on fuel, which they used cynically before the election to generate so many favourable headlines and to gather votes, is not only late in arriving, but looks shambolic and incoherent.

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

rose—

[Charlie Elphicke]

rose—

[Ms Eagle]

It is clear that the policy can be introduced only at the risk of injecting huge and dangerous uncertainty into the public finances. I give way to the hon. Member for North West Leicestershire (Andrew Bridgen).

[Andrew Bridgen]

The Labour party’s apparent damascene conversion on fuel taxes will amaze and intrigue the bulk of the electorate. Will the hon. Lady confirm whether she supported the crafty action of the previous Chancellor of the Exchequer, who effectively excluded fuel from a VAT reduction in 2008 by raising duty, and then put the VAT on fuel back up to 17.5% in January 2010?

[Ms Eagle]

One minute Government Members say that we have no plan to deal with the deficit, and the next minute they complain that we had a plan that would have raised money. They really do try to have it both ways and are not remotely coherent.

The time for action is now. The Chancellor should take immediate action on fuel prices to ease the cost of living crisis in Britain. He does not even have to wait until the Budget. We are calling on him to reverse immediately the 2.5 percentage point increase in VAT on petrol that he imposed in January.

[Charlie Elphicke]

rose—

[Sajid Javid]

rose—

[Ms Eagle]

I have given way to the hon. Member for Dover (Charlie Elphicke).

The House of Commons Library has estimated that that reduction would cost £700 million and take nearly 3p a litre off the price of petrol.

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

Will the hon. Lady give way?

[Ms Eagle]

I always give way to the hon. Gentleman.

[Jacob Rees-Mogg]

The hon. Lady is always enormously gracious and generous in giving way. The Labour party is now proposing tax cuts, and has not proposed any serious spending cuts. Does it just want the country to go bankrupt?

[Ms Eagle]

The hon. Gentleman should not believe the propaganda from Tory central office. Of course we do not want the country to go bankrupt. We had a plan that would have halved the deficit, rather than dealing with it in four years. If I were in the Conservative party, I would not be quite so proud of producing the third largest fiscal consolidation—public spending cuts in ordinary language—of the top 29 industrialised countries, beaten only by Iceland and Ireland. As the hardship and the squeeze on living standards in this country become clearer in the coming year, the Government will come to rue their decision to cut too far and too fast. People will suffer day in and day out as a result of that decision.

[Several hon. Members]

rose—

[Ms Eagle]

I want to get to the end of my remarks, and I have given way a lot.

[Mr MacNeil]

Will the hon. Lady give way?

[Ms Eagle]

I will give way to the hon. Gentleman before I finish.

[Mr MacNeil]

I am not sure what the hon. Lady thought about living standards in the Outer Hebrides when, time after time, she stood at the Dispatch Box as a Minister and said what she could not do and why she could not do it. Does she, in her quieter moments, regret not approaching the European Commission for a rural fuel derogation for the Hebrides and other islands in Scotland?

[Ms Eagle]

Why does the hon. Gentleman not want to help the whole of Scotland? Why does he want to help only a tiny bit of Scotland?

[Andrew George (St Ives) (LD)]

Will the hon. Lady give way on that point?

[Ms Eagle]

I must continue.

The Chancellor should use the Budget to look again at the annual fuel duty rise due in April, because of the price of fuel in world markets. At this time of instability and change in the middle east and north Africa, the Chancellor has to work with other Finance Ministers to try to keep oil supplies flowing and get world oil prices down.

At the weekend, the Deputy Prime Minister claimed that the Liberal Democrats were

“in the middle, for the middle”.

I say to them this afternoon: prove it. If they really cared about the struggles facing hard-pressed families in Britain, they would join us in the Lobby and vote for our motion. I for one look forward to seeing them.

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

My hon. Friend has laid out clearly why a fuel duty stabiliser or regulator would not work in fiscal terms. The tragedy is that the wider UK public, on the back of the Fair Fuel UK campaign, have been sold the idea of a stabiliser while at the same time talking about a reasonable price. Does she have any idea what would be a reasonable price with which people would be satisfied? It would be quite unsustainable, I think.

[Ms Eagle]

I thank my hon. Friend for his observations, and he is quite right. The stabiliser mechanism relies on our having some idea of the price at which petrol ought to be stabilised, which means guessing right. A wrong guess could lose the Exchequer a lot of money. The question is, when is a rise in fuel prices a blip and when is it a trend? A stabiliser would require a judgment call on that point, too, and if the Government got it wrong it could cost a lot of money.

We have had nothing but delay and dithering on the issue from the coalition parties, despite their electoral promises, which were lavish in the extreme. The Government should be taking action now. Instead, just 10 months in, what do we have? A Foreign Secretary who is looking for his mojo, a Deputy Prime Minister publicly denying being taken hostage by the Prime Minister from inside his £2 million ring of Sheffield steel, and a Business Secretary who is so full of self-importance that he claimed he could bring the Government down single-handed if he was pushed too far. Millions of Britons struggling in the middle of the largest squeeze in living standards for 80 years are hoping and praying that somebody will push him, and push him fast.

Families are crying out for help now, but the Government are cutting too far, too fast and pursuing a dangerous and extreme experiment on the UK economy. Since they came to power, growth has stalled. Today’s unemployment figures are the worst since 1994, and inflation is double the Bank of England’s target. They need to recognise that families need help now, and they need to forget the dogma and join us in the Lobby to vote for this cut.

13:23

[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 that the Government inherited the largest deficit in UK peacetime history and that the previous Government and current Opposition has no credible plan to deal with the deficit; further notes that this Government has already taken steps to support families and that those on low and middle incomes will benefit from April 2011 from a £1,000 increase in the income tax personal allowance, above-indexation increases in Child Tax Credit and that pensioners will receive new ‘triple-lock’ increases in the basic State Pension; further notes the significant impact on fuel prices in the UK of the dramatic increase in the world oil price to over $100 per barrel and the impact on households and business; notes that the previous Government increased fuel duty no less than four times between December 2008 and April 2010, proposed introducing a fuel escalator from 2011 and planned for a further series of six consecutive fuel duty rises up to 2014; nonetheless recognises the significant impact of high fuel prices on motorists, hauliers and businesses and that the Government is considering a fair fuel stabiliser that could support motorists and businesses when oil prices are high; and in addition notes that a reduction in VAT on fuel would be deemed illegal under EU law and that the Chancellor will update the House on this issue at the time of the Budget.”.

There we have it, from the party that came into government with fuel duty at 36.86p a litre and left it at 57.19p a litre—a whole load of moaning and insubstantial comments about what it cannot do to help motorists. The Government, unlike the Opposition, understand the seriousness of the issues that we are debating today. We know that the increase in the world’s oil price, as it feeds though to all other goods, is leaving many people out of pocket, and that families up and down the country are finding it hard to make ends meet. The Opposition clearly have no grasp of the issues at hand, as we have just heard; to them, it is just politics. They are simply not interested in how people on the ground actually feel about things, and they have no credible policies to back up their claims.

[Andrew George]

The Labour motion mentions

“securing the appropriate EU derogation”.

I hoped that the shadow Minister would give way to me, so that I could ask her what European derogation that is, and how many times in the past 13 years Labour attempted to seek it. Has the Economic Secretary seen anything in the records of the Treasury suggesting an answer to those questions?

[Justine Greening]

Officials are not aware that the last Government sought any derogation in relation to VAT on fuel at any point in the past 13 years. In fact, if the shadow Chancellor had gone off to Europe with his influencing strategy, which was clearly so unsuccessful when he was running for the leadership, I doubt that there would have been any prospect whatever of his making any progress. The Labour party seems to have about as much understanding today of the economic situation that it has left our country in as it did of the situation two years ago, when it ran this country into the deepest and longest recession in living memory.

[Rehman Chishti]

Will my hon. Friend confirm that the shadow Chancellor was wrong in law when he said that there should a reversal of the VAT rise on fuel? Under EU directive 112 of 2006, that cannot legally be done.

[Justine Greening]

My hon. Friend is absolutely right. In fact, the EU directive on VAT states:

“Member States may apply either one or two reduced rates…The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III.”

That annex does not include road fuel, and other amending articles do not permit a reduced rate or exemption to be applied to transport fuel. That in is European Council directive 2006/112/EC of 28 November 2006 on the common system of value added tax, at article 98 and annex III.

[Charlie Elphicke]

In the light of what my hon. Friend has just said, is not the motion before the House a shamelessly opportunistic preying on the justly held fears of the British people about the cost of fuel?

[Justine Greening]

That is absolutely what it is, and it is something else as well—it is a smokescreen. The Labour party has no plan whatever to tackle the deficit, and this Opposition day debate is all about trying to divert attention from that. It had no plans when it was in government, and it has no plans now it is in opposition.

[Sajid Javid]

One of the most important components of the cost of living is the interest rate, which in turn determines mortgage rates. Does my hon. Friend agree that, because of the action this Government have taken, Britain today has a lower interest rate than countries in Europe that have far higher deficits? That is the very action that the shadow Minister sought to criticise.

[Justine Greening]

One of the problems is that the Labour party and the shadow Chancellor do not even accept that there is a structural deficit. My hon. Friend is absolutely right to point out that the steps we are taking to tackle the deficit and bring our public finances back under control and into a sustainable shape, so that we can fund public services affordably for the long term, will give us a much better chance of keeping interest rates and inflation low. That is critical to ensuring that we can support our economy more broadly.

[John Mann (Bassetlaw) (Lab)]

It would help the debate and the Economic Secretary’s own Back Benchers if she could tell us which party is responsible for the majority of the taxation on fuel today.

[Justine Greening]

I am sure the hon. Gentleman was quite happy trotting through the Aye Lobby when his party brought forward its 12 fuel duty rises and the Budget in which it announced a further six. His question is particularly disingenuous because at that time the Conservative party was campaigning against unreasonable and unfair rises in such things as road tax. The Labour party paid no attention and continued to hammer motorists again and again.

[Caroline Lucas]

rose—

[Justine Greening]

Perhaps I will make a bit of progress, because I know that many Members want to take part in the debate.

[John Mann]

We want an answer.

[Justine Greening]

I shall answer the hon. Gentleman, who is hectoring from a sedentary position. When his party was in government, it knew all about raising taxes. In fact, it formed the ultimate tax-and-spend Government, who got us into such a situation that their final Chief Secretary wrote a note saying that there was no money left. I really do think that if the Labour party wants to be taken seriously on the economy, it must start living in the real world instead of the fantasy world that it currently finds itself in, particularly in relation to EU VAT directives.

[Mr Speaker]

Order. I apologise for interrupting the Minister. I said to the hon. Member for Na h-Eileanan an Iar (Mr MacNeil) a few minutes ago that he was making an excessive noise—[Interruption.] That was my best effort at the pronunciation of his important constituency. However, my remonstrance extends more widely. The debate has been notably scratchy, and it needs to calm down a bit from now on.

[Justine Greening]

Thank you, Mr Speaker.

The Government are taking steps to help the poorest and most vulnerable in our society. From April this year, we are raising the income tax personal threshold by £1,000, taking nearly 900,000 of the lowest-income workers in our country out of tax altogether.

[Robert Halfon]

Will the Minister give way?

[Justine Greening]

I shall make a bit more progress, because I want to talk about the Labour party’s so-called fuel duty proposals, which are of course VAT proposals.

We are increasing child tax credits above the rate of inflation, giving lower-earning families an extra £210 over the next two years. Of course, poorer families will still receive more in child credits than they received under the previous Government, and, as I said, lower earners will be better off as a result of this Government’s changes to the personal allowance.

[Caroline Lucas]

Will the Minister explain how it is compatible for a Government who claim to be the greenest ever to duck this opportunity to introduce a shift to green taxation—in other words, to keep the fuel duty escalator but to reduce other taxes accordingly?

[Justine Greening]

The hon. Lady’s point is about how to strike the balance between achieving environmental change and managing to raise revenues for the Exchequer to fund public services, which I am sure she agrees need the right level of funding. I think we have got the balance right in our approach to fuel duty and VAT on fuel. The challenge is that if we do not go ahead with the previous Government’s increases, we could fundamentally damage our ability to tackle the deficit. This Government are constrained purely because of the terrible financial situation that the previous Labour Government handed over to us.

[Several hon. Members]

rose—

[Justine Greening]

If I may I shall make a little progress, mindful of what Mr Speaker said about ensuring that hon. Members get a chance to have their say after the opening speeches.

One of the many things that this Government are doing to help people in Britain—it is the last one I will mention—is changing the state pension. The shadow Chancellor knows all about that, because he was chief economic adviser to the Chancellor who later became Prime Minister in the previous Government when he proposed increasing pensions by 75p. Many thought at the time that that was a real slap in the face for pensioners.

This Government have gone further than the previous one ever did. We have already introduced proposals to re-establish the earnings link, and introduced the triple-lock guarantee, so that each and every year the basic state pension will increase by the greater: earnings, prices or 2.5%. Of course, when things improve—when inflation comes back down below 2%, which is the Bank of England’s aim, and when the economy recovers from the years of Labour’s irresponsibility—those in retirement will still have higher pensions, poorer families will still receive more in tax credits, and lower earners will still be better off as a result of our changes to personal allowances. Those are real, credible, long-term policies that will stand the test of time, not half-baked initiatives conjured up over a weekend that do not last even the course of a single debate.

That brings me on quite nicely to the impact of the rising cost of fuels. Opposition Members know all about that, because as we have heard, the previous Government increased fuel duty four times in their last 16 months in office.

[Robert Halfon]

Is my hon. Friend aware that the previous Government planned six future fuel price increases, even though they knew the state of the economy?

[Justine Greening]

Absolutely. They left many tax bombshells, but perhaps that pre-planned tax increase was the tax road mine. There was a pre-planned additional per pence increase on fuel and a pre-planned year-on-year RPI increase—the so-called escalator. Ironically and utterly bizarrely, we are today debating a Labour motion that goes against the policy introduced by the previous Labour Government.

[Richard Graham (Gloucester) (Con)]

Given that I and several Conservative Members were not in the House for Labour’s last Budget, will the Minister confirm whether the hon. Member for Wallasey (Ms Eagle) and her colleagues on the Opposition Front Bench voted for the seven increases in fuel duty proposed by the Chancellor at that time?

[Justine Greening]

I do not know exactly how they voted, but the previous Labour Government consistently increased fuel duty on motorists, taking no account of whether that was affordable.

[Mr Russell Brown]

I thank the hon. Lady for giving way—at the end of the day, she is a fair person. She talks about the increases imposed by the previous Labour Government, but she must also recognise that on 11 occasions over a nine-year period, they saw fit to suspend or abandon any proposed increases simply because of the rising price of fuel. I sincerely hope that she and her colleagues remember that in the light of the motion.

[Justine Greening]

The hon. Gentleman is talking about postponements, because those fuel duty increases eventually came through. That is one reason why in their final months in office—from December 2008 to April 2010—the previous Government increased fuel duty no fewer than four times.

Over the weekend, the shadow Chancellor confidently proposed cutting VAT on fuel.

[Sammy Wilson (East Antrim) (DUP)]

The Minister quite rightly highlights in her amendment the previous Government’s fuel duty increases, but the motion recognises that people are feeling pain now, and holds out the hope that the Government will do something about fuel duty. Rather than talk about what the previous Government did, will she tell us what she intends to do to alleviate the hardship for people in places such as Northern Ireland?

[Justine Greening]

I shall not pre-empt next week’s Budget, but the hon. Gentleman knows that both parties in the coalition Government spoke in opposition about the effect of fuel duty on motorists. Conservatives spoke in opposition about how the oil price fed through into fuel prices at the pump, and Liberal Democrats talked about the impact of fuel prices on people living in remote rural areas. The coalition Government are now looking at how to tackle both those problems, but I cannot pre-empt the Budget.

[Ms Angela Eagle]

Will the Minister now admit that although before the election the Conservatives said they would reduce fuel by 10p a litre if petrol prices were high, they have actually increased fuel duty twice—once in October and once in January—since getting into power?

[Justine Greening]

Listening to the Opposition is stunning. The outgoing Chief Secretary’s message to the incoming Government was that there was no money left. Worse than that, the previous Government had pre-planned increases, which were due to come in now, as the hon. Lady just pointed out. The bottom line is that it is outrageous for the Labour party to cry crocodile tears about tax increases that it had planned—it is disingenuous in the extreme, and shows that it has no credibility and no leadership on the issues that matter to people, such as motoring, which we are debating today. The audacity of the motion is stunning.

Let me turn—as I was about to—to the Opposition’s proposal to cut VAT on fuel. [Interruption.] The shadow Chancellor is hectoring from a sedentary position, and I think the reason is that he is worried that we are about to talk about his policy—a policy that unravelled within hours of his announcing it. He has come late to the debate on motoring. Obviously he spent many years being driven around in a Government car that the taxpayer paid for. I understand that it was reported in the papers that he used to use it for journeys of just 100 yards. Perhaps he was not aware at that point of how much it cost people to fill up their cars, but perhaps he knows now, and perhaps that is why he has suddenly realised that this is an issue, as we did in opposition. He has come to this debate late, but his policy-making suggestions are, to put it bluntly, illegal under EU law.

It is quite an achievement to make a proposal along those lines. As I said to my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti) , the shadow Chancellor is quite wrong to say that we can reverse the VAT rise on fuel, because doing so would be illegal under the EU VAT directive. However, if the right hon. Gentleman thinks that the UK operates under a different VAT directive, perhaps he would like to intervene on me right now. [Interruption.] I think we have established that there is only one EU VAT directive, and his proposal is illegal under that directive. The other big flaw in his argument—[Interruption.] Does he want to intervene?

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

rose—

[Hon. Members]

Hooray!

[Ed Balls]

When we have only one reduced rate, but Italy, France and Poland have three reduced rates, and when the French President secured a VAT rate cut for French restaurants, is the hon. Lady really saying that she is going to hide behind European law and fail to stand up for the British motorist? Is that really what she is saying?

[Justine Greening]

There is only one party failing to stand up for the British motorist, and it is the Labour party. Let me outline precisely why France was able to get a reduced VAT rate on—

[Ed Balls]

rose—

[Justine Greening]

There is no point the right hon. Gentleman asking a question and then getting excited about the fact that I might answer it.

[Ed Balls]

rose—

[Justine Greening]

If the right hon. Gentleman just calms down for a second, I will answer him; if he then wants to intervene on me, he can do so. However, if he is that desperate to get in on this debate, perhaps he should have opened it instead of his hon. Friend the Member for Wallasey (Ms Eagle).

The right hon. Gentleman is right to point out that across Europe different products have different VAT rates. Some are exempt from VAT, some have a zero rate, some have a reduced rate and some have a standard rate. Indeed, he should be well aware of that because he was an economic adviser at the Treasury the last time the negotiations that he referred to started. In fact, they took six years. He mentioned President Sarkozy’s determination to secure a reduced VAT rate for restaurants, which is indeed what he did. However, in that renegotiation of the rules governing which products would be in which categories and which would no longer have standard VAT rates, I am not aware of the UK Government at any stage pressing for anything other than the standard rate to apply to road fuel. Perhaps the right hon. Gentleman can confirm that: yes or no?

[Ed Balls]

At no point did we apply for a special reduced VAT rate for road fuel, and the reason was that we never raised VAT on fuel. The people who have raised VAT are this Government. Can the Minister confirm that it is entirely in her gift and that of the Chancellor, who is not here, and the Chief Secretary, who has not turned up either, to apply for a derogation to reverse their mistaken increase in VAT? They have not done so and will not, but they could if they wanted to stand up for the British motorist.

[Justine Greening]

I do not think the right hon. Gentleman even believes that himself. The bottom line is that he wants—[Interruption.] The shadow Chief Secretary says that we need to take action now, but he wants us to embark on a process that took six to seven years the last time it happened. How is that taking action now?

Let me tell the House on which items the rate was changed. Here are a few of the products and services to which a reduced VAT rate is now applied in other countries:

“minor repairing of bicycles, shoes and leather goods, clothing and household linen”.

Window cleaning was also one, and hairdressing was another. The Government at that time—a Government of whom the right hon. Member for Morley and Outwood (Ed Balls) was part—did not seek to add road fuel to that list. He says that that was because the previous Government never raised VAT on fuel. That is not strictly true, of course: they reduced it, but then put it back up again, as we have heard. The other reason was that, year on year—and, in the final stages, month on month—they were consistently raising fuel duty, so they had no need to use VAT as a tool. They were getting plenty of additional tax from the motorist.

[Mr Aidan Burley (Cannock Chase) (Con)]

The last Government might not have increased VAT, but they certainly increased fuel duty. When Labour came to power in ’97, duty on unleaded petrol was 36p a litre; when the last Government left office in 2010, it had risen to 57.9p a litre. Does my hon. Friend think that Labour Members should take some responsibility for increasing fuel duty by more than 20%?

[Justine Greening]

Of course they should, but as so often they never do, unfortunately.

[Mr Russell Brown]

Will the hon. Lady give way?

[Justine Greening]

I will give way one more time, but then I really must make some progress so that other Members can have their say.

[Mr Brown]

I am indebted to the hon. Lady, but may I just put the record straight? When Labour came to power in 1997, the duty and tax left by the previous Conservative Government accounted for 74%; when we left office, duty and tax accounted for 65%.

[Justine Greening]

And a huge fiscal deficit and debt to boot, so we will take no lectures from the Labour party. Perhaps the hon. Gentleman can discuss with the shadow Chancellor how he thinks the huge deficit that his party left our country—it costs us £120 million a day to service our debt interest—should be addressed. The elephant in the room, which we have not talked about so far today because it is not in the Opposition’s motion, is how they would tackle the deficit. The answer is that they would not tackle it, which is why it is so lucky that Labour is not in government at the moment.

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

rose—

[Ms Angela Eagle]

rose—

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Justine Greening]

I will not give way to any more Opposition Members, and I will tell the House exactly why. This is not the first time that there has been an opportunity to debate fuel duty rises: last month a Conservative MP had a debate in Westminster Hall. The reason the Opposition have now gone quiet is that they probably did not know that that debate was due to take place, but if they did, it is even more disgraceful. How many Opposition Members turned up to participate in that debate and represent their constituents?

[Mr Reid]

None.

[Justine Greening]

Absolutely none, so all this is nothing more than political opportunism in advance of the Budget, and it is incredibly poor quality opportunism too, because the Opposition have made a proposal that is impossible to implement and is utterly flawed in every respect.

[Ed Balls]

Will the hon. Lady give way?

[Justine Greening]

No, sorry.

The other reason why the Opposition’s proposal is flawed is that they say in their motion that they would pay for the proposal with receipts from the bank levy. The first thing to say about that is that we introduced a bank levy—something that Labour never managed to do—but, secondly, we brought forward the rate at which it would fully kick in early, because the banks were doing better and therefore could afford it. The money is a one-off additional revenue stream that we are getting a year earlier, but the Opposition are so economically illiterate that they want to use it to fund a long-term, permanent tax reduction on fuel. Looking at their faces, I do not think they necessarily realise that yet, so as well as their proposal being illegal, their figures do not add up.

To finalise my comments, it is only this Government who are serious about helping British motorists. We tasked the Office for Budget Responsibility with investigating the impact of oil price fluctuations on the economy and we are actively considering proposals for a fair fuel stabiliser.

[Ed Balls]

Will the hon. Lady give way?

[Justine Greening]

No, I will not.

Motorists deserve better than a VAT proposal on fuel that everyone knows is completely unrealistic and unworkable. It is disingenuous of the Opposition to suggest it, and it is unaffordable, given the economic mess that we inherited. They want a derogation that would be unsuccessful and take six to seven years to implement. We are talking about taking action to tackle the cost of living now. That is the choice facing the House today. At the end of the day, we all know that this motion is just a smokescreen, and that the Opposition have no plans whatever to tackle the deficit. Yet again, they have missed a chance to be credible on the economy. Yet again, they have failed to show any leadership on their solutions to the big problems facing Britain today. I sincerely hope that the House will vote against their motion, because it is one of the lowest-quality and most disingenuous motions that we have debated on the Floor of the House recently.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Members will see that this is a popular debate, and there is a six-minute limit on Back-Bench speeches, with the usual injury time for two interventions.

13:50

[Fiona O’Donnell (East Lothian) (Lab)]

I am genuinely grateful for the opportunity to speak in this debate. The increase in VAT has been a matter of great concern to my constituents and I am unashamedly going to concentrate on how it is affecting them.

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

I thank my hon. Friend for giving way, as the Minister did not. The Minister talked about living in the real world, but I am sure that we on the Opposition Benches know more about that than she does. I am sure that my hon. Friend’s constituents will be struggling with the £450 a year increase—

[Justine Greening]

On a point of order, Mr Deputy Speaker. The hon. Lady has just made an accusation about what I do or do not know about living in the real world. That goes beyond what I think is a personal comment. She has no understanding of what I do or do not understand. I can assure her that I get on the District line every day to come into work and I know exactly what is going on in the real world. I only wish that the Opposition did.

[Mr Deputy Speaker (Mr Nigel Evans)]

That is a point for the debate, not a point for the Chair.

[Fiona O’Donnell]

Thank you, Mr Deputy Speaker. I am obviously going to have to treat the Minister with kid gloves as she is so sensitive.

East Lothian is a largely rural constituency made up of small gatherings of communities that rely heavily on the use of their cars. I suspect that the hundreds of e-mails that I have received over the past few weeks will now be followed by hundreds more, as my constituents will be bitterly disappointed by the Minister’s utterly sterile contribution to the debate.

[Charlie Elphicke]

Will the hon. Lady give way?

[Fiona O’Donnell]

Not at this stage.

The e-mails that I have received have not been the standard campaign e-mails that many of us find in our inboxes every day. I have been genuinely moved and angered by the stories that they have told. They have been from motorists, some of them older people living on pensions, people surviving on disability living allowance—Lord knows, they have enough to worry about under this Government—or people stuck on fixed incomes. This rise in the cost of fuel is hitting them hard.

I have also had e-mails from employers in my constituency. East Lothian relies heavily on small employers, but they are struggling. Two have already told me that their businesses will close this month, and that is bad news for East Lothian and for my constituents. We are promised that we will have a Budget for growth next week, but in East Lothian, the Government’s policy is not working; it is going in the opposite direction.

[Mr Reid]

Like the hon. Lady, I represent a rural constituency and, like her, I agree that we need action on fuel prices now. However, we need action in the Budget next week, not in the six years it would take for this Labour motion to be implemented.

[Fiona O’Donnell]

I am sure that all my constituents will feel so much better after hearing that intervention. They do not want to hear the hon. Gentleman’s political point scoring and opportunism; they want to hear what the Government are going to do for hard-working families, for pensioners and for those with disabilities in my constituency.

I have had e-mails from people who have lost their jobs. People living in East Lothian need to be able to keep their cars on the road in order to access the services that will help them get back into work, to turn up for job interviews and to get out there to find and keep a job. I have also had e-mails from people who have been struggling throughout the past few years. I am going to admit that, for those on fixed incomes, times have been difficult, but the message is now clear that, under this Government, they are getting tougher.

I am also going to be unusually generous and congratulate the Tory party on a splendid result in the general election in East Lothian, where it moved up to second place. The Scottish National party—I see that its Members have now deserted us—moved down to fourth. Before the Tories get too excited, however, I should point out that that result involved a 0% swing from Labour. Many of the people who have contacted me voted for the Tories at the election, and I am representing them today without fear or favour. They want to know when the Government are going to deliver for them. If the Government will not listen to me or to those on our Front Bench, I urge them to listen to my constituents.

I know that the first questions that my constituents would want me to ask today are, “Where is the Chief Secretary to the Treasury?” and “Where is the Chancellor of the Exchequer?” They will be insulted that the Chancellor and the Chief Secretary have not had the guts to turn up and take part in this debate and to answer my constituents’ questions. I have something of interest to tell the House. I went to the same school as the Chief Secretary to the Treasury. The right hon. Member for Ross, Skye and Lochaber (Mr Kennedy) also went to that school, and he has remarked to me, “That’s now one of us from each of the political parties.” I am particularly disappointed that the Chief Secretary to the Treasury, who represents a rural constituency, does not see the impact that the increase in fuel prices is having.

I try hard not to be judgmental about the Conservatives, and I try hard not to make the kind of comments that the Minister finds so harsh. But when they talk about the tough choices that they face in government, I have no sympathy for them. I am sick and tired of hearing them talk about that. Being in government and having a chance to reach out to families in East Lothian is not what is tough in life; what is tough for people is working out how they are going to fill up their car at the Co-op in Tranent next weekend in order to keep their family on the road. That is what is tough.

Mr Speaker rightly criticised the hon. Member for Burnley (Gordon Birtwistle) for bringing an electronic device into the Chamber. I presume that the hon. Gentleman has been running around for the past half hour trying to find a printer somewhere on the estate. I have gone to the trouble of printing off a couple of the representations that I have received from my constituents, and I should like to read them out to the House. One comes from Alec Flynn in Tranent, who says of the fuel price rise:

“We are a small family road haulage business…and we would like your support to fight the price the government plan to put on in the budget”.

I want the Minister to address Alec Flynn’s concerns, and to stop moaning about tough choices.

[Justine Greening]

Many hauliers can recover VAT, and I do not think that the Opposition’s proposal on VAT would provide the help that she is seeking to provide for them.

[Fiona O'Donnell]

Perhaps I have some responsibility here. I have not formally congratulated the Government on winning the general election, so perhaps it is my fault that they have not grasped the fact that they are now in government. They are in a position to change their minds, to lower the VAT rate on fuel and to make a difference to Mr Flynn and to ensure that the people he employs continue to have jobs. I suspect that Mr Flynn will remain disappointed, however. We were certainly not planning to increase VAT or to make life even more difficult for people.

[Charlie Elphicke]

Will the hon. Lady give way?

[Fiona O'Donnell]

No thank you.

Then there is the case of Mary Johnston from Haddington, who said:

“My husband and I are senior citizens. We live in a farm cottage 2.5 miles outside Haddington”.

Let me summarise by saying that the rising costs of motoring are making it virtually impossible for them to leave their house. I hope that at some point during this debate we will hear some words of comfort from a Government who have let down my constituency.

14:00

[Mr Robin Walker (Worcester) (Con)]

I will be brief, as I know many other Members want to speak in this short debate.

I am glad that the Opposition have chosen the subject of fuel prices, as it is an issue that affects all our constituents and MPs of all parties have already urged the Government to take action. I have signed cross-party early-day motions 1252 and 1241, which call for progress on a fair fuel stabiliser. Along with colleagues of all parties, I have also supported the Federation of Small Businesses in its campaigns. There is a great deal of ground for cross-party consensus on this issue. We all recognise that the cost of living is rising and that fuel prices play an important part in it. We all recognise that the soaring costs of petrol and diesel have knock-on effects on the price of everything—from food and clothing and the cost of getting to work to the cost of educating children.

[Mr Chuka Umunna (Streatham) (Lab)]

The hon. Gentleman is right to refer to the rising cost of living. The big difference between now and a few months ago is, in many ways, the rate of inflation. The Governor of the Bank of England has been clear that he has no way of further loosening monetary policy right now. The talk before Christmas was about such further loosening, perhaps with a further round of quantitative easing. That is clearly no longer an option, which means that the only option is to alter fiscal policy, yet we have heard not a single word from the Minister to suggest that there will be any change in fiscal policy. Does the hon. Gentleman believe that the Government are right to sit on their hands when they are in a position to act to relieve the burden on people like my constituents?

[Mr Walker]

I thank the hon. Gentleman for that long intervention, but we are likely to hear what action the Government are planning in the Budget next week, which I would not want to pre-empt at this stage, so I shall continue with my argument.

There would be no disagreement about the underlying premise of today’s motion—that fuel prices drive up the cost of living. We can legitimately debate the action that Governments are able to take. Like many other Members, I believe the Government should take action on fuel prices by introducing a fair fuel stabiliser and by looking at whether they can put off any increase in fuel duty suggested under the last Government’s escalator policy. It is vital to take into account the real impact on the cost of living but, perhaps even more importantly, the cost to the economy of the rising price of petrol at the pumps.

In fact, having read the detailed response of the Office for Budget Responsibility to the Government’s initial suggestion of a fair fuel stabiliser, I believe that it strongly makes the case for intervention in the fuel price. What the OBR showed was that, contrary to the belief that Government revenues rise as a result of higher fuel prices, the depressing effect on the economy, output and therefore tax receipts, along with the impact on inflation, mean that in the long term, Government net revenues are hurt by higher prices. While that might make more challenging the worthy aim of coming up with a revenue-neutral stabiliser, it clearly shows that success in limiting fuel price rises will bring long-term dividends to Government in terms of tax receipts and lower inflation. The real lesson of the OBR’s report is that the Government need to act on fuel prices, through the fuel duty, to avoid a substantial loss of revenue through economic growth. I am confident that that lesson will be taken into account when we receive next week’s Budget—a Budget for growth in the UK.

I know that the Government have already promised action in remote and rural areas, which I welcome, but I represent an urban constituency that has also been badly affected by rising prices, so I want to remind the Government of the need for action everywhere. As a county town, Worcester’s economy is affected by high fuel prices in rural areas, but our city suffers from higher prices than many other urban areas around it.

My constituents have often pointed out that there is a substantial differential of around 5p a litre between prices in Worcester and prices in Gloucester or Birmingham, just a short drive away. Driving as regularly as I do between Westminster and Worcester in my small diesel car, I feel this price differential very directly and often find it is as cheap to fill up at a motorway service station as it would be in my own constituency. The website petrolprices.com quotes prices as high as £1.45 a litre of diesel in Worcester today compared with an average of £1.39 in Gloucester just 28 miles away or £1.38 in Birmingham. I therefore urge Ministers to look into the differential pricing around the country, whereby some areas, whether urban or rural, pay much more for their fuel, and to assess what can be done to address the problem.

I certainly accept that people in rural areas have greater need for their cars, but I urge Ministers to accept that action on fuel prices across the board will benefit the whole economy. We have seen in previous fuel crises that when fuel prices spike, economic growth slows down, both globally and domestically.

I therefore support taking action on the cost of fuel, but I do not support this Opposition motion, which I believe is poorly targeted and opportunistic. It hits the wrong target in focusing on the impact of VAT and only touching lightly on the far more significant issue of fuel duty. Perhaps that is because the Labour party did so much to encourage the escalation of fuel duty when it was in power. As the Government amendment points out, the Labour Government planned for six consecutive fuel duty rises up to 2014 on top of the 12 increases they made when they were in power. It is fair to say that those increases, like the introduction of the fuel duty escalator under the Conservatives, were made in a different environment from today’s, when the uncertainty in the middle east is adding to the upward pressure on prices. There has been no indication, however, that Labour has shifted from its ideological attachment to ever-higher duties on fuel, which rose from 36p to nearly 58p when they were in government, with Labour Members boasting that they left the duty intact at 65% of the cost of fuel at the end of their term.

It is cynical and opportunistic for a party whose last Chancellor laid the groundwork for the increase in VAT to be lashing out at its implementation, and it is beyond the bounds of belief that Labour Members should want to earmark all the proceeds of a bank levy they failed to make on to a rebate they know they could not have given—even if they had been in power. It is even more astonishing, when they have already suggested other plans to spend this levy many times over through opposing changes to child benefit, that they suggest funding more capital spending and reversing changes to tax credits. The Opposition motion has no credibility on this very important issue.

I urge the Government to act on fuel prices, but I urge them to do so through a fair fuel stabiliser on which there is a broad political consensus, and through looking at the broader case for changes in fuel duty to reflect the economic circumstances of today.

14:06

[Ian Murray (Edinburgh South) (Lab)]

It is a pleasure to follow the hon. Member for Worcester (Mr Walker), who talked about disingenuous and spurious policies. I am sure it was disingenuous to promise not to increase VAT before the general election and then to increase it immediately after it. There is nothing more disingenuous than lying to the electorate.

I would like to follow my hon. Friend the Member for East Lothian (Fiona O'Donnell) in talking about some of the personal stories that have been brought to my attention and which relate to the Opposition motion.

