House of Commons

Monday 28th March 2011 Commons Chamber

Monday 28 March 2011

The House met at half-past Two o’clock

Prayers

Monday 28th March 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 28th March 2011 Commons Chamber

The Secretary of State was asked—

[Claire Perry (Devizes) (Con)]

1. What assessment he has made of the potential effects on gender equality of the implementation of his proposals for universal credit.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Before I answer this question, I would like to take the opportunity to offer my condolences—and those, I hope, of the House—to my hon. Friend the Member for South East Cornwall (Sheryll Murray), who had tabled a question for today, but whose husband tragically died last week.

As set out in the equality impact assessment published earlier this month, the effect of the universal credit measures and the Welfare Reform Bill on gender equality are approximately equal; and universal credit will see significant improvements in incentives for both men and women to work. We expect the new system will be particularly helpful to lone parents, including those who are looking for work that will fit in with their children’s schooling.

[Claire Perry]

Many working mothers in my constituency are concerned that the universal credit will mean the loss of their working tax credit and access to child care support. Will my right hon. Friend confirm that support for child care costs will be provided through an additional element as part of the universal credit?

[Mr Duncan Smith]

That is absolutely what we plan to do. We will bring forward our proposals shortly. The idea is that the available money will continue to be used for child care support. We recognise how important child care is in helping parents, particularly lone parents, to fit in their obligations to work and to look after their children.

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

Witnesses to the Welfare Reform Public Bill Committee stated last week that incentives for second earners to move into paid employment would be reduced in many cases under universal credit. Will the Secretary of State tell us what assessment has been made of the impact of the universal credit proposals on second earners and on women’s economic independence?

[Mr Duncan Smith]

Yes. The majority of existing and potential second earners will not, on the basis of the figures I have looked at, be affected by the reforms, because the household already has earnings that take them beyond the reach of the benefit system. Approximately—I stress this is an approximate figure—300,000 second earners may see a deterioration in the incentive to increase their hours, and it is possible that some second earners will choose—or may choose as a result of their home commitments—to reduce or rebalance their working hours or leave. However, universal credit will provide much better incentives for the first earner, giving a greater choice to the household about how it wishes to spread its income.

[Stephen Timms (East Ham) (Lab)]

The Secretary of State told us on Thursday that the Government have not yet decided how to support child care costs in universal credit. Is he yet in a position to assure women with children that in the new system they will be better off in work—after child care costs have been taken into account?

[Mr Duncan Smith]

We are going to bring forward our proposals. It is because we acknowledge the importance of this area that we want to get it right. We are going to consult and we want people to recognise their priorities and have the opportunity to decide with us what they think those are. It is our intention—this can be stated absolutely, because it is the purpose of universal credit—to ensure that people will always be better off in work than out of work.

[Mrs Linda Riordan (Halifax) (Lab/Co-op)]

2. What estimate he has made of the number of people in Halifax who will be affected by planned changes to disability living allowance.

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

After disability living allowance reform, we will be spending broadly the same in 2015-16 as we spent in 2009-10. At present, some 5,480 people in the Halifax parliamentary constituency are in receipt of DLA. That is after a 30% increase in the number receiving DLA nationwide in the last eight years. We will work with disabled people and the organisations that represent them on the design and delivery of the personal independence payment. Until this work is more advanced, I am unable to predict precisely whether individuals will see a change in their entitlement.

[Mrs Riordan]

I recently visited Mayfield house, a residential home in Halifax, to meet people who need and rely on DLA. The Government say that they are delaying their cuts to this benefit, but I hope they are not giving false hope to many of my constituents. Will they just admit that they have made a mistake and simply keep this benefit?

[Maria Miller]

I thank the hon. Lady for giving me the opportunity to clarify the situation yet again, even though the Prime Minister did so last week in Prime Minister’s questions. The Government are not removing DLA mobility from care home residents from 2012. We made it clear that we have listened to concerns across the House and from disabled people. We will consider care home residents at the same time as all other recipients—both current and future claimants—as we develop the personal independence payment. What we have uncovered is an unacceptable way in which mobility is often dealt with in care homes, and we will look at that further.

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

3. When he plans to respond to the review of employment support services for disabled people conducted by Liz Sayce.

[Jane Ellison (Battersea) (Con)]

10. When he plans to respond to the review of employment support services for disabled people conducted by Liz Sayce. [Official Report, 1 April 2011, Vol. 526, c. 10MC.]

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

Liz Sayce is due to submit her independent review of specialist disability employment services by the summer of 2012. We look forward to her recommendations and will respond in due course.

[Iain Stewart]

I very much welcome this review, but will my hon. Friend assure me that it will also specifically consider the potential power of new media and new technologies to unlock additional training and employment opportunities for disabled people?

[Maria Miller]

As I travel around and speak to disabled people in various types of employment, I hear from them directly how important new media are in helping people in that sector both to obtain jobs and to remain in employment. I am sure that new media opportunities will remain at the heart of the Government’s drive to get more people into work.

[Jane Ellison]

How is the Work Choice programme helping people with disabilities, especially those who need more specialist support?

[Maria Miller]

As my hon. Friend will know, Work Choice was launched in October last year, and concentrates on both pre-employment and on-the-job support. We will support about 13,000 people a year through Work Choice—people who experience the most difficulties in obtaining employment—and I am sure that it will prove to be an important part of the Government’s programme.

[Ann Coffey (Stockport) (Lab)]

Over the coming months, more than 11,000 people in Stockport will be required to attend a local centre run by Atos Healthcare for reassessment of their incapacity benefit. Disability Stockport is worried about the fact that the centre in Deanery Way does not provide easy access for disabled people on foot, and cars cannot park nearby. Atos has not consulted local disability groups about the choice of site. Will the Minister ask Atos to consult them, in order to ensure that the centre is fully accessible for disabled people before the assessment process begins?

[Maria Miller]

It is vital for such assessment centres to be fully accessible. I should be delighted to take up the point and report back to the hon. Lady.

[Fiona Mactaggart (Slough) (Lab)]

I am still confused after the Minister’s reply to an earlier question, in which she said that the proposal to cut mobility allowance for people in residential care homes had been withdrawn. Can she tell us why the proposal is still in the Health and Social Care Bill, and specify the nature of the continuing review of the proposal to which she and other Ministers have referred?

[Maria Miller]

The provision in the Bill is intended to ensure that there are no overlapping payments for anyone who is receiving other forms of Government money. That is very straightforward. As I told the hon. Member for Halifax (Mrs Riordan), the purpose of the review is to ensure that the most vulnerable members of our community are given the support that they need, and that the current confusion ends.

[Mr Adrian Sanders (Torbay) (LD)]

4. Whether he plans to review the timetable for the raising of the state pension age for women born between December 1953 and October 1954.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We recognise the importance of giving people notice so that they can prepare, which is why the timetable for the state pension age changes will not begin to affect people who are due to retire until after 2016. However, life expectancy has increased dramatically. We believe that the timetable in the Pensions Bill provides the best balance between the impact on individuals and fairness to the taxpayer, who will fund the cost of that increased longevity.

[Mr Sanders]

I think that we all accept what the Minister has said, but it remains the case that a very small group of women who just happen to have been born at a particular time are affected. It cannot be beyond the scope of Government to do something for that group, who at present are being more disadvantaged than anyone else simply because of the time at which they were born.

[Steve Webb]

My hon. Friend has raised an important point, but of course as soon as we do something for that particular cohort, another of people born a month earlier or later will say “That’s not fair”, and before we know it we will have delayed the change until 2020 at a cost of £10 billion. Although my hon. Friend asked his question in a characteristically beguiling way, I must tell him that there is no simple way of dealing with that one group.

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

The Minister will be aware that it is increasingly difficult for women over the age of 50 to obtain employment. Given the later pension age that the Government are introducing and the changes in employment and support allowance, women who find it impossible to obtain jobs may find themselves with no financial support at all.

[Steve Webb]

The hon. Lady has raised an important point about the financial support available to the group concerned. In fact, about 70% of them are in paid employment, and that section of the labour market is doing better than other sections. We reckon that three in five of these women have built up occupational pension rights on which they will be able to draw before they reach the age of 66, and both ESA and JSA will be available in certain circumstances. A combination of sources of income will be available to them.

[Harriett Baldwin (West Worcestershire) (Con)]

In his statement last Wednesday, my right hon. Friend the Chancellor said that he was hoping for

“a new, more automatic mechanism for future increases in the state pension age based on regular, independent reviews of longevity.”—[Official Report, 23 March 2011; Vol. 525, c. 961.]

With longevity increasing by about a year every year, that brought to my mind the vision of a cohort of people who might never actually reach pension age. Will the Pensions Minister comment?