[Andrew Bingham (High Peak) (Con)]

rose—

[Ian Murray]

I would like to make some progress.

My constituents wrote to ask me to bring their stories to the House and put them directly to the Chancellor and the Chief Secretary to the Treasury, so I am disappointed that neither of them is in their place. It shows a real disregard for this place when those two senior Ministers are not present to debate such an important issue. Of course the two Ministers on the Treasury Bench are among my favourites, but it would have been nice for my constituents to have had a response directly from the horse’s mouth.

Let us examine what fuel price rises are doing to the cost of living. I shall start with the case of a constituent in Edinburgh South who runs a small business. Let us look at what these particular fuel increases are doing to growth in the economy; in so doing, I shall echo some of the points made by the hon. Member for Worcester. My constituent runs a business in the service sector, so she uses a lot of suppliers. However, suppliers’ price increases are going through the roof, mainly because of additional fuel costs. She told me that some of her suppliers were charging as much as an additional £5 per delivery to cover their own increased fuel charges. My constituent faces a dilemma of what to do about that £5 increase. Should she pass it on to her customers? She finds doing so difficult. Why? Her problem is compounded by the fact that VAT has increased from 17.5% to 20%, which has also impacted directly on prices to her customers.

[Barbara Keeley]

My hon. Friend makes the important point that this debate is about the cost of living, as well as about fuel prices. He also rightly raises the problem faced by businesses in deciding whether to pass the increases on to their customers. My constituents live in one of the 15 most deprived areas in the country. They have an appalling bus service after the network was privatised by the Conservatives. People in that situation, like my hon. Friend’s constituents, will suffer both from increased costs from fuel charges and from having to pay £450 a year in increased VAT. Does he agree that our constituents are suffering heinously from that?

[Ian Murray]

Of course. The poorest suffer disproportionately because they have to use public transport and face the increased costs, while also having to pay more in VAT for all the supplies they buy. Prices are going up because small business issues, such as the one I am highlighting from my constituency, further compound the problem. I noticed that the Economic Secretary was upset when my hon. Friend the Member for Worsley and Eccles South (Barbara Keeley) suggested that she did not live in the real world, but we are talking about what is happening in the real world and I do not think that the Minister’s 40-minute contribution dealt with any of the real issues for our constituents that are happening at the coal face.

The owner of the small business that I mentioned is faced with a dilemma, but it seems that she must increase prices at a time when consumer confidence is at its lowest. People are worried about their jobs, they are worried about prices going through the roof, they are worried about commodity prices, and they are worried about how they are to fill up the family car. It is a quadruple whammy for businesses, which, as I have explained, face increased core costs as well as increased supplier costs, increased prices owing to the VAT rise, and increased borrowing costs. All that is creating unstable consumer demand, which, I am told by small firms in my constituency, is depressing their businesses.

On Friday I was visited by someone who works as a middle manager at Her Majesty’s Revenue and Customs. He has two small children, he is not a high earner by any means, and he and his wife live in my constituency. He described to me plainly how he has been affected by what the Government have done in the past 10 months. It is clear that he is being squeezed from all angles because of this Government, and fuel and the cost of living are part of that. Let me go through the list. He faces increased national insurance contributions, the increase in VAT to 20%, and the fact that his pension will be linked to the consumer prices index rather than the retail prices index, along with the additional pension contributions that he must make. He faces tuition fees for his children, he has lost his child benefit because he is the sole earner in the relevant bracket, and he faces record commodity prices.

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

The hon. Gentleman is making a powerful speech about the impact of high fuel prices on his constituents and mine. Like him, I should like to see action from the Government, but will he tell us what he would do to secure the reduction in the deficit to which all the tax rises are contributing? I understand that, because of the legacy of the last Government, the present Government’s net debt will rise in every year of the current Parliament—that, in the final year of this Parliament, we shall still be borrowing more money because of the deficit left to us by the last Government. We should love to be given some idea of how, in the real world, we could both make the savings and deliver the benefit.

[Ian Murray]

I am delighted that the hon. Gentleman has managed to ingrain himself with the propaganda being put out by the Conservative and Liberal Democrat parties about the deficit. He has given me a wonderful opportunity to go back to the start of that list so that he can take it all in.

There is no doubt that the Government’s cuts in public services are going too far, too fast and too deep. Everyone knows that the deficit must be reduced, but reducing it over time would protect my constituents from the ideological cuts that the Government are introducing under the veil of the deficit.

Let me return to what is happening to that squeezed middle manager at HMRC. He faces increased national insurance contributions and an increase in VAT to 20%. His pension will be cut because it will be linked to CPI instead of RPI. He faces tuition fees for his two children. He has lost his child benefit because he is a higher-rate taxpayer, and record commodity prices are pushing up food prices. He faces a high inflation rate, partly owing to the increase in VAT to 20%. His salary has been frozen. He has job insecurity. He faces increased energy prices, increased borrowing costs and lower interest on his savings, all because of this Government. Moreover—this brings us back to the motion—the price of fuel means that the cost of filling up the family car has gone through the roof. The Chancellor of the Exchequer is taking an extra £59 million from the Scottish people because of the increase in VAT, which is directly related to the cost of the fuel that they put in their cars.

[Mr MacNeil]

Will the hon. Gentleman give way?

[Ian Murray]

I will not, if the hon. Gentleman does not mind.

Each time people drive down the street, they see the large neon sign at every petrol station, and that is having yet another damaging effect on consumer confidence.

What are we left with? We are left with a broken promise from the Government on VAT, and a broken promise on the fuel duty stabiliser. Many people in East Lothian and Edinburgh South voted for the Conservatives because they had made that promise before the election. Time after time, promises made to ordinary people in my constituency and throughout the country are broken, and it is about time that Ministers did something about it.

14:14

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to be invited to speak in the debate, and a pleasure to follow the hon. Member for Edinburgh South (Ian Murray), who made a passionate if somewhat partisan speech. The Opposition’s problem is that out there in the country no one believes a word that they say about this topic. We all know of their record during 13 years of government, but, just in case a reminder is needed, let me point out that when they took office in 1997 the price of a litre of unleaded petrol was about 56p, which included 43p of duty and VAT. When they left office nearly a year ago, the price was about £1.20 a litre, including tax amounting to about 75p. We hear talk of fuel duty rising “ahead of inflation” or “in real terms”, but if the price of petrol had risen in line with RPI throughout Labour’s term of office, it would have been 80p a litre at the last election rather than £1.20. That is the hike that we have all had to suffer.

As the contents of my inbox make very plain, fuel price rises are a real problem for people and businesses throughout my constituency. In many areas people have no alternative to driving a car if they want to go to work, but the fuel price rises are preventing them from being able to afford to go to work—let alone the damage that they are doing to all manner of small businesses all over the constituency. The Government must take action in next week’s Budget.

[Andrew Bingham]

As a fellow Derbyshire Member, I agree with everything that my hon. Friend is saying. Does not the rural character of both his constituency and mine, High Peak, exacerbate the pressures and difficulties experienced by small businesses, in particular?

[Nigel Mills]

I am grateful for that intervention from a fellow Derbyshire Member, and I entirely agree with him.

The hon. Member for Bassetlaw (John Mann), who is no longer in the Chamber, said that all Governments had chosen to increase fuel duty over the years. We must accept that it was our Government who, nearly 20 years ago, introduced the fuel duty escalator, but the aim then was to encourage people to improve their behaviour by driving smaller and more fuel-efficient cars and considering alternative means of transport. I think we can tell the Government that we have all got that message. Many of us have started using diesel and have bought cars with smaller engines in an attempt to cut our spending on fuel. I know that many of my constituents have done that. However, the scope for such measures is limited, as many people still cannot afford to drive a car. If the nudge is the order of the day, I think that we have got the message and do not need any more nudging.

[Fiona O'Donnell]

I can tell the hon. Gentleman that we too have got the message from the Government, who claim that they want to make work pay. Does the hon. Gentleman accept that for many working people, fuel price increases mean that work is not paying?

[Nigel Mills]

I am grateful for that intervention—I think. The cost incurred in driving to and from work is clearly a factor when people are deciding whether work pays, which is why the increase planned for 1 April really should not go ahead.

Let me return to the topic of nudging. I think we all accept that tax can influence behaviour, and that if we further increase the tax on driving we will see the changes in behaviour that we would expect. People will drive to work less, and businesses will not be able to survive, prosper and grow because they will not be able to cope with the increased cost base. We can all cite small haulage businesses in our constituencies that are struggling to deal with the duty rise. As has been pointed out, reversing the VAT rise will not help those businesses at all; it is the level of duty that we need to consider. If the Government want to find another way of raising some revenue from the haulage industry to help compensate for the loss of fuel duty, I urge them to accelerate their plan to charge foreign road hauliers for using our roads.

[Julie Hilling (Bolton West) (Lab)]

Will the hon. Gentleman give way?

[Nigel Mills]

I am afraid that I have already given way twice.

There is anecdotal evidence that foreign hauliers drive into our country with full tanks of petrol, which in many instances means that they can do all their work here without paying any fuel duty. We are making our haulage industry uncompetitive through the prices that we are charging hauliers to buy diesel in this country and the road taxes that they have to pay. Meanwhile, we are not charging foreign hauliers anything to use our roads. Let us collect that revenue as soon as possible, and use it to help support our own small businesses.

We have heard that, according to the review by the Office for Budget Responsibility, rising prices do not necessarily generate rising tax revenues. As was demonstrated by my hon. Friend the Member for Worcester (Mr Walker), that is because of the damage that increasing fuel prices do to the overall health of the economy, which depresses tax revenues. The Government are looking for tax cuts to try to enhance growth. We have plans to reduce corporation tax, but we should consider the damage that fuel tax rises do to growth. There must be some scope for a reduction in fuel tax. Even if it were not revenue-neutral, it might make a positive contribution to the growth that we need if we are to tackle the deficit.

I cannot support this Labour motion. The fact is that we could not reverse the impact of the VAT rise, because that would be illegal. Even if we could try, it might take six years. I urge the Front-Bench team, and the Chancellor when he delivers his Budget next week, not to go ahead with that planned fuel rise. We need some sort of fuel duty balance, to try to ensure that the shock of oil price rises does not do the real, serious and predictable damage to our economy that it could, and we must also bear in mind that if the middle east situation worsens, the shock could become much more severe than at present. We could be faced with the real damage to jobs that those significant price hikes could do.

14:20

[Alex Cunningham (Stockton North) (Lab)]

Many Members have concentrated on prices at the pump, but there are much wider issues to do with fuel in general and the cost of living, and I want to focus on fuel poverty, which has an immense impact on family life. It is an issue that is close to my heart.

According to the House of Commons Library, between 1996 and 2004 the number of households in fuel poverty fell from 6.5 million to less than 2 million, largely due to the measures put in place by successive Labour Governments. Now, in the face of massive increases in energy prices, the number of households in fuel poverty is estimated to be 5.5 million, or more than one in five households

Petrol price rises add to poverty. That is a new type of fuel poverty—if any fuel-poor households can actually afford a car. Domestic fuel prices fell by 17% in real terms between 1996 and 2003, but then increased by a massive 74% in the following six years. Those dependent on oil have suffered particularly badly, especially those who need oil to heat their homes. Our motorists have also suffered as prices have increased. The average standard credit gas bill for a typical consumer in 2010 was £683, which is 80% above the 2001 low in real terms. In 2009 the electricity bill for a typical consumer was £440, almost 50% above the 2003 price.

I know that energy companies do much to promote energy efficiency—mostly financed through a levy on their customers’ bills, I believe—but they, and the Government for that matter, need to do much more. There are several good reasons to do so. More than three out of four of the poorest 10% of households in England were in fuel poverty in 2008; I do not think they can afford a car, in fact. That means that the poor are getting poorer as prices increase way beyond the inflation rate, and inflation is already far too high under this Tory-led Government.

In 2008 more than half a million households needed to spend more than 20% of their income on energy to maintain a satisfactory heating regime. They are those in so-called extreme fuel poverty. Under Labour’s decent homes programme, 750,000 social homes had insulation works and 900,000 had new central heating systems. Warm Front assisted vulnerable people in more than 1.7 million homes, and large numbers of rented homes were improved under Warm Zones, Warm Wales and other initiatives. Now we need to see clear, comprehensive and well-funded initiatives from the Tory-led Government to deal with fuel poverty, because as they squeeze wages, raise taxes—such as those on fuel—cut benefits and hit our people’s pockets in so many other ways, more people will fall back into the group who will see 10% or more of their money disappear on just buying fuel.

This month the Government have announced that they have appointed a fuel poverty tsar, Professor John Hills. I hope that is not just a publicity stunt, as much more needs to be done to address this issue. His independent review will redefine and measure fuel poverty. I hope that does not mean we just change the numbers, and lift many out of fuel poverty by simply changing the way the numbers are added up. It does not matter what the numbers say: if people cannot afford to heat their home or put fuel in their car tank because they have not got enough money, they are still cold and still poor. I hope there will be no dragging of feet on that.

One area in which we may see some recommendations is the need to ensure that privately rented accommodation is properly insulated—and again, we can do that without waiting. Some of our poorest people live in privately rented property, where many landlords are happy just to pick up the rent without investing as they ought to. I hope the Minister will do a bit of cross-Government thinking today, and tell us how this issue will be dealt with under their new plan to tackle fuel poverty.

There are other solutions, and the Energy Bill, which is currently in the other place and is due to come to the House of Commons, may help if sufficient capacity is built in to make things happen on a similar, or greater, scale than in recent years. It allows for the implementation of a green deal scheme from 2012, which will allow householders to install energy efficiency improvements without having to meet any of the up-front costs. Those will be met by energy companies and will be paid back over a period of up to 25 years—but is that really the good news it is made out to be? We need to ensure that the financial environment in which such schemes are taken forward is the right one. Will potential changes to the feed-in tariff in respect of the installation of photovoltaic panels, for example, provide the right financial incentive to deliver that day-time free electricity for householders? We will need to wait and see, but the Government will miss a major opportunity if they mess about with the tariff and negate the incentive that investors and householders need.

I have concentrated on fuel poverty in terms of the household budget. This Tory-led Government are helping to create a new type of fuel poverty. Many people cannot afford to buy petrol or diesel, and that particularly affects the rural communities in my constituency, such as Stillington.

[James Wharton (Stockton South) (Con)]

The hon. Gentleman speaks passionately on a subject about which I know he cares a great deal. He and I represent different halves of the same town, and we often disagree on political matters, but I suspect we share some common ground on this issue, in wanting to see the costs to our constituents brought down at every possible opportunity. Does he agree that if the Government could introduce a fair fuels stabiliser, that would be useful in allowing people who particularly need to be able to do so to plan their budgets and manage their money better, so that they could help themselves by planning their finances and avoiding the problems of poverty that, sadly, we so often see in the north-east?

[Alex Cunningham]

This is amazing, but I find myself in agreement with my colleague who represents the opposite side of the Stockton borough. Any measure that reduces costs for the people whom he and I represent has got to be important. That is particularly the case in places such as Stillington in my constituency, where people need to commute, often to low-paid jobs, and have limited public transport services. They are hit the hardest by the current economic policies.

I hope that the Government will see sense. I hope that they will avoid a fudge on the need for a comprehensive programme to tackle fuel poverty, and I hope that they will reverse the VAT increase at the pump, and introduce the fuel duty stabiliser—and maybe even keep a couple of the promises they made to our people during the election campaign.

14:27

[Stephen Williams (Bristol West) (LD)]

First, I want to strike a note of empathy with people both in my constituency and around the country who are struggling with the spike in prices that we have all witnessed in recent months—and, indeed, the last couple of years. This morning, I asked those in my office to check the petrol prices at the garage nearest to my home in St Andrews in Bristol: the Texaco garage on Gloucester road. For the first time, prices in Bristol have risen above 140p. One of the most popular places to fill up in the city is Tesco in Eastville; my constituency neighbour, the hon. Member for Bristol East (Kerry McCarthy), will be familiar with it. Prices there are now 136.9p. Everywhere in the city of Bristol, prices are now above 130p, yet only a couple of years ago I remember being surprised when prices went through the £1 barrier.

In cities, there is competition: there is competition on the forecourts, and there are also alternatives on public transport. Many rural constituencies, such as those in the south-west, mid-Wales or, indeed, Scotland, cannot benefit from that price competition, however. My hon. Friend the Member for Argyll and Bute (Mr Reid) was present for the earlier part of the debate, but has had to leave to attend a Scottish Affairs Committee meeting. He told me that on the island of Colonsay in his constituency, the price of diesel is 163.3p, a full 23p higher than the price in my constituency.

We face a fourfold political challenge. We have to decide how to respond to the pressure on household budgets, how to make that response against a background of having to maintain the taxes and duties necessary to tackle the appalling fiscal legacy left us by the last Government, and how to continue to incentivise a switch to a lower-emissions and lower-carbon economy. Finally, we must consider the background of international factors, such as movements in the oil price and in exchange rates, which are effectively beyond our control. We have to respond to those factors and political challenges responsibly, not in the blatantly opportunist way set out in this motion.

[Mr Graham Stuart]

My constituents, like those in many rural areas, are not just suffering from the price of fuel at the pump. As they do not have gas at home but oil-fired central heating, the price of which has increased too, there is a double whammy of cost. There is therefore a strong moral case for making sure that the Government find ways to help the most vulnerable people in rural areas, despite the appalling legacy left, as my hon. Friend rightly says, by the Labour party.

[Stephen Williams]

My hon. Friend makes a powerful point about the price of heating oil, which many households in rural communities have no choice but to use.

The first challenge is how to respond to the pressures on household budgets that I was describing. The coalition Government have said that their priority is to ensure that as we make difficult decisions, the poorest and most vulnerable households are protected. We have already made progress on reducing income tax for the lowest-paid, and I look forward to further progress being made in the Budget. We have a triple lock in place for pensioner households and we are going to introduce work incentives in order to tackle worklessness, which is the major cause of poverty in our country.

However, we also have to tackle the deficit. We have been waiting 10 months for a specific proposal from the Labour Opposition on tax, and this motion is the first detailed one that we have received. The critique that we have heard repeatedly from them is that they want fewer cuts in public expenditure and more emphasis on raising tax, yet their first detailed proposal is for a reduction in tax. In effect, this is another uncosted spending pledge. The hon. Member for Wallasey (Ms Eagle), who led for the Opposition, rightly said that the increase in VAT represents about 3p on the pump price that we all have to pay. We know that each penny of that pump price raises about £500 million for the Exchequer, so the motion is proposing a £1.5 billion spending pledge. However, the Opposition cannot tell us, other than in an allusion in the motion to the banking levy, how on earth they are going to find that £1.5 billion. As has been said, they are in effect proposing a new VAT rate of 17.5%, but they know that under international law, they cannot do that.

This duty as a whole raises about £30 billion as a contribution to reducing the deficit, and it makes up about 62% of the pump price. That is a considerably lower proportion than a decade ago, when the share of the pump price represented by taxes was in excess of 80%. I well remember, when I was on the Opposition Benches and the Labour party was in government, that the person who is now leading the Labour party had much promise when he became Energy Secretary. He certainly talked a good talk in that post, although he was perhaps making up for the rather “brown” years of the Labour Government. Now that he is in opposition, we find that his words were hollow and he has moved on to opportunist ground.

We need to move to a transport system that is more sustainable, with more efficient engines, a different mix of fuels, and electric cars, as proposed in the coalition agreement. As our dependency on hydrocarbons declines, we also need to move to a completely new fiscal model for taxing the use of road space, because road fuel duty and vehicle excise duty are a blunt fiscal instrument.

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I have listened carefully to what the hon. Gentleman has been saying, and I was very interested in some of his points. What would he say to the family in the rural part of my constituency who live a mile and a half up a farm track, who have no access to public transport and who cannot wait for the kind of interventions that he is talking about to come along somewhere down the line? Does he support the Government reconsidering in the Budget the fuel duty rise that is due?

[Stephen Williams]

I do not know whether the hon. Lady was listening at the time, but I acknowledged right at the start of my speech that the pressures in rural constituencies are much harder than those in my urban constituency; I have been made fully aware of that by my colleagues. I do not know the details about her constituency, but I certainly empathise with the situation and I am sure that the Government will respond to what she says.

As I was saying, I wish to see a move towards a more sustainable model for taxing motoring and haulage in our country—road pricing, which would make us better able to respond to changed circumstances. But that is the future, and what we have to do now is respond to the genuine concerns of our constituents and motorists up and down the country. It is only a week before the Budget, and although the Chancellor is not in his place I am sure that he is carefully listening to and being informed by his colleagues about what is being said in this debate. I am sure that when he does respond to those pressures and demands from around the country, he will do so in a way that is not fiscally reckless, is environmentally sustainable, and certainly does not follow the opportunistic advice in the motion.

14:29

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

I am grateful for the opportunity to speak in this debate and convey the feelings of my constituents about fuel prices. In Na h-Eileanan an Iar—as the good Speaker himself would say and, of course, did say—we are paying the highest tax per litre in the UK; we are doing so consistently, at a range of fuel stations throughout the entire constituency. That has been the situation throughout the life of this Government and indeed the previous one. The last lot—the Labour Government—made excuses; this lot—the Tory and Liberal Government—are making promises. The upshot at the pumps in Ness, in Uig, in Back, in Stornoway, in Lochs, in Tarbert, Harris, in Lochmaddy, in Balivanich, in Creagorry, in Daliburgh and in Castlebay is the same; excuses and promises equal exactly the same.

The rural fuel derogation has been announced twice at Liberal Democrat conferences that have been six months apart, but there has still been no formal approach to the EU Commission. Can we be given an indication of how long it typically takes to get such a measure approved by the EU Commission, especially as it has given approvals in respect of far less rural areas in other places in Europe than the Hebrides and other Scottish islands?

[Mr Andrew Turner (Isle of Wight) (Con)]

I hope that the hon. Gentleman is not speaking only of Scottish islands, because the Isles of Scilly are included in this and I hope that the Isle of Wight will be too.

[Mr MacNeil]

As the hon. Gentleman knows, and as I have demonstrated in the past, I have great sympathy for the Isle of Wight and indeed for the Cornish Isles of Scilly, so I hope that this will extend to them as well.

May I suggest that the Government put in place a maximum percentage that can be taken at the pumps in taxation, or at the very least a desired percentage to be taken in taxation, just as the inflation rate seems to be a desired rate and a target for the country? I say that because in the UK 62% of the price of petrol is duty, which is the highest level in Europe—the lowest level in Europe is 46%. May I also ask the Government to examine the fuel distribution network, because many people have long had deep concerns about profiteering between refineries and retailers in what seems to be a very opaque business model? We have to ensure that any gains we make in the—so far promised—rural fuel derogation are felt at island pumps and are not snaffled away elsewhere.

We know what fuel tax is doing to people’s pockets on a daily basis up and down the land: it is affecting the poorest more, as this is a highly regressive tax. In areas such as mine, where wages are below the national average, the cost of living is higher and fuel poverty is high—my constituency has the highest in the land—the regressive nature of this tax is really felt. The tax pulls money out of the economy from families, businesses and individuals, and from local authority budgets and health board budgets. Clearly we need help and I ask the Government to provide it in tackling fuel tax and in taking the foot of high fuel tax off the neck of the islands’ economy.

When I last spoke in the House on this matter, on 7 February, I said—I have checked the Hansard record—that fuel was £1.44 a litre. My office in Stornoway tells me that it is now £1.48 a litre, and I shudder to think what it might be the next time I speak on this issue in the House, because the cost seems to be going in one direction. Before the staff at Benbecula airport correct me, yet again, on the price, I point out that the price in Uist will inevitably be higher. I understand that the price in Uist and Benbecula is more than £1.50 a litre. Consistently, throughout the length of my constituency, we are paying the highest fuel tax in the UK. The simple re-announcements of the intention to have a rural fuel derogation without any change coming at the island pumps are greeted with nausea by my constituents, who are tired of hearing pious words and are instead looking for pious actions.

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

Can the hon. Gentleman explain to my constituents why his party is interested in giving help only to Scots in rural areas and not to people in my constituency?

[Mr MacNeil]

I will indeed. I imagine that in West Dunbartonshire the price of fuel is 15p to 20p a litre lower. How I wish we could enjoy the prices of West Dunbartonshire. I also wish that the hon. Lady could express some sympathy for the voters, constituents and people of the Western Isles who have suffered higher fuel prices than many other areas in the UK as a result of the policies of successive Governments.

[Gemma Doyle]

For the purposes of clarification, let me assure the hon. Gentleman that fuel in West Dunbartonshire is currently £1.36 a litre for unleaded and £1.43 for diesel—not far behind the prices he quoted for his area.

[Mr MacNeil]

I have every sympathy for the people of West Dunbartonshire—those are high prices—but with our prices of £1.48 and £1.50 a litre, I wish that we could enjoy prices such as £1.36 a litre. If I went back to the Outer Hebrides tomorrow and announced a price of £1.36, I would be regarded as some sort of hero, but unfortunately I cannot do that. I have sympathy with the hon. Lady but I am afraid that she must reciprocate and understand the problems that come when fuel poverty is higher, the cost of living is higher and wages are lower. The pilot project in the Outer Hebrides and other islands in Scotland is the right way to go. If it is a success, I hope we can extend it. I find the lack of sympathy from Labour Members about the problems in the Outer Hebrides somewhat distressing.

[Cathy Jamieson]

Having visited the hon. Gentleman’s constituency in the past, I understand some of the difficulties his constituents face, but does he agree that although we are talking about derogations, stabilisers and all sorts of things people want action now and that there is an opportunity for the Government to act next week? Will he support the Labour motion today to ensure that the maximum pressure is piled on the Government?

[Mr MacNeil]

I probably will support the Labour amendment, but at my own risk. I am grateful for the hon. Lady’s words. She is very welcome back in Na h-Eileanan an Iar at any time of her choosing. I would be more than pleased to show her around the islands or to entertain her in Stornoway—at my expense.

I must wind up, because I have to speak at a meeting at 3 o’clock about coastguards, which are a very important issue in my constituency. The last time I spoke about this issue I said that the rural fuel derogation was not like Christmas because Christmas had been and gone. It seems to me that it will not be like Easter either, because it looks like Easter will also come and go while we are still waiting.

14:42

[Claire Perry (Devizes) (Con)]

It is always a pleasure to follow the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). I represent a large, rural constituency in Wiltshire, and when I filled up my car on Monday morning, I found that we, too, are paying £1.40 for diesel and £1.35 for unleaded fuel. The point was very well made by the hon. Member for Bristol West (Stephen Williams) that once one gets out of London and the major metropolitan areas there is a real problem with competition. That problem is shared by many constituencies across the UK.

I am afraid that the Labour motion is breathtakingly cynical. Not one Labour Member bothered to show up at the recent debate on this issue in Westminster Hall, and the Labour Government consistently penalised motorists across the country for 13 years, with unused bus lanes, underinvestment in rural transport and 12 rises in fuel duty over 13 years, of which four were in the last 16 months of their term of office. They also planned, as part of their scorched earth economic policy before the election, six further rises to come into effect over four years, so their cynicism in presenting this motion is breathtaking.

[Julie Hilling]

The hon. Lady is very keen to talk about what the previous Labour Government did, but does she want to think a little about what is happening now? The Road Haulage Association says that in the last week alone £850 was added to the cost per year of running an average-sized lorry—that was under her Government’s watch.

[Claire Perry]

I am grateful for the hon. Lady’s intervention and I will come to my “demand” for something to be done about this problem. I think we both have in our constituencies small haulage businesses that are really suffering from the increases in fuel prices.

I find the motion muddled and inaccurate. This is yet another unfunded spending commitment from the shadow Chancellor and the Opposition. We cannot use a one-off levy of £800 million to fund a permanent reduction in VAT costing several times that amount. The maths just does not add up. I had always thought that the shadow Chancellor, who is not in his place, was a fairly financially literate fellow.

[Andrew Bingham]

Is my hon. Friend aware that this is the 10th spending pledge that Labour has made from this banking levy? It has spent that money 10 times—is that not typical of the overspending and double-counting of its years in government, which got us into this mess in the first place?

[Claire Perry]

My hon. Friend makes an excellent point. The shadow Chancellor’s predecessor referred to a financial primer that he felt he should read. Might I suggest that the current shadow Chancellor should borrow a copy? I would be delighted to lend him my calculator because I think that a financially literate Opposition would be a quality Opposition and one that the country would welcome.

I find this muddled and inaccurate motion extremely worrying because it is illegal. The EU directive on VAT states:

“Member States may apply either one or two reduced rates…The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III”,

but annex III does not list road fuel and other amending articles do not permit a reduced rate or an exemption to be applied to transport fuel. Even if we wanted to do this—if the motion were passed—it would be impossible. This is yet another inaccurate attempt to create a political narrative that joins words such as “bankers”, “tax” and “too far too fast”, but does nothing to address the fundamental problem that the Labour Government left, which we are having to clear up. I do not know about you, Mr Deputy Speaker, but people in my constituency are sick to death of this political posturing and narrative.

[Sheila Gilmore]

Will the hon. Lady give way?

[Claire Perry]

I am afraid that I will not at the moment.

The motion is a sham attempt to create dividing lines when we should be working together to get the country growing and out of this mess. It is cynical, muddled and inaccurate, but, as in all our debates on this issue, I welcome the chance to speak about these matters. Outside London, in many parts of rural Britain, people use their cars. Some 43% of households in London do not own or have access to a car, whereas the figure for my constituency is only 15%. That is not because it is a wealthy constituency—the average income in Devizes is well below the national average—but because in large parts of rural Britain people must have a car to go about their everyday business, to get to their job, to take their children to school and to carry out normal day-to-day activities. It is a necessity.

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

A car is also a necessity for families in Cornwall. Does my hon. Friend agree that the prices are much higher in such areas? In my constituency, the cost of diesel is almost 6p a litre higher than here in London.

[Claire Perry]

My hon. Friend makes a very good point, which many Members across the House who represent rural constituencies will recognise. Devizes has one of the lowest population densities per hectare of all English constituencies. We have real problems with our road services and thanks to the very misguided policies of the Labour party our rural services were hollowed out. We lost a third of our post offices and, shockingly, all the minor injuries units in the constituency, so people have to use their car to access even the most basic services.

Like many Opposition Members, I am calling on the Chancellor to bring to fruition some of the plans that we all talked about before the election. I do not underestimate the difficulty of introducing a unilateral fair fuel stabiliser, which would be a tricky thing to do. Unlike the Opposition’s proposals, however, it would be legal, and it would be extremely welcome to many Members on both sides of the House and their constituents.

14:49

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to follow the hon. Member for Devizes (Claire Perry), who spoke with her usual panache, confidence and strength of purpose—rather like the Economic Secretary to the Treasury did in setting out the agenda from the Government’s point of view, which she set out very well. I do not agree with that agenda at all, but at least she was here to set it out, unlike the Chief Secretary to the Treasury. Like my hon. Friends who have made this point, I wonder where he is. I am rather reminded of a children’s book that was very popular with my children and I wonder, where’s Wally?

[Mr Graham Stuart]

It is admirable that Labour Members should be so disciplined in following the line they have been given, but does the hon. Gentleman agree that those on the Front Bench should spend as much time crafting their message so as not to table a motion that is illegal, impractical and careless? They should pay more attention to that rather than just drilling their Members to keep asking where’s Wally, which perhaps sums up the state of their politics today.

[Nic Dakin]

I think I was the first person to ask that in this debate. Of course, we have a clear economic message that runs counter to the posturing successfully used by the parties in government to suggest that there is a need to cut fast and deeply. Our message is that there is no need for such cuts. Three tools are at our disposal to manage our way out of the economic challenge: growth, taxes and service reductions. The Government are using only taxes and service reductions, at a heinous rate, when we should have a policy for growth. Their policy is for the opposite of growth.

Let me draw attention to the headlines sought by the Conservative party as long ago as 2008: “Tories vow to slash fuel duty”, from the Press Association on 6 July 2008; and “Tory tax cut to beat hike in fuel” from The Sun on 7 July 2008. In a sense, since 2008 the Conservative party has made promises to the British people on fuel duties that it has singularly failed to meet in government.

[Lilian Greenwood (Nottingham South) (Lab)]

Does my hon. Friend recall a promise being made before the election to increase VAT to 20%?

[Nic Dakin]

I recall one of the parties in government saying to the other party that it was telling an untruth when it said that it would not put up VAT. It turns out that both parties were planning to put up VAT all the while.

People face real difficulties because of the situation in the middle east, the fuel duty rises that the Government have already imposed and the burden of putting VAT up, totally unacceptably, to an all-time high. That favourite Tory tax is now at 20% and that is causing real difficulties for people—we need to listen to them.

[Neil Carmichael (Stroud) (Con)]

May I clarify that it was the Labour Government who introduced most of the VAT increases, which needs to be discussed? Does the hon. Gentleman agree that it is wise for the Chancellor to be considering a fuel stabilisation change?

[Nic Dakin]

When there were huge economic challenges caused by the great global banking crisis, the Labour Government reduced VAT on fuel and on everything else—they did not put it up and worsen the situation, which is the policy of the parties on the Government Benches.

Let us look at the impact of this tax on growth on people and businesses. Alongside the tax on growth, we have cuts in public services, rising prices, inflation wobbling out of control, cuts to the education maintenance allowance—given to the poorest of our young people so that they can continue and aspire in education—and tuition fees being set at record levels. Unemployment among young people is, on this Prime Minister’s watch, the highest it has been for almost 30 years. That is the Government’s disgraceful economic record.

People on fixed incomes—including pensioners and those on disability living allowance—are hugely worried about the mobility effect of the hike in fuel prices and the difficulties it will make to their lives. Only today, a witness appeared before the Select Committee on Education—David Lawrence, the principal of Easton college in Norfolk—who said, “Higher fuel costs are a disincentive to participation.” That is what is happening in the real world.

Let me quote one letter that I have received this week, which illustrates the sort of correspondence that we all receive from our constituents. It reads:

“I am thirty eight years old, married with a family of six running two small cars to keep the cost down on tax and running costs. The biggest cost that we are finding hard to cover is fuel, since the beginning of last year, average petrol pump prices have risen from just under 111p/litre to almost 128p/litre. Diesel now costs more than 132p/litre, compared to 112.5p a year ago. I would like to explain to you what impact this is having on my ability to drive and go about my everyday life. The price of fuel not only affects work but personally the cost of running my car has significantly increased so that I only can afford to travel to work, any family trips to visit other areas of the region/country I simply just can not afford.

I am employed as a Transport Manager for a local business that relies heavily on local haulage transport companies and also sub-contractors that travel to our region making deliveries. To keep cost down along with trying to keep our CO₂ emissions down we use these sub-contractors as back hauliers as a reduced rate. Over the past few months we have seen transport companies we use either going to administration or just closing the business whilst they can pay back the creditors. This has a big impact on the business I work for as we can not be competitive in a tight margin industry we work in.”

That illustrates the difficulties caused in people’s private and working lives by fuel prices getting out of control and their impact on the economy.

In my area, as Government Members who represent Humberside constituencies know, we also have the spectre of the Humber bridge board threatening to put up the cost of Humber bridge tolls—an outrageous suggestion of yet another tax on local people and a tax on local businesses.

Let us look forward at what we can do. There are things we can do and messages about what we can look forward to. I agree with the hon. Member for Devizes that we should be careful not to engage in political posturing. We all, on both sides of the House, do that from time to time—I think she did a little bit, and I probably have, too—but there are practical things we can do. There is no need for the planned fuel duty increase. It should be postponed or stopped completely because of the circumstances that we are in. We can also consider what can be done about VAT. It did not need to go up on everything and there ought to be imagination and resolution in the EU to ensure that VAT is treated properly for people who drive vehicles in this country.

There are things we can do and it is time to do them. It is time to stop talking and time for action.

Royal Assent

[Mr Deputy Speaker (Mr Nigel Evans)]

I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified her Royal Assent to the following Act:

Appropriation Act 2011.

Fuel Prices and the Cost of Living

Wednesday 16th March 2011 Commons Chamber

Debate resumed.

14:58

[Mark Pawsey (Rugby) (Con)]

It is a pleasure to follow the hon. Member for Scunthorpe (Nic Dakin), but I am disappointed that he chose to repeat the remarks of Opposition Members on the attendance of Front Benchers in this debate. It is pretty reasonable for us to expect that they would be working hard on a most important Budget, which will be delivered in this Chamber in only a week’s time.

I want to concentrate on the effects of fuel costs on small businesses. The success of our small businesses will be crucial to our work in rebalancing our economy, achieving economic growth and clearing up the economic mess left behind by the Labour party. Certainty and stability in the price of fuel are critical for small businesses—in some cases, they are more important than the price itself, although small businesses suffered massively as a result of rising fuel prices implemented by the previous Government over the past few years. In 13 years, the duty increased from 36p to 57p a litre.

Let me give the example of a medium-sized business in my constituency, Rugby. It is a business that I know well, because I owned and ran it for 25 years before arriving in this place. With 10 vehicles—five delivery vans and five cars for representatives—we served customers around the midlands, and the cost of fuel was a major budget consideration for us. In November each year, I would set my budgets for the following year, and try to estimate the price of fuel over the coming year. In recent years, that became almost impossible. In just the past two years—between January 2009 and January 2011—fuel costs have increased by £1,000 a month. The price per litre went up from 98p to £1.29 in that period; it is now closer to £1.40. The business is now spending £3,000 a month on fuel instead of £2,000. That is £12,000 in additional annual costs attributable to fuel alone. That comes directly from the bottom line; it is a reduction in the profitability of the business, which means that there is less available to reinvest in the business.

As was alluded to earlier, there is evidence from the business community that some suppliers are using the increase in the cost of delivering goods as a reason for price increases to small businesses. That is detrimental to small business profits and is inflationary. When fuel costs change, there are significant implications for distribution costs. Small businesses suffer disproportionately, because they are often in a weaker negotiating position and are thus unable to recoup the shortfall from their customers.

Certainty of price is what small businesses need, so that they can plan. That is often more important to them than price in isolation. I am therefore very sympathetic to the fuel duty campaigns calling on the Government either to freeze fuel duty or to implement the fuel stabiliser. To me, the fuel stabiliser seems a responsible decision, and although I recognise the complexity involved, I support any measure that will decrease the burden on small business.

The motion calls for a reduction in VAT on road fuel to take it back to 17.5%. As the Economic Secretary to the Treasury reminded us, a separate rate of VAT, as well as being illegal under EU law, will have no impact whatever on small businesses, because most of them simply reclaim VAT. If the motion were accepted, it would, of course, lead to additional tax complication for small businesses and make it more difficult for them to prepare their paperwork.

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

The hon. Gentleman makes an excellent case on small business and its financial concerns, but how does he think the price of fuel will affect the cost of running vehicles in the Home Office, the Royal Mail fleet, and the Department of Health?

[Mark Pawsey]

The point that I am making is that the most important thing in any organisation is the ability to budget accurately across the business. The stabiliser proposal will deal with that; a reduction in VAT simply will not have any effect on that at all.

It is my contention that Labour Members are to blame for the situation that we are in, because this January, the Government implemented a rise in fuel duty for which the previous Government had legislated; the previous Government raised fuel duty 12 times when in office, and they planned for six further rises to take place after the general election. Businesses are looking forward to seeing what measures the Chancellor will bring forward in the Budget in a week’s time to ease the burden on the important small business sector.

15:04

[Gemma Doyle (West Dunbartonshire) (Lab/Co-op)]

I am delighted to speak in this debate, which is an important opportunity to highlight the real difficulties faced by people the length and breadth of the country as a consequence of the record price of fuel at the pumps and the squeeze that is being forced on people’s incomes by the Government. Those issues, along with the reckless pace of public spending cuts, are the concerns most widely raised by people in my constituency, and it is easy to understand why. The area has significant economic challenges, which are being made much greater in the current climate by the Government’s approach to the cost of living.

Unemployment in West Dunbartonshire is higher than across the rest of Scotland and the UK. According to the latest figures, published today, the local claimant count has risen to 6.5%, compared with 4.3% for Scotland and 3.8% for the UK as a whole. Recent analysis of pay across Scotland has highlighted that wages in West Dunbartonshire are 11% below the Scottish average, and of course unemployment and low pay have a clear relationship with poverty. West Dunbartonshire has a disproportionately high number of people living in deprivation, and people living there have a disproportionately low life expectancy. I say that not with pride, but to try to communicate to the Government the challenges found in areas such as mine—challenges to which they have seemed impervious, particularly in this debate.

West Dunbartonshire has a high percentage of people employed in the public sector. Of course, the Government are slashing jobs in the public sector; they seem to believe that the private sector will magically rush in to fill the gaps in employment. The last thing any business needs to contend with at the moment is record fuel prices. Far from growing the private sector, they may mean that even more people lose their jobs. Just this afternoon, the owner of a delivery business in my constituency contacted my office to outline the impact of record fuel prices on his business.

Given all those factors, it is clear to see why people in West Dunbartonshire are struggling to afford the squeeze on their family budgets and businesses as a result of record fuel prices, rising inflation, and cuts to the help for families on low and middle incomes.

[Justin Tomlinson (North Swindon) (Con)]

I agree with the hon. Lady’s comments on the effects of high fuel costs. Does she agree that there should be some regret for the Labour Government’s 12 fuel duty increases?

[Gemma Doyle]

There should be regret that this Government have raised VAT to 20% with no regard for people in my constituency. Never before have people in West Dunbartonshire been forced to pay £1.36 for a litre of unleaded or £1.43 for diesel, as they do now at some local forecourts. Every time they make a trip to the filling station, they find that it costs them a bigger share of their income to fill up their car.

As we know, the recent spike in the price of fuel has been driven in part by rising world oil costs, especially as a consequence of the crisis in the middle east, but the Government have heaped unnecessary extra pain on people by hiking VAT to 20%, adding 3p to a litre of fuel. It is astonishing that the Government have acted so callously in driving up the cost of fuel, given the pre-election promises made by both the Conservatives and the Liberal Democrats last year. I am sure that I am not the only Member who saw leaflets promising action to keep fuel prices down circulated at the last election by one or both parties, although to the best of my knowledge, the Lib Dems did not even bother using their Royal Mail freepost in my constituency in the election last year.

That the price of fuel at the pumps is now at a record level as a consequence of the Government’s actions is an unforgivable betrayal, but that is of course something that we are getting used to from the Government. The attack on ordinary families’ standard of living goes much further than rising fuel prices driven by the actions of this Government. The VAT hike will cost families with children around £450 a year. Unfair cuts to tax credits, child benefit and housing benefit will further erode the incomes of families who rely on that support.

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

Does my hon. Friend agree that the Government have failed to recognise the impact that the VAT rise on fuel will have even on products that are protected from VAT, such as food and children’s clothing?

[Gemma Doyle]

My hon. Friend makes a significant point. I was about to say that a number of factors are adding up to put intense pressure on family incomes. For example, 1,000 families in my constituency will lose a further £400 a year as a result of the Government’s cuts to the child care element of the working tax credit. What makes that all so much worse is that while the Government are choking off help for hard-working families and recklessly cutting jobs and services, they have given the banks a huge tax cut this year. I know my constituents find it hard to understand how that can be squared with the Prime Minister’s claim that we are all in it together—a frankly laughable claim from a Cabinet of millionaires. [Interruption.] I am sorry if Government Members do not like to be reminded of how many millionaires are in the Cabinet, but I am afraid that that is a matter of fact.

The Government have heaped pain on families, but they could have made a different choice and relieved some of that pain. As my hon. Friend the Member for Wallasey (Ms Eagle) said, the Government could use the £800 million raised from the bank levy immediately to reverse the VAT rise on fuel. Just as the previous Government often postponed fuel duty rises when oil prices were rising, as they are now, the Chancellor should look again at the Budget—that is why he should be here today, listening to the arguments—ahead of the planned 1% rise in April.

[Charlie Elphicke]

Has the hon. Lady considered that the reason the Chancellor is not here today is that he is busy trying to sort out the Budget to undo the massive financial mess left by the Labour Government and deal with their economic incompetence?

[Gemma Doyle]

It is the duty of the Chancellor to listen to Members as he is putting together his Budget. Both he and the Chief Secretary to the Treasury should be present, listening to Members as we debate this important subject.

I have outlined a different approach, which would be the right approach. I notice that none of the Scottish National party MPs is present. Their proposal for a fuel duty cut in remote areas would do nothing to help my constituents in West Dunbartonshire. The name of the constituency may include the word “shire”, but on the whole it is not a rural area, although a small number of my constituents would consider themselves to be in a remote area. The majority of my constituents live in an urban or a suburban area and they are struggling with the record price of fuel. We need to go much further and bring down fuel costs for everyone in urban and rural areas.

I will of course support the motion in the name of the Leader of the Opposition. The Government can and must take action to provide some relief to people in my constituency and across the country. They can do this in the ways outlined today. Like numerous other Members, I urge the Chancellor to take that action and go some small way towards showing that he has not completely lost touch with the pain that British motorists are suffering.

15:12

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

I can assure the hon. Member for West Dunbartonshire (Gemma Doyle) that I am not a millionaire. I would, in the words of Travie McCoy, quite like to be a billionaire, but I do not expect that will happen. There are plenty of rich people on the Opposition Benches—people in glass houses and all that.

We should begin by recognising that over the past couple of decades, Governments of all shades have hiked up fuel duty and, broadly, people have been in general agreement with that because it has been seen as a green tax. That is why it was created. An injection of honesty is needed to counteract the feigned anger that has suddenly appeared and the damascene conversion that has taken place among Opposition Members. Everybody supported fuel duty rises over the year, and their position lacks credibility.

I agree with much that is in the Opposition motion. We all have concerns about fuel costs. Obviously I do not agree with the part that asks us to do something that is illegal under EU law. My radical solution to that would be to leave the European Union, but that is a debate for another day. Before we accuse the Opposition of cynicism, it is incumbent on those of us on the Government Benches to prove that the pledges we made at the general election were not cynical. That is why I look forward to the Budget, on which the Chancellor and Chief Secretary are working so hard, and I look forward to the answers on fuel duty. I hope they include a fair fuel duty stabiliser.

I dished out leaflets to the good voters of Brigg and Goole—hounded them with leaflets, one might say—on the fuel duty stabiliser. I supported it, knowing of the work that had gone into that policy at Conservative central office. I look forward to the Budget next week, when I hope we will hear more details about stabiliser. The price of fuel is having a massive impact on my constituents across north Lincolnshire and east Yorkshire. I note the proposals in relation to the islands and I heard the comments from the hon. Member for Na h-Eileanan an Iar (Mr MacNeil). He has been a passionate advocate on behalf of his constituents. I would say to him if he were here—I know that he is off trying to save coastguards, and I wish him the best of luck on that too—that the effect of fuel prices is not limited to the islands.

Constituents such as mine have to travel an awful long way to their places of work. I represent a largely rural constituency, and most of my constituents travel considerable distances, whether to Lincoln, Leeds, Hull, York or Doncaster. Much of the time they sit in traffic, which is not good for fuel consumption, I am told. The pressures that affect the islands of Scotland and the Scilly Isles affect our constituents too.

[Justin Tomlinson]

I echo the comments of my hon. Friend. My constituency, North Swindon, has a considerable number of commuters who have no choice but to travel by car. The increased fuel costs impact on them as well.

[Andrew Percy]

I thank my hon. Friend for that intervention. What we are both saying is that if any solution is applied to one part of the United Kingdom, it must be applied to other parts of it as well. If we are all about fairness, as I am sure we are, it must be a solution that is fair to everybody in the United Kingdom.

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

Does my hon. Friend share my concern for 1,000 dairy farmers in west Wales, who cannot pass on the additional fuel duty to their customers because their milk price is fixed by supermarkets?

[Andrew Percy]

Absolutely. I share that concern for dairy farmers throughout the United Kingdom. I am sure the Minister heard that and I hope he will respond.

My constituency is a logistics hub. We have many transportation firms. A business owner, Paul Emms, came to see me at my surgery in Epworth this weekend. He said that because of fuel prices, he now faces the possibility of laying people off. Rather than contributing tax to the economy, not only has he been stung by tax rises on fuel, but he is putting people out of work whose payroll taxes will be lost and who will have to be funded by the taxpayer through their benefits.

[Sheila Gilmore]

Will the hon. Gentleman give way?

[Andrew Percy]

No, I will not. I have taken a couple of interventions already.

Fuel prices are a particular issue to my constituents and to businesses in our area. In our patch we also suffer the problems of rural transport. We have very little rural transport. My local Labour council—this is my dig at it—is proposing to scrap the Axholme shopper bus service, which costs only £13,000 a year to run. A political assistant at the council is still being paid several thousand pounds, but we are losing many of our rural bus subsidies. My constituents are not even in the privileged position of being able to rely on public transport as an alternative.

My plea to the Government is to listen to the genuine concerns that have been expressed. I greatly respect the Economic Secretary. She is one of the Ministers who accepts my invitations to visit Brigg and Goole. I heard what she said, and there seemed to be the possibility of some positive messages coming out of the Budget. My constituents cannot bear the prices as they are.

Figures out today show that the average wage in northern Lincolnshire is much lower than in the rest of the country. We pay a lot for our petrol and we have to drive a long way to get to a petrol station these days. This is a massive problem for my constituents, and I urge the Government to pay heed to the promises that we made at the general election—promises on which I was elected—which included doing something about fuel duty and introducing a fuel duty stabiliser. As I said, I am sure that was a well thought out policy before the election and will be implemented shortly.

15:18

[Sammy Wilson (East Antrim) (DUP)]

I welcome the opportunity to bring a Northern Ireland perspective to the debate, although I expect that it will not be all that different from what we have heard from all round Great Britain. There are a number of particular problems which the escalation of fuel prices brings to a place that is on the periphery of Europe and on the edge of the United Kingdom, with all the attendant costs for industry, whether for the transport of raw materials in or for the transport of goods out.

At a time when the Northern Ireland Executive are trying to rebalance the economy and promote the private sector, such increases in costs present particular difficulties. They also present a difficulty when the fuel duty in Northern Ireland is much higher than in other parts of the island. For example, on diesel there is a 60% tax take, whereas across the border in the Republic it is 55%. That distorts competition in industry. Northern Ireland also has a large and dispersed rural community with high levels of rural poverty, so escalating costs will hit people who can ill afford them, as many Members have highlighted for their constituencies.

[Mr Jeffrey M. Donaldson (Lagan Valley) (DUP)]

Does my hon. Friend agree that an added problem in Northern Ireland is that it is the only part of the UK that has a land border with another state and that fuel smuggling has been endemic for many years? Would the Government not be better served by putting more resources into HMRC’s capacity to tackle fuel smuggling and apprehend those engaged in that unlawful activity, as that could bring in a lot more revenue to the Exchequer?

[Sammy Wilson]

I accept my right hon. Friend’s point: with a 20% price differential, fuel smuggling of course becomes a lucrative trade.

Although there are differences in approach, there seems to be a fair degree of unanimity that this issue needs to be dealt with. In fact, the only dissenting voice I have heard is that of the member of the Green party who sits in front of me, the hon. Member for Brighton, Pavilion (Caroline Lucas), who seems to think that it is a good idea that fuel prices go up. I think she is more interested in influencing temperatures in the world in 100 years’ time than dealing with the poverty people face in the present day—it is a quirky party, so of course it has quirky ideas.

A number of criticisms have been made of the motion before us, and I must say that I have some sympathy with them. I know that getting a derogation from Europe will not be easy. Indeed, after this debate I will be speaking with the Minister about the aggregates levy and derogations for it, and even for something that simple we are looking at more than a year for Europe to agree a variation on something that it has already accepted. One must bear it in mind that that is not a quick remedy. However, the motion at least highlights the issue, which is one reason I support it, and it does so in stark terms, setting out the impact that fuel price rises have on people.

The Economic Secretary’s response has been threefold. First, she spent quite a lot of her speech looking back. I suppose it is difficult for someone from Northern Ireland to criticise another for looking back, so you will have to allow me to overcome that irony, Madam Deputy Speaker. I admire the way the Economic Secretary made her argument. In fact, I like her style—head-butt the opponent, get them on the ground and kick them when they’re down. She should be an honorary Ulsterwoman. I appreciate her approach, but although the previous Government have a case to answer, I think that people outside are interested not so much in who did what in the past, but in what will happen in future. Although it was good to hear her robust response, it has to go further.

Secondly, the Economic Secretary gave a number of reasons why things could not be done. She talked about deficit reduction and the fact that there would be a cost attached to any action on fuel prices, but one point that has escaped mention in the debate is that we are talking about a windfall for the Government. The increase in money that has resulted from the price rises was not anticipated in the deficit reduction plan in the first place—at least I do not think that the Government anticipated there would be a war in Libya and that that would put up fuel prices and built that into their Budget. If they did, God help us, because if that kind of planning goes into a long-term Budget we should be very worried. It is a windfall tax, so the Government have an opportunity to give it back to the people; it does not impact on the deficit reduction plan and it alleviates a problem that they have identified.

Thirdly, the Economic Secretary said that she cannot pre-empt the Budget, and I suppose we must have some sympathy with that. I do not think that anyone would want her to do so, but if there is to be some good news in the Budget, I would have liked her to have at least softened us all up by giving some hope that that will happen.

[Robert Flello (Stoke-on-Trent South) (Lab)]

I am thoroughly enjoying the hon. Gentleman’s speech, but, to pick up on that point, Government Front Benchers could pre-empt the Budget by announcing now, as Labour did in the past, that the proposed increase will not happen. They do not have to wait until the Budget.

[Sammy Wilson]

I was just coming to that point. Government Front Benchers could today at least have offered us some softening up, some promise or some hope held out, but that was not apparent in the speech we heard. Perhaps in the winding-up speech there will be such an opportunity. The one thing we do know is that in opposition and faced with increasing fuel prices and protests about them, the current Chancellor said that when prices and the tax take go up, taxes should go down, and that when prices go down, taxes should go up. That was the policy enunciated when Government Members were in opposition. I look forward to next Wednesday to see whether that promise and policy will be given some effect in the Budget. If that happens, this motion and this debate will have been worth while and there will be at least some alleviation of the hardship that fuel price increases have brought.

15:26

[Charlie Elphicke (Dover) (Con)]

It is a privilege and honour to follow the hon. Member for East Antrim (Sammy Wilson), who made an entertaining, engaging and thoughtful speech on this issue, which we all feel strongly about. It has been an emotional debate on both sides of the House. Constituents write to me daily expressing concern about the cost of living and how they will manage, given the way the cost of fuel has risen in recent times. It is a just concern that is understood on both sides of the House. Hauliers in my constituency write to me expressing grave concern about the situation they find themselves in and their ability to compete with operators on the continent who undercut them.

However, I must say that for the Opposition to bring forward such a motion is the most extraordinary and shameless opportunism I can recall seeing in this House. It is shameful because we know that the Labour party increased duty 12 times in its period in office. We know that it took away the 10p tax rate. We know that tax discs went through the roof, and we know that the haulage industry was decimated in the last decade because the Labour Government had no interest or desire to ensure that that industry was safeguarded.

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

Does the hon. Gentleman agree that the most damning verdict on the coalition’s first year in government was when someone wrote to me and said, “Mr Evans, thanks to the increase in VAT on fuel duty, I’m worse off than I was a year ago”? Does the hon. Gentleman agree that most people in this country are worse off than they were a year ago?

[Charlie Elphicke]

Measures taken by this Government will take 800,000 of the poorest people in the land out of tax. The Chancellor is not in his place today; I hope very much that he is working out how he can look after the least well-off people in this country in his Budget. I hope that he will be listening and thinking carefully about how he can engage with people’s understandable concern about the cost of fuel and how the country can be put right after 10 years of being driven into the international sidings.

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

Does my hon. Friend agree that in his Budget the Chancellor should be looking at areas such as South West Norfolk, where people have little alternative but to use their cars both for business and domestic purposes? In particular, does he agree that the rural fuel reduction should be extended to areas such as Norfolk, where there is very little public transport?

[Charlie Elphicke]

My hon. Friend makes a powerful point on behalf of her constituents, for whom she is such a brilliant advocate. As she and I know, the difficulty is the amount of money in the kitty, which is massively in the red. We have a structural deficit of £109 billion and borrowings this year of more than £150 billion. That is the poisoned economic inheritance that the previous Government left, having maxed out the nation’s credit card and brought this country to the brink of bankruptcy. What do they urge us to do? Opportunistically, they urge us to cut taxes. How would they do that? They would borrow more money, as we know from the shadow Chancellor’s Bloomberg speech, and raise interest rates on mortgages for the average householder, who struggles to get by as it is.

[Sheila Gilmore]

Did the hon. Gentleman actually listen to what his hon. Friend the Economic Secretary to the Treasury said earlier about the impact of VAT rises and fuel cost rises on businesses? They mean that businesses go under, people are put out of work and they then buy less? Is that not the crux of the issue? If we want growth, we need to give people income with which to purchase things.

[Charlie Elphicke]

The crux of the issue is that we have to stop the draining of money from the public finances, right the nation’s finances and get this country growing with a pro-business agenda. That is what the Government are looking at, and I hope that in the Budget next week we will see a pro-growth, pro-business, pro-jobs and pro-money economic policy, which we have not had for the past decade. We have been brought to the brink of ruin by the amount of debt that the previous Government encouraged ordinary people to get into and, indeed, managed to get the public finances into. This Government are about putting those things right: ensuring that our housekeeping personally and as a nation is put back on the level. That is really important.

[Fiona O'Donnell]

Among all those tough choices, which does the hon. Gentleman think his Chancellor found tougher: taking money from his friends in the City and in the banks, or taking money from hard-working families in my constituency?

[Charlie Elphicke]

I gently encourage the hon. Lady to be cautious when making remarks about rich people. The other day her right hon. Friend the Leader of the Opposition talked about how his house is worth millions and millions, so we should be careful before we start trading such ludicrous insults. This is a serious debate; we have people in our constituencies living in deprivation, and all she can do is trade political barbs. I encourage her to consider how we can create more jobs and money, and how we can grow the private sector, so that it includes real jobs and real money that will take this country forward and grow our economy. The priority has to be to ensure that this country gets back into the fast lane of economic growth in the international arena. We have been slipping down the global competitiveness league over the past 10 years, and we need to ensure that this country goes back to the head of the economic river.

[Pamela Nash]

Does the hon. Gentleman not agree that rapidly rising fuel prices are doing exactly the opposite of what he says his Government are trying to achieve, with economic growth and the number of jobs throughout the country decreasing?

[Charlie Elphicke]

I cannot control the weather; God controls that. Nor can I control world oil prices; they are controlled by the global markets. Would that we could just magic away the fact that global oil prices have risen, but we cannot, and global oil prices have been rising and creating the problem felt deeply by many of our constituents. The situation has not been helped by the past decade’s 12 rises in fuel duty, which saw it go up from 36p to 57p. That is a massive, 20p increase, and on top of that there is VAT. But, to come to this House and say, “Well, why don’t we just chop the VAT by 2.5%,” knowing that is illegal and unlawful, and that it would take six years to secure such a derogation, is a shameless and craven exercise in opportunism.

[Tom Blenkinsop]

The Government are proposing enterprise action zones, so if I were to set up a petrol station in one of them, would I be able to sell petrol exempt of all taxes? That would present a problem for the hon. Gentleman’s argument that, under EU law, we are not able to roll back VAT.

[Charlie Elphicke]

I do not think the Chancellor would introduce any such enterprise zone on that basis, and nor should he; that would be a ridiculous thing to do.

Just as ridiculous is the fact that the previous Government did so little about smuggling across the border. We see it daily in Dover, where local hauliers complain to me bitterly about the people who fill up in Luxembourg but not in the United Kingdom. They bring goods in, pick up another load, leave and then fill up again in Luxembourg. They contribute nothing to duty, road funds or vehicle excise duty in this country; they come on a free pass, and the previous Government did nothing about it.

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

Does the hon. Gentleman understand the anger felt by law-abiding people in these days of great financial constraint about the fact that on Tuesday the UK’s biggest fuel laundering plant was found in Crossmaglen in Northern Ireland? That industrial-scale plant was capable of producing more than 30 million litres of illicit fuel a year, representing the equivalent of £20 million in lost revenue. Surely it is about time that such despicable action was stamped out.

[Charlie Elphicke]

I completely agree with the hon. Gentleman, who makes a very fair point. We need to be firmer and tougher on smuggling and ensure that everyone pays their fair share. Two hauliers in my constituency, Martin Husk, and Tony Thompson of Comfret, stopped me the other day in Dover, complaining bitterly about the way they are hobbled by international competition, and I said that we should look carefully at daily road-user pricing. That would need a European derogation, but all other countries seem able to do it. We should look at introducing that as a longer-term, well thought-out, non-opportunistic measure.

We need measures on fuel which are lawful and affordable. We cannot just prey on people’s fears and be cravenly opportunistic; we have to be considered and careful. We need the Government to continue carefully considering the policy for the Budget next week, and to bring forward something that is affordable, credible, sensible and well thought-out, not the sort of ludicrous opportunism that we have seen from the Opposition.

15:29

[Gregg McClymont (Cumbernauld, Kilsyth and Kirkintilloch East) (Lab)]

Time is running away from me, so I will keep my contribution short. The Opposition have called the debate today because we have certain questions about the Government’s attitude to fuel, to living standards and to the economy more widely.

First, do the Government understand the squeeze on working families? Secondly, do the Government understand the need for a political economy that puts growth and jobs at the heart of everything government do? Thirdly, are they a Government who put the interests of the many above those of the few? [Hon. Members: “Yes.”] Well, I have to say—

[Tessa Munt (Wells) (LD)]

Will the hon. Gentleman give way?

[Gregg McClymont]

No, I will not give way, I am afraid. I have only three minutes. I am sure the hon. Lady will understand.

Government Members say “Yes”, but nothing I have heard so far in this debate leads me to believe that they have an affirmative answer to those questions. Reversing the VAT rise on fuel would be a statement—a declaration—of faith in working families in this country.

[George Freeman (Mid Norfolk) (Con)]

Will the hon. Gentleman give way?

[Gregg McClymont]

I will not, I am sorry. I have only two and a half minutes now, and the hon. Gentleman will understand, I am sure, that there is no time to give way.

Reversing the VAT rise in fuel would be a small concession in the context of a cocktail of economic policies that amount to a sustained assault on the living standards of ordinary families in this country. The Chancellor, the Chief Secretary to the Treasury and other Front Benchers will claim that the squeeze in living standards is beyond their control, but the Deputy Prime Minister admitted at the weekend that this Government’s policies are their choices. They have chosen to make ordinary families pay the price for their chosen economic policy. Regressive indirect taxes are going up; taxes on bankers and financial services are falling. A return of the bonus tax on bankers would be strongly welcomed by Labour Members. Support for families and for children has been cut aggressively this year. The cut to the child care element in working tax credit will hit hard families up and down this country from April.

Ministers talk of rebalancing the economy, but over the next five years the Office for Budget Responsibility has predicted falling savings rates and a lower share of GDP going into the wages of ordinary families. We already know that lower wages, squeezed living standards and lower savings rates lead to higher personal debt, higher financial stress and more personal bankruptcy. Is this the rebalancing of the economy that we really want, where debt is shifted from Government to families? I, for one, do not think so.

Today we are calling for a reversal of the VAT rise on fuel. This would be a declaration of faith in ordinary families up and down the country, and I hope that the Government will look on it kindly.

15:40

[Kerry McCarthy (Bristol East) (Lab)]

We have heard today from Members on both sides of the Chamber about how ordinary working families and people are feeling the squeeze in these tough economic times.

My hon. Friend the Member for East Lothian (Fiona O’Donnell) made an excellent speech in which she spoke up for the constituents who have contacted her by e-mail telling stories of how they are being hit by the fuel price rises. My hon. Friends the Members for West Dunbartonshire (Gemma Doyle) and for Scunthorpe (Nic Dakin) added their tales of woe from constituents who are finding times difficult. My hon. Friend the Member for Edinburgh South (Ian Murray) mentioned a constituent who wrote to him about being hit from all sides by a litany of blows rained down on him by this Government. My hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) referred to a cocktail of economic policies that amount to an assault on the living standards of ordinary working families.

My hon. Friend the Member for Edinburgh South talked about the impact on small businesses, as did the hon. Member for Rugby (Mark Pawsey), who spoke from first-hand experience as someone who used to run his own business. He said that the cost of fuel had gone up from £2,000 per month to £3,000 per month, which was obviously having a major impact on the ability to run a profitable business.

[Robert Flello]

Is my hon. Friend aware that organisations such as the Road Rescue Recovery Association, the Freight Transport Association, the Road Haulage Association and the Scottish Vehicle Recovery Association are asking, “When are the party in government going to honour their pledge about the stabiliser?” They are desperate for that to happen.

[Kerry McCarthy]

I will turn in a moment to the pledge about the stabiliser. The hon. Member for Worcester (Mr Walker) called for it to be implemented very soon, as did the hon. Member for Devizes (Claire Perry), who is no longer in her place.

[Tessa Munt]

Does the hon. Lady agree that the Minister will be very generous in seeing representatives of the FairFuelUK campaign, who have 140,000 signatures on their petition as of today? That is organised by Peter Carroll. The chief executives of the Road Haulage Association and the Freight Transport Association and the operations director of the RAC, together with Quentin Willson, the motor journalist, and I, coming from a hard-hit rural constituency, will discuss this tomorrow. We are suffering the double whammy of domestic oil and fuel oil—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. This is supposed to be an intervention, not an opportunity to make another speech or to put out an advert.

[Kerry McCarthy]

I would not expect any less of the Minister, as she certainly should be meeting the organisations. It is a shame that the Chancellor and the Chief Secretary to the Treasury were not also here today to listen to people.

The hon. Member for Brigg and Goole (Andrew Percy) talked about his election leaflets hounding his constituents about the fuel duty stabiliser. He referred to the work that Conservative central office had put into the policy, which he described as a well-thought-out policy from before the election that will be implemented shortly. I may disabuse him of that delusion a bit later in my speech.

The hon. Member for Amber Valley (Nigel Mills) talked about the impact in rural areas and the fact that people could not afford to go to work, and he urged the Chancellor not to go ahead with the fuel duty escalator. My hon. Friend the Member for Stockton North (Alex Cunningham) ventured further afield and discussed the impact of fuel poverty on people who were having to spend more than 10% of their income on heating their homes, saying that what the Government are doing across the board is likely to push more people into fuel poverty. It was a very thoughtful speech.

The hon. Member for Bristol West (Stephen Williams) talked about petrol prices in Bristol. I am sure that one of the few things on which we can agree is that Bristol desperately needs to sort out its transport issues and develop a better public transport system. It has the worst congestion of any city in the country, and we need to address that. The hon. Member for Na h-Eileanan an Iar (Mr MacNeil)—did I pronounce that correctly?

[Mr MacNeil]

Almost.

[Kerry McCarthy]

Almost. The hon. Gentleman talked about the rural fuel derogation, but I do not think that he got an answer from the Economic Secretary. He asked when the pilot in the Outer Hebrides would happen and whether he could have more details.

The hon. Member for East Antrim (Sammy Wilson) went on a bit of a flight of fancy about the Economic Secretary engaging people in head-locks and bare-knuckle fighting, which, I am afraid, she missed. He then expressed disappointment that we had had no softening up from her—I am not sure where he was going with that. However, he also spoke evocatively about the impact of the fuel price rise on his Northern Ireland constituents.

The hon. Member for Dover (Charlie Elphicke) accused the Labour party of shameless opportunism in speaking up for constituents and trying to address the impact on hard-hit motorists. What I would describe as shameless is the Conservative party’s leading people to believe before the election that it could cut 10p off the price of petrol and then doing nothing about it.

[Mr MacNeil]

Will the hon. Lady give way on that point?

[Kerry McCarthy]

I am sorry, but I have no time to allow any more interventions.

We heard today that unemployment has now risen to more than 2.5 million. Another 27,000 people have been added to the dole queue in the past three months. Those who are in work find their income squeezed by the rising cost of living, with inflation surging over 5%, but average wages growing by just 2.3% and many in the public sector facing a cut in real terms. People are struggling to make ends meet.

This month, the Office for National Statistics added iPhone apps and online dating fees to its RPI shopping basket—I am not sure what was in its RIP shopping basket. The ONS believes that essentials such as food and fuel now make up an increasing proportion of the average family spend. Of course, we have heard today that the price of fuel is rising fast. A litre of fuel is now £1.32, which is up 7p from the beginning of the year. That is an extra £80 for the average driver.

We accept that the Government cannot control the price of oil. We understand that the turmoil in the middle east and north Africa is having an impact on global prices. However, the Government are not powerless. They have a choice. They could choose to help working families get through the tough times, or to carry on regardless down their reckless path of cuts, which are too fast and too deep, slashing support for families and putting the recovery at risk.

The Government have made the wrong choice. The Chancellor chose to raise VAT to 20%, which hits low and middle-income families hardest and has pushed up the prices of fuel, energy and food and, as we have heard, has hurt businesses, too.

[George Freeman]

Will the hon. Lady give way on that point?

[Kerry McCarthy]

I am afraid that I do not have time.

Before the election, when a litre of petrol was 12p cheaper than it is now, the Conservative party said that it would consult on the fair fuel stabiliser. It said that it would ensure that families, businesses and the whole British economy were less exposed to volatile oil markets. The Prime Minister said that he would help with the cost of living by trying to give a flatter, more constant rate for filling up the car. The Chancellor said that that would be delivered in the Government’s first Budget. It was not. Conservatives led voters to believe that they could and would act. However, we now face the exact problem that the policy was designed to prevent. Rising oil prices have pushed up fuel prices at the pump beyond £6 a gallon, yet there is no sign of the fair fuel stabiliser. Not only that, but the Government have added nearly 3p to the price of a litre of petrol with their VAT rise this year.

The Government need to come clean about whether they will move ahead with the stabiliser and answer the criticisms of a host of commentators, who said that the idea would never work because rising oil prices do not necessarily lead to higher tax revenues. They include the Office for Budget Responsibility, the new head of which said that its analysis suggested that a fair fuel stabiliser was likely to make the public finances less rather than more stable, and the Institute for Fiscal Studies, which said that the claim that the Treasury receives a windfall gain that it can share with motorists when oil prices rise is incorrect. Even the Secretary of State for Business, Innovation and Skills said before the election that the fair fuel stabiliser would be “unbelievably complicated and unpredictable”.

The Government are no closer to introducing the fuel duty stabiliser now than they were a year ago. Rather than teasing the public and dangling the prospect before them, the Government need to nail their colours to the mast and tell us what they intend to do. Labour believes that the Government should reverse their VAT rise on fuels and reconsider the fuel duty escalator rise, which is due in April. In government, Labour often postponed fuel duty increases when oil prices were rising and families felt the pinch. It was clearly the right thing to do then and we urge the Government to reconsider now.

Obviously, there is a balance to be struck between raising revenue and ensuring that ordinary people who are trying to get on with their lives—earn a living, get the kids to school, get to work on time—are not unfairly penalised. For some, driving is a choice and they can cut down on their journeys when petrol prices increase, but what about those who rely on their cars every day and do not have the option of using public transport because the bus and rail services simply are not there, or those who run small businesses, or the self-employed who need to run vehicles as part of their work?

Ordinary working people did not create the global economic crisis; it began in the financial sector. However, under this Government, it is ordinary working people who are paying the price. The Government are taking away more money from families with children than they are asking for from the banks that caused the problem in the first place. The bank levy is expected to raise £2.5 billion, but the last Budget and the spending review took nearly £5 billion from families with children through cuts to child benefit, child tax credits and other measures. The Government have refused to repeat the bank bonus tax that Labour introduced last year, which raised £3.5 billion and could be expected to raise another £2 billion this year.