[Steve Webb]

Tempted though I am, we do not propose to abolish retirement. What my right hon. Friend the Chancellor said was that we need to take account in a more automatic way. I do not recognise the improvement of one year per year, although it is rising very rapidly. The key is that we need to do things with proper notice and make sure people have successful longer working lives and therefore build up bigger pensions when they come to draw them.

[Rachel Reeves (Leeds West) (Lab)]

I could not agree more with the points made by the hon. Member for Torbay (Mr Sanders), because the Government’s proposals mean 500,000 women will have to wait for more than a year longer before they receive their state pension, while 33,000 women will have to wait for exactly two years longer. With 10,000 signatures now on a petition calling for a rethink, and full-page letters in today’s Times and Telegraph asking the Government to think again, will the Minister now accept that the strength of opposition both in this House and outside is too great for the Government not to think again?

[Steve Webb]

I am surprised the shadow pensions Minister chose not to raise the issue of the state pension reform announced by the Chancellor in the Budget statement, which will be of particular benefit to this group of women. Many of the women who are aged about 57 spent considerable amounts of time out of work bringing up children, and we will reform the state pension system so that they get a proper pension for the first time.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

5. What recent progress has been made on implementing the recommendations of the Harrington review of work capability assessment.

[Sheila Gilmore (Edinburgh East) (Lab)]

19. What recent progress has been made on implementing the recommendations of the Harrington review of work capability assessment.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We are committed to taking forward Professor Harrington’s recommendations so that we can make the system we inherited from the previous Government fairer and more effective. Many of the changes he proposed are already in place, and we will implement the remainder by the summer, to coincide with the first work capability assessments of incapacity benefit claimants taking part in the full nationwide reassessment.

[Annette Brooke]

I thank the Minister for his answer. What guidance and training will be given to decision makers and Atos Healthcare professionals on implementing the new work capability assessment effectively and fairly, and in particular what training will be given for assessing people with fluctuating conditions such as multiple sclerosis and ME?

[Chris Grayling]

Staff decision makers in Jobcentre Plus and Atos assessors are currently going through a renewed training programme to take into account the changes proposed by Professor Harrington. We have also now moved ahead with, and pretty much put in place, the recommendation to have champions in the network who specialise in dealing with some of the more challenging conditions which will undoubtedly be a factor in the assessments, and on which expertise may not previously have existed to a sufficient degree.

[Sheila Gilmore]

One of the findings of the Harrington report was that the Jobcentre Plus decision makers were not, in fact, making decisions; rather, they were simply rubber-stamping the Atos assessments. What steps have been taken to ensure that that is no longer the case, and will the Minister publish some figures on this so that we can have some reassurance that that has actually changed?

[Chris Grayling]

The hon. Lady makes an important point. That was clearly one of the flaws in the system we inherited. We have retrained decision makers, instructing them to take into account a broader range of evidence than simply the assessment so that claimants now have the opportunity to submit proper evidence from their own medical practitioners, and we have made it absolutely clear to decision makers that they are in charge. We have also introduced a process of reconsideration within Jobcentre Plus to reinforce that process.

[Jenny Willott (Cardiff Central) (LD)]

The Harrington review contained some very welcome and important recommendations that the Government are implementing, including on increasing the discretion of Jobcentre Plus staff. In contrast, the Department recently introduced regulations making the descriptors for work capability assessments more prescriptive. As Professor Harrington will now be reviewing the descriptors as well, can the Minister assure the House that the Government will take into account Professor Harrington’s recommendations in that area, and look in general at the descriptors being applied to work capability assessments?

[Chris Grayling]

I can absolutely give that assurance. We want to get this right, and we have introduced these changes because we think they improve the process. For example, we expect more mental health patients to end up in the support group as a result of the changes we have introduced. I have made it very clear to everyone involved that if there are further ways of improving the process, as a result either of recommendations from Professor Harrington or of the experience of the national roll-out, we will move quickly to make the necessary changes.

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

I want to be clear on what the Minister is saying will be in place by June in respect of Professor Harrington’s recommendations, and whether that will include the new descriptors—I understand that they will be another year away. I ask about this because my constituents have already been through the system as they are the first to be migrated from incapacity benefit to employment and support allowance. It is important to ensure that they have been assessed properly, because they will also be the first cohort whose contributory ESA will be removed from them after they have been on it for a year—there is an unfairness in that process too.

[Chris Grayling]

We will take all necessary steps to ensure that the decision-making process is correct. Professor Harrington did not recommend changes to the descriptors ahead of the national roll-out; he recommended that they should be part of the second year review process. I invited him to accelerate that work, and if and when he makes further recommendations, either before or as part of the second year review, we will move quickly to implement them.

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

6. What steps he is taking to reduce the level of benefit fraud.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We are taking all necessary measures to try to clamp down on benefit fraud—we are using the latest technology—and we regard this as a key area for progress. The introduction of the universal credit, which will provide better flows of information around the Department, will make it easier to reduce fraud.

[Andrew Bridgen]

Can my right hon. Friend confirm that his Department is not only sharing data with other Departments but using the services of credit rating agencies to detect fraudulent claims? Such claims not only unfairly burden the taxpayer but unfairly tarnish those in genuine need of help.

[Chris Grayling]

I can absolutely give my hon. Friend that assurance. The Welfare Reform Bill improves the flow of information and data sharing within the public sector. I can also confirm that we are now working closely with credit reference agencies—he will understand if I do not give too many details, as I do not want to give the fraudsters advance notice of what is coming.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

The Minister will be aware that companies such as Atos Healthcare, which is French-based, are paid about £100 million per annum by taxpayers, yet in Scotland alone 40% of those deemed “fit to work” won their appeal. Does he think that that is a good use of money? Would it not be better used tracking down those who are avoiding paying tax in this country?

[Chris Grayling]

The hon. Gentleman is absolutely right to highlight the flaws in the system we inherited from his party when it was in government. We have taken steps to improve the process. The Harrington review was designed to ensure that we have a better and more just process, with fewer appeals being made. I agree with the hon. Gentleman about wanting to see the number of appeals reduced significantly, but it is the right of the individual claimant to appeal if they so choose.

[Damian Hinds (East Hampshire) (Con)]

7. What assessment he has made of the potential effects on incentives to work of implementation of the provisions of the Welfare Reform Bill.

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

8. What assessment he has made of the potential effects on incentives to work of implementation of the provisions of the Welfare Reform Bill.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The Welfare Reform Bill introduces a fundamental reform of the benefit system and should ensure that work always pays. The universal credit will improve earnings incentives for some 700,000 people and could reduce the number of workless households by about 300,000.

[Damian Hinds]

Casual work and temporary work are important routes into employment, but many people are put off them, not only by benefit loss but by the complexities they will face. How will my right hon. Friend’s welfare reform programme help to address that disincentive?

[Mr Duncan Smith]

One of the complexities that most people face is the fact that two Departments administer what are, in essence, benefits: the working tax credit and the Department’s own benefits system. One of the problems that occurs is that people in difficulty often find it difficult and stressful to figure out who they are supposed to notify of the changes taking place in their lives, their working hours and so on, and they have to go to two Departments to deal with two sets of figures. That will all be sorted out as we bring those together under one benefit. First, these people will not have to notify so many people, and secondly, universal credit will pick up a great deal of that through the real-time system.

[Nick de Bois]

Does the Secretary of State agree that in addition to the incentives in the Welfare Reform Bill, community initiatives such as the Enfield jobs club, which we launched this morning, play a vital role in securing employment, as does the support of a national charity such as GB Job Clubs?

[Mr Duncan Smith]

May I take this opportunity to congratulate my hon. Friend on his job club, whose launch I attended? This is a good example of an area where Members of Parliament can help enormously, because by working with their local jobcentres to set up these job clubs, which we now discover work incredibly well with those who are out of work, people can be given real enthusiasm and hope for the future.

[Nic Dakin (Scunthorpe) (Lab)]

Can the Secretary of State give a clear commitment that nobody will be worse off in work when child care and other costs, such as the cost of school meals, are taken into account?

[Mr Duncan Smith]

With respect, I think the hon. Gentleman will have to wait until I bring the proposals forward. As I said earlier, there is no point in introducing the universal credit unless we stick with our principle that work should always pay better than being out of work.

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

Work incentives are only effective where there is work. As we now know, unemployment is projected to be at or above 2 million for the life of this Parliament. Will the Secretary of State update us on whether the Treasury has provided him with additional funding to expand the Work programme so that it can take up the additional demand from the workless?