We believe that the bank levy, which is expected to raise £800 million more this year than was originally predicted, could be used to pay for a reversal of the VAT rise on fuel. That would be the right thing to do: helping people when times are hard, getting the economy moving again and asking the financial sector to pay its fair share. Asking ordinary people to pay and hitting them where it hurts most is the wrong choice. Government Members can try to pass the buck and blame the EU for their failure to act, but the fact is that they have a choice. They could choose to help ordinary working people in the Budget next week. I urge Members to support the motion.

15:51

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

This has been a helpful debate. There is little doubt that the cost of living and the rising price of fuel are difficult issues that affect all our constituents. I thank my hon. Friends who raised issues from their constituencies, in particular my hon. Friends the Members for Worcester (Mr Walker), for Amber Valley (Nigel Mills), for Bristol West (Stephen Williams), for Devizes (Claire Perry), for Rugby (Mark Pawsey), for Brigg and Goole (Andrew Percy) and for Dover (Charlie Elphicke).

When times are hard, things are clearly very difficult, and we understand that people want us to do something. We have to address the deficit. The plans that we inherited were not credible. One plan announced by the previous Government was to increase fuel duty six times over the course of the next few years. The Chancellor will, of course, update the House next week on our plans on all tax matters. I am sure that the points that have been raised today will be fully taken into account.

I will focus on one particular Opposition proposal: the suggested cut in VAT on road fuel. In advance of a Budget, the Opposition seek to find a popular and eye-catching policy to get some headlines and broadcast time. One can imagine the enthusiasm of the shadow Chancellor when he told the Leader of the Opposition of his cunning plan. He wanted to use the money from a tax on unpopular people—our bank levy—to reduce costs for motorists. However, rather than the obvious proposal of reversing fuel duty increases, which might have been a little awkward for the Labour party, he proposed to focus on VAT on fuel, and in so doing to distract attention from the fact that Labour is dropping its opposition to other parts of the VAT increase.

[Mr MacNeil]

I am grateful to the Minister. I did try to intervene on the Opposition spokesman. I wonder whether the Minister is aware that 37 days ago, on 7 February, there was a debate in this House calling for action on fuel prices, and Labour MPs abstained.

[Mr Gauke]

I am grateful to the hon. Gentleman for raising that point.

With the new policy prepared, how could the shadow Chancellor’s plan possibly fail? An interview round was done on Sunday, a press conference was booked for Monday, and an Opposition day was planned for today—I believe by moving aside other plans. However, let us consider what happened. So quickly did the flagship policy of a cut to VAT on fuel unravel that the shadow Chief Secretary, in her 32-minute speech, completely skipped over it. She did not want to discuss it for a moment. What went wrong? The starting point, of course, is that the funds identified by the shadow Chancellor are a one-off amount of £800 million that is available this year from the bank levy. There are no funding plans for future years. Of course, the bank levy should be spent in myriad ways, according to the Labour party—I think it has committed it 10 times over.

Let us turn to how a VAT reduction on fuel duty would be achieved. As has been pointed out, the operation of VAT by EU member states has always been restricted by EU-wide rules. Of particular relevance is the fact that reduced rates may apply to certain specified items, but road fuel is not among them. Under the current rules in the relevant EU directive, we simply cannot do it.

Today’s motion states that we should seek a derogation, and the shadow Chancellor has said that France has obtained a derogation with regard to restaurants. That is correct, and it is perhaps worth describing the process required to obtain a derogation—unless, of course, Labour Members wish to leave the EU. That would liven up the debate, but I do not think that that is their position. If they wanted a derogation, there would have to be discussions with the European Commission, which would have to be persuaded to make a proposal. Each and every member state would have to agree to that proposal, and there would also have to be consultation with the European Parliament.

It is true that a new agreement was reached in 2009 on the list of excepted activities, but that agreement took nearly seven years from start to finish. There is no guarantee of success, either. Opposition Members dismiss the European situation, but they sought derogations to achieve lower rates of VAT for listed places of worship and green energy-saving materials. They were unsuccessful, and they abided by the decision. The VAT directive currently allows derogations only on the grounds of simplification or the prevention of avoidance or abuse, so the chances of success are slim. The shadow Chancellor’s position today is that we should begin a lengthy, and almost certainly unsuccessful, attempt to obtain a derogation that may result in our being able to reduce VAT on fuel in six or seven years.

That is not quite what the shadow Chancellor has been saying recently. On 27 February, on the “Politics Show”, he said in respect of additional VAT on road fuel that the Chancellor

“should say I will reverse that now.”

In The Sun on 28 February, he stated that the Chancellor should “act now”. Again on the “Politics Show”, on 13 March, he said:

“The VAT rise he could reverse immediately and I think he should.”

The same morning, on Sky News, he called on the Chancellor to

“act immediately on VAT…on Wednesday we’ll be urging Conservative and Liberal Democrat MPs to join with us in voting in parliament to urge the Chancellor, cut VAT on fuel now and give immediate relief to hauliers and motorists across the country.”

When he says “immediate relief” and that we should not wait until the Budget and that we should “act now”, what he really means is that we should start a lengthy process that just might, possibly, with a bit of luck and with the consent of 26 other member states, mean that we could take some action in about 2018. As an example of immediate action to help hard-pressed British motorists, that is somewhat lacking in effectiveness.

The cynical view is that the shadow Chancellor knew that that policy would not work, but it was enough for him to have something to say to get in the media. The cynics will point out his vast experience in the Treasury—he is, after all, a man with a past. How, they will ask, could he possibly be so incompetent? I think those cynics are being unfair to him. He could be that incompetent. After all, he has told us that he wants to cut VAT to help hauliers, but hauliers can reclaim VAT. He has talked about the cutting of VAT on fuel in the 1990s, but in fact that was domestic fuel. He has talked about asking for a VAT cut on fuel in rural areas, but now asks for a derogation on fuel duty.

If the Labour party is to have a shadow Chancellor who does not understand the tax system and who makes embarrassing mistakes, they would do a lot better with the previous one, who at least did that with a certain amount of charm. Only at the weekend, the current shadow Chancellor told The Guardian:

“My task is to rebuild Labour’s economic credibility, but that won’t happen in a week”.

That will certainly not happen this week. In a desperate attempt to have something to say on a matter of genuine concern, he has come up with a risible policy that is unfunded from next year and that cannot be implemented for years, if at all.

Once again the Labour party has demonstrated that on economic matters, it lacks credibility and competence, and I urge the House to oppose the motion.

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

16:00

Division 231

Ayes: 236

---

Labour: 222
Scottish National Party: 6
Plaid Cymru: 3
Democratic Unionist Party: 2
Social Democratic & Labour Party: 2
Independent: 2

Noes: 301

---

Conservative: 257
Liberal Democrat: 42
Green Party: 1

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

16:13

Division 232

Ayes: 307

---

Conservative: 262
Liberal Democrat: 44

Noes: 239

---

Labour: 223
Scottish National Party: 6
Democratic Unionist Party: 3
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Independent: 2
Green Party: 1

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

Resolved,

That this House notes that the Government inherited the largest deficit in UK peacetime history and that the previous Government and current Opposition has no credible plan to deal with the deficit; further notes that this Government has already taken steps to support families and that those on low and middle incomes will benefit from April 2011 from a £1,000 increase in the income tax personal allowance, above-indexation increases in Child Tax Credit and that pensioners will receive new ‘triple-lock’ increases in the basic State Pension; further notes the significant impact on fuel prices in the UK of the dramatic increase in the world oil price to over $100 per barrel and the impact on households and business; notes that the previous Government increased fuel duty no less than four times between December 2008 and April 2010, proposed introducing a fuel escalator from 2011 and planned for a further series of six consecutive fuel duty rises up to 2014; nonetheless recognises the significant impact of high fuel prices on motorists, hauliers and businesses and that the Government is considering a fair fuel stabiliser that could support motorists and businesses when oil prices are high; and in addition notes that a reduction in VAT on fuel would be deemed illegal under EU law and that the Chancellor will update the House on this issue at the time of the Budget.’.

[Madam Deputy Speaker (Dawn Primarolo)]

I now have to announce the result of a Division deferred from a previous day. On the question relating to environmental protection, the Ayes were 282 and the Noes were 20, so the Ayes have it.

[The Division list is published at the end of today’s debates.]

NHS Reorganisation

Wednesday 16th March 2011 Commons Chamber

[Madam Deputy Speaker (Dawn Primarolo)]

I advise the House that neither of the amendments has been selected by Mr Speaker. I remind Members that there is a six-minute limit on Back-Bench contributions, and I am sure that when making their opening speeches, both Front-Bench speakers will be conscious of the number of Back Benchers who want to speak in the debate.

16:27

[John Healey (Wentworth and Dearne) (Lab)]

I beg to move,

That this House supports the founding principles of the National Health Service (NHS); therefore welcomes the improvements patients have seen in the NHS and supports steps further to ensure the NHS is genuinely centred on patients and carers, achieves quality and outcomes that are among the best in the world, refuses to tolerate unsafe care, involves clinicians in decision-making and enables healthcare providers to innovate, improves transparency and accountability, is more efficient and gives citizens greater say; recognises however that all of those policies and aspirations can be achieved without adopting the damaging and unjustified market-based reorganisation that is proposed, and already being implemented, by the Government; notes the strength of concerns being raised by independent experts, patient groups and professional bodies about the Government’s NHS reorganisation; further notes the similar concerns expressed by the Liberal Democrat Party spring conference; and therefore urges the Government to halt the implementation of the reorganisation and pause the progress of the legislation in order to re-think their plans and honour the Prime Minister’s promise to protect the NHS.

We have called this debate because of the growing crisis of confidence in the Government’s handling of the health service and the Conservatives’ NHS reorganisation, and a growing lack of confidence among independent experts, professional bodies and patients groups. Only one in four of the public back giving profit-making companies free access to the NHS, two thirds of doctors think the reorganisation will lead to worse, not better, patient services, and nearly nine in 10 believe it will lead to the fragmentation of services. When the Prime Minister misquotes me at Prime Minister’s Question Time in support of his plans, we know he is desperate and increasingly isolated.

[Several hon. Members]

rose—

[John Healey]

I will give way shortly.

Yesterday the British Medical Association delivered a comprehensive vote of no confidence in the Government’s plans. Dr Hamish Meldrum, the BMA chair, said they were

“driven by ideology rather than evidence, enshrined in ill-thought-through legislation and implemented in a rush during a major economic downturn.”

On Saturday the Lib Dems did the same. Baroness Williams called the plans “lousy” and a “stealth privatisation”. I heard that very good speech for myself at the conference in Sheffield, and I hope that today the House will hear speeches by the hon. Members for Southport (John Pugh) and for St Ives (Andrew George) similar to those that they made to their party conference on Saturday. I must also say to the Minister of State, Department of Health, the hon. Member for Sutton and Cheam (Paul Burstow), that I hope that when he winds up this debate we do not hear the same flat and feeble apology that he gave for the Government’s plans when he opened the conference debate. He was totally rejected by his party, which told him and his parliamentary colleagues that the Health and Social Care Bill must be amended.

[Several hon. Members]

rose—

[John Healey]

I will give way in a moment.

The test for the Prime Minister is whether the Government’s proposals are always under review, as the Health Secretary said on Sunday, or whether this is not about significant changes to the policy, but about reassuring people as the Bill goes through the House, as people in the Department said on behalf of the Health Secretary on Monday.

[Mark Pritchard (The Wrekin) (Con)]

Does the right hon. Gentleman not accept that with an annual budget of £100 billion and rising, there is room for efficiency savings and reform? Why has he set his face against fundamental reform, which even the public accept needs to take place?

[John Healey]

Nobody can doubt our commitment to the NHS, and to both investment and reform, during our 13 years in office—often in the face of opposition from trade unions. Of course there is room for efficiencies, and there are ways to get much better value for money out of the NHS but, as the Select Committee on Health has said, the reforms will make it harder, not easier, to meet that challenge.

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

Has the shadow Health Secretary seen the consultation responses to the White Paper, which show widespread support for the reforms?

[John Healey]

The hon. Gentleman needs to read some of the material for himself, rather than just reading the briefings provided by his Whips and his Front-Bench team. Some of the 52 organisations that this Government and the Health Secretary claim supported the Bill have written to me saying that far from supporting the principles of the Bill, they have “grave concerns” about the White Paper; that was said by the Patients Association. The Chartered Society of Physiotherapy has said:

“We have been very clear that we have grave concerns about the scope and speed of the structural changes proposed”.

Diabetes UK, Cancer Research UK, the Royal College of Speech and Language Therapists and others do not take kindly to being misrepresented by Ministers as supporting this Bill when they have such grave concerns.

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

I always thought that the right hon. Gentleman was a reformer at heart, but he obviously is not, given what he is saying today. Why did productivity in our hospitals decline by 15% during the 13 years of the Labour Government, while bureaucracy increased?

[John Healey]

One of the problems—we all know this, and the new Government will be faced with it in exactly the same way—is exactly how to measure productivity in the NHS. Given the complexity of what is provided for patients—and the requirement to put together packages of care to help people recover from serious illness and live independently is so complex—it is hard to do that. The NHS just is not like a commercial business, which is what this Government want to turn it into.

[Henry Smith (Crawley) (Con)]

Let us consider something more quantifiable. Is the right hon. Gentleman in favour of more or less bureaucracy in the NHS?

[John Healey]

Let me send the hon. Gentleman a copy of the Labour manifesto, because we set out exactly how we could make significant savings from the bureaucracy.

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

rose—

[John Healey]

I am just responding to the hon. Gentleman’s colleague, so I ask him to be patient. We set out exactly how we could reduce the costs and some of the bureaucracy. Perhaps the hon. Member for Crawley (Henry Smith) could ask his Front-Bench colleagues how bureaucracy will be cut when the function currently carried out by 150 primary care trusts in England will be carried out instead by more than double that number of general practitioner consortia.

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

Perhaps the Secretary of State, too, would share his thoughts about how money will be saved on bureaucracy when expenditure on Monitor, which will take on a new economic regulator role under clause 52 of the Health and Social Care Bill, will increase from £21 million a year under Labour to as much as £140 million a year—£500 million over the course of a Parliament. How is that saving money on bureaucracy?

[John Healey]

My hon. Friend does a great job in ensuring that this Government are held to account on the NHS through the Health Committee. He rightly says that Monitor’s budget is currently about £20 million and the impact assessment calculates that that could increase to as much as nearly £140 million—although Monitor’s core operating costs are not that entire total, the figure will be at least three times as high as it is now. That is not a decrease in bureaucracy and operating costs, it is an increase. Hon. Members would do well to read some of the documents, rather than the briefings they have been given by their Front Benchers.

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

My hon. Friend the Member for Easington (Grahame M. Morris) has told us that Monitor’s budget will increase by the amount that he said, but does my right hon. Friend agree that it will continue to increase exponentially, because the Government are opening up the NHS to European competition law, and that competition will grow exponentially year on year?

[John Healey]

This is such a big and fundamental change to the NHS that £140 million is the best guess. Clearly, as the competition role of Monitor increases and the competition legislation it has to deal with becomes stronger, those costs could increase. We simply do not know, because this is a leap in the dark for the NHS.

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

Having listened to the debate at our party conference on Saturday, the right hon. Gentleman will know that there were strong views that the Bill needed to be further improved and strengthened, but he will also know that there was no call for it to be pulled or paused. He will also remember that when his party and my party joined together to form the NHS, the doctors were not always on the side of the enlightened.

[John Healey]

The Liberal Democrats are quick to try to claim credit for other people’s successes, and quick to try to duck responsibility for some of the difficult challenges they face. However, the right hon. Gentleman is right—it was the BMA that called yesterday for the Bill to be withdrawn. Our motion calls not for it to be withdrawn but for a pause in its passage through Parliament to give the Government a chance to rethink, exactly as was requested by speaker after speaker at his conference in Sheffield on Saturday, and all but a handful of the members who voted at it.

[Several hon. Members]

rose—

[John Healey]

I am going to make some progress. We are all conscious of your encouragement to do that, Madam Deputy Speaker.

Some say that the Prime Minister and the Health Secretary are failing to get the message across, but from the start they have told only half the story. The Tories did not tell people about their plans for reorganisation and market competition at the heart of the NHS before the election, and they did not tell the Lib Dems about them before they signed the coalition agreement pledging that there would be no NHS reorganisation. There is no mandate from the election or the coalition agreement for this fundamental reorganisation and far-reaching legislation. They will not be straight with people about their plans. This is not just about communication; it is about judgment. In the face of widespread warnings, they are forcing through at breakneck speed the biggest reorganisation in the NHS’s history.

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

The right hon. Gentleman wisely started by saying that there is room for reform. The right hon. Member for Edinburgh South West (Mr Darling) had plans in his Budget for a 20% cut in the NHS. Will the shadow Secretary tell us which bit of the NHS he would cut to deliver that 20%?

[John Healey]

There is someone else who needs a copy of the Labour manifesto. He almost used his six minutes’ allocation to make that intervention.

[Several hon. Members]

rose—

[John Healey]

I am going to move on. If that is the best the Conservatives can do, I am going to move on.

The truth is that the more people see of the plans, the less they like them. The closer they look the more concerned they become, because they start to see far-reaching changes at the very heart of this reorganisation and legislation. These are the wrong reforms for the wrong reasons at the wrong time. As our motion says, and as the Lib Dem conference motion said, most people would agree on the declared and desirable objectives—indeed, that is the direction in which the Labour Government were heading—but those aims could be better achieved without this huge internal reorganisation and, as the Lib Dem conference motion stated,

“without adopting the damaging and unjustified market-based approach that is proposed.”

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

Does my right hon. Friend agree that there is room for reform, but not room to risk the GP-patient relationship? Dr Gerada and the Manchester business school have both highlighted that there is a risk that bonuses and profits could be put above diagnoses and treatment.

[John Healey]

My hon. Friend is right: this reorganisation and legislation leave no part of the NHS untouched. One big concern is that when GPs are making both rationing and referral decisions at the same time, patients will start to ask whether their GP is making a judgment about their treatment in their best interests or in the best interests of his or her budget and consortia business. That can hit at the trust at the heart of the patient-doctor relationship.

[Sajid Javid (Bromsgrove) (Con)]

I thank the right hon. Gentleman for giving way so generously. He has mentioned the Labour manifesto twice, and I just happen to have a copy of it. It says that Labour will support a

“role for the independent sector”,

encourage any willing provider, make all hospitals foundation trusts and give them the

“freedom to…increase their private services”.

On that basis, will he explain why he and the leader of the Labour party, who I believe to have been the author of that manifesto, are reneging on that position?

[John Healey]

We were doing what the manifesto said before the election. [Interruption.] We were doing it where the private sector and competition could add capacity to clear waiting lists, or do something new that the NHS was not doing. We did it in circumstances that were carefully planned, properly managed and always publicly accountable. If the hon. Gentleman is going to swallow the guff from those on his Front Bench that this is somehow an evolution of Labour’s policy, he will have to ask the Health Secretary why he needs legislation that is more than three times longer than the Act that set up the NHS in the first place.

Why do we say what we do in the motion before the House? In truth, this is a Tory reorganisation, and the legislation has been mis-sold. It is not just about getting GPs to lead commissioning or looking to cut layers of management; it is setting up the NHS as a full-scale market driven by the power of the competition regulator and the force of competition law. The reorganisation and legislation is designed to break up the NHS, open up all areas of the NHS to private health companies, remove requirements for proper openness, scrutiny and accountability to the public and to Parliament, and make the NHS subject to both UK and European competition law. The Tories are driving the free market political ideology through the heart of the NHS.

[The Secretary of State for Health (Mr Andrew Lansley)]

On precisely that point about scrutiny and accountability, we have been talking about independent sector providers. Under Labour, if scrutiny committees in local authorities wanted to investigate the activities of independent sector providers they could not do so. Under our legislation, they will be allowed to do so. Wherever NHS money—the public pound—goes, scrutiny will be able to follow. That is a change for the better.

[John Healey]

That is simply not true. The people who will make the big decisions about £80 billion of spending—the GP consortia—will not need to meet in public or to publish minutes of their meetings. They will not be subject to scrutiny by this House or proper public accountability.

Let me turn now to the question of subjecting the NHS to UK and European competition law. The Prime Minister clearly did not know about that at Prime Minister’s questions today—he clearly did not know that a third of his legislation sets up this new free market NHS. Perhaps the Health Secretary has only told him half the story about the legislation—

[Mr Lansley]

Will the right hon. Gentleman give way?

[John Healey]

Shall I finish what I have to say? Then I will give way. If the Health Secretary has not told the Prime Minister, he certainly has not told the public or this House, so let me spell it out—[Interruption.] The Health Secretary says that I have made it up, but why not wait for me to explain to the House, and then he can say whether what I am about to explain to the House is in my words or his?

Clause 52 of the Health and Social Care Bill, entitled “General duties”, sets up the new competition regulator, Monitor, and says:

“The main duty of Monitor in exercising its functions is to protect and promote the interests of people who use health care services—

(a) by promoting competition where appropriate, and

(b) through regulation where necessary.”

The new regulator is given legal competition powers, as well as functions under the Competition Act 1998 and the Enterprise Act 2002, and there are provisions on reviews by the Competition Commission and co-operation with the Office of Fair Trading.

[Mr Lansley]

Will the right hon. Gentleman give way?

[John Healey]

The Secretary of State can speak in a minute; I will finish this point. The regulator can investigate complaints about competition, force services to be put out to competitive tender, remove licences and fine the commissioner or provider up to 10% of their turnover. Helpfully, the Government’s new chair of Monitor confirms that. In The Times last month, he said:

“We did it in gas, we did it in power, we did it in telecoms, we’ve done it in rail, we’ve done it in water, so there’s actually 20 years of experience in taking monopolistic, monolithic markets and providers and exposing them to economic regulation”.

[Mr Lansley]

It is dead simple: the Health and Social Care Bill does not extend the application of EU competition law, or the application of domestic competition law. The powers given to Monitor as a sector regulator are the same as those now available to the Office of Fair Trading. The Bill does not change the scope of competition law at all.

[John Healey]

The right hon. Gentleman was involved, so he knows better than anyone else that the Tories are now setting out to do to the public services, including the NHS, what they did to the public utilities in the 1980s.

[Several hon. Members]

rose—

[John Healey]

Let me finish. The Government’s explanatory memorandum is helpful on the issue of EU law. It says, about chapters 1 and 2 of the Bill—the one third of the legislation that sets up the new competition system—that

“The Chapter 1 and Chapter 2 prohibitions are modelled on Articles 101 and 102 of the Treaty on the Functioning of the European Union which prohibit agreements that prevent, restrict or distort competition, and abuse of a dominant market position.

Monitor would have concurrent powers with the OFT to conduct investigations where it had reasonable grounds for suspecting that either of these two prohibitions—under either UK or EU law—had been infringed in the provision of health services in England.”

That means that a competition challenge in the NHS can be taken all the way to the European Court.

Helpfully, under pressure in Committee yesterday, the Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), confirmed that

“As NHS providers develop and begin to compete actively with other NHS providers and with private and voluntary providers, UK and EU competition laws will increasingly become applicable.”––[Official Report, Health and Social Care Public Bill Committee, 15 March 2011; c. 718.]

As GP consortia will be corporate bodies, not public sector bodies, and as hospitals will be competing with each other, will have no limit on treating private patients, and will have no support from the wider NHS if they run into financial problems, they will be bodies to which the EU competition rules and legislation apply. That means that the NHS will be tied up in the red tape of market regulation and competition law, and we risk decisions about who provides our health care services being taken not in England by GPs or Ministers, but in Brussels by the European Commission, and in Luxembourg by the European Court.

[Margot James (Stourbridge) (Con)]

The right hon. Gentleman has already acknowledged that competition and markets were a hallmark of the Labour Government; they took them far further than the previous Conservative Government ever did. Of 475 acute care sites providing elective care, 175 are independent sector providers. The Bill proposes making the competition fair and putting it on a level playing field. No longer will we allow the private sector to be as favoured as it was under the Labour Government.

[John Healey]

This is a debate. People in the country and in the NHS are worried not about what we did in government—they saw the massive improvements under Labour—but about the application of competition law, domestic and European, in full force to the NHS for the first time. The hon. Lady is serving on the Public Bill Committee. She will have the chance to get her head around that, as she clearly has not done so yet.

[Owen Smith (Pontypridd) (Lab)]

My right hon. Friend has anticipated the point that I was going to make. As we heard clearly in Committee yesterday—the Secretary of State ought to read the Official Report—his Minister, the right hon. Member for Chelmsford (Mr Burns), let the cat out of the bag. Hitherto the NHS has been insulated from European competition law. As there are more entrants to the market, competition law will have to apply—competition red in tooth and claw—followed by the break-up of the NHS.

[John Healey]

My hon. Friend is right. We have misinformation and confusion. If the Health Secretary disagrees with his Health Minister, I suggest that they have a word about it after the debate.

In the end, perhaps Nye Bevan was right. When Clement Attlee suggested that the NHS opening should be celebrated as a national institution supported by the whole nation, he said, “The Conservatives voted against the National Health Act, not only on second but the third reading. . . I don’t see why we should forget this.”

It is time for the Health Secretary to tell us why he is spending £2 billion on an NHS reorganisation when front-line staff and services are being cut. How many hospitals will be forced to close because of these reforms? Why is he handing such powers over our NHS to new national quangos, competition lawyers and the EU? Why is there no democratic voice in commissioning? Why is he allowing profit to be made in commissioning essential health services? Why is he removing any limit on private patients paying to jump the queue for treatment in NHS hospitals?

[Several hon. Members]

rose—

[John Healey]

It is time the Health Secretary told us who is fully in support of the NHS reorganisation and the legislation. NHS staff, dedicated to the part that they play in our NHS, will strive to keep things going whatever the pressures, but patients are starting to see operations cancelled, waiting times rise, hospital services at risk, front-line staff jobs cut and services cut. This is not what people expected when the Prime Minister said that he would “protect the NHS”. Instead, they are seeing the Prime Minister’s NHS promises to “protect front-line services”, to “give the NHS a real rise in funding”, and to “stop top-down reorganisations that get in the way of patient care” all broken. The NHS was the Prime Minister’s most personal pledge. It is now becoming his biggest broken promise.

Now is the time to listen to the chorus of criticism and concern, and to recognise the growing crisis of confidence in the Government’s handling of the health service. Now is the time to call a time out, pause the passage of the Bill in Parliament, and think again. I commend the motion to the House.

16:50

[The Secretary of State for Health (Mr Andrew Lansley)]

The Labour motion is interesting. I will ask the House to reject it, but it is an interesting motion. The first half of it accepts the principles of our reforms—it even does so in the same terms in which we have expressed them—but in the second half it goes on to say, “Not yet. Don’t make us do it yet.” Labour Members are turning their backs on the change that we need in the national health service and even on the policies they pursued in government.

But it is time for change. The public agree—65% of adults in England think that fundamental changes are needed in the national health service. The need to improve results for patients demands it. The need to empower clinical leadership demands it. The need to cut bureaucracy and invest in front-line care for patients demands it. As a coalition Government, we do not shirk our responsibilities. We have been absolutely clear that the NHS will remain free at the point of need, paid for from general taxation and based entirely on need and not on the ability to pay.

Those values are not, and never will be, threatened by this Government. The Health and Social Care Bill will not undermine any of the rights in the NHS constitution. It is for those same reasons that we, in a coalition Government, are protecting the NHS in the life of this Parliament by increasing NHS funding by £10.7 billion.

[Clive Efford (Eltham) (Lab)]

Will the Secretary of State distance himself from the comments of Dr Charles Alessi, a GP alleged to have been one of the architects of GP commissioning in this Bill and one of the people invited to No. 10, who is of the opinion that too many people in his area are receiving treatment for macular degeneration? Is that not rationing services and nothing whatsoever to do with providing them on the basis of clinical need?

[Mr Lansley]

All GPs and their colleagues who were part of the first wave of pathfinders were invited to No. 10—there were far more than we ever expected—and Charles Alessi was one of them. It is a complete illustration. I do not know what Charles said or why he said it, but he is the doctor, not me. Frankly, I think that it is clinical leaders in the NHS who are responsible for what they say, not me.

[Nadhim Zahawi]

Does my right hon. Friend agree that the way in which the Opposition are conducting themselves, when they proposed a 20% cut to the NHS, is scaremongering among our constituents and entirely irresponsible?

[Mr Lansley]

My hon. Friend makes an extremely good point, and he made it to the shadow Secretary of State, who did not answer it.

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

Will the Secretary of State give way?

[Mr Lansley]

No.

The fact is terribly clear that before the election the Labour Government said that in three years the NHS would have to save between £15 billion and £20 billion. The Labour party never said in government that that money, if saved in the NHS, would be reinvested in the NHS. The other point is that when we came to the spending review, in which we agreed £10.7 billion extra for the NHS over the life of this Parliament, the shadow Secretary of State’s friends, who were then responsible, said that we should cut the NHS. We do not need to speculate about what they said they would do, because we can look at the example of Wales. The Labour-led Welsh Assembly Government are proposing to cut the NHS budget in Wales by 5%, while we are increasing it. We know exactly what Labour would do if they were in charge of the NHS: they would cut it. We have not cut it and are going to protect it.

[Simon Hughes]

I share absolutely my right hon. Friend’s view that the protection of the budget and the commitment to the principles of the NHS, which he has just enunciated, are really valuable and that Labour’s record in forcing privatisation undermines its whole argument. He knows that there are concerns. Having come back from the debate in my party, I ask him straightforwardly whether he will take on board the concerns expressed and look at ways to strengthen and further improve the Bill as it passes though this House and the House of Lords.

[Mr Lansley]

My right hon. Friend was busy in Sheffield over the weekend, but he might have heard me say on Sunday that where there are legitimate concerns, founded in reality rather than myth, about how we will secure the NHS and its modernisation for the future, we will listen. We have listened and changed the policy before the Bill was introduced. We have already amended the Bill during the course of its passage so far and will always look to clarify and improve it as it proceeds.

[Michael Dugher (Barnsley East) (Lab)]

Will the Secretary of State give way?

[Mr Lansley]

I will give way to the hon. Gentleman, and perhaps he can explain why the Labour party leading the Welsh Assembly Government will cut the NHS by 5% while we are going to increase the budget by £10.7 billion.

[Michael Dugher]

I might be new to Parliament, but we ask the questions and he is supposed to answer them. The Secretary of State knows full well that patient groups, health charities, doctors and nurses oppose the Bill—even that shower opposite opposed it at their conference. Is it not just arrogance on the part of the Government—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The hon. Gentleman needs to moderate his language. I would grateful if he withdrew the word “shower” and thought of another way to make his point that uses parliamentary language.

[Michael Dugher]

I withdraw “shower”.

Is it not just arrogant for the Government to think that everybody else is wrong and they are right—

[Madam Deputy Speaker]

Order. It was not an opportunity to ask another question, either.

[Mr Lansley]

The hon. Gentleman has now learned that, if one is trying to pray somebody in aid, it is best not to insult them at the same time.

We have made it clear that we need to protect the NHS now and for future generations through modernisation. Under the Labour party—

[Owen Smith]

Will the right hon. Gentleman give way?

[Mr Lansley]

Ah! Now we really do have somebody who can explain why in Wales the Labour party is cutting the NHS budget while we are increasing it. Come on!

[Owen Smith]

That is happening as a result of the very difficult decisions being taken in Wales, having seen the Welsh Assembly budget cut by £1.8 billion by the right hon. Gentleman’s Government. What we are not doing in Wales, however, is effectively privatising the NHS, exposing it to competition law or stuffing the mouths of private companies with public gold.

[Mr Lansley]

Let us remember that, when we decided to support the NHS here, through the Barnett formula by extension, money was provided to the devolved Administrations, but the hon. Gentleman confirms that a Labour-led Welsh Assembly Government chose not to invest in the NHS, while we in England chose to do so. I urge Welsh voters to remember that when they come to the elections in May.

Under the trade union thumb, Labour is turning its back on modernisation in the NHS, but the NHS cannot be preserved for the future and protected by neglect; it is not something that sits in a static format. It has to change to improve. When the number of managers in the NHS doubled under Labour, when results for patients in many conditions remain way below those achieved in other countries, and when the number of patients placed in mixed-sex accommodation runs into the thousands every month, the NHS needs to change.

[Brandon Lewis (Great Yarmouth) (Con)]

Does my right hon. Friend agree that some GPs are seeing the potential benefits to their local areas of improving the service for patients, and will he join me in congratulating GPs, such as those in Great Yarmouth, who are moving forward, several years ahead of schedule, with the pathfinder projects?

[Mr Lansley]

Yes. My hon. Friend will know that we have already arrived at the point where 177 GP groups, representing 35 million patients all over England, have volunteered as pathfinders to show how they can demonstrate such work. [Interruption.] Labour MPs who are insulting general practitioners might like just to remember—

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Come on; we want to see the debate continue. A lot of Members want to speak and to intervene, but we cannot have so many of them on their feet at once.

[Mr Lansley]

I remember that if we ask the public whom they trust in public service, we find that general practitioners are at the top of the list. Members of Parliament and politicians are pretty near to the bottom of the list, so the public might take it pretty amiss that Labour politicians are insulting general practitioners by thinking that they are in it for the money. They are not; they are in it for the patients.

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

Will the right hon. Gentleman give way?

[Mr Lansley]

No.

[Clive Efford]

rose—

[Mr Lansley]

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

Only yesterday—

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

Will the right hon. Gentleman give way?

[Mr Lansley]

In a moment.

Only yesterday, the Public Accounts Committee said that over the past 10 years the productivity of NHS hospitals had been in almost continuous decline, and that taxpayers were getting less for every pound invested in the NHS: Labour, leaving us to sort out the mess. The truth of the matter is that the NHS needs to change to meet the rising demand for and cost of health care.

The changes that the NHS needs are simple: more investment, less waste, power to front-line doctors, nurses and health professionals, and to put patients first.

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

Will the right hon. Gentleman give way?

[Mr Lansley]

No. I will give way to the right hon. Member for Lewisham, Deptford (Joan Ruddock) first.

[Joan Ruddock]

The right hon. Gentleman speaks of the respect that patients have for their GPs, and that is certainly the case in my area, where GPs do an incredibly difficult and demanding job. How does he think, therefore, patients and the doctors themselves regard the pressure being put on them to become managers, to adopt skills that they do not have, and being forced to do it, when they say to me that the plans are untested, potentially divisive and will take them away from their patients? Those things are actually happening. Does he think that it is ethical to pay GPs £300,000 to cut services to patients?

[Mr Lansley]

The Royal College of General Practitioners has said that it believes that there should be more clinician-led commissioning, and yesterday the British Medical Association reasserted its view that general practice-led commissioning is the right way forward. The Labour Government set up practice-based commissioning but, as the shadow Health Minister, the hon. Member for Leicester West (Liz Kendall), said, GPs were not given the power, responsibility and opportunity to do it. I am afraid that the right hon. Member for Lewisham, Deptford is speaking against the evidence and the experience of GPs all over the country.

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

Does my right hon. Friend agree that the words of the shadow Secretary of State in this debate seem to contrast somewhat with his words back in January, when he said that

“the general aims of reform are sound—greater role for clinicians in commissioning care, more involvement of patients, less bureaucracy and greater priority on improving health outcomes”?

Why does my right hon. Friend think he has changed his mind?

[Mr Lansley]

I think I know why he has changed his mind.

[Nadhim Zahawi]

Opportunism.

[Mr Lansley]

Yes, that is one possibility. Another is that Labour Members are paid for by the trade unions.

Our changes are driving real improvement. Our investment means that more than 1,300 patients are now getting the life-extending cancer drugs they need; that is investment in cancer drugs that the Labour party opposed.

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

My right hon. Friend is absolutely right to make no apology about the need for reform when cancer outcomes in this country remain well below the European average. The all-party group on cancer and, most recently, the Public Accounts Committee have made the case for recording staging data, which provide an insight into early diagnosis. Will he assure the House that, under these reforms, the importance of this issue will be pursued by the Government?

[Mr Lansley]

Yes. I am grateful to my hon. Friend and pay tribute to his work in this area, which is much respected. He is absolutely right—we will be doing that. Indeed, we can see the benefit already. A few weeks ago, I launched the bowel cancer awareness campaign in the east of England. The reason we were able to start that awareness campaign in that region is that we had good staging data arising out of the cancer networks in the area, which means that we will be able to make valid comparisons between the past and the future in terms of the stage at which patients are presenting for diagnosis of cancer.

[Tom Blenkinsop]

rose—

[Owen Smith]

Will the Secretary of State give way?

[Mr Lansley]

No, I have given way to the hon. Gentleman before. [Interruption.] He only gets one shot.

Let me make it very clear. Our cuts in bureaucracy—

[Several hon. Members]

rose—

[Mr Lansley]

No, I will not give way—Labour Members might like to hear this.

Our cuts in bureaucracy have led to 2,000 fewer managers since the general election and 2,500 more doctors. We are already shifting resources to the front line. More than 5,000 surgeries across the country are now part of the pathfinder groups taking responsibility for front-line services. Some 25,000 front-line NHS staff are taking the opportunity to come together in social enterprises. All this is the modernisation that Labour now opposes. It is the modernisation that is delivering the results that matter, and will matter in future even more as we get to the outcomes that people really care about—whether they live, whether they recover, whether their treatment is successful, whether they have successful lives at home with long-term conditions.

At the same time, waiting times are stable and hospital infections are down, with C. diff down by a fifth and MRSA down by more than a quarter. The number of patients who are in mixed-sex accommodation when they should not be has also come down.

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

Does my right hon. Friend agree that we should totally dissociate ourselves from the disgraceful remarks implying that our reforms will somehow encourage GPs to make choices that are not best for their patients?

[Mr Lansley]

My hon. Friend makes a very important point. I caution Labour Members not to put political opportunism in place of the relationships that they should have in future with GPs, doctors and nurses and local foundation trusts in their constituencies. They are not speaking for their constituencies—they are just speaking for the trade unions.

The coalition Government are listening to patient groups, professional bodies and independent experts. We have had eight separate substantial consultations on our proposals, and we have changed policy as a result. For example, we have amended the Health and Social Care Bill on an important point, which greatly concerned the BMA, and clarified that the measure supports competition on quality, not price. At the point when a patient exercises choice or a GP undertakes a referral, the price of providers will be the same. By extension, competition must be on the basis of quality. That is important.

[Malcolm Wicks (Croydon North) (Lab)]

Given the removal of the limit on private patients who can go to an NHS hospital, my constituents will be concerned that, in conditions of scarcity, clinical need for a bed will be trumped by the weight of a wallet. Will the Secretary of State reassure my constituents that money will not trump the needs of patients?

[Mr Lansley]

Yes. I can entirely reassure the right hon. Gentleman’s constituents because the Bill makes it clear that even if private patient income is available to foundation trusts, it must support the principal purpose, which is provision of services to patients through the NHS. If the right hon. Gentleman wants an example, he might like to go along the road into the constituency of the Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow), and meet people from the Royal Marsden, which is a foundation trust that attracts, from memory—I may not be entirely up to date—approximately 25% of income from private patients. It has consistently recorded the highest scores of excellence for its quality of service to patients.

[Several hon. Members]

rose—

[Mr Lansley]

I want to make progress. I have given way several times.

The right hon. Member for Wentworth and Dearne (John Healey) said that we planned to get rid of regional system management in the NHS, but that was Labour’s policy when it introduced NHS foundation trusts. Through introducing health and well-being boards in local authorities, we will have a genuine, system-wide view that looks at the NHS, public health and social care. He complains about the commercial insolvency regime, but Labour introduced that under the legislation that set up the foundation trusts eight years ago. He said that our plans introduce EU competition law. No. EU competition law already exists and the Bill does nothing to change that—it does not extend the application of competition law. [Interruption.] No, it does not. In Committee, the Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), explained the current position, which the Bill does not change.

The right hon. Member for Wentworth and Dearne and other Labour Members talk about price competition. We have clarified the Bill to ensure that the competition is on quality. What happened under Labour? The private sector was paid 11% more than the NHS. Under Labour, private sector providers were paid £250 million for operations that they did not perform. Under Labour, NHS hospitals were barred from tendering to provide the capacity that Labour offered to the independent sector. Labour Members favoured the private sector. A Liberal Democrat manifesto commitment stated that we would not in future allow the private sector to be given advantages and the NHS to be shut out. We will implement that.

I want to know a bit, because although the right hon. Member for Wentworth and Dearne said that it was the Opposition’s job to ask questions today, I have done many Opposition day debates on health when I was asked many times what our policy was, and I answered those questions. Is it Labour’s policy to extend the use of voluntary sector providers in the NHS? That was in the Labour party’s manifesto. Indeed, Labour said that it wanted to use the independent private sector, too. Is it still the policy? No answer. We do not know. Is it Labour’s policy to make every trust an NHS foundation trust? Again, it was in the Labour party manifesto. Is it still the Labour party’s policy—yes or no? No answer. Again, we do not know. Is it Labour’s policy to promote competition in the NHS, as quoted from the Labour party manifesto in the debate? The right hon. Gentleman has just made a speech opposing that. Does he wish to intervene?

[John Healey]

I am grateful to the Secretary of State for giving way. We had the NHS as the preferred provider and were ready to use other providers when they could help, and we did so. The great improvements in the NHS happened because we were prepared to put in the investment and to make the reforms. The Secretary of State talks about policies. The problem with what he is doing to the NHS—the reorganisation, the legislation and the ideological change at the heart of it—is that he did not tell the people about it before the election and he did not tell the Lib Dems about it before they signed the coalition agreement. This top-down reorganisation is exactly what he promised not to do.

[Mr Lansley]

The right hon. Gentleman was not satisfied with his first speech, so he had to have a go at a second one. He did not answer any of my questions. The Labour party said in its manifesto that it would use the private and voluntary sectors alongside NHS providers. The reason for that was simple: having the NHS as the preferred provider meant that the patient could be let down time after time before another quality provider could be permitted. We are going to allow competition on quality, but the quality has to be there. Patients will get the best possible service from whoever is best placed to provide that care.

Our changes are being seen across the country already.

[Mr Edward Leigh (Gainsborough) (Con)]

This party political ding-dong is great fun, but what worries me is that we have an ageing population, there are rightly more and more expensive techniques, and the taxpayer cannot put any more money in. Who is going to save the NHS if there is no co-operation with the private sector?

[Mr Lansley]

Over many years as Chair of the Public Accounts Committee, my hon. Friend challenged the failure of the previous Government to secure the improvement and value for money that is necessary patients. I make no bones about it: I think that if we give NHS organisations freedom and opportunity through foundation trust status, they will be competitive. I do not think that we will see a big expansion in the number of private sector providers, because the NHS has the enterprise and innovation to succeed. However, we have to make sure that they are open to that test. We test whether voluntary and independent sector providers meet the right quality, and we must expose the NHS to that test.

[Several hon. Members]

rose—

[Mr Lansley]

No. We will hold the NHS to account—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The Secretary of State has decided that he is not going to give way. That is his decision. He has given way already. We need to have a little less noise so that we can hear the Secretary of State.

[Mr Lansley]

Thank you, Mr Deputy Speaker. I have to conclude to ensure that we do not trample on Members’ time.

We will hold the NHS to account for what it achieves, but not tell it how to achieve it. We want continuous improvements in outcomes and more personalised care. We are going to change accountability in the NHS. In the past, the only question in accident and emergency was whether people were seen within four hours. We will ask whether a patient was seen by the right person, whether the quality of care they received was appropriate, and whether they recovered. From April, we will know those things for the first time. On mental health, we will ask whether we are helping people with serious mental health problems to live longer, and whether we are helping them to get a job. We will ensure that we find out those things and that we know which services provide the right care.

Beyond the NHS, we will make changes that increase accountability. As of today, 134 local authorities with social care responsibilities—almost 90% of such local authorities in England—have signed up to be early implementers of health and well-being boards. Those are the bodies that will finally tear down the walls between the NHS, public health and social care; and they will strengthen local accountability to the public and patients. Local authorities will finally have the powers that they need to scrutinise all NHS-funded providers of care, be they public, voluntary or private sector providers.

The coalition Government were elected to protect the NHS and that is what we are doing. We are protecting the NHS in this Parliament through increased investment, and protecting it for future generations through modernisation. We need an NHS in which every system, process and incentive encourages excellence in health care and weeds out poor performance. Labour now opposes that. It has turned its back on the NHS. It wants to drag the NHS back into politics; I want the NHS to be freed from political interference so that it can deliver the best possible care and results for patients. This Government will always support the NHS. We have a simple aim: to create an NHS that is up there with the best in the world. Our modernisation plans will do just that.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I remind Members that there is a six-minute limit.

17:19

[Rosie Cooper (West Lancashire) (Lab)]

I have spoken in this place on several occasions about the deeply disturbing reforms that the Government are proposing to our national health service. On those occasions I have accused the Secretary of State of glibness and hubris, and as each day passes, as each new piece of information comes to light and as we scrutinise the detail of the Health and Social Care Bill, he proves my assertions right. He currently presides over what I can only describe as an unholy mess that will have huge negative consequences for the NHS and the people who love it and depend on it.

I tell the Secretary of State that the Opposition have seen through his plans, and the Liberal Democrats, who are on his side of the Chamber, see through them as well. Many of his colleagues are very nervous about them, and yesterday the British Medical Association and medical professionals made a clear and unequivocal statement that they, too, see through them. As the plans unfold further, I can tell hon. Members that patients and the British public see through them as well.

Despite the broken promises, the Secretary of State and the Prime Minister seem to think that their NHS reforms are a good idea. I am not sure that they are 100% convinced, though, given that they did not seem confident enough to share the details of their plans with the British public before the general election. In fact, the Prime Minister was very clear in his promise to the British people:

“no more pointless top-down reorganisations”

of the NHS. He even said:

“When your family relies on the NHS all of the time—day after day, night after night—you know how precious it is.”

How quickly forgotten those words were.

Some people felt reassured that, whatever else might happen if the Tories were elected, the NHS would be left untouched. How wrong they were. Today we find the NHS in a state of turmoil and facing massive reorganisation, with hundreds of health workers laid off and its very future threatened by a desire to set up a commercially driven market in health care. This very lunchtime, the Prime Minister said, “We are not reorganising the bureaucracy of the NHS. We are abolishing the bureaucracy of the NHS.” The bit he left off was that private providers would be doing that work. Who is he kidding?

[Graham Evans (Weaver Vale) (Con)]

rose—

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

rose—

[Rosie Cooper]

I give way.

[Graham Evans]

I thank the hon. Lady—

[Rosie Cooper]

No, I was giving way to—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Lady will have to sit down during the hon. Gentleman’s intervention.

[Graham Evans]

I am new to the House, but I seem to recall the right hon. Member for Leigh (Andy Burnham), who was then the Secretary of State for Health, saying that we should

“celebrate the role of the private sector in the NHS.”

What has changed for Labour Members? [Interruption.]

[Rosie Cooper]

I am sorry, I did not hear the end of that.

[Graham Evans]

When he was Secretary of State, the right hon. Member for Leigh said that we should be celebrating

“the role of the private sector in the NHS”.

What has changed since he made that comment?

[Rosie Cooper]

The health service was not an issue at the general election, and why? Because people broadly supported it and were not worried about the state that it was in. Government Members must listen to the furore that will happen and prepare to defend their seats in light of the decisions that they take now.

[Mr Steve Brine (Winchester) (Con)]

Will the hon. Lady give way?

[Rosie Cooper]

No, I have very little time now.

I believe that what Michael Portillo said on the BBC’s “This Week” programme was an accurate reflection of how the Government have sought to mislead the people of this country. When asked by Andrew Neil why the Government had not told us about the plans for the NHS prior to the general election, he responded:

“Because they didn’t believe they could win the election if they told you what they were going to do. People are so wedded to the NHS. It’s the nearest we have to a national religion—a sacred cow.”

He could not have been more clear: the Government intended to misrepresent their position and to mislead voters.

As I have said previously, this Conservative Government have been prepared to play to the gallery while playing Russian roulette with the future of people’s health services. That is still the case, but the gallery is now empty. They are on their own and have no mandate—

[Mrs Main]

On a point of order, Mr Deputy Speaker. On two occasions the hon. Lady has accused the Government of misleading the public. I cannot believe that that is the case, and I am sure she would like to withdraw those remarks.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. That is not a point of order, because the accusation was not against individual Members.

[Rosie Cooper]

Oh how the truth hurts! Michael Portillo could not have been more clear that the Government intended to misrepresent their position and to mislead voters.

I believe very clearly that you are playing Russian roulette with people’s futures, but the gallery is empty and you are on your own. I still believe that you have no mandate for these ill-advised reforms. You do not have that support, and it seems to me you do not have a clue—[Interruption.] It is impossible to make a speech with that noise.

I shall just recap. I do not believe that you have any mandate for these reforms. You do not have the support out there and it seems to me that you do not have a clue. For goodness’ sake, stop now before you kill the NHS.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. May I just remind Members that the Chair is not responsible? I would be pleased if we did not use the word “you”.

17:26

[Mr Stephen Dorrell (Charnwood) (Con)]

I serve on the Select Committee on Health with the hon. Member for West Lancashire (Rosie Cooper), which I enjoy doing. If I may say so, her speech was uncharacteristically partisan, but I guess that that is the nature of debate on the Floor of the House.

The motion moved by the right hon. Member for Wentworth and Dearne (John Healey), the shadow Health Secretary, has a clear, simple message: “Frank was right.” For 20 years, every Health Secretary—starting with my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) and including me and my right hon. Friend the current Health Secretary—with the exception only of the right hon. Member for Holborn and St Pancras (Frank Dobson), has espoused the principles that underlie the Health and Social Care Bill.

The motion is an apologia from the Labour party to the right hon. Member for Holborn and St Pancras, for whom I feel rather sorry. He was roundly rubbished by his party in opposition, and now he is being canonised. As in the Roman Catholic Church, it is better that you are dead if you are to be a saint in the Labour party. I did not agree with him when he was in office, and nor do I agree with him now.

As my right hon. Friend the Secretary of State said, the truth is that the principles in the Bill are principles that every Labour Health Secretary, with the exception of the right hon. Gentleman, sought to carry out in office. Let us go through them. GP-led commissioning was one of the first principles that Labour espoused in 1997. My right hon. Friend rightly refers to practice-based commissioning, but that was actually the previous Government’s second attempt to introduce GP-led commissioning, which happened after the first attempt—primary care groups—had failed. The previous Government tried twice to apply the principle that they espoused; my right hon. Friend is trying once again.

[Tom Blenkinsop]

The Bill gives primacy to Monitor, which makes economic decisions. It does not give primacy to quality under the Care Quality Commission. Primacy will go to Monitor, which will make economic decisions on what health treatment people receive.

[Mr Dorrell]

I understand the point, and it is part of the argument that the Labour party has started to make about how, since Christmas, it has suddenly discovered that the Health and Social Care Bill and the policy that it implements—a policy based on commissioners having choices in the interests of taxpayers and patients—require commissioners to have those very choices if the policy is to be effective. As my right hon. Friend the Secretary of State said, the principle of competition for commissioners’ budgets, as funded by the taxpayer, was set out by the last Government in their policy of December 2007. Hon. Members should look at the text—it is there in the record.

The last Government were right. The right hon. Member for Wentworth and Dearne seeks to set up an Aunt Sally when he says that there is something wrong with European principles of competition law when applied to health care. Let us be clear: if we are spending £100 billion of taxpayers’ money on securing high-quality health care on the principle of equitable access, what is wrong with insisting on the principle that we should not allow monopolists to restrict the choices available for using that budget to deliver high-quality care for patients? That is the principle, and that is why I am in favour of competition law applying to the provision of health care in response to a tax-funded budget.

[Nadhim Zahawi]

Does my right hon. Friend agree that this is political opportunism of the worst kind?

[Mr Dorrell]

It is, but it is not even political opportunism that applies to a popular principle. Surely opportunism is normally motivated by some popular principle, yet defending the interests of a monopolist does not seem to me to be a very popular principle.

[Grahame M. Morris]

Will the right hon. Gentleman give way?

[Mr Dorrell]

I will give way to the hon. Gentleman, who is another member of the Health Committee.

[Grahame M. Morris]

I am doubly honoured, because the right hon. Gentleman has afforded me a courtesy that the Secretary of State would not. The concept of having greater clinical engagement—not just for GPs, but for doctors in secondary care—enjoys broad support across the parties. However, the framework laid out in the Health and Social Care Bill opens the service up to privatisation.

[Mr Dorrell]

I thought that the hon. Gentleman was going to make the point that he has made in the Select Committee—a point with which I agree—that the purpose of GP-led commissioning is to engage the entire clinical community, not just GPs, in the commissioning process. That is a principle that my right hon. Friend the Secretary of State agrees with. It is also a principle that Sir David Nicholson has made clear will be part of the principles that will be expected to be applied in GP-led commissioning consortia.

Before the hon. Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) led me down the road of competition policy, I was going through the principles that are consistent across the health policies implemented by all Health Secretaries since 1990, with the single exception of the right hon. Member for Holborn and St Pancras.

[Mr Brine]

Will my right hon. Friend give way on that point?

[Mr Dorrell]

If my hon. Friend will forgive me, I will not.

There are two other important principles, one of which was espoused by the hon. Member for Leicester West (Liz Kendall) when she worked for Patricia Hewitt. That is the principle that all NHS providers should be foundation trusts, in order to provide a level playing field, and to ensure that commissioners have a fair choice and that we deliver good value, high-quality care for patients. Finally, there is the principle of “any willing provider”, where the Labour party provided us not only with a policy, but with a slogan and an election commitment to implement that policy. Now Labour wishes to desert both the policy and the slogan in its election manifesto.

This debate makes me feel as though the last 20 years never happened. It could have happened at any time between 1990 and 1997; and in fact it did—many, many times. What has happened since is that Labour in government picked up those principles and sought to put them into effect. Now, less than 12 months after the general election, it has reverted to type. It is as though nothing happened in the past 20 years. We have heard industrial quantities of nonsense this afternoon, and I hope that the House will reject the Opposition’s motion.

17:35

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

This costly reorganisation of the NHS has no mandate from the British people, and no support from health professionals or, apparently, the Liberal Democrats. It will be the end of the NHS that we know and love. As I have said before, the NHS is not just an organisation that plans and provides our health services; it also represents the values of our society by which this country sets much store. Contrary to the assertions from the Government Front Bench, the NHS reorganisation defined in the Health and Social Care Bill will wipe out the founding principles of the NHS in one fell swoop.

For the first time since the NHS was established in 1948, the Secretary of State for Health will not have a duty to provide a comprehensive health service. I will let that sink in. Instead, it is to be replaced with duties to “promote” and to

“act with a view to securing”

health services—weasel words that beggar belief. The original duty is fundamental to protecting the provision of a universal, comprehensive health service. It is the foundation on which the NHS was established. Without it, we will no longer be sure that a comprehensive national health service will be provided, and Members of Parliament will no longer be able to hold the Secretary of State to account on behalf of the constituents who elected them.

Rather embarrassingly for the Secretary of State, he might recall that, when he presented evidence to the Health and Social Care Bill Committee, I questioned him on this and asked him why he was repealing that fundamental duty. He said that he was not. However, it is absolutely clear from the Bill’s explanatory notes that that is exactly what will happen. Paragraph 64 states that clause 1

“removes the current duty on the Secretary of State in subsection (2) of section 1 to provide or secure the provision of services for the purposes of the health service.”

That duty is absolutely core: the NHS was established to provide a universal, comprehensive health service, but that will soon be gone. It is worrying that the Secretary of State did not appear to understand the implications of competition law, or to know what was being repealed in his own Bill.

The Government have suggested that these functions will now be the duty of the NHS commissioning board and the GP consortia, but the exercise of the functions will be discretionary. There will be no requirement to provide those services. So I repeat that the Bill will take away the duty to provide a comprehensive, universal health service.

[Nadine Dorries (Mid Bedfordshire) (Con)]

Will the hon. Lady give way?

[Debbie Abrahams]

No, I am sorry, I am going to make progress so that everyone gets a chance to speak.

The Government have also said that the NHS commissioning board will ensure that NHS delivery is free from political control, but I am not so sure about that. The Bill contains a variety of contradictions, particularly in relation to the Secretary of State’s appointments to the various quangos. Another of the founding principles under threat from this Government is that treatment should be based on clinical need and not the ability to pay. We heard the Secretary of State say that that would be protected, but the Government’s reorganisation of the NHS will result in opening up that fundamental principle. The NHS commissioning board and the GP consortia will have the power to generate income, perhaps by charging for non-designated services. What constitutes designated and non-designated services has yet to be defined, however. My hon. Friend the Member for Leicester West (Liz Kendall) tried to get some elucidation on that, but none was forthcoming.

[Mr Lansley]

Will the hon. Lady give way?

[Debbie Abrahams]

No, I am sorry, I want to make some progress—[Hon. Members: “Give way!”]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

[Debbie Abrahams]

Not only are the founding principles of the NHS in danger of being wiped out, but its culture—the reason that most of its employees work for the NHS—will go as well. The whole ethos of the NHS will change. It will now be driven by competition and consumer interests—[Interruption.]

[Mr Deputy Speaker]

Order.

[Debbie Abrahams]

My first question to the Secretary of State was about the proposal that the NHS commissioning board will be able to award bonuses to the GP consortia that it deems to be adopting innovative measures. The Bill states:

“The Board may make payments as prizes to promote innovation in the provision of health services.”

That means bonuses within the NHS based on innovation, which is anathema to the NHS and not what we want for it. This is indicative of the Bill as a whole. Central to the reforms are increasing competition across the NHS and opening it up to providers from the private and voluntary sectors. The Government claim that increasing competition drives down costs and improves quality, but there is evidence from across the world—in the US and Europe—that that is not the case. It does not improve quality at all in health care systems.

Although I am glad to see that the Government have reversed their position on price competition, as of yesterday they were still wedded to establishing Monitor as a powerful economic regulator with the duty to promote competition. As has been pointed out, our health services will be subject to EU competition law for the first time. By forcing these GP consortia to put any services out to competitive tender—even if they are working well and patients and the public are happy with them—the Bill encourages “any willing provider” to—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

17:41

[John Pugh (Southport) (LD)]

I am glad to be called to speak. I had a hand in drafting both amendments and the motion in that it is taken from the Liberal Democrat conference. I appear to be responsible for the lot, so I may be a parliamentary first.

I begin by stating the blindingly obvious: the Health and Social Care Bill is in trouble. There is hostility to it from the professions, anxiety about it among the public, concern in the Cabinet and an unease that can be felt spreading in all sections and all parties in this House and the other place. That is just a fact, and it matters more than the political knockabout here or any loss of face, because the effects of the policy—for good or ill, for better or worse—announced with unseemly and misguided haste last June are going to be felt in every home in the country.

[Nadine Dorries]

I thank the hon. Gentleman for having the good grace to give way. Would he describe the 5,000 GPs who agreed to be part of the pathfinder consortia as “uneasy”? It appears to me that they are incredibly enthusiastic to get going.

[John Pugh]

I think it is Hobson’s choice.

This is not the first health reform—the last Government introduced more “step changes” than could fill an episode of “Strictly Come Dancing”—but it is certainly the biggest, the most expensive and possibly the most risky. The Secretary of State seems to have chosen for himself a path on which future generations will either put up statues to him or burn him in effigy. However, it is no longer his Bill; it is our Bill. No Secretary of State currently commands a majority in this House.

This Parliament may act like all the others hitherto—and, sadly, it usually does, as it has largely done today—but it is not like any other Parliament. There is no party in this House with a majority, so we should dump the tribalism, the point scoring and the political games. We can get round to doing what we have to do and what we need to do. We have the chance to scrutinise, to seek to amend and improve—and, if unsatisfied, the chance to reject the Bill on Third Reading. That applies to Members of all parties. It is not just “top-down reorganisation” of the health service that we should have dropped with the coalition; we should have dropped “top-down legislation”, whereby MPs simply become pawns in a wider political game, and conviction takes second place to coercion.

There has never been a Secretary of State who has looked at the NHS and found it to be perfect and incapable of improvement. That is largely because we demand so many incompatible things of it that any incarnation is unlikely to satisfy all. Each successive Secretary of State suggests proposals for reform, rather like the Flying Dutchman in a hopeless and sadly doomed pursuit of the ideal format for the NHS. I have to say that the current Secretary of State is probably better equipped for this eternal task than any others: he is committed, passionate, well informed—probably the best informed Secretary of State we have had for some time—and he is brave. He voyages on, undeterred by the siren voices of think-tanks from right and left and the warnings about costs and practical difficulties, and unfazed by the lack of enthusiasm, if the polls are to be believed, among the NHS crew and staff. Of course, as a Liberal Democrat I am disinclined to believe polls at the moment. He carries on, unmindful of the uncharted nature of the course he has set. In Committee, we found real gaps in the understanding of how things will proceed. It is not that he is unaware of the possible danger, but the big danger is that any potential shipwreck will cause us all to be engulfed if costs overrun, if productivity falls, if hospitals close, if waiting lists grow, if morale declines, or if the NHS appears to be denatured, privatised, and not safe in our hands. That is why Parliament’s role is so important in this context, and why good argument rather than the Government machine must prevail.

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

I pay tribute to the work that my hon. Friend is doing on the Bill. Does he agree that, as with the forestry decision, the coalition shows its strength when it actually listens to the concerns that are out there, and is that not exactly what we need the Government to do at this stage?

[John Pugh]

Indeed. In the circumstances that my hon. Friend cites, both coalition parties listened to the voices that they heard and took serious note of them.

It would be unsafe to draw any conclusions from the voting patterns today. Political gamesmanship and party loyalties will prevail. However, it is not necessary to hang around the Lobbies much to see that a corrosive unease is spreading through Government ranks, even in the most unlikely quarters, and to see how opposition hardens with every defiant, unbending rebuttal from the Richmond house bunker. We must accept that the Committee, for all its forensic talent, will not solve the problem; we must concentrate on Report and Third Reading, and on the debates that will take place offstage beforehand.

This is our Bill, not the Secretary of State’s. It will not come about unless we vote for it. Even the most calculating, the most tribal, the most ambitious of us—but not, possibly, the most stupid—must see the clear risks as well as recognising the opportunities. If we get it right, reform can take place with the grain of professional and expert opinion, without Ministers’ ceasing to be ambitious for the NHS, and with broad political support in the House and in the country, and arguably it will work better as a result. However, it will require dialogue.

It is a profound irony that the Government want to abolish what they call the command and control model of the NHS by means of a command and control model of legislation. Indeed, they issued a Command Paper over the Christmas period, but then Richmond house does not do irony. If Parliament is to help the Government to climb out of the hole into which they threw themselves last June when the White Paper announced the liberation of the NHS, we need genuinely constructive, open dialogue, and we need it to start here. Perhaps, in order to liberate the NHS, we need to liberate Parliament a little bit first.

17:47

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

It is a privilege to follow the hon. Member for Southport (John Pugh). Like him, I am a member of the Public Bill Committee considering the Health and Social Care Bill, and I always listen intently to his well-informed and reasoned speeches. I think that many Opposition Members, at least, will agree with what he has said today.

The Government’s proposed changes will fundamentally alter the nature of the health care system for the worse. That opinion is held not only by Opposition Members but by numerous experts, including the British Medical Association, the Royal College of Nursing and the Royal College of Surgeons, to name but a few. I am pleased to say that we now know that the Liberal Democrats agree with us on this issue, but it is not enough for them to talk tough. They must do what they say they can do. They should not just sit on the fence. They have a real opportunity to prove to the electorate that they can change Government policy when it is damaging and destructive to their constituents.

The damage that this policy will do is, in my view, irrevocable. Let us make no mistake: the Government are ripping the N from the NHS. They are planning, by stealth, a wholesale change in the structure of our health service system. The plans are damaging and, without question, revolutionary rather than evolutionary.

[Nadine Dorries]

Will the hon. Gentleman give way?

[Karl Turner]

Not at the moment.

The Government Front-Bench team and its Lib Dem colleagues can argue against what I say until they are blue in the face, but we know what the reality is. The chief executive of the NHS, Sir David Nicholson, says:

“The scale of the change is enormous—beyond anything that anybody from the public or private sector has witnessed”.

When we bear in mind the context of the plans, the destruction to the NHS becomes very apparent. The plans are to be implemented at a time when the NHS is to make £20 billion in efficiency savings. This is a costly, unnecessary and reckless top-down reorganisation of the NHS, and it is without any real mandate. The coalition agreement clearly states that the new Government will stop the top-down reorganisation of the NHS. Instead, we are faced with a reorganisation that is described as being so big

“you can see it from space.”

[Christopher Pincher (Tamworth) (Con)]

The hon. Gentleman seems to favour top-down organisation of the NHS. Does he agree with his party’s shadow Health Minister, the hon. Member for Leicester West (Liz Kendall), who said:

“Many staff are disillusioned and disempowered by the top-down target driven approach that has dominated much of the last decade of health policy”—

his party’s policy?

[Karl Turner]

I am well aware of my hon. Friend’s remarks, and they were made in a very different context, but let us listen to the BMA. Yesterday, it held its first extraordinary meeting for 20 years. Interestingly, it has convened two emergency meetings in the past 20 years, both of them under a Tory Government. It is the same old Tory story: they cannot be trusted with the NHS.

The most damaging part of these plans is the competition aspect. The Secretary of State’s smokescreen about GP commissioning is designed simply to divert attention from the underlying plans, which are, as Baroness Williams has said, privatisation by stealth, and Professor Ham of the King’s Fund correctly asserts that the commissioning reforms

“are of secondary importance compared with the radical extension of competition”.

The Health and Social Care Bill brings the NHS within the remit of competition law for the first time, and Monitor, the new economic regulator, will be instructed actively to promote competition under clause 52. Placing a statutory obligation on Monitor to enforce competition creates a situation in which commissioners will not be able to act in the best interests of their patients, for fear of a costly legal challenge lurking in the shadows.

The Government’s approach to Monitor demonstrates how ill thought out these plans are. In a clamour to roll back the state and win favour with the private health companies that have bankrolled their party, the Government’s plans to introduce competition into the NHS will work against the integrated networks needed to ensure that the long-term ill receive the services they need and are entitled to.

The most worrying aspect of this policy is that the Government have ignored expert criticism—or, indeed, criticism of any kind. The divide is pretty stark. On one side there is the BMA, A National Voice, the Royal College of Nursing, the Stroke Association, the Royal College of Surgeons, the Chartered Society of Physiotherapy, the Royal Pharmaceutical Society, the Foundation Trust Network, the Royal Society of GPs, and, since the weekend, the Lib Dems. On the other side, there is the Secretary of State and the private health companies, who are bound to be rubbing their hands, waiting expectantly for their investment in him and his party to pay off.

17:54

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

It is a great pleasure to speak after the great tour de force that we heard from my right hon. Friend the Member for Charnwood (Mr Dorrell). He dispelled a huge number of the myths that the Opposition have been trying to put forward today and during our entire Committee proceedings on the Health and Social Care Bill—one would almost believe that they had not been in power for the past 13 years. It is clear that one of the main reasons why we need to reform the NHS is not just to build on what the previous Government have done in terms of using private sector providers, but to make sure that we put a lot of things right. We are cutting bureaucracy and putting more money into front-line care—that is one of the main purposes of the Bill.

Before I develop my arguments about bureaucracy, I wish to pick up on what my hon. Friend the Member for Gainsborough (Mr Leigh) said in his intervention. He talked about the challenges of dealing with an ageing population. This country undoubtedly faces a big problem in providing health care as a result of many people living a lot longer, although that is a good thing. A lot of people have multiple medical comorbidities as they get older and they need to be looked after properly. The key financial challenge to the NHS is in ensuring that we look after our ageing population, and properly resource and fund their care, so when we cut bureaucracy and put more money into front-line patient care, that is what that is about.

When we talk about the need to ensure that the NHS has local health care and well-being boards—an NHS that is more responsive to local health care needs—it is a response to the fact that some parts of the country, such as, Eastbourne or my county of Suffolk, have an increasing older population, who need to be properly looked after in terms of funding. That is why it is so important that this Government have committed £1 billion to adult social care and are increasing that. It is also why we are putting an extra £10 billion into the NHS budget over the lifetime of this Parliament—the Labour party would not have done that.

On bureaucracy, it is worth reminding the Labour party of a few things it did when it was in power. Under Labour the number of managers in the NHS doubled. In 1999, there were 23,378 managers and senior managers in the NHS, but that figure had almost doubled by 2009, having increased to 42,509.

[Owen Smith]

rose—

[Dr Poulter]

The hon. Gentleman might wish to listen to this, but I will take his intervention.

[Owen Smith]

The hon. Gentleman has returned to this point about bureaucracy many times during our proceedings in the Public Bill Committee. Does he not share my concern about our shared ignorance as to how many managers and how much bureaucracy there will be under the new structure in the GP consortia and in the regional presence of the national commissioning board? Does he know what bureaucracy there will be under this Bill, because I do not?

[Dr Poulter]

What we do know—the hon. Gentleman would do well to listen to this—is that the NHS currently spends £4.5 billion on bureaucracy, and that could be better spent on patient care. Under the previous Labour Government PCT management costs doubled by more than £1 billion to £2.5 billion, and that money could be better spent on patient care. By scrapping PCTs, we will have more money to give to GPs to spend on patients and front-line care, and that can only be a good thing.

Labour Members would do well to listen to a few more of the statistics on NHS bureaucracy that I am about to read to them. Under Labour, the number of managers increased faster than the number of nurses in the NHS. How can that possibly be right? Managers were paid better than nurses in the NHS. In 2008-09, top managers in NHS trusts received a 7% pay rise whereas front-line nurses received a rise of less than 3%. The Labour party was obsessed with bureaucracy, management and top-down targets, and we would much rather see that money spent on patients and front-line patient care.

[Grahame M. Morris]

We have heard about the layers of bureaucracy that the coalition Government propose to take away, but what does the hon. Gentleman have to say about the additional layers that they are imposing through the exponential growth of Monitor, which will be the economic regulator? They are increasing its budget from £21 million a year to as much as £140 million a year. How many more thousands of people will it employ? How many lawyers? It will cost £600 million over the course of a Parliament.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We must have shorter interventions.

[Dr Poulter]

This is very much the point. Let us not forget that Monitor was introduced by the Labour party to regulate competition in foundations trusts, and the Government are looking at giving it a slightly increased role while also cutting £5 billion-worth of bureaucracy in the NHS, which has to be a good thing. I hope that the hon. Gentleman agrees that that £5 billion would be much better spent on patients rather than on management and paper trails.

The core of the issue is that Government Members would like GPs to be placed at the heart of the commissioning process. Giving power to doctors and health care professionals is undoubtedly a good thing because the best advocates for patients are undoubtedly doctors and other health care professionals rather than faceless NHS bureaucrats. I am delighted that my hon. Friend the Member for Ipswich (Ben Gummer) is sitting next to me because far too often in Suffolk damaging decisions to remove vital cardiac and cancer care services from Ipswich hospital have been taken by the strategic health authority and the primary care trust, against the advice of front-line professionals. Community hospitals in my constituency in Hartismere have been closed despite GP advice that we need to look after older people and the growing older population. Putting GPs and health care professionals in charge of the new system will bring better joined-up thinking between primary and secondary care, which does not happen at the moment because GPs are often hindered in what they are trying to do and are unable to communicate effectively with the hospital doctors and trusts they need to talk to because of PCTs intervening in the process. Bureaucrats are getting in the way of good medical decisions and the Bill will deal with that problem.