[Mr Duncan Smith]

The Work programme is well set to cope with all the ups and downs that might take place over the next few years. The reality is that the Opposition go on about there being no jobs, but even now, advertised through the jobcentres, nearly a million new jobs have been placed in the past three months—that is 10,000 a day and about half the total number of new jobs created in the outside world. I say to the hon. Lady, with respect, that we are making these reforms and changing this complex system because more than half those jobs are likely to go to those from overseas, which does not help at all unless we reform the system to ensure that British people get a shot at the jobs, too.

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

9. What support his Department provides for mothers who wish to stay at home to care for their children.

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

All parents have a responsibility to support their families, but we will make it as easy as possible for families to adapt their own working arrangements. The structure of disregards and tapers in the universal credit will make it easier for parents to move into financially rewarding work that they can balance with their child care needs. When the child is very young—pre-school age—one of the parents can always choose to stay at home or to work and, where parents are meeting their responsibilities by working to support themselves and their children, they will have the freedom to decide whether one of them should stay at home.

[Mr Burrowes]

Does the move towards a single-tier retirement pension that recognises the contribution of stay-at-home mothers signal the value the Government place on the choice of women to give up careers and care for their children?

[Maria Miller]

As my hon. Friend will know, at the moment parents caring for their children can claim credits for the basic pension, but the credit for the second pension is more limited and has only come in since 2002. Our proposals to put in place a single-tier pension would have the advantage of making one year of caring worth the same as a year of working.

[Kerry McCarthy (Bristol East) (Lab)]

Obviously, the Minister will be aware that it is not just women who bring up children, and it is often not just the parents, either. I have been speaking recently to groups such as Kinship Carers about the situation that arises when grandparents or older siblings are left with the responsibility of bringing up a child, often having to give up work as a result. What support is available for people in such a situation?

[Maria Miller]

Obviously, we support the very idea of kinship care. It is an important way in which children can remain in family care when their own parents are unable to look after them. I believe that in April we will bring in some support to help them with their pensions, too.

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

12. What recent progress his Department has made in reducing pensioner poverty.

[Jesse Norman (Hereford and South Herefordshire) (Con)]

17. What recent progress his Department has made in reducing pensioner poverty.

[Stuart Andrew (Pudsey) (Con)]

18. What recent progress his Department has made in reducing pensioner poverty.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

We have restored the earnings link for the state pension and given a triple guarantee that the pension will rise by the highest of earnings, prices or 2.5%. We will pay the winter fuel payment in 2011-12 exactly as budgeted for by the previous Government. We have made permanent the increase in the cold weather payment from £8.50 to £25 a week.

[Mr Evennett]

I welcome the approach the Government are taking on this very important matter. What estimate has the Minister made, however, of the impact of the single-tier pension proposals on future levels of pensioner poverty?

[Steve Webb]

We will shortly publish a Green Paper with a range of options for state pension reform. As my hon. Friend says, one of those is a single flat-rate pension. One of its great advantages is that whereas many pensioners do not claim their means-tested benefits and therefore live in poverty, everyone claims their pension.

[Jesse Norman]

Like many Members, I welcome the single-tier pension. Will the Minister help us consider whether there could be an interesting interaction between that and a lifetime savings account, whereby people can take money in and out of an ISA-style savings account?

[Steve Webb]

Although policy on the tax treatment of savings is a matter for our friends in the Treasury, it is absolutely the case that the single tier provides a firm foundation for saving. Whereas under the current system, every pound one saves results in the clawback of means-tested benefits, a decent single pension will get one clear of means-testing to a far greater extent.

[Stuart Andrew]

Will my hon. Friend confirm that thanks to the re-linking of the basic state pension with earnings, the typical person retiring this year can look forward to receiving an extra £15,000?

[Steve Webb]

My hon. Friend is absolutely right. Although earnings are temporarily depressed, this is a policy for the long term, as many pensioners will draw a state pension for 20 or 25 years. He is absolutely right to say that the typical person retiring this year will have an enhanced state pension of about £15,000 through the restoration of the earnings link.

[Kelvin Hopkins (Luton North) (Lab)]

Even with the Government’s reforms, the restoration of the link and so on, the basic state pension will still be below the official poverty level, and way below comparable basic state pensions on the continent. What are the Government going to do to address the problem?

[Steve Webb]

We have a twin-track strategy that does right by today’s pensioners and that puts in place reform for tomorrow’s. For today’s pensioners, as well as restoring the earnings link we are looking at measures to make sure that people claim the means-tested benefits to which they are entitled, but we will also be consulting on a much firmer foundation of state pension for the future so that we guarantee that more people do not have to retire into poverty, as too many people have had to in the past.

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

On Radio Sheffield last week, the Deputy Prime Minister did not seem aware of the Government’s decision on the winter fuel allowance which means that pensioners will receive up to £100 less this year. Were the Minister and his team aware of the changes, and can he confirm that winter fuel allowance payments to pensioners will be up to £100 lower this year?

[Steve Webb]

My right hon. Friend the Deputy Prime Minister pointed out that the budget for winter fuel payments is exactly as budgeted for by the previous Government. The winter fuel payment increases that were, mysteriously, for two years before the election and one year after—I cannot think why—were always temporary. However, what we have not done is cut the cold weather payment, which the hon. Lady’s party had planned to do.

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

What made the Government think they could get away with reducing the winter fuel payment by £100 by smuggling it through and not mentioning it in the Budget statement? If they think that they have got away with it and that pensioners have not noticed, they should have been in my constituency at the weekend.

[Steve Webb]

Well, the right hon. Gentleman must not have been paying attention last year when the Chancellor announced in his comprehensive spending review that the winter fuel payment would be exactly as budgeted for by the previous Labour Government. Perhaps he was not listening.

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

13. What assessment he has made of the potential effects on pensioners of the uprating of pensions using the consumer prices index.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

The net effect of the triple guarantee for the basic state pension—the figure we gave a moment ago—and CPI for the additional pension is estimated to be a lifetime gain of around £10,000 for the average person reaching retirement in 2011. The impact on private sector occupational pension schemes will vary from scheme to scheme.

[Paul Uppal]

Can my hon. Friend confirm that the triple guarantee will ensure that pensioners will receive a decent offering from the state in their retirement?

[Steve Webb]

My hon. Friend correctly points out that for the past 30 years the value of the state pension has been falling and falling relative to the living standards of the working population. We are proud to have put a halt to that.

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

Will pensioners be worse off or better off should income tax and national insurance be combined?

[Steve Webb]

Obviously, this idea is at a very preparatory stage, but my right hon. Friend the Chancellor has made it clear that pensioners will not simply face an increase in overall tax as would be the case if the two tax rates were simply added together. The idea is in its very early stages, a lot of preparatory and consultative work is going on, and I am sure that the Chancellor is entirely mindful of the points that the hon. Lady raises.

[Jo Swinson (East Dunbartonshire) (LD)]

15. What assessment he has made of the potential effects on women of his proposals on pensions.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

My hon. Friend will be aware that the Chancellor announced in the Budget that the Government will shortly consult on various options, including one for a simpler state pension. In looking at these options one of our key priorities will be to consider how we deliver improved outcomes for women. Under proposals for a single-tier pension we would expect many women to benefit and we will publish more details of our proposals shortly.

[Jo Swinson]

I thank the Minister for that reply, and I warmly welcome the single-tier pension, which bears a striking similarity to the citizen’s pension on which he and I have campaigned. May I bring him back to the answer he gave to my hon. Friend the Member for Torbay (Mr Sanders) about the injustice faced by women born in 1953 and 1954, which he said there was no simple way of dealing with? The Minister is widely respected for his great expertise on the intricacies of the pension system, so even if there is not a simple way of dealing with the problem, may I urge him to look hard to find a complicated way of tackling it?

[Steve Webb]

I am very grateful to my hon. Friend. The issue, unfortunately, having dealt with the one-month cohort about whom I understand there is particular feeling, is that it is not only that group who face an increase of more than a year. When one looks at the neighbouring months, an obvious way of dealing with the problem is by delaying until 2020, but if we did that, we would soon rack up a £10 billion bill. That is the sort of difficult trade-off we have had to face.

[Guto Bebb (Aberconwy) (Con)]

16. What progress his Department has made on delivering new enterprise allowance support in Merseyside.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I am pleased to inform my hon. Friend that the new enterprise allowance was launched in Merseyside on 31 January. We have a partner in place to deliver the mentoring support, which is being done through the local chambers of commerce, and we have appointed a provider for the NEA loans service. The early signs are promising: we have had nearly 400 referrals from Jobcentre Plus to the mentoring service, more than half of whom are now working with a business mentor, and some of the propositions for new businesses are close to fruition.

[Guto Bebb]

Certainly, in the 1980s and 1990s the enterprise allowance was a great success in north Wales and I look forward to a roll-out to our part of the world. If the enterprise allowance is rolled out throughout the rest of the United Kingdom, what proposals does his Department have to ensure that the universal credit will work in tandem with the enterprise allowance scheme in order to ensure that work pays, even for the self-employed?