I am aware that others want to speak in this debate so I shall not speak for much longer. I think that all Government Members must oppose the motion. The hypocrisy of the Labour party in its dealings with health care and the NHS has been ably exposed by my right hon. Friends the Member for Charnwood (Mr Dorrell) and the Secretary of State. Government Members want to cut bureaucracy and put money into front-line patient care and helping patients. We believe that GPs and health care professionals are the best people to do that. We want a patient-centred NHS that is locally responsive to local health care needs and that will properly address the fact that we have an ageing population. We want joined-up thinking between adult social care and the NHS, which did not happen under the previous Government. For all those reasons, I commend the health care reforms to the House, and I beg the Conservative party to oppose the motion.

18:02

[Paul Blomfield (Sheffield Central) (Lab)]

Over Christmas, I found myself using the services of the Royal Hallamshire hospital in Sheffield for emergency eye surgery. I want to take this opportunity to pay tribute to the staff there, who saved the sight in my left eye, which is, as hon. Members might imagine, important to me. That procedure was routine for those staff—something that they did day in, day out. The whole experience—the quick diagnosis, emergency admission, successful operation and supportive aftercare—brought home to me the importance of having a national health service that is not only free at the point of delivery but available equally to all and with the capacity to meet the health care needs of our people. Let me contrast it with the system in the United States, where the quality and speed of treatment depends on patients’ ability to pay. Incidentally, the American system costs the public purse more. I know that some Conservative parliamentarians look at that system with enthusiasm. Many of us will recall Daniel Hannan campaigning against President Obama’s health reforms and describing the NHS as a 60-year old mistake, so it is not surprising that the majority of people in this country do not trust this Government with the NHS. When Government Members talk about monopolies, the people of this country see a public service.

[Christopher Pincher]

rose—

[Paul Blomfield]

I will give way once and then make some progress.

[Christopher Pincher]

The hon. Gentleman talks about Government Members, but he might note that, other than those on the Front Bench, there are only 11 Members on the Opposition Benches for their Opposition day debate. On the Government side there are more than double that number. Does that not bear eloquent testimony to who really cares about the NHS?

[Paul Blomfield]

What bears eloquent testimony to who really cares about the NHS is our record. Before 1997, I remember patients being stacked up in hospital corridors in Sheffield every winter because the hospitals could not find beds. That situation has been transformed under Labour over the past 13 years.

The Prime Minister has tried hard to reassure the public that the NHS is safe in Tory hands, but he has failed. In January, a major survey of the British public demonstrated that only 27% of people back moves to allow profit-making companies to increase their role in the NHS. That reflects the way in which our people treasure the NHS and its values, and that is why the Government did not have the confidence to say at the general election what their real intention was: the deconstruction and privatisation of the NHS by stealth.

It is not only the public whom the Prime Minister has failed to convince. The Secretary of State told us again today, as the Government have done many times during discourse on the issue, that we should trust doctors—those who understand the NHS.

[Dr Poulter]

Will the hon. Gentleman give way?

[Paul Blomfield]

I am afraid that I will not; I said that I would give way once and then make progress.

I hope that the Government will take their own advice and listen to doctors, because yesterday the doctors spoke clearly and powerfully with one voice, despite reports that we have seen that under the proposals, doctors could earn up to £300,000. At the first emergency conference of the British Medical Association in 19 years, they sent a clear message to the Government: “Think again.”

Five of Sheffield’s hospitals are in my constituency, and I want to focus on the consequences of ending the cap on private income earned by hospital trusts without providing any safeguards. As hospitals face squeezed budgets, they will inevitably look at every opportunity to enhance their income. At one level, they might see the chance of offering additional services such as en suite facilities to those who can afford to pay, but at another, more damaging level, we need to recognise that in Sheffield and across the country, patients are now being refused non-urgent elective surgery. There are increases in waiting times for knee and hip replacements, and for cataract, hernia and similar operations. Those are not operations for life-threatening problems, but they are hugely important for people’s quality of life. Access to that sort of surgery at the earliest point of need transformed the lives of tens of thousands of people under Labour. Those operations may not be life-critical, but delaying them condemns people to pain and immobility.

[Ben Gummer (Ipswich) (Con)]

Will the hon. Gentleman give way?

[Paul Blomfield]

No. I have said it once: I have given way, and will not give way again, because I want to make progress.

The Government’s plans mean that as we return to the days of long waiting lists, in will step the health insurance companies, perhaps with their links to new commissioning bodies, which will pitch to those who understandably want the assurance of prompt treatment when they need it. There would be a self-reinforcing cycle: more patients would go private to escape worsening NHS services, and NHS providers would then prioritise private patients, worsening services further. Before long, the NHS would be changed beyond recognition. Its founding principles of free and equal treatment for all who need it would be fundamentally undone. No wonder that the chair of the Royal College of General Practitioners has attacked the plans as

“the end of the NHS as we currently know it”,

or that the Royal College of Midwives has said that

“this could accelerate the development of a two-tier service within foundation trusts, with resources directed towards developing private patient care service at the expense of NHS patients.”

[Nadine Dorries]

Will the hon. Gentleman give way?

[Paul Blomfield]

No, I will not. The Royal College of Nursing says that it

“cannot support the removal of the private income cap...Until foundation trusts can credibly demonstrate that private income is not at the expense of NHS patients”.

The proposals reveal the ideological heart of the Government and their vision for public services: a two-tier health system, with the best available for those who can afford it, and the NHS becoming a safety net for those who cannot. I was pleased that last Saturday, in the heart of my constituency, the Liberal Democrats found their voice and spoke out against the anti-state, anti-public-services faction that now leads their party. I say to Liberal Democrat Members, as the hon. Member for Southport (John Pugh) said, “This is our Bill”. This is our motion—support it today.

18:10

[Mark Simmonds (Boston and Skegness) (Con)]

It is a pleasure to follow the hon. Member for Sheffield Central (Paul Blomfield), who I thought was going to give a thoughtful speech. The only comment on which I agreed with him was his congratulations to the hard-working, committed staff in the NHS. I am sure that all hon. Members would agree with that.

I have been disappointed by the debate, but perhaps not surprised. Labour Members’ opposition to the reforms proposed in the Health and Social Care Bill and the evidence presented in support of their motion are based on inaccuracies, incorrect assertions and assumptions, and myths about the destruction and privatisation of the national health service. The plans were clearly laid out in the Conservative and Liberal Democrat manifestos. Two thirds of the country is already covered by GP consortia, many of which are keen to crack on with the reforms so that they can improve the care that they are delivering for their patients.

All Government Members are totally committed to the ethos of the national health service. We are totally committed to a free, taxpayer-funded national health service. Most importantly of all, we are totally committed to continual improvement of patient care. The Health and Social Care Bill will achieve all those things, for the reasons set out by my hon. Friends—ageing populations, increasing costs of drugs and technology, and the increasing level of co-morbidities.

In all the debates about the future of the national health service, no Member of the House should forget the most important factor—the user of the service. Some people on the Opposition Benches seem to have forgotten the patient. The Bill moves patient care in exactly the right direction. The reforms are about high-quality care and value for money for the taxpayers. They transfer resources to front-line patient care by reducing bureaucracy and administration. They are about driving up the quality of patient care and improving patient experience and outcomes.

I have no wish to repeat the Second Reading debate on the Bill, but it is wrong to suggest that everything in the national health service is perfect, and that improvements cannot be made through reform. Putting clinicians in a position to lead commissioning and allowing patients to be involved in the decision-making process will drive improvements. Providing easily accessible patient-centric information to inform choice and raise quality standards will drive improvements in patient care.

[Nicky Morgan (Loughborough) (Con)]

My hon. Friend is making a powerful argument. Does he agree that it is rather tragic—nay, even worse—that we have heard Opposition Members having a go at the motives of both GPs and those who work in hospitals? Opposition Members think that they are driven by money, not by the quality of patient care and outcomes.

[Mark Simmonds]

I thank my hon. Friend for the point that she has forcefully made. A few—not all—on the Opposition Benches believe that GPs are in it for the money. No GP I have ever met, or with whom I have discussed patient care, is interested in money. They are there to improve the lives of the patients for whom they are responsible.

If we are to engage seriously with improving patient care, we must allow any willing provider to provide services, and allow the provider that is best for optimising patient outcomes in a regulated way to drive up standards. As my hon. Friend the Member for York Outer (Julian Sturdy) said, it is perplexing to hear the arguments that Labour Members have been coming out with today, and ever since Christmas. Is it right that substandard and mediocre services should be allowed to continue purely because they are provided by the state, even when the patient can get better care elsewhere at the same cost? That has to be wrong. What is important is the quality of patient care that is free at the point of delivery, not the delivery mechanism.

The shadow Secretary of State’s position is completely untenable. He must be squirming inside, because he is an intelligent man and a reformer. The Labour party introduced foundation trusts, payment by results, patient choice and private sector provision in the delivery of patient care, and it twice introduced GP commissioning. As recently as 2010, the Labour party manifesto stated:

“We will support an active role for the independent sector”—

that is in the Bill;

“Patients requiring elective care will have the right, in law, to choose from any provider”—

that is in the Bill;

“All hospitals will become Foundation Trusts”—

that is in the Bill;

“Foundation Trusts will be given the freedom to expand their…private services—.

that is in the Bill. Labour also claimed that it would

“ensure that family doctors have more power over their budgets.”

That is in the Bill. The Labour party should support the Bill, not castigate it on the basis of false promises.

The Government are absolutely right to push the Bill, which is on exactly the right lines. We need more investment in the NHS, less waste and more powers for doctors and nurses to be involved in commissioning and clinical decisions. We need to focus on results, create accountability and transparency, and facilitate innovation. The Bill preserves the best of the NHS—equality of access—and creates the architecture to drive and deliver excellence for all.

18:16

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

Thank you, Mr Speaker, for giving me the opportunity to take part in this important debate. Health is undoubtedly one of the most important areas of public policy, and one that the British people care about deeply. We on the Opposition Benches are very proud of our record on the NHS. It was Labour who created the NHS in 1947, and Labour who saved it from Tory destruction in 1997. Under the Labour Government there was significant real growth in the resources going into health care. NHS expenditure increased by more than two thirds over 13 years, with real-terms growth averaging around 5.5% per annum. Those high rates of investment led to improvements in hospital waiting times, life expectancy and health outcomes.

It is all too easy to forget what the NHS was like under the previous Tory Government. People waited for years for treatment such as hip replacements, and it was common for patients to spend hours in the cold corridors of old hospitals built in the 19th century while waiting for beds to become available. We changed that by building new hospitals and employing more doctors and nurses.

[Henry Smith]

Will the hon. Lady give way?

[Angela Smith]

I will give way once and no more, because I want other Members to have an opportunity to speak.

[Henry Smith]

I am interested to hear the tale of life in the NHS before the Labour Government and now, because under Labour my constituents lost hospital provision, including accident and emergency and maternity services. That was the Labour experience in Crawley.

[Angela Smith]

All I will say to the hon. Gentleman is that I worked in the NHS as one of the so-called bureaucrats in the Tory ’80s, and I remember having a patient crying to me over the phone, begging me to admit him so that he could have his eye taken out, because the Tory NHS was not providing the beds or the theatre space for such operations. We changed that by investing in the NHS so that life chances for many people could be improved. There is no doubt that there are people alive today who would not be so had that investment not been made.

Before the election, the Tories promised to protect the NHS with real-terms increases in spending. Let us get one thing straight: the 0.1% per annum increase that the coalition Government said they would provide does not equate to real increases in spending, because since then inflation rates have gone through the roof. There is no real-terms increase in spending, so one has to ask why the Government want to divert a further £2 billion from tight budgets into a top-down, ideologically driven reorganisation, especially when the coalition agreement specifically stated that the Government would not do that.

Furthermore, it is a reorganisation that no one wants—and that includes the Lib Dems, as we saw with last week’s vote in the great city of Sheffield. Just this week the BMA voted against the proposals, and many other health professionals think that they are dangerous and ill thought through. Without the support of anybody, it seems, the Government are intent on forcing through

“the biggest…upheaval in the health service, probably since its inception.”

Those are not my words but the words of Chris Ham, the chief executive of the King’s Fund.

I have a fundamental disagreement with the Secretary of State’s view that competition and free markets will drive innovation in the NHS, and that profit will motivate performance. I do agree, however, with my hon. Friend the Member for Kingston Upon Hull (East) (Karl Turner), when he says that the introduction of these reforms risks removing the N from NHS. No longer will we have a national service; instead, the system will be fragmented and the postcode lottery of service will become more and more prevalent.

The notion of “any willing provider” means that many NHS hospitals will be at a disadvantage compared with private providers, which will not have to provide a comprehensive service for complex problems. “Fine,” some might say, “if that brings costs down”—but what happens when hospitals and other treatment centres become insolvent and have to close down, leaving many areas of the country without adequate health care provision? Handing over £80 billion to GPs to commission services not only risks the important relationship between patient and doctor; it is extremely risky in itself, because of the lack of accountability.

If the plans are passed unaltered, GPs, through the quality premium bonus, will have a financial incentive to keep costs down and not to refer patients for diagnostic tests or treatment. As we found the last time the Tories tried to undertake such a scheme, they could also become unwilling to take on costly patients with chronic conditions. Those who need the most help could find it more and more difficult to get the treatment that they require.

Of deeper concern is the opaque nature of the consortiums. They will have to produce annual financial reports only for the national commissioning board, and they will not have to publish them. At the same time, every council in the country will have to publish every invoice over £500.

These health reforms have no mandate with the British people. They were in neither of the coalition parties’ manifestos, and even if NHS funding were not being cut, they would still run the clear risk of destabilising the service, because they hand over £80 billion of taxpayers’ money to private institutions, with insufficient safeguards in terms of accountability. The reforms are simply wrong. To allow any willing provider to deliver services risks the destruction of the NHS and a return to the dark days of the 1930s, when we had a two-tier system, with the state providing a minimum service and those who could afford to going private. That, too, would be plainly wrong, and something that the British people have consistently said they would not want.

It was pleasing to see the Lib Dem grass-roots vote against the policy last week, so I say to Lib Dem Members, “The ball is in your court. You can be on the right side of this argument, and your party can be on the right side of the British people, if you go through the Lobby tonight with us. The choice is yours. Flex your muscles and demonstrate that you are prepared to force the Government to revisit their plans by voting with Members on this side of the Chamber tonight.”

18:23

[Andrew George (St Ives) (LD)]

It is a pleasure to follow the hon. Member for Penistone and Stocksbridge (Angela Smith), who made a number of important points about the extent of the reorganisation, quoting Chris Ham of the King’s Fund. Indeed, a number of other authoritative sources point out that these reforms amount to the most significant reorganisation of the NHS since its inception 62 years ago. Therefore, we need to look with great care at the issues that arise as a result of this substantial change. We are talking about the public institution that the majority of people in this country hold most dear, so we have a great responsibility in this House to deal with these issues seriously.

I query the hon. Lady’s final point on the purpose of today’s debate. If the intention was to alienate those who broadly share her and the shadow Secretary of State’s analysis of the Bill, then adopting the device of today’s debate was probably the best way of doing so, so I congratulate them on that. Following the debate in our conference in Saturday, I would say that if Labour Members have a significant interest in the future of the NHS, the most appropriate thing to do would be to try to form a coalition of the people who share concerns about the Bill. Many of the institutions that she and others quoted—the King’s Fund, the BMA, the GMC, the royal colleges and many others—share concerns on the basis of a very objective and dispassionate point of view and could make a significant contribution. That is how we should be doing it, not by using—I am sorry to describe it thus—the playground politics of an Opposition day debate as a means of advancing the issue.

[Angela Smith]

Is the hon. Gentleman indicating that he would be prepared to talk to Labour Front Benchers on meaningful ways of taking this debate forward?

[Andrew George]

I am prepared to talk to anyone who wants to engage constructively in improving the Bill to ensure that it achieves its stated intentions, because I do not think that it will, given the nature of the reorganisation proposed in it. The reason I will not be joining the hon. Lady and her colleagues in the Lobby to support the motion is that it is tactically wrong at this stage to engage in such antics. This issue is a great deal too important to be turned into a party political playground game.

I am pleased that the Secretary of State said today that he is prepared to listen and engage. We need to explore every opportunity to engage in constructive dialogue with him, involving all the stakeholders I mentioned, and, indeed, those in the Labour party who want so to engage, to find a way through and to ensure that the genuine concerns about the impact of the Bill are properly scrutinised. Yes, they are being scrutinised in the Bill Committee, but before we get to Report stage in this House, it is important that we create a coalition of the bodies that share these concerns. Rather than inviting them to go out on to Parliament square and wave their placards and so on, it would make a lot of sense to encourage them to engage in greater constructive dialogue than we have succeeded in achieving so far.

[Mr Dorrell]

Does my hon. Friend agree that the case he is making is reinforced by the fact that our right hon. Friend the Secretary of State has already moved two amendments to the Bill dealing with the cherry-picking issue and—this was mentioned by the Prime Minister today—price competition. The amendments have been tabled to ensure that the Bill addresses concerns expressed by the hon. Gentleman and some of his hon. Friends.

[Andrew George]

I am grateful to my right hon. Friend. Indeed, that is a very encouraging indication of the fact that the Secretary of State is prepared to listen. As far as I am concerned, however, he is not prepared to go far enough in reassuring me on those points, because taking the word “maximum” out of the clauses relating to price competition and the role of Monitor, the market regulator, is still insufficient. We have not got time to debate that today.

There are several issues, through which I shall canter in the few moments I have left, about the Bill’s objectives and what we want to achieve. First, we want to drive patient choice and innovation. I do not think that anyone would disagree with that, but we do not need to demolish the core—or at least the institutional architecture—of the NHS and PCTs, and alienate the majority of clinicians against achieving such innovation and patient choice.

Again, I think we all agree that giving power to communities and patients is highly desirable. However, although GPs will be given responsibility for commissioning services through the consortia, I do not think that they are particularly asking for that. Having spoken to many of them and listened to the national debate, I believe that they are reluctant, or at best resigned to taking on those roles, feeling that they have to follow that course.

If we want decentralisation, why will we end up with the ludicrous centralisation of commissioning NHS dentistry and dispensing? Indeed, every contract for a GP surgery will be centrally commissioned from an NHS commissioning board in Leeds. That is absurd. It does not even achieve what it is claimed that the Bill wants—decentralisation.

Many attempts have been made to argue that the Bill will cut bureaucracy and managers. I am not sure that that will happen. A big focus of today’s debate is the impact of competition, which will be unleashed. Once the private sector has its foot in the door, the genie will be out of the bottle. It is clear that everything, including designated services, in my view, will be open to contest. Although it is claimed that the Bill will result in fewer managers, I think that it is a dream come true for litigators, lawyers and management consultants.

[John Pugh]

Will my hon. Friend give way?

[Andrew George]

I am afraid that I do not have time.

The idea that the Bill will drive integration and social care is more wishful thinking because there will be less coterminosity between commissioning boards and local authorities under the Government’s proposals for an increased number of commissioning bodies than we have now.

Much rethinking needs to be done, and I hope that Government Front Benchers are listening.

18:32

[Helen Jones (Warrington North) (Lab)]

In the devastation that followed the second world war, this country had the courage and the vision to realise the dream of a health service available to all in times of need. If the Government’s plans go ahead, that dream will die. [Interruption.] Yes, it will. It is not simply that the reorganisation represents a broken promise, which it does, or that it is costly, although it is, but that it strikes at the very foundations of the NHS. Indeed, if it goes ahead, there will no longer be a national health service, but a vast postcode lottery, with treatment depending on where people live.

[Henry Smith]

Will the hon. Lady give way?

[Helen Jones]

I am sorry—I have not got time. [Interruption.] Other Members are waiting to speak and I will not give way.

The market, not the patient will be king. That is being done under the cloak of localism—the Government’s current buzz word. Remove the cloak and we will see the realities: an NHS driven by the market, run by a vast, unelected and unaccountable bureaucracy, with accountability to Parliament greatly reduced.

The Government plan to give all commissioning to GPs. They conveniently ignore the fact that if GPs wanted to be managers, they would have taken MBAs rather than medical degrees. They will bring in other companies—mostly private—to do the managing.

[Nadine Dorries]

Will the hon. Lady give way?

[Helen Jones]

I have said no. The hon. Lady was not even here for the beginning of the debate.

It is not sufficient for the Government to ensure that private companies determine our health care; they will also introduce EU competition law into the NHS. That means that the private health companies that are currently hovering over the NHS like a bunch of vultures will threaten legal action if services are not put out to tender. They will then cherry-pick the services in which they can make the most money—they do not want to do geriatric care, paediatrics or A and E. That will fatally wound and undermine local hospitals and some, no doubt, will go to the wall. It is no surprise that the Health and Social Care Bill includes detailed insolvency provisions.

Some hospitals will bring in more private patients to fill the gap, because the Bill lifts the cap on private patients. We will therefore have the absurd situation of private companies making decisions on health care, and of NHS staff and facilities being used not for those most in need, but for those with the ability to pay. There is a word for that and it is not often used in this House: it is quite simply immoral. It is also indefensible.

At the same time, these plans will undermine our ability to deal with long-term conditions. Progress has been made on conditions such as stroke through co-operation, not competition. It has been made through stroke networks, by sharing expertise and by reconfiguring services to get the best deal. All the expertise in primary care trusts on delivering those services will be swept away.

[Ben Gummer]

rose—

[Helen Jones]

I have made my view clear, so the hon. Gentleman is wasting his time. The expertise will be swept away, and the plethora of GP commissioning consortia will have no strategic overview of these services.

There has always been a democratic deficit in the NHS, but the Bill will increase it vastly. It will give £75 billion to £80 billion to unaccountable consortia. It will remove from the Secretary of State the requirement to secure the provision of services. I say to Government Members: when the services go, do not come here to complain because the Secretary of State will not be responsible any more. The NHS commissioning board will be appointed by the Secretary of State and he will be able to dismiss its members at will. It will have no independence. Monitor will not have a single elected member.

The Bill does not give power to patients, and it does not empower health service staff. Kingsley Manning of Tribal summed it up cleverly as a Bill to denationalise the NHS. It is not supported by doctors, and it is not supported by patients. I say to the Liberal Democrats that if they go through the Lobby tonight in support of this reorganisation, people out there will not forget and they will not forgive.

18:37

[Liz Kendall (Leicester West) (Lab)]

This debate is about one of the most important issues facing this House and this country: the future of our NHS. It has been an excellent and at times lively discussion, with important contributions from all parts of the House.

My hon. Friend the Member for Sheffield Central (Paul Blomfield) spoke with great passion about his recent experience of using the NHS and the importance of the NHS for his constituents. My hon. Friends the Members for West Lancashire (Rosie Cooper), for Oldham East and Saddleworth (Debbie Abrahams) and for Kingston upon Hull East (Karl Turner) gave compelling speeches about their concerns over what is really in the Health and Social Care Bill, including the implications of removing certain duties from the Secretary of State and of introducing competition law explicitly in the NHS for the first time. The hon. Members for Southport (John Pugh) and for St Ives (Andrew George) raised important and serious issues with regard to the Bill, including the implications of centralising services such as dentistry, pharmacy and primary care. It is far from clear how a national body will know what primary care services need to be commissioned in my constituency. They also expressed concerns about the dangers in the Bill. My hon. Friend the Member for Warrington North (Helen Jones), whom I am proud to be following, raised the importance of the threats to the “national” in the national health service and concerns about patients with long-term and chronic conditions, of whom we know there are an increasing number in the NHS.

The debate has shown that, as on so many occasions with this Government, it is not their rhetoric but the reality that counts. They promised in their manifesto an end to top-down reorganisations, but instead they are forcing the NHS through the biggest reorganisation of its life. As the right hon. Member for Charnwood (Mr Dorrell) has said many times, although unfortunately not in the House today, they are doing that at a time when the NHS faces its toughest ever period of funding, when jobs are already being cut and when, far from what the Secretary of State told the House earlier, waiting times are starting to rise.

The Government also say that they want clinicians to lead changes in the NHS, but their Health and Social Care Bill fails to guarantee even that GPs will be running consortia, let alone that hospital doctors, nurses or other NHS staff, who are so crucial to improving the quality of care, will be involved. As eight of the country’s leading patient charities said in a letter to The Times last month:

“The reforms will place £80 billion of the NHS budget into the hands of GPs, but plans to make GP consortia accountable to the public are far too weak.”

There is no requirement to have elected representatives on GP consortia, as the coalition agreement promised for primary care trusts. The new health and well-being boards will have no power to require GP consortia to do anything, and local councils’ scrutiny committees will actually lose some of their powers to refer decisions to the independent reconfiguration panel in the case of services not on the safe list of designated services.

At the heart of the Bill are proposals to change the NHS fundamentally that the Secretary of State simply does not want to talk about: his plans to run the NHS along the same lines as the gas and electricity companies.

[Nicky Morgan]

I know that the hon. Lady is a hard-working fellow Leicestershire MP, but I disagree with her. Is not the fundamental principle of the Bill, as we have discussed in the Public Bill Committee, that what constituents want is an NHS free at the point of need and the delivery of services, and funded by taxpayers? Which part of the Bill changes that fundamental principle?

[Liz Kendall]

What patients want is their views and voices to be heard. As the hon. Lady well knows, eight of the country’s leading patient charities, including the Alzheimer’s Society, Asthma UK and Diabetes UK, have said that the patient and public voice is not strong enough under the Bill, and they have demanded changes. I respectfully ask that she look at their comments and act on their views.

The fundamental issues at the heart of the Bill are turning Monitor, which is currently responsible for foundation trusts, into a powerful new economic regulator to promote competition across the NHS, and enshrining UK and EU competition law into primary legislation on the NHS for the first time. That is not my view but the view of David Bennett, the new chairman of Monitor, expressed in his evidence to the Public Bill Committee. The Government are explicitly modelling the NHS on the gas, electricity, railway and telecoms industries. Government Members who are shaking their heads or looking blank should read the explanatory notes to the Bill, which make that absolutely clear.

[Grahame M. Morris]

May I point out that yesterday, in an Adjournment debate in Westminster Hall about the future of the blood services contract, the Under-Secretary of State said in response to a question from my hon. Friend the Member for Middlesbrough South and East Cleveland (Tom Blenkinsop) that EU competition rules would apply?

[Liz Kendall]

The Minister of State, Department of Health, the right hon. Member for Chelmsford (Mr Burns), also said yesterday, in the Health and Social Care Bill Committee, that EU competition law would apply, and gave me some assurances that that would somehow not change anything. When I asked whether the Government had taken legal advice on that, he admitted that they had. I asked him then to publish that advice so that hon. Members did not have to take my word for it, and I shall do so again. Will he publish that advice so that hon. Members can see whether GP-commissioning consortia and providers will be subject to EU competition law? Sadly, it appears that he will not do so.

[Dr Poulter]

If the hon. Lady is so concerned about competition and markets, why did the previous Government introduce Monitor, and why were they happy to pay the private sector 11% more than the NHS to provide NHS services?

[Liz Kendall]

I am sure the hon. Gentleman knows that Monitor was established as part of the regulation of foundation trusts. Removing that responsibility will mean that there will be no outside checks and balances on those trusts as there are now. Government Members should think seriously about that.

Our health and our NHS are not the same as gas, electricity or the railway. That the Secretary of State believes that they are shows how dangerously out of touch he is. What is the likely result? GPs will be forced to put local services out to tender even if they are delivering good quality care that patients choose and like; hospitals and community services will be pitted against one another when they should work together in patients’ interests; care, which as many hon. Members have said is vital as our population ages and there is an increase in long-term conditions, will become more and not less fragmented; the financial stability of local hospitals will be put at risk, and they will have no ability to manage the consequences of choice and competition in the system; and the whole system will be tied up in the costs of red tape, as GPs and hospitals employ an army of lawyers and accountants to sign contracts and fight the threat of legal challenge, huge fines and the potential of being sued. Let us also be clear that the Bill gives Monitor the same functions as the Office of Fair Trading, so it can fine organisations up to 10% of their turnover.

The more we see of the Bill, the more the truth becomes clear. The Secretary of State says that he wants clinicians to be more involved, and “no decision about me without me” for patients, but when the Royal College of General Practitioners, the Royal College of Surgeons, the Royal College of Nursing, the Royal College of Midwives, the British Medical Association or anyone else tells him that he should stop, think again and halt his reckless NHS plans, he refuses to listen. When the Alzheimer’s Society, the Stroke Association and Rethink tell him that his proposals will not give patients a stronger voice and improve public accountability, he simply tells them that they are wrong. When health experts such as the King’s Fund warn that driving competition in every part of the NHS will make it more difficult to commission the services that best serve patients’ interests, he simply puts his fingers in his ears and walks away. What makes this Secretary of State think that he is right when professional bodies and patient groups know that he is wrong?

Doctors and nurses do not support the Government’s plan, patients do not want it, some Conservative Back Benchers and members of the Cabinet do not like it, and the Liberal Democrats hate it. They had the sense last Saturday to see what the hon. Member for St Ives (Andrew George) called the potential catastrophe as far as the future of the NHS is concerned, and to ask for amendments to the Bill. I hope they have the sense to join us in the Lobby tonight. I commend the motion to the House.

18:49

[The Minister of State, Department of Health (Paul Burstow)]

I start by thanking the right hon. Member for Wentworth and Dearne (John Healey) for attending the Liberal Democrat conference last Saturday. Unfortunately, no one knew who he was when he arrived. Had he been more clearly identified, I am sure he would have received a very warm welcome from delegates, because he was welcome, as was the registration fee he paid. He will know that I gave my Liberal Democrat colleagues a guarantee on Saturday that, along with other members of this Government, we will listen to every word that Liberal Democrats said at that event.

I agreed with my hon. Friend the Member for Southport (John Pugh) when he said that it was important that we should drop the rhetoric and listen. However, I am not absolutely certain—if I can say this gently to him—whether his contribution entirely measured up to his own statement. Dialogue, yes, but dialogue is not diatribe. Let me also tell him that had the amendment in the name of Conservative and Liberal Democrat Members been selected, I would have urged hon. Members to vote for it, because it sums up the Government’s approach. We are listening to concerns and seeking to strengthen and improve the Bill, and we will continue to do so.

However, that is not what Labour is about. Labour’s purpose is very clear indeed. Those on the Labour Front Bench let the cat out of the bag a few weeks ago when the hon. Member for Islington South and Finsbury (Emily Thornberry) said in Committee that

“many of our amendments seek to undermine the Bill entirely and in every way possible”.––[Official Report, Health and Social Care Public Bill Committee, 3 March 2011; c. 448.]

That is not about improving the Bill; that is about trashing it. Sometimes it seems like we are debating two entirely different Health and Social Care Bills. One is the Bill currently in Committee—the real Bill. The other is the phantom Bill that has been conjured up by Labour Members—a hall of mirrors constructed by the Labour party and the unions that bears no resemblance to the real Bill, and is a gross distortion of so many of its provisions. Let me deal with some of the myths that have been peddled in today’s debate.

First, let me address the charge of privatisation. I thought that the

“ideological battle over using private and third sector providers”

was “over,” and that

“What matters to the public is not who provides but how well a service is provided.”

That is not just my view; that is the view of the Labour Business Secretary from 2008, the former Member for Barrow and Furness. He was a long-standing Health Minister who took that view then and, I suspect, holds it today. My right hon. Friend the Member for Charnwood (Mr Dorrell) was absolutely right: the involvement of the private sector is not new to the NHS. Indeed, involving the private sector was certainly not new to the last Government. Labour imposed private sector treatment centres on the NHS, guaranteed the private sector higher prices and, through all that, institutionalised cherry-picking in the NHS. Indeed, it is a scandal that in none of the Opposition speeches was there any sense of an apology for the £250 million spent on the private sector for doing absolutely nothing.

Instead of loading the dice in favour of the private sector, which is what Labour did, we are correcting the balance, creating a fair playing field for the full range of providers—something that Labour said in its manifesto it would do, but which it is running away from in opposition. We have tabled amendments to the Health and Social Care Bill to put beyond doubt the fact that there will not be price competition, but there will be quality competition, to ensure that, unlike Labour, we will not see differential prices set on the grounds of ownership. Under our plans there will be less competition on price than there is now and more competition on quality.

[Angela Smith]

Shirley Williams described the level playing field to which the hon. Gentleman refers as “lousy”. How would he respond to that?

[Paul Burstow]

I am looking forward to further dialogue with my noble Friend to ensure that we deliver the important improvements to the NHS that will ensure that unlike Labour, which cherry-picked and set up contracts with the private sector that undermined the NHS, we deliver a level playing field that delivers good quality care, chosen by patients not politicians.

The debate has shown that we continue to share an enduring commitment across the House to the notion that the NHS must be based on need and free at the point of use. That is what the Bill entrenches and what it will secure. Our plans are all about offering more choice to patients, more accountability for the public and more autonomy for front-line professionals. It is easy for the Opposition to attempt to caricature and distort those policies, but they are based on our belief that we need an NHS that is not about looking up to Whitehall for its lead, but about looking out to its communities and ensuring that it delivers the quality services that make a difference to our constituents.

The purpose of the motion is very clear. It is nothing to do with listening; it is all about scaremongering, opportunism and grandstanding, and the House should throw it out. We will continue to listen and to improve the Bill, but we will not do it by listening to Labour Members, who have no interest in making the NHS better and who would have cut it, had they had the opportunity to do so in government.

Question put.

18:55

Division 233

Ayes: 224

---

Labour: 218
Democratic Unionist Party: 2
Liberal Democrat: 1
Green Party: 1
Independent: 1

Noes: 305

---

Conservative: 269
Liberal Democrat: 35

[Owen Smith (Pontypridd) (Lab)]

On a point of order, Mr Deputy Speaker. You were not in the Chair at the conclusion of the Opposition day debate, but the Minister of State, the hon. Member for Sutton and Cheam (Paul Burstow), used barely half his allotted time in winding up, as he was clearly short of arguments to defend his position on the important subject under discussion. That left many of us who have plenty to say on the subject short of time to speak. Will you work through the usual channels, Mr Deputy Speaker, to make sure that in future either Ministers use all their time or Back Benchers are given more time to speak?

[Mr Deputy Speaker (Mr Nigel Evans)]

How long the Minister wishes to speak for is not a matter for the Chair. The Minister spoke, the debate came to an end, and a vote was taken.

Business without Debate

Wednesday 16th March 2011 Commons Chamber

Protection of Freedoms Bill (Programme) (No. 2)

Motion made, and Question put forthwith (Standing Order No. 83A(7)),

That the Order of 1 March 2011 (Protection of Freedoms Bill (Programme)) be varied as follows:

1. Paragraph 2 of the Order shall be omitted.

2. Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 17 May 2011.—(Angela Watkinson.)

Question agreed to.

European Union (Amendment) Act 2008

Wednesday 16th March 2011 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

The amendment has not been selected.

19:11

[The Minister for Europe (Mr David Lidington)]

I beg to move,

That this House takes note of draft European Council decision EUCO 33/10 (to amend Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro) and, in accordance with section 6 of the European Union (Amendment) Act 2008, approves Her Majesty’s Government’s intention to support the adoption of draft European Council decision EUCO 33/10.

Under the terms of the European Union (Amendment) Act 2008, the House should approve this motion on the proposed change to the European treaties so that the Prime Minister can then support the adoption of the draft European Council decision to amend article 136 of the treaty on the functioning of the European Union at the European Council scheduled for 24 and 25 March. It is my belief that agreement to this, which is about the narrow change brought forward to enable the countries that use the euro as their currency to establish a permanent stability mechanism from 2013 onwards, is profoundly in the interests of the United Kingdom.

[Mr Philip Hollobone (Kettering) (Con)]

Will my right hon. Friend confirm that this is the first time that the passerelle mechanism—in other words, a fast-track treaty amendment without an intergovernmental conference—is being used? Is this the first time that such a passerelle clause has been brought before the House?

[Mr Lidington]

We can debate whether or not it is a passerelle. It is certainly the first time that the provisions under the Lisbon treaty for a simplified revision procedure, rather than the full-scale procedure to which my hon. Friend alluded, has been employed.

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

Can we be absolutely clear what we are doing here? It used to take months, even years, to change a European treaty. Tonight, we are going to debate this motion for 90 minutes and then the Government will go to the European Council and agree to that change in the treaty. That is correct, is it not, because the next time this comes back for scrutiny it will be a fait accompli?

[Mr Lidington]

No, I do not share my hon. Friend’s analysis of the procedures that lie ahead of us, and I think he underestimates the further opportunities there will be for the House to consider this proposed treaty amendment. I will come on to that in a little more detail later.

First, however, I want to make it clear why the Government believe that agreement to this treaty change is in the interests of this country. As my right hon. Friend the Prime Minister made clear to the House in his statement following the European Council held in December last year, no one should doubt that stability in the eurozone is in the interests of the United Kingdom. Nearly half our trade is with the eurozone, and London is Europe’s international financial centre. It is precisely because of this interrelationship that the UK’s financial institutions and companies, both big and small, have huge exposure to the banks and businesses based throughout the eurozone. Worsening stability, let alone a further and prolonged economic and financial crisis, would pose a real threat to the UK economy and to jobs and prosperity in this country.

[Kelvin Hopkins (Luton North) (Lab)]

Would it not be more appropriate for an intergovernmental agreement to be reached among the member states of the eurozone, rather than have some change to the treaty on the functioning of the European Union?

[Mr Lidington]

It would have been possible for the member states of the eurozone to have come to such an intergovernmental agreement, but they chose not to do so. In addition, a number of the other member states which have not joined the euro but aspire to do so and which have an obligation in their accession treaties to do so in due course would prefer any necessary treaty change to be agreed by 27 states, rather than dealt with on an intergovernmental basis alone.

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

Given that this vote will have to be unanimous and we therefore have veto, is this not an ideal opportunity at least to try to extract concessions from the EU? We could take such an approach on, for example, the working time agreement, in line with the coalition agreement.

[Mr Lidington]

As I hope to demonstrate to my hon. Friend’s satisfaction later in my speech, my right hon. Friend the Prime Minister secured an extremely good bargain for this country when he took part in the negotiations that produced this amendment. First, however, I wish to deal with the points raised by my hon. Friends the Members for Kettering (Mr Hollobone) and for Harwich and North Essex (Mr Jenkin).

This kind of motion has not been debated in this place before and should the European Union Bill, which this House agreed without Division on Third Reading last week, become law, we will not have this particular procedure here in the future. I want to give a firm assurance to the House that, in particular because of the provisions in that Bill, this evening is only the first opportunity for the House to have its say on the proposed treaty change; a second opportunity will be provided through the process of ratification.

I have to say to the House that the previous Government left this country with a system of both popular and parliamentary control over treaty change that was grossly inadequate. Under the inherited arrangements, this motion would have been all that was required by way of parliamentary approval, at least in terms of an affirmative resolution. If the European Union Bill were not to become law, a motion of this type leading to the adoption of a proposal for treaty change would, on ratification, still have to come back to Parliament and be laid before both Houses, but it would then be for Parliament to pray against the provision which had been laid before the House. Obviously the usual problems are involved in terms of what amounts to a negative resolution procedure in giving effect to an understandable desire for full and effective parliamentary scrutiny. However, as I have said, the Government, through the new legislation that we are taking through Parliament at the moment, want to provide a much stronger assurance for the future that this particular proposal and any others that might conceivably come forward will be given much greater and more rigorous parliamentary scrutiny.

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

Let us be clear about what will change if that Bill becomes an Act, as I am sure it will in due course. Is it the case that the sort of debate we are able to have tonight will not be possible in future because we will have post-decision debates, in that decisions will have already been taken before that Act, as it will be then, kicks in?

[Mr Lidington]

I hope that I can give my hon. Friend the reassurance he seeks. First, I will make a bit of progress and describe how the provisions in the European Union Bill will bite on this measure and any future measures that are modelled on it.

[Mr Wayne David (Caerphilly) (Lab)]

A very important question has just been asked by a Back Bencher and the Minister has made no attempt to respond to it. Would it not be technically possible to have the new procedures introduced by the European Union Bill as well as the current procedures? One is post and the other is pre.

[Mr Lidington]

I had better invite the hon. Gentleman to read the Hansard record of the debates on the European Union Bill in which he took part—both in Committee and on Report. If he does read them, he will see that the Government introduced an amendment precisely to make explicit the requirement for this proposed treaty change to be subject to more rigorous parliamentary scrutiny than would have been permitted if the current statutory procedures under the Constitutional Reform and Governance Act 2010 had been allowed to stand and to suffice. I hope that he was not asleep when we debated that amendment. If he examines Hansard, he will find that we have covered that point in some detail.

The previous Government left the country with a system of control that was grossly inadequate. Section 6 of the European Union (Amendment) Act 2008 requires that when a draft decision under the simplified revision procedure—under article 48(6) of the treaty on European Union—is proposed, a Minister must introduce a motion and have it passed by both Houses without amendment before the Prime Minister can signal his agreement to its adoption at a subsequent European Council. That is the point in the decision-making process that we have reached tonight.

There is an option, under the 2008 Act, for the Government of the day to insert a disapplication provision into this type of motion. Such a provision would enable the Government to agree to subsequent amendments to the draft decision to amend the treaty without having to come back to the House for approval. The options were put before me by my officials and I was absolutely clear from the moment I read the papers that to introduce a disapplication provision of that kind would be completely unacceptable and would give Parliament absurdly little control over such an important matter. For that reason, there is no such provision in the motion.

Let me make it clear: if the House approves the motion, it is authorising the Prime Minister to agree to this draft decision—this text alone—at the European Council. Should there be any suggestion of amending the draft decision at the European Council—there is no such suggestion from any quarter at present—the Prime Minister could not legally agree to it at the European Council without first coming back to this House and the other place for additional approval after a further debate. The draft decision that is referred to in the motion will be the version that is agreed at the Council and there can be no other version of the treaty change without the further approval of the House in a debate such as this.

The European Scrutiny Committee has rightly assessed the draft decision as politically important and has recommended it for debate on the Floor of the House. We are scrutinising the draft decision, as the Committee has requested, and debating whether the Prime Minister may signal his support for its adoption at the Council on 24 and 25 March.

[Mr William Cash (Stone) (Con)]

My right hon. Friend is going through all the procedures and the technical side of things, but, as he knows, that is not really what the treaty is about. I hope he will agree that it represents a huge change in the relationship between the United Kingdom and the European Union. Anyone who cares to look back at what those of us who have argued this case before have said, and to look in particular at The Economist this week, will know that the treaty is a hybrid one that is being devised, driven and pressed forward by Germany and those countries that wish to acquiesce in Germany’s dictated terms. Does he agree?

[Mr Lidington]

No, I am afraid I do not agree with my hon. Friend on that point. As I have said, it is in the interests of the United Kingdom for there to be stability in the eurozone. To some extent, the measures that the eurozone countries are now taking are a response to the kind of critique that he and other Members of this House made 10 or 11 years ago when the euro was first created. They—I was very much in this camp—argued that it would cause huge difficulties to create a currency union involving a single interest rate and single monetary policy that did not have some way of reconciling very different rates of growth, inflation and unemployment in the countries in that single currency area.

I want to finish on the procedural points and then move on to the content. If the draft decision is adopted by the European Council, all 27 member states will have to approve the treaty change and ratify it in accordance with their respective constitutional requirements before the decision enters into force. The treaty amendment cannot come into effect until we—and everybody else—ratify the adopted decision.

My right hon. Friend the Foreign Secretary and I have already given an assurance at this Dispatch Box that this and every other future treaty change will be considered in accordance with the terms of the European Union Bill, once that enters into force. That Bill will require Ministers to lay a statement before Parliament within two months of the commencement of part 1 of the Bill, explaining whether the treaty change would fall within clause 4 of the Bill—namely, whether it would involve a transfer of competence or power from the United Kingdom to the European Union.

The treaty change will then have to be ratified by primary legislation—a full Act of Parliament—before the United Kingdom is able to say formally that it has completed the ratification process, so even when we get to that stage, the final version, agreed by all 27 Heads of Government, has to come back to Parliament for ratification and will be debated in all the stages of primary legislation. Tonight is therefore not the only opportunity that my hon. Friends will have to debate the measure.

[Mark Reckless (Rochester and Strood) (Con)]

Surely the key point about this debate is that we have a veto, and that gives us a lever? Most people in this country feel that EU integration has already gone far too far. Is it not the case that the Minister’s refusal to use that lever can only mean that our relationship with the EU will, sooner or later, have to be resolved through an in/out referendum?

[Mr Peter Bone (Wellingborough) (Con)]

rose—

[Mr Lidington]

I will reply to my hon. Friend the Member for Rochester and Strood (Mark Reckless), but first I give way to my hon. Friend the Member for Wellingborough (Mr Bone).

[Mr Bone]

I am grateful to the Minister for giving way; he is being exceptionally generous, as always. Will some European countries use a referendum to ratify a change to a treaty?

[Mr Lidington]

It is obviously for those countries and their legal and constitutional systems to say how they will go about ratification, but when the proposal was discussed at General Affairs and External Relations Council meetings, at which I represented the United Kingdom, there was great concern among the member states that have provision for referendums in their constitutional arrangements to ensure that the agreed wording was such that it made it possible for them to ratify without triggering a referendum. I can remember Ministers from a couple of countries making those points very firmly. The president of the European Council, the Commission and the German Government who, it is no secret, had been promoting the need for a treaty change, accepted that. The language that we have is narrow in its scope and provides only for provisions affecting the countries that have the euro as their currency. It is for Ireland, the Netherlands and other countries to decide whether they need a referendum. My understanding is that those Governments think that that is not required.

[Robert Halfon (Harlow) (Con)]

rose—

[Mr Lidington]

It will come as no surprise to my hon. Friend the Member for Rochester and Strood to know that I disagree with him about the need for an in/out referendum. We debated that at some length the other day in proceedings on the European Union Bill. The Government believe that it is in the interests of the United Kingdom to remain an active and positive player in the European Union. That does not mean that we like everything it does or everything about the way the current arrangements have been established, but we believe that it is in the interests of our country to engage, campaign and fight for our interests within the European Union and not to turn our backs on it.

[Several hon. Members]

rose—

[Mr Lidington]

I shall give way to my hon. Friend the Member for Harlow (Robert Halfon), then I shall make progress.

[Robert Halfon]

As the veto has been mentioned, perhaps it could be waved in front of the EU countries that are so against implementing a no-fly zone over Libya.

[Mr Lidington]

My hon. Friend makes an important argument, which is probably somewhat outside the scope of the treaty change that we are debating today, but it will have been noted by those he wished to hear his comments.

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

We have touched on whether or not the Minister thinks our membership of the EU is a good thing, but we should ask the people whether they believe we should be in Europe. That is a question which, I am sorry to say, he has not answered.

[Mr Denis MacShane (Rotherham) (Lab)]

The Prime Minister did.

[Mr Lidington]

The Prime Minister made it clear in answer to questions last week that he believes it is in the United Kingdom’s interest to remain part of Europe. One of the things that my hon. Friend the Member for St Albans (Mrs Main) needs to say, in the hypothetical choice she advocates, is what the United Kingdom should leave the European Union in order to join. I will not stray beyond the confines of the motion this evening; I merely pose that question to my hon. Friend.

I shall give way to my hon. Friend the Member for Gainsborough (Mr Leigh); then I will make progress and not give way for a while.

[Mr Edward Leigh (Gainsborough) (Con)]

The Minister argues that we should be part of the process, but is there not a logical absurdity in what he is saying? When the real decisions were taken, our Prime Minister was kicked out. We are like a cork bobbing in their wake. We have no real power over the eurozone. That is why many people now think the time has come for a referendum on whether to stay in or get out.

[Mr Lidington]

My hon. Friend, uncharacteristically, underestimates the influence of our right hon. Friend the Prime Minister. When we look at how he has managed to assemble and lead a coalition of countries committed to greater budgetary discipline—something that would not have happened without his initiative—and when we look at the work that he is leading at a European level on the need for growth, competitiveness and deregulation, we can see that the influence of the Prime Minister and of the United Kingdom is being felt. I would encourage—

[Richard Drax (South Dorset) (Con)]

rose—

[Mr Lidington]

I am not giving way further.

I would encourage my hon. Friend the Member for Gainsborough to visit more EU member countries and talk to representatives of their Governments, and I think he will find that our right hon. Friend has in 10 brief months attained considerable respect and a high standing among the partner countries with which he deals and negotiates.

Let me turn to the proposed treaty change and how it came about. It originates from the need for a permanent mechanism to be established by the member states of the euro area to safeguard the financial stability of the euro area as a whole. As the House knows, in May last year the EU established two emergency instruments to respond to financial crises—the European financial stability facility and the European financial stability mechanism. Many hon. Members have expressed their unhappiness at the EFSM arrangements, to which, because of a decision taken in the dying days of the previous Government, this country is a party. That unhappiness is wholly shared by this Government. It is yet another mess that we have inherited and must seek to clean up.

Against that backdrop and the continued uncertainty in the financial markets, the members of the European Council agreed last December to amend article 136 of the treaty on the functioning of the European Union to provide that member states of the eurozone may establish a permanent stability mechanism. That will provide a necessary means for dealing with cases that pose a risk to the financial stability of the euro area as a whole, something that is important to us given the extent of our trade and other economic connections with the eurozone even though we are outside it and intend to remain so.

The proposed amendment contained in the draft decision adds the following paragraph to article 136:

“The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole. The granting of any required financial assistance under the mechanism will be made subject to strict conditionality.”

By providing for eurozone members to establish a permanent mechanism, the European Council is making absolutely clear the responsibilities of all members of the euro area to each other and to the overall stability of the euro area. The proposed new paragraph will be added to treaty provisions that apply—I stress this point—only to member states whose currency is the euro. It does not apply to non-euro area member states and cannot confer any obligations upon them. We believe that financial problems within the euro area should be resolved primarily by euro area members.

The details of how the ESM will operate are being discussed in Brussels. In accordance with the conclusions of the December European Council, member states whose currency is not the euro can be involved on a voluntary basis in finalising work on what will be an intergovernmental arrangement to set up the ESM under the authority given by this proposed amendment to the treaties. My hon. Friend the Financial Secretary to the Treasury is responsible for overseeing UK input to those discussions.

I want to stress that while we are involved on a voluntary basis in the design of the mechanism—it is in our interests to be so—we cannot and will not be part of the mechanism. In fact, we could not be part of the ESM unless the UK first joined the euro area, and as the whole House is already aware, the Government have declared their intention not to join or to prepare to join the euro. Furthermore, under the terms of the European Union Bill, if any future Government were so foolish as to wish to do so, they could join only with parliamentary approval by Act of Parliament and the consent of the British people in a referendum.

[Mr Baron]

Will my right hon. Friend return to the power of the veto that we have? I accept that the matter will come back to this place and that we will discuss it again, but surely we should now be trying to extract concessions in return for not using our veto. I ask him again, because he uncharacteristically did not address the point last time, whether we could be using our veto to extract concessions on the working time agreement—an aim that was, after all, in the coalition agreement.

[Mr Lidington]

On the working time directive, I completely share my hon. Friend’s objectives. Work is going on involving, in particular, my right hon. Friends the Secretaries of State for Business, Innovation and Skills and for Health. We judge that the appropriate time to seek to give effect to the objectives set out in the coalition programme for government will be when the Commission comes forward with its own proposals to change the terms of the working time directive, which we expect will be some time in the next 12 months. That is the moment that will give us the opportunity to do this. However those changes to the working time directive might be given effect, there will have to be a legislative procedure involving not only the Council of Ministers but the European Parliament. It is at that time that we will need to deal with the matter.

[Martin Horwood (Cheltenham) (LD)]

Does the Minister agree that the stability mechanism is a test of our willingness to engage positively with Europe and to act responsibly, using the existing procedures of the House and those laid down in the European Union Bill? After all, we have no interest in further weakness or instability in the eurozone; it is positively in Britain’s interest to engage responsibly with the process, rather than to talk of vetoes or of extracting concessions on issues quite unrelated to the stability mechanism.

[Mr Lidington]

My hon. Friend makes good points. It is in our interests that the euro succeeds. Many in the House still doubt whether that is possible, but I can say only that, in discussions with my counterparts throughout the European Union, I recognise that those countries that have chosen the euro as their currency retain an incredibly powerful political commitment to the project, and I simply do not think it realistic to talk about shaking them from that and trying somehow to bring about some eurozone Gotterdammerung in the near future. The converse would be true: that sort of outcome—the disintegration of the eurozone—would cause enormous damage to jobs and to prosperity in the United Kingdom, precisely because of the interrelationship between the economy of this country and the economies of our chief trading partners.

[Mr Jenkin]

Will my right hon. Friend allow me?

[Mr Lidington]

No, I am not giving way again at the moment.

A number of my hon. Friends were also keen to be reassured that the proposed treaty change does not and will not transfer any competence or power from the United Kingdom to the European Union, and I want to reassure them now. As I have mentioned, the treaty change involves an amendment to one of the provisions that applies only to member states whose currency is the euro, not to others. Therefore, we cannot be part of the ESM without joining the euro itself.

The change is also being undertaken using article 48(6) of the treaty of the European Union, which explicitly states in its provisions that it

“shall not increase the competences conferred on the Union in the Treaties”.

All member states are agreed on that point and stated so, in terms, in paragraph 6 of the recitals to the draft decision. The opinion of the European Commission, dated 22 February, reaffirms that the proposed treaty change does not affect the competences conferred upon the Union.

Some hon. Members have questioned whether the Government should be required to hold a referendum even when the United Kingdom is not directly affected, and this starts to address the point that my hon. Friend the Member for Stone (Mr Cash) made in an intervention. As I highlighted earlier, the European Union Bill, after our seven days of debate on it, will ensure that any treaty changes constituting a transfer of competence or power from this country to Brussels will be subject to a referendum. But this treaty change will enable no such thing, and it does not make sense to try to insist on a referendum on agreements that concern only other member states. It makes sense no more than it would have made sense for Germany to hold a referendum on the recent defence treaty between the United Kingdom and France.

The treaty change under discussion is in our national interests, but on top of that, to come to the point that my hon. Friend the Member for Basildon and Billericay (Mr Baron) made, the Prime Minster during the course of the negotiations achieved two further important objectives. First, as the conclusions of the December European Council and, more importantly, the preamble—the recitals, as they are known—to the draft decision itself confirm, once the ESM is established to safeguard the stability of the euro area, article 122(2), on which basis the European financial stability mechanism was established, will no longer be used for such purposes. Therefore, our liability—bequeathed by the previous Government—for helping to bail out the euro area through EU borrowing backed by the EU budget, under the EFSM, will cease. That was an important achievement for British interests.

[Mr Cash]

As my right hon. Friend will know, according to Reuters and many other news agencies Portugal is on the brink of needing a bail-out because its economy is imploding. Does he accept that, as this debate continues, we will be exposed under the EFSM to the tune of up to whatever is the proportion that we should contribute under the proposals until 2013, and that we should have insisted that that was repealed and revoked when the other arrangement was entered into? That is the concession that we should have got, and the Government did not even seek to achieve it.

[Mr Lidington]

We inherited from our predecessors a legislative measure that was brought in under an existing competence and treaty base and that was, from that time, legally binding. My hon. Friend will understand that I am not going to be drawn into speculating about the position of other individual member states. My understanding, on the basis of the most recent information that I have, is that no other member state has been asking the EU authorities for additional financial help.

As the Prime Minister has made clear many times in this House, securing a tight and disciplined budget for the future is the highest priority for the European Union. At the last European Council meeting, Britain led an alliance of member states to unprecedented success in limiting the 2011 EU budget increase to 2.91%—a very marked improvement on our predecessors’ performance in the previous year. Crucially, in moving forwards, working alongside key partners such as France, Germany, Netherlands and Finland, we are committed to a real-terms freeze in the EU budget in the new perspective, which we expect to run from 2014 to 2020, and we have written collectively to the President of the European Commission setting out our position.

[Mr David]

The Minister claims that a great victory was achieved by our Prime Minister with regard to the 2.91% increase. Will he confirm to the House, however, that just a few months earlier he was opposing that?

[Mr Lidington]

That is no secret. It is a matter of public record that we would have preferred a complete freeze on the 2011 budget, and we voted for that in the Council of Ministers. I regret that we were one country short of achieving the blocking minority. [Interruption.] That kind of protest from the shadow Minister is rank double standards. The Labour Government not only conceded increases in the annual budget that went way ahead of anything like 2.91% but, even more significantly, negotiated an agreement on the current multi-annual financial framework in which they agreed to give up a significant slice of this country’s hard-won rebate from the EU budget in return for no more than a half-promise of a review of agricultural policy, and they did not even manage to get that at the end of the day. We know that they were dysfunctional. According to the memoirs of the then Prime Minister’s chief of staff, the Prime Minister and Chancellor of the Exchequer could so little stand the sight of one another that they refused even to share the figures that they were using in parallel negotiations about an EU budget, the settlement of which was absolutely central to the interests of the United Kingdom. Having let down this country so badly in the past, it ill behoves the Labour spokesman to come and lecture us this evening.

Should this House not approve the motion unamended, I have to say to my hon. Friends that the consequences could be serious and damaging for Britain. The Prime Minster would not be able to signal support for the draft decision in March, and since the decision cannot be adopted without unanimity, it would fall. That would mean, for example, that this country would remain, for the indefinite future, indirectly liable for eurozone bail-outs through the EFSM since there would be no ESM to replace it.

[Mr Nuttall]

Will my right hon. Friend give way?

[Mr Lidington]

I will give way for a last time before completing my remarks so that other hon. Members can make their speeches.

[Mr Nuttall]

Have we not missed an opportunity to include a specific provision to exclude the EFSM under article 122 of the treaty on the functioning of the European Union to prevent it from being misused, as it was previously? The article specifies providing financial assistance in the case of “natural disasters” or “exceptional occurrences”. We should have spelt it out—it was our opportunity to do that.

[Mr Lidington]

Article 122(2) was interpreted by the then Governments of all 27 member states as capable of being used as a proper legal basis for the EFSM and we inherited that binding measure.

[Martin Horwood]

Article 122 mentions

“natural disaster or exceptional circumstances”,

and the position certainly merits the word “exceptional”.

[Mr Lidington]

We can debate whether that interpretation of article 122 was justified. However, the reality is that the mechanism had been established. I ask my hon. Friend the Member for Bury North (Mr Nuttall) to consider not only the fact that we inherited something that was legally binding, but that, if there had been some renunciation by the European Union of a mechanism, which, for all its imperfections, had given a measure of reassurance to the markets, there could well have been adverse consequences for eurozone countries, which would have had adverse consequences for United Kingdom companies and financial institutions with exposure and investments in those eurozone member states.

If we refuse to agree to the draft decision, the effect on our trading partners in the eurozone would not be helpful. I do not wish to speculate too much, but it is safe to assume that the markets would not view favourably a failure by the EU to establish a permanent support mechanism, especially when all 27 Heads of State had publicly set themselves a timetable that would conclude at the March European Council. The consequences for many economies that are already under pressure could be severe. The knock-on effect on the prospects for jobs, investment, growth and prosperity in the UK would also be severe.

I therefore believe that the case for approving the motion without amendment is clear. By supporting the adoption of this treaty change, the UK will support the members of the eurozone to establish a permanent mechanism, and thereby make clear the responsibilities of all members of the eurozone to each other and to the overall stability of the euro area.

We will ensure through our agreement that our current indirect liability for eurozone bail-outs ends in 2013, and because the mechanism is established using the treaty provisions specific to members of the euro area, it does not apply to us or other non-euro-area member states and cannot confer any obligations or duties on them. We will not be part of the ESM, and the treaty change does not therefore involve a transfer of competence or power from the UK to the EU. However, as I said earlier, I can pledge to the House that hon. Members will have the opportunity to scrutinise the decision in still greater detail, as the EU Bill requires parliamentary approval by primary legislation before the UK can ratify the measure.

19:54

[Mr Wayne David (Caerphilly) (Lab)]

There is no doubt that it is in Britain’s national interest to do everything we can to ensure that the eurozone is stable and prosperous. It was therefore right for the European financial stabilisation mechanism, the EFSM, and the European financial stabilisation facility, the EFSF, to be created last May. In those extraordinary and dangerous circumstances, it was necessary to take swift action. More than 40% of Britain’s exports go to the eurozone. If this country is to secure a strong economic recovery, exports to the eurozone must play a vital role.

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

I thank the shadow Minister for giving way. I wonder if he is correct. The history of economic crises shows that the countries that devalue and default first are often the first to recover. By sticking with the euro, Europe has therefore made a mistake and lengthened the period of distress for Ireland, Spain, Portugal and the other economies.

[Mr David]

It is for other European Union member states to decide whether they wish to be part of the eurozone, and there is no doubting their commitment to it.

When the dust had settled after the fraught days in May 2010, moves were made to establish a more permanent stabilisation mechanism, facilitated by a treaty change to provide a stronger legal base. That mechanism will come into force after 2013 and will replace the EFSM and the EFSF.

I find the procedure before us rather strange, to say the least. When or if the European Union Bill, which is currently in the other place, reaches the statute book, there will be a change to the relevant constitutional procedure, as the Minister explained, and the procedure that we are using this evening will no longer apply. Instead, we will have what is essentially a post-decision procedure. Treaty changes will require a statement to be laid before Parliament on whether the decision falls within clause 4 of that Bill. I understand that the treaty change to establish the European stabilisation mechanism would not fall within clause 4, so would not trigger a referendum. However, it would require an Act of Parliament. The Government have said on at least three occasions, and have confirmed this evening, that they would seek the support of the House, using the procedures of the European Union Bill, by introducing primary legislation. As the Financial Secretary to the Treasury said:

“The mechanism is not a transfer of power from Westminster to Brussels, so it does not require a referendum, but it will require primary legislation, which will be introduced in due course.”—[Official Report, European Committee B, 1 February 2011; c. 12.]

Given that commitment, I wondered why the Government were putting forward this motion at this time. The reason, of course, lies in section 6 of the European Union (Amendment) Act 2008, which requires that when a decision under article 48(6) of the treaty on European Union is proposed, a Minister must introduce a motion and have it passed by both Houses of Parliament without amendment. That must happen before the Prime Minister can give his agreement to the adoption of a draft decision at the European Council. In other words, for the Prime Minister to be able to give Britain’s support to this draft proposal at the European Council meeting at the end of next week, it is necessary to secure the approval of Parliament.

I want to make a point about procedure. I welcome what the Minister said earlier on this matter, and I hope that the Prime Minister will adhere to that if there is even the smallest change to the proposed amendment. I hope that that is truly a cast-iron commitment.

[Mr Jenkin]

Is the hon. Gentleman saying that the European Union Bill will set aside the procedure set out in the 2008 Act, and that there will no longer be a requirement to bring draft Council decisions before this House before they are made? I think that he should invite the Minister to intervene on him to clarify whether that is the case.

[Mr David]

I would indeed welcome clarification on that subject. Indeed, I intervened on the Minister earlier and received no clarification. It is my understanding that the new procedure will supersede the procedure that we are using this evening, and that the procedure will be post-decision rather than pre-decision. I invite the Minister to clarify that.

[Mr Lidington]

I am happy to provide clarification. The present decision is unique, in that it is being handled under the 2008 arrangements but will also become subject to the arrangements in the European Union Bill—assuming that it becomes law. The Bill, which we debated for seven days, will extinguish the 2008 arrangements, but it will ensure that after the adoption of the decision, in order for ratification to take place, the text agreed by Heads of State and Government at their final adoption meeting must go through all stages of primary legislation in both Houses.

[Mr David]

I thank the Minister for that clarification, but although there might be extensive post-decision debate, after the implementation of the Bill we will no longer be in a position effectively to give the Prime Minister a mandate. That is a step backwards and a negation of democracy.

[Matthew Hancock (West Suffolk) (Con)]

The hon. Gentleman has just said that he believes it is an error not to have a mandate, but did the previous Government have a mandate when they signed up to the EFSM after losing an election?

[Mr David]

I have already referred to that point. The former Chancellor and Government were facing exceptional circumstances, and my guess is that if the current Government had taken over the reins at that point, they would have done exactly the same thing.

[Mr Lidington]

The idea that the new system that will be introduced in the Bill is somehow weaker than the current one is laughable. An Act of Parliament is a much tougher form of scrutiny and accountability than a single vote before the initial decision is taken. Under the 2008 Act there would be no need for primary legislation before ratification took place. Furthermore, in extinguishing the 2008 provisions the Bill will extinguish the possibility of a disapplication procedure, which exists under the 2008 Act and would allow the Government of the day, by means of a motion such as the one before us this evening, to decide that its Head of Government could agree a change to a text without ever coming back to Parliament to give it a further opportunity to comment.

[Mr David]

I hear what the Minister says, but it does not alter the fact that we will no longer be in a position effectively to give the Prime Minister a mandate. Effectively, he will be able to do what he wants and have it retrospectively approved.

[Jacob Rees-Mogg]

I thank the shadow Minister for giving way a second time. It is very generous of him.

Tonight’s debate came about initially because of a suggestion by the European Scrutiny Committee, which could continue to recommend draft decisions for debate in the House before the Prime Minister went off to negotiate, and then we could have a Bill later. I do not really think we have lost anything.

[Mr David]

I think that statement was really made for the Minister’s benefit, and it would be useful to have his response to it.

[Mr Lidington]

What my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) said is absolutely true.

[Mr David]

I am glad that for once there is unanimity on the Conservative Benches.

I have two concerns that I should like to dwell upon related to the broader situation in which we find ourselves. The first is the fact that the countries of the eurozone have apparently established a new decision-making structure. The reasons they have done that are perfectly understandable, but it is worrying that the Government do not acknowledge that decisions taken by the eurozone countries could have profound implications for the UK. Take, for example, the issue of the single market. The development and completion of the market is of critical importance to Britain, but we have to be aware that there could be a temptation for the eurozone countries to see the single market in eurozone terms only.

In fairness, the conclusions of the Heads of State and Government of the euro area summit last week state that the new pact for competitiveness and convergence will respect the integrity of the single market in the euro area and the EU as a whole, and the involvement of the European Commission in the work of the euro area group should be a safeguard.

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

Is the hon. Gentleman suggesting that eurozone members propose to break up the single market, which is established by treaty of all member states, and to impose borders, restrictions or differences between the rules that apply in eurozone countries and those that apply in the rest of the single market? If he is not, his point falls.

[Mr David]

I am not making that point at all, and with respect, the right hon. Gentleman has not listened carefully to what I said. The statement issued by eurozone countries makes it clear that they will acknowledge, respect and uphold the integrity of the single market. I am simply making the point that the development of the single European market is a key issue. It should be one of Britain’s priorities—it would be, if we had a proactive Government—to ensure that the single market continues to develop. My concern is that in future the eurozone countries, which are perhaps more tight-knit than the rest of the EU, could be tempted to extend the single market provision among themselves rather than applying it to other member states.

[Matthew Hancock]

Is the hon. Gentleman therefore suggesting that the Labour party position is that the UK should be a part of the European stability mechanism, and therefore tied into bailing out eurozone countries, or does he agree with the Government’s proposal that the European stability mechanism should be for eurozone countries only?

[Mr David]

If the hon. Gentleman bears with me, I will tell him what I propose.

One sure way to prevent the single market from developing in a way that does not work to Britain’s advantage is for Britain to be involved in the current discussions. It is important for us to have an appropriate involvement in eurozone summits. I understand that countries such as Poland and Sweden, and even the Czech Republic, which has absolutely no intention of ever joining the single currency, have already indicated that they wish to be involved in those discussions. In contrast, Britain has made it clear—so I am told—that it does not want to be involved in any way whatever. I suggest that that is potentially harmful to Britain’s national interest, and therefore urge the Government not to close the door on our eurozone partners.

The second issue is another important and profound one. I have reservations about the economic and political assumptions that underpin this treaty change and the ESM. Let me be clear that the eurozone countries are correct in agreeing a permanent crisis mechanism. To that extent the treaty change is understandable, but my concern is that the ESM is part of a wider economic approach that is completely insufficient to address Europe’s deep-seated economic problems. Austerity, rapid economic retrenchment policies and fiscal consolidation will not of themselves create the kind of growth that the eurozone desperately needs. If all EU countries cut back at the same time, growth is likely to be sluggish at best. The hardest hit countries could find themselves facing stagnation, or even another recession. The risk is low economic growth and high long-term unemployment, with the poorest member states being hit hardest.

Of course, Europe has a 2020 strategy, which is supposed to be a 10-year strategy for jobs and

“smart, sustainable and inclusive growth”.

The stated aim of the strategy is to help Europe to deliver structural reforms and to recover from the crisis. However, although it is full of good intentions, the strategy plays second fiddle to Council and the Commission plans for deep economic retrenchment. It is clear that throughout most of Europe economic recovery is far from strong, and there is little evidence that private sector job growth will be fast enough to compensate for the huge number of jobs lost in the public sector. My concern is that the political and economic philosophy underpinning the treaty change and the ESM will make economic recovery in the eurozone both fragile and uncertain. As I said at the beginning of my speech, that is not in Britain’s best national interests.

These are important and serious reservations, and I hope that our concerns will be listened to carefully. Europe, including Britain, needs a coherent, well-thought-out growth strategy. Without that, the treaty change will fail to deliver the stability and prosperity that we all want.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The debate will finish at 8.41 pm, so there is slightly over half an hour left. There will be no wind-up, so the allotted time is for Back Benchers. However, there is no time limit on speeches, so if Members could please show discipline and restraint, more people will get in.

20:10

[Mr William Cash (Stone) (Con)]

The essence of this debate is not just the technicalities, which we heard about at great length from the Minister, but something far more fundamental—the political landscape of Europe. The Minister knows it and the Foreign Office knows it. To give an example, there was a massive row between Nicolas Sarkozy and Mr Kenny about the terms of European economic governance only a few days ago. Furthermore, as was said this week in The Economist:

“Mrs Merkel has struck a Faustian bargain with France’s Nicolas Sarkozy.”

He knows that France is losing influence, and as one senior EU official commented:

“France needs Germany to disguise its weakness, and Germany needs France to disguise its strength”.

The fact is that we have the strength to prevent this hybrid treaty arrangement, which presents Germany with a predominant role. We have great sympathy for Germany’s predicament, given that it contributes so much to the European Union and is having to pay out so much. I have fairly regular meetings with German politicians, who tell me that if their country had the opportunity, it would almost certainly go back to the Deutschmark. There is a serious crisis in Europe, but the response is about the nature of a treaty, something in which this Government are acquiescing—it is not far short of appeasement.

The plain fact is that this is a serious moment for the future of Europe. This is a new, unprecedented situation, and it is accompanied by other proposals, which, as I understand it, will also be considered on 24 and 25 March, namely the proposals for the euro pact, which has otherwise been known as the competitiveness pact. However, nobody really knows exactly what the ingredients of it are, any more than they knew about the ingredients of the proposal that we are discussing this evening in its earlier stages. Indeed, I had to use an urgent question to extract from the Government the fact that it was even being made. That is the manner in which Europe works: by secrecy and behind closed doors. Indeed, there are already signs of committees meeting, and we are discovering—through leaks and otherwise—the manner in which they are going forward.

One element in all this is that, as my hon. Friends have rightly said, it would have to be determined by unanimity, so we would have the leverage to stop this juggernaut moving forward. I described it the other day as being like an aircraft carrier in comparison with a rowing boat, but we in Britain will not be regarded as a rowing boat by any means. If such arrangements were being made co-operatively by a voluntary association of nation states, I would be the first to say, “This is fine”, but they are not. They are being dealt with in the context of a legal treaty. We are parties to it, which is why clause 4 of the European Union Bill is such a disgrace. I say this with great respect for my right hon. Friend the Minister, but he talks about how we would be under no legal obligation and how there would be no transfer of powers or competences, but that is not the issue. The issue is whether the United Kingdom is affected. That is the point that I put to the Prime Minister repeatedly, and he cannot answer it. The fact is that the arrangements in question do affect the United Kingdom. They are matters of foreign policy; they are not just constitutional questions relating to sovereignty, competence and powers.