[Chris Grayling]

It is important to say that we recognise the need to ensure that the universal credit works with self-employment. In the detailed design of the universal credit, we will ensure that it aligns with initiatives such as the new enterprise allowance, but more broadly we will make sure that self-employed people can also benefit from the support that the credit offers. They are a crucial part of our economic future.

[Graham Evans (Weaver Vale) (Con)]

How will my hon. Friend ensure that we harness the skills and expertise of business to help unemployed people get their own businesses up and running?

[Mr Speaker]

With reference to Merseyside.

[Chris Grayling]

In the context of Merseyside, we have been very pleased by the co-operation and support that we have had from the chambers of commerce. They are actively recruiting more mentors among the local business community. The lessons we have derived from Merseyside will enable organisations in other parts of the country and Jobcentre Plus to follow best practice in getting the scheme up and running nationwide in the course of the year.

[Sajid Javid (Bromsgrove) (Con)]

20. What estimate he has made of the likely effects on welfare expenditure of implementation of the provisions of the Welfare Reform Bill.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

In real terms working age welfare spending climbed by 54% over the past decade from £48 billion in 1999-2000 to £74.7 billion in 2009-10. The explanatory notes to the Welfare Reform Bill report that there will be savings of some £960 million in 2012-13,rising to around £3.9 billion in 2014-15. We have also set aside £2 billion to cover the costs of implementing the universal credit.

[Sajid Javid]

This Government inherited a record Budget deficit, which rightly requires the re-examination of every Department’s spending. Instead of getting constructive suggestions from the Opposition, we too often get opportunism, including a demeaning comparison this weekend between protesters, civil rights marchers, people who fought for women’s rights and anti-apartheid campaigners. Does my right hon. Friend believe that the best way to bring down our welfare bill sustainably is to get people back into work by giving them the right work incentives?

[Mr Duncan Smith]

My hon. Friend is absolutely right. The key is to get people back into work, to reform the system so that it is simpler and to ensure that work always pays. As we approach April, when the Darling plan was meant to start, I have yet to hear one single figure for anything that the Opposition say they would have reduced, had they introduced it. Instead, apparently, the Leader of the Opposition now lines himself up with Pankhurst, Mandela and Martin Luther King. Miliband does not quite work, does it?

[Hywel Williams (Arfon) (PC)]

What account does the Secretary of State take of arguments by disability campaigners such as my constituent, Mr Rhydian James, who points out that much of the increased cost of the system is due to demographic matters and to reduced under-claiming?

[Mr Duncan Smith]

The hon. Gentleman will therefore be pleased with the design of the universal credit, because the one thing that it will tackle hugely, which is why there is an extra cost to it, is under-claiming, which will stop. Those who are eligible and who should have their money will be able to get it. Better still, that will improve the level of those coming out of poverty, as opposed to what happened under the previous Government.

[Angie Bray (Ealing Central and Acton) (Con)]

The Secretary of State may recall a row that broke out when a family on benefits was moved into a house in Acton worth well over £1 million, which people on average salaries would only dream of. Does he agree with those constituents who tell me that these reforms are fair not only to those in work, but to the taxpayer? Why has it taken so long for common sense to prevail?

[Mr Duncan Smith]

Most people who work hard and who are on marginal incomes will consider it reasonable that the benefits system does not pay more than average earnings, which turn out to be about £36,000 gross. Most people who are in work would consider that to be a reasonable level of income. Those who complain about that complain about something that they should have resolved anyway.

[Margaret Curran (Glasgow East) (Lab)]

Of course, the Secretary of State will have received many representations from carers’ organisations about the Welfare Reform Bill and its likely impact. In reply to a written question I tabled last week, the Under-Secretary of State for Work and Pensions, the hon. Member for Basingstoke (Maria Miller), who has responsibility for disabled people, stated that she did not yet know what impact the new personal independence payment will have on carers, yet the Bill is now in Committee and PIP will be decided in just a matter of weeks. Will the Secretary of State confirm that PIP will remain a passported benefit from carers’ allowance, how many carers will be affected by the change and how many carers will lose as a result of the changes being introduced by the Government?

[Mr Duncan Smith]

I can say to the hon. Lady, much as my hon. Friend the Under-Secretary has before, that we are reviewing all of this. The purpose is to ensure that those who are involved in caring will get greater and better support and that they will be better cared for themselves. The reality is that we chose for that reason not to take carer’s allowance into the universal credit, which the hon. Lady has not touched on, because that would have meant that some people might have lost out.

[Mr Peter Bone (Wellingborough) (Con)]

21. What plans he has for the future of disability living allowance; and if he will make a statement.

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

Disability living allowance will be replaced by the personal independence payment, which is a new, more transparent and sustainable benefit underpinned by an objective assessment of the barriers disabled people face in living full and independent lives. From 2013-14, working-age individuals in receipt of DLA will be reassessed against the new eligibility criteria for PIP.

[Mr Bone]

It is so nice to have a Minister give such a full answer. In my constituency, people are worried that DLA is going to go and not be replaced by anything. I wonder where such false information is coming from. Does she have any idea?

[Maria Miller]

I thank my hon. Friend for his question and share his concern about the lack of understanding that people sometimes have about what we are trying to do. I can reassure him that the Government’s reforms are all about putting integrity back into the support available for disabled people, moving away from a discredited system of DLA in which, in terms of the higher rate for the DLA mobility component, more money goes to people who are drug and alcohol addicts than to people who are blind.

[Mr Wayne David (Caerphilly) (Lab)]

What can the Minister say to my constituent, Jordan Owen, who is deaf and blind, currently attending school and in receipt of the mobility component of DLA, but who may well lose it when he leaves school and moves into residential care?

[Maria Miller]

The hon. Gentleman will of course have heard the earlier exchanges in which I said that the Government are not removing the mobility component of DLA from care home residents from 2012. We will ensure that the needs of individuals in care homes are assessed in the same way as those of everyone else in receipt of DLA as part of the PIP reforms.

[Duncan Hames (Chippenham) (LD)]

What measures are the Government taking to ensure that assessments for PIP, the successor to DLA, are not as disastrous as those introduced under the previous Government for their work capability assessment?

[Maria Miller]

I can absolutely give an undertaking to my hon. Friend that we are learning a great deal from the development of the work capability assessment, although I would stress to him that it is a very different sort of assessment that looks at the barriers people face in living independent lives, rather than the barriers they face in getting into work.

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

Last Thursday night I met representatives of Lanarkshire Ace, a group in my constituency that looks after adults with learning difficulties. They are terrified about the prospect of going through a reassessment for DLA. Will the Minister confirm that people with life-long conditions, such as adults with learning difficulties, will be exempt from a reassessment in future?

[Maria Miller]

I am sure that the hon. Gentleman will take this opportunity to ensure that his constituents are not terrified about the future of DLA, and indeed the personal independence payment, because we are making sure that it will be a fair and transparent assessment. We will not be, as a rule, saying that individuals would be exempt from assessment, because we want to make sure that they are getting the right support, and we can do that only by looking at their needs.

[Nicky Morgan (Loughborough) (Con)]

22. What steps he is taking to improve the ICT systems operated by the Child Support Agency and its successor.

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

The CSA currently uses two IT systems. It was the intention of the previous Government to transfer all 1993 cases to the 2003 scheme, but this proved impossible because of deficiencies with the IT they commissioned. This situation is unacceptable, which is why the Government have decided to bring in a new single system to replace the current ones. We plan to introduce this from 2012.

[Nicky Morgan]

I have previously written to the Secretary of State about my constituent, Mr Jonathon Little, who had arrears added to his current child support bill that were impossible for him to pay. The CSA told Mr Little that the payment period would be extended to 2014, but he then received a letter stating that the payments on account would be reviewed every six months. When I queried this, the CSA told me, “That’s just a computer-generated letter; we’ve had problems with those.” Will the Minister assure me that he will look into the matter as part of the wider improvements being made to the IT system operated by the Child Maintenance and Enforcement Commission?

[Maria Miller]

I thank my hon. Friend for that example. She has just underlined the need for change, because the current system is not working as it should for all constituents. Indeed, there are now 100,000 cases that cannot even be dealt with on the current IT system—costing the taxpayer a great deal of money and, as she points out, the patience of a great many of our constituents.

[Laura Sandys (South Thanet) (Con)]

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

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

This Government inherited a youth unemployment crisis, and to tackle the problem the Chancellor’s Budget announced 100,000 new work experience places and funding for an additional 40,000 apprenticeships, on top of the 75,000 places that we announced last year. That is a far better way of helping young people into sustainable jobs and long-term careers than some of the rather expensive and ineffective programmes that we inherited.

[Laura Sandys]

I would like to associate myself and my local fishermen with the condolences that the Secretary of State paid to our hon. Friend the Member for South East Cornwall (Sheryll Murray).

I, like many other hon. Friends, am taking on an apprentice, and I wondered what the Department was doing to support apprenticeships and work placements, which are so crucial to giving young people that first step in the workplace.

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

We are doing two things. First, we are supporting the programmes in a practical sense. We already have apprentices working in the Department, but we as a Department will take a lead in providing work experience places—including something like 4,000 throughout the Department per year. We will also actively go out and encourage organisations to come forward and take part in the work experience programme. I hope every company in the country—private, public and voluntary sector organisations—will give young people the chance to take those first steps in the workplace.

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

May I start by associating Opposition Members with the condolences expressed to the hon. Member for South East Cornwall (Sheryll Murray)? The circumstances that the Secretary of State outlined were extremely tragic.

May I return the Secretary of State to our debate this afternoon and ask about what the Prime Minister said to the House last week? He said that he had no plans to proceed with the removal of the mobility component of disability living allowance, and the Under-Secretary of State for Work and Pensions, his hon. Friend the Member for Basingstoke (Maria Miller) appeared to confirm that this afternoon. Yet, two hours after the Prime Minister sat down, his right hon. Friend the Chancellor said that he was ploughing ahead with making the savings. Whose side is the Secretary of State on? The Prime Minister’s or the Chancellor’s?

[Mr Duncan Smith]

I am on the side of both of them, to be quite frank. I make it my business to be so—although it is not always necessarily reported accordingly.

The situation, as I, the Prime Minister and even the Chancellor have outlined, is very simple. We have a requirement to look at the whole disability living allowance spectrum, of which the mobility and mobility in care homes components are part. As I said the last time I was asked about the issue, we are absolutely setting out to make sure that the current overlaps and deficiencies in an incredibly messy and complex system, whereby local authorities, care homes and the Department all tread on each other’s toes, are sorted out and do not exist, so that the mobility component that is required for people in care homes will exist after we have completed that work.

[Mr Byrne]

I am grateful for that answer, which is familiar to many in the House. If the proposal were to be dropped, however, the Red Book would show that from 2013 the savings would be returned. In fact, it shows no such thing. Indeed, page 44 of the Budget states that up to £500 million more will be removed from the residential care component than originally planned; and, in a parliamentary answer to me, the Secretary of State says that 100,000 fewer people will be in receipt of DLA by the end of the Parliament. Can he see now why people with disabilities are so worried about his plans?

[Mr Duncan Smith]

The letter I sent to the right hon. Gentleman and, I think, to others is quite clear. The point I am making, and I make again, is that the purpose of what we are doing—what the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) is engaged in—is to review a complex system, which does not work very well. Many people who need disability living allowance often do not get it; people, when they go back to work, are confused about whether they will still receive it; and people often feel that they should not take work because they think that the allowance is work-related, which we know it is not. So, that complex system, which the previous Government left to us, has to be reviewed. Many have welcomed the review, and at the end of it we will make decisions that benefit those who need DLA.

[Mark Menzies (Fylde) (Con)]

T3. I should like to ask the Secretary of State what advantage he sees in placing young people on to apprenticeship schemes as opposed to a six-month placement on the Work programme.

[Chris Grayling]

Essentially, the Work programme’s role is to help those who are longer-term unemployed and are struggling to get into the workplace. Our work experience proposals and apprenticeship plans are very much geared towards those who are newer in the labour market and looking for opportunities in the early few weeks of job search. Of course, the really stark comparison is between what we are proposing and the vastly expensive future jobs fund run by the previous Government, which has proved to be three or four times more expensive than even their relatively unsuccessful new deals. In my view, our programmes will make a difference in a way that theirs did not.

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

T2. Many of my constituents are facing lengthy delays in benefit appeals coming to tribunal. This causes real worry, but also financial hardship. What action are the Government taking to address this, given that demands on the Tribunals Service are increasing?

[Chris Grayling]

I am acutely aware of the issue to which the hon. Lady refers. We have been in detailed discussions with the Tribunals Service about this, and it is moving ahead with an increase in capacity that will help to ease the situation. We have also, for the national roll-out of the incapacity benefit reassessment, introduced a reconsideration stage at Jobcentre Plus level to try to reduce the number of appeals and to make sure that we get as many decisions as possible absolutely right.

[Neil Carmichael (Stroud) (Con)]

T4. In my constituency, a large number of individuals come to my surgeries worried about being passed from pillar to post in the complicated welfare system that we have. Can the Minister give me some reassurance that the reforms are going to make it much simpler, especially in connection with people wanting to establish businesses?

[Mr Duncan Smith]

I can give that assurance to my hon. Friend. We have inherited a system that has huge in-built disincentives and perverse incentives for people to do the wrong thing. The idea of this reform—the universal credit, alongside the Work programme—is that people have a clear understanding of what they will earn when they go to work. They will not need to have the brains of a professor in mathematics to figure it out; they will find it out themselves, and that will incentivise them to stay in work and not be put off by having to report to 50 different people.

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

T5. In his earlier response, the Minister implied that levels of winter fuel payment under Labour were based on the electoral timetable. In fact, the UK has the highest level of excess winter deaths, according to National Energy Action. Can he explain why pensioners in my constituency will be receiving less this winter than last?

[The Minister of State, Department for Work and Pensions (Steve Webb)]

For the first seven or eight years in which the winter fuel payment existed, it was set at exactly £200. For three years only, it was temporarily increased, and the budgeted amount was set to reduce this coming winter. Last year—the hon. Lady may not be aware of this—we ensured that poor pensioners got an £80 electricity rebate. This winter, subject to regulations going through the House, we plan that over 1 million poor pensioners will be entitled to a £120 electricity rebate—real help for people who need it.

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

T6. Next week, pensions get linked to earnings for the first time since Mrs Thatcher abolished the link in the 1980s. I do not think that pensioners have yet got all the good news messages that they should be getting from this Government. Can Ministers assure us, and pensioners, about what those messages are? Can they then make sure that every pensioner and pensioners’ organisation understands the range of good things from which they have already benefited thanks to Ministers in this Government?

[Steve Webb]

My right hon. Friend is absolutely right. I spend a good deal of my time going out around the country talking to pensioners’ groups. I shall be talking to one such group in Birmingham on Wednesday, and I will tell them that restoring the earnings link for the first time in 30 years will provide a firm foundation and dignity for pensioners. That is long overdue.

[Teresa Pearce (Erith and Thamesmead) (Lab)]

T8. Under new welfare rules, jobseekers will be required to undertake mandatory work activity placements such as stacking shelves for 30 hours a week for at least four weeks, and if they do not comply, their jobseeker’s allowance could be withheld. Can the Secretary of State tell me what safeguards are going to be put in place to prevent exploitation and whether sanctions will be placed on Work programme providers if it is found to be occurring?

[Chris Grayling]

The whole point about the mandatory work activity programme is that we listened to the advice of our front-line advisers on what they felt could make the biggest difference to the people they are working with. That is what this programme is designed to achieve in giving people an opportunity to step up their work search by getting involved in more full-time activity to get themselves focused on the challenge ahead. There will clearly be safeguards. Ultimately, the most important safeguard lies in the discretion of our front-line staff. There is no obligation for any staff member to sanction an individual if they judge a sanction to be inappropriate. They know and understand when a sanction is necessary, and when it is not, and that is guidance that we will continue to give to them.

[Karl MᶜCartney (Lincoln) (Con)]

T7. My right hon. Friend is no doubt aware that my constituents in Lincoln help to fund welfare spending in this country. Welfare spending has increased from £132 billion 10 years ago to £192 billion at present—an estimated real-terms increase of 45%. Will he assure me that even in these difficult economic times, this Government, unlike the last Labour Administration, will do all they can to help people in Lincoln who are genuinely able to move from welfare into work?

[Mr Duncan Smith]

I can give my hon. Friend that reassurance. He should be reassured by the fact that this Government are doing more to reform the archaic benefits system, which is full of all the traps to which he referred. That will benefit those who are in work. One big reason why they have to pay more tax is that the last Government left us with a nightmare system that prefers to keep people out of work than in work.

[Alison McGovern (Wirral South) (Lab)]

Having work experience and money reserved for apprenticeships will not automatically equal a reduction in unemployment among young people. When will the Minister report to the House on the unemployment that is faced by young people, and what will he do if the numbers do not fall?

[Chris Grayling]

The hon. Lady needs to understand that this problem has been building steadily for the past decade. It happened in good years under the previous Government. We are dealing with the appalling inheritance of 600,000 young people who left school, college or university and have never worked. We think that our programmes will start to make a difference, that they will be better value for taxpayers’ money, and that they will be more effective than the previous Government’s programmes. Above all, we think that apprenticeships give the foundation for a lifetime of skills and employment. That is why they were such a centrepiece of the Budget.