[Martin Horwood]

I hope that the hon. Gentleman appreciates that I am missing the Cheltenham festival to be in Parliament this week, which I do not mention flippantly. The festival is enormously important to my constituency economically, and it depends enormously on Irish euros to make it succeed. If in the long run the outcome of the stability mechanism adds some discipline and rigour to eurozone economies such as Ireland, can he not see that that would be of enormous benefit to the festival, to Cheltenham and to the whole of the UK, and should we not do everything in our power to facilitate it?

[Mr Cash]

I was one of the first—in fact, I think I suggested that we should help Ireland through the bilateral Bill that we eventually produced. However, the Irish are now being put under pressure, at the dictation of Germany in particular, to reduce their corporation tax. That will not do much for the Cheltenham gold cup.

There is a serious problem, because the Government are effectively obscuring the nature of this measure by giving the impression that it is all about institutions. It is about realpolitik. In the days of Bismarck, the German states were brought together in a customs union. That was done for understandable reasons; I do not want that to be misunderstood. However, there is now a problem for Europe. Our problem is that, in the 43 minutes that the Minister spent addressing the House, he did not deal with the politics of this matter at all. That is most unfortunate. In every serious commentary on this issue, including those in the Financial Times, the real question is whether Germany is becoming increasingly predominant, and whether that is intentional or whether it is happening by accident and Germany is making the most of it.

Germany is making the most of the financial crisis to get a greater degree of political control, and the question of whether we can influence that by entering into an arrangement of this kind—which affects us even though we are technically excluded from it—is a serious foreign policy matter for the innermost parts of the Foreign Office. It is also a matter for this House. I believe profoundly that these issues, including the euro pact itself, are not being properly disclosed. The Minister might know what is going on, but we do not. We are not being told. We do not know what the strict conditionality affecting the other member states in the eurozone will be under article 138 as amended. The plain fact is that in that conditionality a crisis lurks. If over-severe conditions are imposed, we will have another crisis in Europe.

This is a bad treaty proposal. The leverage comes now, when we have the opportunity to say no. The Government propose that this will be dealt with in a Bill, but that will be far too late. The Government are acquiescing in this, and I regard that as a form of appeasement to the modern problems of Europe in the form of a predominant Germany, which is not in the interests of Europe, not in the interests of the United Kingdom, and not in the interests of Germany itself.

20:18

[Mr Denis MacShane (Rotherham) (Lab)]

I actually agree with some of what the hon. Member for Stone (Mr Cash) said: a lot of this does turn on Germany. We are told that the eurozone is a disaster zone, economically, but we can now see that Germany is succeeding rather well in the eurozone according to all the indices that matter: growth, falling unemployment and exports. I agree that Germany is playing its hand. I am worried about the German position on intervening in Libya, but that is the price we pay for—

[Martin Horwood]

Will the right hon. Gentleman give way?

[Mr MacShane]

Very briefly. I want to take up only two or three minutes.

[Martin Horwood]

I hope that, while endorsing the words of the hon. Member for Stone (Mr Cash), the right hon. Gentleman will dissociate himself from the hon. Gentleman’s use of the term “appeasement” in connection with Germany. It was profoundly distasteful and quite inappropriate to this debate.

[Mr MacShane]

I thought the hon. Member for Cheltenham (Martin Horwood) made an important intervention earlier this week about the Saudi invasion and occupation of Bahrain, but that is another point. I am sorry, but the hon. Member for Stone has put his finger on a very profound point, although I would not use the term “appeasement”.

I have affection for the Minister for Europe, who was like Horatio defending the bridge, fighting all by himself “for the ashes of his fathers and the temples of his Gods”, as the Tuscan hordes—the Eurosceptic hordes—bore down on him and tried to thrust him to one side in order to bring to bear their vision of what Britain should be like. This is a very serious development. The Government have used article 48(6) of the treaty of the European Union—the famous passerelle clause, which was not meant to be used.

We are agreed that part of the problem is connected with the budget freeze, about which the Minister spoke so passionately and proudly, but in exchange the President of France is going to get an absolute block on any common agricultural policy reform. Right hon. and hon. Members should have no illusions about that; if any part of Europe is frozen, it all tends to start freezing. In the agreed statement, although the new mechanism applies only to eurozone or euro-using members, it fully engages Britain. As the key statement we are debating tonight states:

“The Heads of State or Government of the euro area”—

that is not us—

“and the EU institutions have made it clear… that they stand ready to do whatever is required to ensure the stability of the euro area as a whole. The euro is and will remain a central part of European integration. In particular, the Heads called for determined action in the following areas”,

which were specified. The Heads of the European institutions speak for us. That means the President of the European Council. We appointed him, as we appointed the President of the European Parliament. Our MEPs elected him. I am afraid that this is not simply a matter solely and exclusively for the eurozone. Frankly, this might be a comfort blanket that my dear friend Horatio is trying to throw over the noisy bedsteads of the Tuscans behind him, but the fact is that this will commit Britain to take part in decisions that involve us as a nation.

When I said in a debate last week that the Prime Minister, after discussing the Libyan crisis on Friday, would be asked to leave the room, the hon. Member for Stone intervened, as some Members might remember, and read out a press release saying that the British Prime Minister would take part in these decisions on the architecture of economic governance of Europe as a whole. The hon. Member for Stone might care to recall that, last Friday, as soon as the Libyan discussions were over—they ended, frankly, in nothing, with bits of paper being waved around—the serious decisions of the European Council started and lasted all through Friday afternoon, Friday evening and Saturday. The Irish Prime Minister, the new one of the newly elected Government, went home, not achieving what the Irish people had voted for, but we were absent. This is what the Deputy Prime Minister rightly calls the “empty chair” policy of the present Government, which greatly worries me.

We will pass this legislation tonight, but I accept what the hon. Member for Stone said—this is a matter of high importance. I worry that we are slowly isolating ourselves from the main thrust of decision making in Europe. I think the Minister is putting up a firm defence. The Prime Minister, however, at Prime Minister’s Questions last week, dismissed the intervention of the hon. Member for Wellingborough (Mr Bone)—I do not mean that unkindly, as I thought it was one of the nicest interventions ever. The hon. Gentleman appealed to the Prime Minister for an in-or-out referendum, but the Prime Minister effectively said on behalf of the British nation state that we are not leaving and that we are not going to a have a referendum, as we are part of Europe.

[Mr Bone]

Will the right hon. Gentleman give way?

[Mr MacShane]

I have quoted the hon. Gentleman, so I suppose I should.

[Mr Bone]

I would like to correct the record. The Prime Minister gave his view on how he would vote in an in/out referendum, but he did not rule out either way whether we would have a referendum. He left that entirely open.

[Mr MacShane]

Yes, and I am going to win the lottery on Saturday! I think the Prime Minister was very clear that we are not going to have an in-or-out referendum and that we are staying in the EU. If we are to stay in the EU, it is better to work co-operatively and effectively in it. Unfortunately, the Government do not accept the consequences of their full membership of the EU. They are pretending—here we find that dear Horatio has been waving a wooden sword—that the measure before us somehow excludes Britain from future responsibilities. It does not; it will not: the European Union issue will go on and on for the rest of this Parliament.

20:25

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

I intend to speak very briefly. First, let me thank my right hon. Friend the Minister for clarifying the procedural issues. I wrote in a note to colleagues that I understood that this would be the last occasion on which we could scrutinise the process before ratification. I now understand that that is not correct, although certainly the decision will be set in stone, and we shall not have an opportunity to change it unless we vote down the Act of Parliament that will be implemented. However, I should like one further clarification.

I understood that whatever amendment was made to the text of the treaties would require an Act of Parliament, regardless of whether the European Union Bill was passed, because that is the way in which we have always implemented treaty changes. To that extent, the EU Bill means no change. It would be a shame if we lost the opportunity to discuss matters before they go to the Council, but I accept the point made by my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) that it is up to the European Scrutiny Committee to bring them before the House.

In the few minutes for which I intend to speak, I shall concentrate on what was said by my hon. Friend the Member for Stone (Mr Cash) and by the right hon. Member for Rotherham (Mr MacShane). The Government should be worried when there is agreement between those two Members. On this occasion, they agree that momentous events are afoot. My hon. Friend seemed to be saying, in so many words, that while we had always opposed the formation of a federal Europe which would inevitably be dominated by Europe’s major economic superpower—Germany—we were now facilitating the creation of a federal Europe, at least within the eurozone.

The text that we are approving states:

“Member States whose currency is the euro may establish a stability mechanism to be activated”,

and so forth, but there is no explicit exclusion of countries that are not participating in the euro in terms of its effects. What exactly is a mechanism? We have in mind some kind of bail-out fund, but the annex to the Council conclusions that were produced in December contains a draft decision that refers in more detail to what this instrument might actually concern. It states:

“The ESM will complement the new framework of reinforced economic governance, aiming at an effective and rigorous economic surveillance, which will focus on prevention and will substantially reduce the probability of a crisis arising in the future.”

All that sounds extremely beneficial and positive, but, as we know, the problem is that although specific sanctions do not apply to non-euro state, there is no exclusion of economic governance over all member states. Everything that the EU does implies that one day all its members will be members of the euro. That is clearly the direction in which it wants things to travel.

[Mark Reckless]

Is my hon. Friend aware that the issue is clarified by the decision made on 11 March on the pact for the euro? Annex I contains four guidelines. Guideline (b) refers to “Participating Member States” and guideline (d) to “Euro area Member States”. Guideline (c) states that we must consult our partners

“on each major economic reform having potential spill-over effects”,

and that that applies to “Member States”, but it makes no reference to the euro or to participating. It does involve us.

[Mr Jenkin]

I am grateful to my hon. Friend for pointing that out. It underlines the fact that we are at a crucial crossroads in the development of the European Union and our relationship with our European partners.

A few months ago I attended a private discussion, and those present included some very senior recently retired Government figures. One of them said—Chatham House rule, I am afraid—“You must be very pleased, Bernard, that the new Government are going to consider all this, because obviously there will be a consolidation of the eurozone area, and Britain will have to establish a different relationship with the European Union because we will remain outside it.” I said, “Well, I’d love to think the incoming Government have thought about all these things, but it seems that their minds are closed. I don’t think they want to think about this at all.” The result is that events are sweeping us along. We are not setting the agenda. The agenda is being set for us, and we are not even looking ahead at the consequences of what we are agreeing to.

That could have profound consequences for the future of our relationship with the EU. Indeed, I would say that it brings forward the inevitability of the United Kingdom finishing up having to make a dramatic in-or-out decision. If the Government have a lever in their hands but are still unwilling to exercise leverage to start drawing the distinction between those who want to consolidate the euro area and those who want to remain outside it, we do not have a European policy worth the name. We will therefore be driven into deciding on this binary question of whether we stay in or get out—and I hear that the Labour party may be beginning to flirt with the idea of holding the referendum that it denied the British people when it was in office.

We should consider the vote achieved by the UK Independence party at the recent by-election, as there has been a constant upward trend in every by-election since 1997. If we do not recognise that a part of the despair with politics that we experience in our daily contact with our constituents is a result of our powerlessness, and of our denial of the real choices and issues facing this country, we will drive those who feel such despair into the hands of more extreme parties than the mainstream ones where we all wish to be.

I leave the following thought with my right hon. Friend the Minister. As this Parliament progresses, this debate will not subside or go away. Instead, it will become more intense, particularly as the economic realities of the euro are based on denial. It is rather like the denial that there was for a period in respect of the European exchange rate mechanism before it broke up. However, because it is so much harder to break up the euro, the denial will go on for longer and the pain inflicted will be much more intense. There will be riots in the streets of European capitals before this situation is resolved, because I do not think it is possible for countries to make the kind of adjustment that the euro is currently imposing on them without the flexibility of separate currencies, which is why it is an accepted fact among many economists that at least some of the southern European states will leave the euro before this crisis is out.

Several Hon. Members: rose—Order

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Three speakers wish to contribute, and there are eight minutes to go. I call Steve Baker.

20:33

[Steve Baker (Wycombe) (Con)]

First, I wish to associate myself with the remarks of my hon. Friend the Member for Harwich and North Essex (Mr Jenkin). Too often, when addressing questions such as the one under discussion we get bogged down either in procedural matters or, matters that verge on the nationalistic, but this evening he has transcended that old territory and talked about what is good for the UK and Europe in broader terms. I shall attempt to add to his remarks.

If we wish to say something about what is going on in Europe today, we must talk about the broader sweep of political economy, and I therefore also refer to the remarks of my hon. Friend the Member for Stone (Mr Cash). We must say something about the EU, and I say this:

“It is the last gasp of an outdated ideology, a philosophy that has no place in our new world of freedom, a world which demands that we fight this bureaucratic over-reach and lead Europe into the hope and potential of a new, post-bureaucratic age.”

That is how the BBC reported the remarks my right hon. Friend the Prime Minister made in Prague in November 2007, which, coincidentally, was the month when I joined the Conservative party and approached my right hon. Friend the Minister for Europe to discuss becoming a Member of Parliament.

[Mr Lidington]

indicated assent.

[Steve Baker]

I see that my right hon. Friend remembers that, but I suspect he regrets giving me the reference.

[Mr Lidington]

indicated dissent.

[Steve Baker]

I am most grateful for that.

We have talked about political economy, and great matters are at stake. It seems to me that there have always been two visions for Europe: a classical liberal vision and a vision of a so-called social Europe—an interventionist Europe. A classical liberal Europe would enable free movement of people, services and goods, all of which are to be applauded because we know that human flourishing depends on free trade and peace. The big question is: when did Europe become a social Europe, a socialist Europe and an interventionist Europe? Is it right that we put our faith in the omnipotence of government to solve all our problems and to deliver stability and prosperity?

With this measure, the European Union becomes explicitly a transfer union and is explicitly moving money and wealth around from one member state to another, and I suspect that Germany has very nearly had enough of it. We should not persuade ourselves that this is an entirely new phenomenon. I was most grateful to my hon. Friend the Member for Stone for giving me the opportunity to write in his European journal with a colleague and friend of mine, Professor Philipp Bagus, a German economist at a Spanish university. We explained how the European Union is inherently a monetary transfer union. By monetising their debts, profligate countries have been able to appropriate for themselves wealth from the productive nations such as Germany. This has been going on in a way that very few people understand for a very long time, and I believe that it has substantially contributed to the crisis that we are in. Having lived with this principle of redistribution by subtle means for a long time, we now seem to be explicitly adopting the notion of fiscal transfer union and direct economic governance.

[Mr MacShane]

May I invite the hon. Gentleman to read the Hansard record from 1984 when Mrs Thatcher brought back the rebate? My right hon. Friend the Member for Blackburn (Mr Straw) said that she had hauled down the Union Jack and hauled up the white flag of surrender to Brussels. She replied that that was quite wrong, that it was right that we should transfer, and right that we aid Portugal and the poorer members of the EU. At times, I feel like a Thatcherite.

[Steve Baker]

I am grateful to the right hon. Gentleman for that, but the question is not whether we should help our friends in Europe, but how we should do so. Everybody here is interested in securing the maximum of human flourishing right across Europe—I do not doubt that—but the question is how to do that. Should it be done through the omnipotence of the state or through free trade, free markets and peace?

I believe in stability and prosperity for Europe, but I do not believe for one moment that the European Union is capable of delivering it. I finish by reading a quote from a great French liberal statesman. He said:

“The state is that great fiction by which everyone seeks to live at the expense of everyone else.”

If this measure goes through, Europe will indeed have adopted that idea and it will have done so very much to its disadvantage.

20:38

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

I am grateful for the opportunity to speak in this debate. I had not intended to do so, but I wish to set the Minister’s mind at rest. I can assure him that few, if any, Members who have reservations about this wish to block the treaty amendment incorporated in this motion. He rightly said that it is in our national interests that the eurozone should seek the maximum stability and be empowered to do so. He went on to say that we must therefore not impose any conditions in giving Europe permission to go ahead with this treaty change. That is a non sequitur. As long as we suggest reasonable and moderate conditions and concessions by way of repatriation of powers, there is surely no conceivable likelihood that Europe will forgo something of first order importance to it in order to prevent our having something that is of very minor importance to it. Would Europe seriously forgo establishing a stability mechanism for the euro in order to prevent our getting back powers over the working time directive? This is of second order importance to us, but of first order importance to Europe, so it provides an opportunity for us to seek concessions, and we should take that opportunity.

The second reassurance I want to give the Minister is that we on the Government Benches want the coalition agreement to be implemented. We see in the measure an opportunity to carry forward that agreement, which commits the coalition to a review of all the powers and competences that have been given to the European Community. The only purpose of doing so is to see which of them should be returned to this country. Many suppose that the Liberal Democrats do not really want that to happen. I am sure that some do not, but one of the joys of coalition for me has been getting to know more Liberal Democrats, and I know that many of them are quite pragmatic about this. One very senior member of the coalition Government has told me that he believes that 30 or 40 of the measures that were transferred in the Lisbon treaty and others should be returned. The whole coalition Government, not least the Liberal Democrats, are committed to the principle of localism. They want to see government in this country when it is not appropriate for it to be transferred, or if it has been wrongly transferred to Brussels in the past. This is an opportunity to secure the return of those powers and I urge the House to take that opportunity.

Question put.

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 23 March (Standing Order No. 41A).

petition

Wednesday 16th March 2011 Commons Chamber

20:41

[Gavin Williamson (South Staffordshire) (Con)]

It is a pleasure to present this petition, which has been signed by 1,256 people who support my campaign to keep a police station in Wombourne.

The petition states:

The Petition of residents of the South Staffordshire constituency, and others,

Declares that the police station in Wombourne is being considered for closure; and further declares that Wombourne has a population of 14,000 who depend upon the service that it provides.

The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to ensure that the police station or a new alternative station is opened in the village of Wombourne to serve its residents and those in the local area.

And your Petitioners, as in duty bound, will ever pray.

[P000902]

Classroom Teaching Assistants (Cumbria)

Wednesday 16th March 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(James Duddridge.)

20:42

[Tony Cunningham (Workington) (Lab)]

It is nice to see so many Cumbrian MPs in the Chamber, because it demonstrates just how important this issue is. I will begin by being extremely blunt. What Cumbria county council is doing through the single status process is wrong and unfair. Classroom teaching assistants are angry, disillusioned and demoralised. I have had more than 70 teaching assistants come to my surgery recently. They feel hurt, upset and desperately worried about their future. The situation has brought some of the most caring and professional people I know out on to the streets of Cumbria. That is how important this matter is to them. Regardless of the levels and bandings they fit into, they see what is happening as grossly unfair. This is really about reducing people’s salary by a third. It applies to staff in care homes, some of whom came to see me recently, and I am told by a lady called Sarah Field that adult education teachers are in the same position, but this debate is about teaching assistants.

I recently spoke to a head teacher in west Cumbria who told me that back in 1997 the only additional resources she had had were packs of felt-tip pens. Her school had since had new classrooms, new computers, whiteboards and all sorts of modern innovations, but she said, “I’ll tell you something: the most important resource we have in schools is classroom assistants.” That is how strongly she felt about the situation.

Teaching assistants work as an integral part of the team. It is not strange or even a coincidence that Cumbrian primary schools are in the top 10% in the country; I think it is very much to do with the support staff, who are working with teaching staff and improving standards in teaching and learning. Support staff enrich the experience of pupils. Teaching assistants cannot be lumped together as their jobs vary enormously. They do a fantastic job, and some work with children with complex needs.

[Mr Jamie Reed (Copeland) (Lab)]

I wish to point out the expertise that my hon. Friend brings to this debate: he was formerly a teacher in west Cumbria. Does he agree with me and with Ofsted that the introduction of teaching assistants has made an absolutely fundamental difference to attainment levels in primary and secondary schools, not just in west Cumbria but across the country, and that the abolition of the national pay and conditions framework, the effects of which we are now seeing, will lead to a race to the bottom when it comes to pay?

[Tony Cunningham]

I wholeheartedly agree; I could not agree more with my hon. Friend. Let me read out what an assistant teacher in a special needs school has said:

“Children with complex needs have to be changed because of incontinence, and then physiotherapy is needed and leg splints applied, then hoisted onto the standers. After one hour they need taking out of their standers, tubes put in place and connected for feeding, after feeding medication is given. Children need this every day, plus hydrotherapy once a week. Children with challenging behaviour need assistance with Makaton (This uses signs, symbols and speech to help people with learning and communication difficulties to communicate.)…Children with learning difficulties need a lot of time, encouragement and resources like Makaton to enable them to achieve objectives and enjoy their lessons.

These are only a few of the duties I do with our children. I love my job, but a reduction in my wage will make it very difficult to carry on working in this school. Our children are the only reason we love to go to work”.

Is anyone going to tell me that that classroom assistant deserves the loss of a third of her salary?

If one asks the teachers and school governors what they think, they will say that the assistants do a great job and thoroughly deserve the pay that they get. They do not earn a lot; a full-time teaching assistant earns around £14,700 for a 32.5 hour week. The cuts will reduce their salary to £11,140. The council justifies the pay cuts by arguing that teaching assistants have a shorter working week and longer holidays than other staff. The council claims that teaching assistants get paid for 37 hours a week and receive 14 weeks’ paid holiday.

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

I thank the hon. Gentleman for raising this important issue. Will he clarify the single status aspects of the issue? To what extent does he think that the situation is part of national law, or is Cumbria doing something different from other county councils? What might the other options have been, within the legislation?

[Tony Cunningham]

If the previous Government’s policy had been continued, those classroom assistants would not have fallen within the single status process. That is the reality. It is not too late to change that; there are opportunities to do so. My figures are only rough but, interestingly, in Cumbria teaching assistants get something like £8.60 an hour, whereas in Lancashire they get £11-something an hour. It is not as though Cumbria has to, or is forced to, do what it is doing.

[John Stevenson (Carlisle) (Con)]

Is not one solution to make teaching assistants a sub-group for the purposes of single status, so that their job qualifications and requirements are analysed on that basis?

[Tony Cunningham]

That is worth looking at, but inherent in what the hon. Gentleman says is the fact that he, like many other Cumbrian MPs, can find faults and flaws in the system; otherwise, he would not suggest changes to it.

I return to the point that I was making. The council’s claim is denied by the assistants. They are contracted for 32.5 hours and are paid for 32.5 hours. As for holidays, they are paid term-time only, albeit in 12 equal monthly payments. The special educational needs allowance given to teaching assistants working in those schools, doing work that I have just outlined, is being abolished. I echo Brian Lightman, the general secretary of the Association of School and College Leaders, who said:

“Working in a school is not the same as working in a county hall or local authority. These people need to have a proper set of pay and conditions that recognises what they actually do in schools.”

As my hon. Friend the Member for Copeland (Mr Reed) pointed out, I taught for about 11 years in west Cumbria, and I am the parent of children who have gone through the system, so I know the value of teaching assistants. The proposed pay cut is not just about money. It is about the standing in society that it gives to those who get little but give a lot. It is about people who are already on a low wage having that wage reduced even further, with no regard for what they do, what they contribute, or their input into our community.

Let us imagine what would happen if the Deputy Speaker suddenly announced that the wages of all of us in the House of Commons were being cut by a third, and the furore that that would create. Teaching assistants are not asking for thousands. They are not asking for bonuses. We read in the papers about the millions of pounds that bankers get in bonuses. Teaching assistants are asking to keep their wages the same as they are. That is not too much to ask. As a further insult, they do not even have the individual right of appeal. The fact that the volume of appeals is large should not be a reason to take away someone’s right to be heard.

I go back to what this says about our values. Surely these people should not be subject to a pay cut. Such an attack demoralises the very people we need to inspire our children. For my constituents, it is vital that their children—our children—are valued. That means that we value, and show that we value, the people who work with them. We do not just give them warm words; we give them a decent wage. We need to help our schools to continue to improve. To do that, we need highly motivated staff. We need to recognise the value of teaching assistants and what they give to our schools.

I plead with the Minister to do everything in his power to stop what is happening, to ask the county council to rethink its strategy, and to work with the unions and any other relevant bodies to find a satisfactory solution. My message to Cumbria county council is clear—please, stop and think again. The bottom line is this: if the process goes ahead, it will be bad for the classroom assistants, for teachers, for schools and for the children we care so much about.

20:52

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

I pay tribute to the hon. Member for Workington (Tony Cunningham) not only for calling the debate, but for being generous with his time. I shall be brief and not take advantage.

The debate is about a group of people who are already not well paid—Cumbria’s teaching assistants are the second worst paid in the country, and that is before any pay cuts. It is about justice for them and about the impact on the quality of education experienced by our children throughout Cumbria. As a parent of three children at primary school, seeing the impact that Cumbria’s teaching assistants have in supporting them in their development and learning is overwhelming. It is appalling that they are under such a threat.

The issue arises as a result of a botched rebanding under the single status process. It was not even intended as a cost-saving exercise by the county council, which makes it all the more ludicrous. It is a huge error. It is important to say that we do not necessarily object to single status as a process. We understand that there are job evaluation processes to go through, but the process was utterly flawed, and the outcome is therefore flawed.

[Rory Stewart]

Is not the answer, then, to define a single status which gives the right salary, the right respect and the right position to teaching assistants, rather than grading them below where they should be?

[Tim Farron]

My hon. Friend makes a good point. Someone without much human resources experience could see at first glance that the county council had botched the exercise by putting teaching assistants alongside talented, able, hard-working people who do a completely different job. It stands to reason that at the very least a different family needs to be created for teaching assistants to belong to. It is wrong to equate people who do teaching assistant jobs to a position that is on fixed hours.

Teaching assistants at the school my children go to in Milnthorpe are there helping with preparation at least half an hour before their working day begins. They are there afterwards if a child is in need or upset. They help with extracurricular work and child development. Crucially, from the point of view of the child, who will not differentiate, a teaching assistant is part of their teaching team. They should absolutely have a band of their own.

I want to quote a teaching assistant from Kendal in my constituency to point out the very different and intensive nature of the role that puts it beyond that of a regular fixed hourly job:

“I have been working with a child with severe autism. I support him every second of the day. He cannot be left unattended. I prepare all his activities and research different strategies to implement with him on a daily basis, often working late into the night. I have always felt valued by my school, but not now by my employer, Cumbria county council.”

That sums up the situation for many people in Cumbria.

The hon. Member for Workington rightly pointed out the issue of appeals. The county council, which is overwhelmed with appeals, says that it will look at only some of them. I am sorry, but it should either deal with them all, as a matter of justice, or get the message from the fact there are hundreds of appeals that they have got the banding badly wrong.

I understand that the Minister will probably say that that is a local government matter, but the issue is clearly about the impact on the quality of education in Cumbria due to a demoralised work force who are being deprofessionalised by a county council that has simply got this wrong. It is not too late to put this right. The lot of us here would like the Government to press the county council to think again.

20:56

[Mr Jamie Reed (Copeland) (Lab)]

It is a pleasure to follow the hon. Member for Westmorland and Lonsdale (Tim Farron), who spoke convincingly about what I hope and think is a shared aim among all Cumbrian Members who want to resolve this issue. I will be brief. In February alone I was lobbied by almost 100 people in the town of Millom. I had been asked to attend a brief drop-in session at a local school, only to find myself in front of 100 people faced with life-changing alteration to their remuneration as a result of the single status process that Cumbria county council is engaged in.

I was asked to attend a similar meeting at my children’s school in Whitehaven. There were more than 200 people there, with standing room only in the school hall. Some of those people could lose around £9,000 a year, a life-changing amount of money. For some of them, who were visibly upset, that means that they will be unable to pay their mortgages. For those who are married to other teaching assistants or other people affected by the single status process, it really is a calamitous event. I hope that the Minister and the Government will take that into account.

I make no apologies for relating the issue to my constituency rather than to Cumbria as a whole, because my constituency is the single most heavily reliant upon public spending in the country, with more than 50% of all jobs, according to independent tables, relying on public spending. It goes without saying that unprecedented and arbitrary reductions in the salaries of so many of my constituents will have a significant socio-economic effect outside those immediately affected by the move.

Pay equality is something that we all wish to see. I understand that the county council is having to cut its cloth because of the cuts it has to deal with, but the winners of the process that is under way in Cumbria—even those who are seeing slight improvements in their terms and conditions—do not like what is happening to their colleagues. They do not think that it is right to rob Peter to pay Paul.

Finally, I am clearly not a spokesman for any trade union or any of those involved in the single status process, and nor am I an advocate for industrial action, particularly indiscriminate industrial action. No one ever wants to see industrial action, which is the very last resort for any professional, but I completely understand why someone facing a life-changing reduction in salary who does not have their appeal heard would feel moved towards withdrawing their labour. That is a natural human impulse. Without continuing negotiation and a fair resolution of the situation, I struggle to see what options, apart from threatening industrial action, remain open to those who are being subjected to such swingeing changes to their standards of living. As my hon. Friend the Member for Workington (Tony Cunningham) said, none of us in this House would put up with it, and we should not expect our constituents to put up with it, either.

20:59

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

I add my thanks to my hon. Friend the Member for Workington (Tony Cunningham) for securing this debate, and for his generosity with his time. I will be brief, because I want the Minister to have a proper chance to respond.

I, too, attended a standing-room-only meeting of teaching assistants, at Ormsgill primary school on Friday, and the people there were absolutely united not only by the deep sense of commitment that they retain towards the children whom they care for and help teach day by day, but by the anger at the way they feel the cards have been dealt. There was such a strong feeling in that room, and it is felt unanimously by teaching assistants throughout Barrow and Furness and throughout the county.

We need to recognise that teaching assistants have brought enormous value to schools throughout the county and throughout the country over the past decade—value that is probably beyond their remuneration. The Government, pupils, parents and schools have had a brilliant deal out of teaching assistants, and that is why they find it so hard to take the fact that they face such an enormous cut, rather than a pat on the back for their work over the past decade. We all understand that the single status process is difficult, and we all understand that is probably necessary, but we all want the council to recognise that it has just got it wrong in this instance.

I shall finish with the words of a teaching assistant whose door I knocked on by chance while canvassing on Saturday, as I do every Saturday. During our conversation, she broke down in tears and said to me, “I just don’t understand how I’m going to be able to make ends meet and pay my mortgage, and I don’t understand why the work that I do every day is simply not being recognised.” I ask the Minister to reflect on what he can do to give guidance to the council, and to reflect the value that he knows teaching assistants bring throughout the country. We all urge the council to make the appeals process meaningful, not partial, and to look again properly at the whole issue, which in this instance it has just clearly got wrong.

21:02

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

May I congratulate the hon. Member for Workington (Tony Cunningham) on securing this debate and thank him and the other Members who have spoken for the way in which they raised an issue about which people in their part of the country clearly feel very strongly. I understand that. It is classically and appropriately one of the functions of an Adjournment debate in the House to raise issues that involve strong local feeling.

As I will explain, and as the hon. Gentleman and other Members will know, the Government’s role in decisions on pay and conditions and on work force issues is limited, but I will set it out. This debate has, none the less, given them an opportunity to vent the views of their constituents, and, as someone who has served as a member of a local authority and as a school governor, including at a special school, where particular demands were placed on the staff, I recognise and completely understand the issues to which they referred.

These decisions are essentially for the county council, as they are for any other local education authority, so it is probably appropriate that I set out factually the legal position that gives rise to the situation in relation to equal pay and single status on the one hand, and to the terms and conditions of the employment of teaching assistants on the other, because obviously in the case before us the two are interlinked.

Historically, the terms and conditions on which teaching assistants and many other local government staff are employed are decided not by central Government but by local authorities. In principle, that is right and proper, because they are generally best placed to do so. As hon. Members will know, there is a well-established mechanism in place with the National Joint Council for Local Government Services and other negotiating bodies of employers, trade unions, and other work force representatives that historically deal with these matters.

It is worth putting the single status agreement, which gives rise to this, into that context. The single status agreement is a national agreement between the trade unions and local government employers. The Government welcome the greater transparency that the agreement provides. Its principle is a good one, in line with the fact that we remain committed to promoting equal pay and ending discrimination in the workplace. I do not think that the underlying principles, or the agreement itself, are an issue between any of us. The signatories, including any local authority and the relevant trade unions, commit themselves to placing the majority of their work force into a single pay and grading structure, which is generally referred to as the green book structure. That provides the harmonisation that we all want and increases transparency.

Things such as spine points, which are familiar to all those of us who have been in local government, are set by the national joint council. However, the decision on where employees are placed on the pay spine is a matter for the local authority. Although virtually all local authorities remain within the scheme, it is not compulsory; Government cannot compel authorities to be a member. Some authorities—I think only three, in fairness—have opted out in relation to areas such as school support staff. Broadly speaking, however, the scheme works satisfactorily and efficiently.

The fact that there is that need to place employees on a single scale means that local authorities need to go through a process of ensuring that equally valued work is paid an equal amount, so that they can then assess whether they are meeting their obligations under the Equality Act 2010. The implementation of the single status agreement, following several court judgments that have been pretty well publicised, has revealed some historical inequalities in pay. For that reason, authorities such as Cumbria, and many others, have carried out job evaluation exercises. Of course, the outcomes and decisions taken are individual matters for each authority, but many have gone through the process.

[Tony Cunningham]

Does the Minister accept, though, that if the process itself is flawed, we end up with a very different result than we would if it were a proper process?

[Robert Neill]

Any local authority must act properly in carrying out a process. As we have heard, an appeals process is in place. I am told—in a sense, I am relaying factual information held by my Department—that because, as has rightly been observed, there is a very high number of appeals, schools have been invited to nominate a representative for each post being appealed to attend a hearing on behalf of their colleagues. It is a little bit like a class action in the courts. That is not a decision that Government take or can impose; that is the view that has been taken.

[Tim Farron]

Will the Under-Secretary take the view that it is wrong, given the volume of appeals, to decide that the majority will simply not be heard? Is not that an obvious signal that the county council has botched this grade?

[Robert Neill]

It is dangerous and not helpful if I make a judgment on something to which the Department and I are not party, because I am not seized of all the evidence. However, I observe as a matter of common sense and of law that any employer who goes through a process has to meet their obligations under employment law more generally. It is probably best that Ministers do not try to advise either party about employment law, but it is a factor that everybody has to bear in mind in ensuring that any process is appropriate.

[Mr Reed]

The Under-Secretary is being generous with his time and I genuinely appreciate the constructive way in which he is trying to engage with the issues. I also feel for him because he has to answer the debate. Does he agree that it might be a more elegant and effective fit if he went back to his colleagues in government, particularly the Secretary of State for Education, and asked him to reinstate the School Support Staff Negotiating Body? That abolition, which the Secretary of State for Education announced last October, has landed the process in the single status framework, where it should not be.

[Robert Neill]

Of course all Ministers always take back to their colleagues matters that overlap, and that is on the record in Hansard for all to see. Let me deal with the specific point about the School Support Staff Negotiating Body. The previous Government set it up, and the hon. Gentleman is right to say that that my right hon. Friend the Secretary of State for Education decided to bring those arrangements to an end. However, it is worth noting that that body had not reached agreement about any of the issues with which it was tasked. Its existence or non-existence therefore had no influence on the particular circumstances that were determined in Cumbria. We could have a separate debate about whether that was desirable, but the decision to discontinue the body had no impact on the pay and negotiations of the school support staff with whom we are concerned today. It is important to state that. However, the hon. Gentleman has raised the matter, and it is now on the public record.

[Mr Reed]

The Under-Secretary has been exceptionally gallant.

[Robert Neill]

I hope that I have been exceptionally factual. It is my duty to the House. Against that background, I hope that hon. Members will understand—

21:12

House adjourned without Question put (Standing Order No. 9(7)).

Deferred Divisions

Wednesday 16th March 2011 Commons Chamber

Division 230

Ayes: 282

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Conservative: 241
Liberal Democrat: 35
Democratic Unionist Party: 3
Independent: 1

Noes: 20

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Labour: 14
Plaid Cymru: 3
Social Democratic & Labour Party: 2
Democratic Unionist Party: 1
Conservative: 1
Green Party: 1