[Mr Steve Brine (Winchester) (Con)]

T9. Severe autism sufferer, Alastair Bolan, and his family came to my surgery in Winchester on Friday afternoon. Like many families living with the condition, they are anxious about the move to personal independence payments. They made the case to me passionately that a one-to-one interview for Alastair would be an absolute disaster, as it would be for many like him who have been granted permanent disability living allowance with good reason. I know that the Minister is good at reaching out to organisations, so will she reassure me that she will continue to engage with the all-party group and autism charities to minimise the uncertainty that some people feel?

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

I can reassure my hon. Friend that both I and officials have met representatives from the National Autistic Society, which has put forward helpful thoughts on the new assessment. It has asked for the people who carry out the assessments to be trained in autism, for individuals to be able to bring somebody to a face-to-face assessment, and for them to be able to use the best supporting evidence. We agree 100% with its proposals.

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

By insisting that widows’ pensions should be treated as unearned income under the universal credit, widows will lose a large slice of their pension. How can the Secretary of State justify that?

[Mr Duncan Smith]

The hon. Lady knows that we are looking at all these matters. I am happy to discuss that matter with her if she wants to talk to me.

[Stuart Andrew (Pudsey) (Con)]

T10. I have been approached by a number of constituents who are private landlords, who are concerned that they have not received payments that have been made to their tenants. What measures are the Government considering to alleviate that problem?

[Steve Webb]

We recognise that payments do not always get through to landlords. There is a provision that allows direct payment when there are eight weeks of arrears, and we have added a provision under our new rules so that direct payment can be made to a landlord when it will secure or maintain a tenancy.

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

I was contacted last week by a constituent who is in her 50s, has advanced multiple sclerosis and lives in a residential home. Her elderly mother has moved into a nursing home on the other side of Aberdeen. The taxi that allows my constituent to visit her mother costs £50 there and back—exactly the amount she gets from the mobility component of disability living allowance. Will the Minister guarantee that my constituent will continue to have access to those funds after the changes to DLA, and that she will not have to go through a reassessment to make sure that she really deserves it?

[Maria Miller]

As we have said before from the Dispatch Box, the intention of our measures to reform the personal independence payment is not to remove the ability of people such as her constituent to get out and about. We will now include the needs of people in care homes in the overall PIP reassessment.

[Robert Halfon (Harlow) (Con)]

A number of my constituents are facing redundancy. What extra help can the Government give those people, particularly those who have worked in their companies for a very long time?

[Chris Grayling]

I express my sympathy to those of my hon. Friend’s constituents in that position. Unemployment is a very difficult thing for anybody to experience. We have put together a number of different proposals. Most immediately, there is support through the Jobcentre Plus rapid reaction service in the immediate aftermath of redundancy. Schemes such as the new enterprise allowance, as it is rolled out across the country, will give people the opportunity to move into self-employment, and we will examine all other sensible ways of ensuring that we mitigate the impact of unemployment on people at what remain difficult times in the labour market.

Petition

Monday 28th March 2011 Commons Chamber

Mr Iain Wright (Hartlepool) (Lab)

- Hansard - - Excerpts

I rise to present a petition on behalf of my constituents who are concerned about the loss of bus services, particularly evening bus services and those on socially vital routes.

The petition states:

The Petition of residents of the borough of Hartlepool,

Declares that the petitioners are concerned that residents in areas of the borough such as The Headland and Burbank, as well as villagers in Dalton Piercy, Elwick and Greatham, have been left isolated and without transport following the decision of Hartlepool Borough council to cut public subsidy to private bus companies.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to work with the Secretary of State for Communities and Local Government, residents of the borough, Hartlepool Borough Council and bus operators immediately to reinstate the services and then to secure a financial settlement and a regulatory framework which provides a comprehensive, reliable and cheap system of bus transport in Hartlepool, designed to address the social and economic needs of passengers in both the urban and rural areas of the borough, rather than the narrow interests of private bus companies.

And the Petitioners remain, etc.

[P000909]

Disturbances (London)

Monday 28th March 2011 Commons Chamber

15:30

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

(Urgent Question): To ask the Home Secretary to report on the violent disturbances over the weekend.

[The Secretary of State for the Home Department (Mrs Theresa May)]

On Saturday, 4,500 police officers worked to keep order during the TUC march of up to 500,000 people. During the afternoon and evening, gangs of thugs carried out acts of violence against the police, private property and public monuments. I want to place on record my gratitude to the officers who put themselves in harm’s way during Saturday’s operations. I want also to praise the Met’s senior officers—Assistant Commissioner Lynne Owens and Commander Simon Bray—for their leadership, and I want utterly to condemn in the strongest possible terms the mindless behaviour of the thugs responsible for the violence.

I can confirm to the House that 56 police officers were seen by force medical examiners and that 12 of them required hospital treatment, while 53 members of the public were also hurt. I can also confirm that officers arrested more than 200 people on Saturday, and that 149 of them have already been charged. I expect that number to increase as the police go through video evidence, as they did after the student protests last year. The message to those who carry out violence is clear—they will be caught, and they will be punished.

Throughout Saturday and Sunday, Ministers were kept informed of events. The Home Office was in regular contact with the Metropolitan police and City Hall. The Minister for Policing and Criminal Justice has spoken to Kit Malthouse, the deputy Mayor, and I have spoken to Lynne Owens to thank her for the police operation, which was, on the whole, a success. The police might not have managed to prevent every act of violence, but they were successful in preventing wider criminality and are now actively engaged in investigating the perpetrators so that they can be brought to justice.

In my statement to the House following the student demonstrations in December, I said that the police would learn the lessons of that experience. Since then, the Metropolitan police have been learning the lessons necessary, and the tactics deployed on Saturday reflected that learning, but there is more that can be done. Just as the police review their operational tactics, so we in the Home Office will review the powers available to them. I have asked the police whether they feel they need further powers to prevent violence before it occurs. I am willing to consider powers that would ban known hooligans from attending rallies and marches, and I will look into the powers that the police already have to force the removal of face coverings and balaclavas. If the police need more help to do their work, I will not hesitate in granting it to them.

That is the right way of doing things. The police are operationally independent, the Mayor holds them to account for their performance and the Home Secretary’s role is to ensure that they operate within the right legal framework and have the right powers to do their job. I know the whole House will want to join me in sending this message: we will always back the police when they do their important work, and we will back them as they do everything they can to bring these mindless thugs to justice.

[Yvette Cooper]

I thank the Home Secretary for her answer to my urgent question, after she withdrew her planned statement earlier today.

Hundreds of thousands of people demonstrated peacefully on Saturday in support of their families, services, jobs and communities, but a few hundred mindless idiots and thugs launched violent attacks against property, businesses and police officers, and 31 police officers were injured. In a democracy, that kind of violence is no form of political protest. It is violent assault and criminal damage, it is thuggish behaviour of the worst kind and it must face the full force of the law. I welcome the speed with which the police have acted to charge 149 people with offences already. They will have the Opposition’s support in taking a strong line.

The police have made it very clear that those violent incidents were separate from the legitimate, peaceful march, and the Home Secretary has rightly done the same today, but I have three things to ask her. First, she rightly praised the police—like her, I have thanked Lynne Owens and Acting Commissioner Tim Godwin for the work of the Metropolitan police and other police forces, to which I pay tribute—but in addition to the 4,500 officers on the streets hundreds more officers and support staff worked on the operation behind the scenes. Will she join me in paying tribute to all of them, and assure the House that the police will have the resources that they need on the front line and behind the scenes to deal with future events?

Secondly, I welcome the Home Secretary’s consideration of further action. Will she consider co-ordinated action to deal with the so-called anarchist groups? It is vital that we do not let a violent minority undermine the power of peaceful political protest in a democracy. Such incidents have been increasing every time there is a crowd event, and, frankly, people are fed up with it. Co-ordinated, determined action was successful some years ago in tackling the football hooliganism that used to hijack crowds and frustrate ordinary fans. May I offer her the Opposition’s support? We will work with her and the police on a parallel or similar co-ordinated approach to wider action to deal with problems at crowd events.

Thirdly, we have a tradition in the House of standing together against extremism to protect public safety, property and the public right of peaceful protest. The Home Secretary will know that the Mayor of London today claimed that the Leader of the Opposition and the shadow Chancellor will feel quietly satisfied—[Interruption.] I want to quote the Mayor of London accurately because this is important. The Mayor said that the Leader of the Opposition and the shadow Chancellor will

“feel quietly satisfied by the disorder”

and that:

“They will be content to see the police being unfairly attacked on all sides”.

Will she condemn those disgraceful and outrageous remarks? The Mayor is the man whom she wants to put in charge of the governance of the Metropolitan police. Does she agree that it is the worst kind of politics to slur those who supported hundreds of thousands of peaceful marchers?

Will the Home Secretary answer those three questions on the police, a future strategy and the London Mayor? Let us be united in this House on rooting out hooliganism and supporting peaceful protest.

[Mrs May]

I thank the right hon. Lady for the tone in which she conducted most of her comments. Unfortunately, towards the end, she chose to move into a rather more political tone.

May I make two factual corrections to the right hon. Lady’s remarks? First, she claims that I withdrew a statement to the House, but I never asked to make one. Secondly, she said that I intended to put the Mayor of London in charge of the Metropolitan police, but, of course, he is in charge of them.

I, too, put on record the House’s support for and thanks to all those involved with the Metropolitan police who were not in police uniform or not warranted officers who took part in the policing operation on Saturday, both in relation to the march and the mindless acts of violence that took place.

The right hon. Lady mentioned the possibility of co-ordinated action. She will have noted that I said in my response that I was prepared to look at the possibility of some sort of pre-emptive banning orders for hooligans, which we have in place for football hooligans. It is now worth our looking at such experience, and I welcome the support she was willing to give on behalf of the Opposition. Everybody in the House wants to ensure that the police have the right powers and tools available to do the job of keeping our streets safe. The great majority of the march went ahead peacefully, but, sadly and unfortunately, it was damaged by the mindless violence of the thugs. The description given by Liberty is a very good one:

“The demonstration appeared to have been infiltrated by violent elements who periodically separated from the main route in order to attack high profile commercial properties and the police before melting into the demonstration once more…This minority presented significant challenges for the police and trade union stewards alike and at times jeopardised both the safety and ability to protest of those with peaceful intent.”

[Several hon. Members]

rose—

[Mr Speaker]

Order. We have statements by the Prime Minister and the Secretary of State for Education and a heavily subscribed Budget debate to follow, so there is pressure on time. Short questions and short answers are essential.

[Mr David Davis (Haltemprice and Howden) (Con)]

It is incumbent on those of us willing to criticise the police when they make mistakes, as they did during the G20 protest, to step in and correct the record when inaccurate and unjust criticisms are made, as happened over the weekend. The simple fact is that few police forces in the world could have delivered the peaceful outcome for the vast majority of 200,000, 300,000, 400,000 or 500,000 demonstrators during a march in which none was harmed or hurt, and in which all were able to exercise their democratic right properly. Similarly, the police were able to use intelligence to make the arrests to which the Home Secretary referred. However, I hope she will not pay any attention to the sort of thing said in The Times this morning by a retired police officer, when he called on her to use “dawn raids” and “snatch squads”. That is the sort of thing we might expect in Tripoli, not London.

[Mrs May]

It is important that the police have the powers they need to deal with such violent incidents. Of course, however, a balance always needs to be struck to ensure that the powers that the police use do not inadvertently damage the civil liberties that we hold so dear in this country. It is right that the police have operational independence—that is crucial—but we need to set the right legal framework for them. My right hon. Friend is right. I thought that the way in which the police dealt with the demonstrations and the march on Saturday was a fine example of, and a tribute to, the British model of policing. We do indeed have the finest police force in the world.

[Keith Vaz (Leicester East) (Lab)]

The Home Secretary is right to praise the police and condemn those responsible for this wanton violence, but a pattern is now emerging of peaceful demonstration followed by violent demonstration. Tomorrow, Assistant Commissioner Lynne Owens will appear before the Home Affairs Select Committee to update us on what happened last Saturday. We need a big and open conversation with the police and to give them whatever they need to police the second part as effectively as they police the first; otherwise this tale of two protests will continue whenever there is a demonstration in London.

[Mrs May]

I agree with the right hon. Gentleman. When I spoke yesterday to Assistant Commissioner Owens, I specifically asked her whether the police would need further powers, so that we can discuss what is necessary to enable them to do the job we all want them to do.

[Mr Julian Brazier (Canterbury) (Con)]

Does my right hon. Friend agree that in rightly condemning the extreme behaviour of a few hundred people we are in danger of losing sight of the essential foolishness of the perfectly legitimate, but nevertheless misguided, demonstration, in which many prominent people in the Opposition took part? Does she agree that at a time when we have a deficit comparable to that of Portugal and Greece, it is ludicrous for the Leader of the Opposition to couch his words in those of Abraham Lincoln?

[Mrs May]

I think that many people in the House would share my hon. Friend’s views about the tone of the language used by the Leader of the Opposition. I wonder how many of those who demonstrated against the cuts know that the Leader of the Opposition, who addressed the demonstration, would, if in government, be cutting £4 out of every £5 that this Government are cutting.

[Mr David Hanson (Delyn) (Lab)]

The Home Secretary will be aware that it is an offence to encourage or assist crime. Will she please examine and have a conversation with the police to ensure that people who use social network sites such as Twitter and Facebook to encourage or assist crime are prosecuted?

[Mrs May]

The right hon. Gentleman makes an interesting point. After such events, it is important that we take the appropriate time to consider all the issues that have arisen and give proper consideration to whether we need to give the police any further powers to enable them to do the job we want them to do in this new environment.

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

Will the Home Secretary commend the overwhelming majority of peaceful protesters and the police for their measured response, urge the police to maintain their close-proximity approach to policing and reject calls for a policing approach that is based on distance and relies on water cannon and cordoning off large sections of a city?

[Mrs May]

As I said in response to the question from my right hon. Friend the Member for Haltemprice and Howden (Mr Davis), the way in which the main march was policed was a good example of, and a tribute to, the British model of policing. It was important that the police were able to do that in co-ordination with the organisers of the march, who had been in discussions with them about it in advance of the event.

[Mr David Anderson (Blaydon) (Lab)]

Will the Home Secretary enter into discussions with her colleagues about the way the events on Saturday were reported? Any impressionable young person watching the news on Saturday evening or through the night, or reading the newspapers yesterday, would believe that the only way to make their voice heard is by being involved in such actions, which none of us in this House condones. We need more balance from the British media so that that message can get through.

[Mrs May]

Yes, of course the media have a responsibility in how they report such incidents. I find it deeply distressing that too many people are willing to stand up and condemn the police, when they should be condemning those who perpetrated the acts of violence.

[Mr Marcus Jones (Nuneaton) (Con)]

Will the Home Secretary investigate the possibility of introducing a system akin to football banning orders to keep the minority of anarchist thugs off our streets when such demonstrations take place?

[Mrs May]

I thank my hon. Friend for that question; I am indeed prepared to do that. Over a period of years we saw a sensible response to football hooligans, which included banning orders. That is why I have asked the police whether we need more powers, and I am willing to look at that example.

[Jim Sheridan (Paisley and Renfrewshire North) (Lab)]

Has the Home Secretary had time to reflect on the policing Minister’s response to a patsy question on the BBC, where the sense was that the Leader of the Opposition was responsible for the anarchist attacks? If she honestly believes that the Leader of the Opposition is responsible for them, then we had better bring back the planes from Libya and have a no-fly zone over the Labour party headquarters in London.

[Mrs May]

I would simply say to the hon. Gentleman that that was not what the policing Minister said. It is extremely disappointing that, at a time when the House should be uniting in its support of the police and its condemnation of violence, the hon. Gentleman chose to address his question in that way.

[Justin Tomlinson (North Swindon) (Con)]

What action will my right hon. Friend take to recover the costs of the damage from the extremists who have been arrested?

[Mrs May]

My hon. Friend makes an interesting point. If he looks at the Riot Act of 1886, he will see that it presents us with an interesting suggestion in dealing with those costs, and I am currently looking into its operation.

[Ian Murray (Edinburgh South) (Lab)]

This weekend saw 400,000 people marching in London, while Sunday saw 35,000 of the tartan army march into the Emirates stadium. Will the Home Secretary congratulate those involved on the good nature of those mass events, and put on record her disgust at the violent minority who insist on ruining them?

[Mrs May]

I am happy to join the hon. Gentleman in saying that, across this House, we want people to be able to demonstrate and make their point peacefully. It is those who chose to use violence to disrupt demonstrations or perpetrate acts of criminality as part of such demonstrations whom we condemn across, I believe, the whole of this House.

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

UK Uncut claims that what it characterises as a “fun and friendly” and “creative occupation” of premises on Oxford street on Saturday has been misrepresented. What advice does my right hon. Friend have for those who claim that they have been misrepresented?

[Mrs May]

I say to them that they certainly have not been misrepresented. We need to make it absolutely clear that the police are right in what they were doing to try to prevent violence on our streets. The people who should be condemned are those who were engaged in that occupation, and in perpetrating those acts and the mindless thuggery that took place. They will be brought to justice.

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

Will the Home Secretary take this opportunity to say unequivocally that the remarks of the Mayor of London were unacceptable?

[Mrs May]

The Mayor of London is open to make the remarks that he chooses to make about the policing and the demonstrations. He is responsible for the Metropolitan police as the elected representative. We are all united in believing that it is absolutely right that the role of the police should be praised across this House, because they did a very good job in managing the situation on Saturday.

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

Has my right hon. Friend had a chance to quantify the cost to the public purse of the damage done at the weekend and of prosecuting the perpetrators? That money could otherwise have been spent on the public services that they claim to protect.

[Mrs May]

My hon. Friend is absolutely right. Of course there will be a significant cost as a result of the violence at the weekend and, sadly, that is money that could otherwise have been spent in rather better ways.

[Fiona Mactaggart (Slough) (Lab)]

Does the Home Secretary agree that one of the reasons the policing of this demonstration was more effective than that of some previous events was that the police clearly differentiated the peaceful majority who were demonstrating from the violent, thuggish minority? Is it not therefore depressing that the Mayor of London, who is responsible for the police, actively sought to conflate the two? Will the Home Secretary take this opportunity to repudiate his remarks?

[Mrs May]

Of course it was important that the police learned from recent experience of policing demonstrations, and that, as a result, they chose to operate slightly differently and to use slightly different tactics. I quoted Liberty earlier, which made it clear that some of the violent demonstrators were moving in and out of the peaceful demonstration and—

[Ms Rosie Winterton (Doncaster Central) (Lab)]

And the Mayor?

[Mrs May]

I would say to those who want to comment on the remarks made by individuals about the demonstration that the reason Opposition Front Benchers are choosing to say so much about the Mayor is perhaps because they do not want to talk much about the comments made by the Leader of the Opposition at the demonstration.

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

The Home Secretary will be aware that, back in 2002, I was partly responsible for bringing 407,000 people to the capital and back again without so much as cracking a window pane. Will she assure the House that future protests will not be made more awkward or more expensive as a result of her proposals?

[Mrs May]

The only march I have been on was that Countryside Alliance march. It was notable that it was entirely peaceful and that virtually no litter was left afterwards. Everyone cleared up and made their point in entirely the proper way.

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

On a day when the House should be standing united in opposition to boys in black masks who disgrace the traditions of democracy in our country, will the Home Secretary dissociate herself from the Mayor when he said:

“Balls and Miliband…will be content to see the police being unfairly attacked on all sides”?

[Mrs May]

The House is indeed united in saying that we should praise the work of the police and condemn the acts of violence by the perpetrators of criminal acts on Saturday.

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

Can my right hon. Friend confirm whether the people who were charged today will be remanded in custody, so that we can be certain that they will not be planning future demonstrations?

[Mrs May]

I am not able to give my hon. Friend confirmation one way or another in relation to all 149 individuals—[Interruption.] The shadow Leader of the House is saying, “Can’t she just do it? Can’t she just say it?” Actually, it is not the Home Secretary’s decision whether to remand people in custody. This is the Opposition’s problem with these matters; they do not recognise the difference between political responsibility, operational responsibility and judicial responsibility.

Libya/European Council

Monday 28th March 2011 Commons Chamber

15:53

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on Libya and report back from last week’s European Council. On Libya, I want to update the House on military action, on the steps that we are taking to strengthen and deepen the alliance, on our efforts to ensure that humanitarian aid gets through and on plans for the future, including the conference that we are holding tomorrow.

First, on military action, I believe that it is quite clear that allied operations have had a significant and beneficial effect. We have stopped the assault on Benghazi and helped to create conditions in which a number of towns have been liberated from Gaddafi’s onslaught. In towns such as Ajdabiya, Ras Lanuf and Bin Jawad, people are now free to return to their homes. The no-fly zone is now fully operational and effective. When it has been challenged, Gaddafi’s planes have been shot down. He can no longer terrorise the Libyan people from the air.

UK pilots have now made more than 120 sorties and flown for more than 250 hours. Over the weekend, RAF Tornados continued to conduct armed reconnaissance sorties, hitting a total of 22 tanks, armoured vehicles and artillery pieces around Ajdabiya and Misrata. This involved some extremely skilful and courageous work by British pilots seeking out and destroying tanks while doing everything possible to avoid civilian casualties. I am sure that everyone here will want to send their best thoughts and wishes to our brave pilots and all those in our armed services for the work they do.

I can also tell the House that during the early hours of this morning our Tornado pilots flew deep into the desert to strike against major ammunition bunkers at Sabha, which we believe were being used to resupply Gaddafi’s forces, including those terrorising people in Misrata. Initial reports suggest that the bunkers have been destroyed.

There remain, of course, real issues of concern. The situation of civilians in Misrata and Zintan is extremely grave, and the situation for civilians in other towns under the regime’s control is also deeply concerning, with widespread reports of human rights abuses. But we have moved quickly and decisively over the last week and we will stick to our task, as set out in the UN resolution and take all necessary measures to protect civilian life.

Secondly, on the strengthening and deepening of the alliance, I told the House last week that we believed NATO should take on the command and control of Libyan operations. This has now been agreed. NATO is already co-ordinating the arms embargo, the maritime operation and the no-fly zone. Now it will take on command and control of all military operations, including those to protect the civilian population. Canadian Lieutenant-General Charles Bouchard has been appointed as the NATO commander of the joint taskforce for the operation.

I have also made clear the crucial importance of the further active involvement of Arab nations. On Friday, the United Arab Emirates confirmed it would provide 12 fast jets, six F-16s and six Mirages, while on Saturday jets from the Qatari royal air force flew over Libyan airspace to patrol the no-fly zone for the first time. We look forward to welcoming the representatives of five Arab states, the Arab League and the African Union at our conference tomorrow.

Thirdly, it is critically important that humanitarian aid gets through to those who need it. It is absolutely clear that when the Gaddafi regime occupies a town such as Ajdabiya, the people suffer terribly. When the regime leaves a town, the way is open for proper humanitarian access. The important thing now is to make sure that it happens.

Our strategy is to help fund the humanitarian organisations that have been able to get in, to help the UN play its co-ordinating role and to provide assistance at Libya’s borders. We have funded the International Committee of the Red Cross, which is now present in Misrata, to provide support for up to 100,000 people for basic necessities and to treat 3,000 walking wounded. We flew 12,000 migrant workers trapped on the Tunisian border back to their countries and their families and we delivered 2,000 large tents and 38,000 blankets to the border. We will continue to give intense focus to humanitarian access in the coming days.

Fourthly, on plans for the future, in order to make the pressure on the Gaddafi regime as effective as possible, it is vital that we have the maximum political and diplomatic unity around the world. At the European Council, Europe came together over Libya. The Council conclusions endorsed UN Security Council resolution 1973, set out Europe’s

“determination to contribute to its implementation”

and recognised the lives saved by our action so far. This is an important step forward and it shows that Europe is now fully on board with this mission.

Today, alongside the British and French aircraft, there are Danish, Dutch and Spanish aircraft taking part in the action over Libya, flying from Italian bases, working with warships from the UK, France, Italy, Belgium, Netherlands and Poland. Romania will also provide a frigate and the Turks are planning to make naval assets available, too. Tomorrow, Britain will host a broad international conference in London to review progress and plan for the future. This will include representatives from more than 40 countries, including all the military contributors to the operation, and the United Nations Secretary-General will also be there.

I can tell the House this afternoon that France and the UK will issue a joint statement to the conference participants, setting out what is at stake as we gather to support a new beginning for Libya. A copy of the statement is in the Library.

Libya’s new beginning requires three things: first, to reaffirm our commitment to UN Security Council resolution 1973 and the broad alliance determined to implement it; secondly, to ensure the delivery of humanitarian aid, including to the newly liberated towns; and, thirdly, to help plan for the future of Libya after the conflict is over. It is for the people of Libya to choose how they are governed and who governs them, but they have a far better chance of doing that as we stand today than they did 10 days ago. Had we not acted, their future would already have been decided for them.

Let me now turn to the economic issues discussed at the Council. Britain had two goals at the summit: first, to support the euro area’s efforts to bring stability to the eurozone while fully protecting Britain’s sovereignty, and, secondly, following our Budget for growth last week, to win support for a similarly ambitious pro-growth, pro-market agenda for Europe as a whole. Let me take those two goals in turn.

I have always said that a successful eurozone is in Britain’s national interest. Given that 40% of our trade is with eurozone countries, we want the eurozone to deal with its problems and challenges, and we should therefore welcome the steps to which eurozone countries are committing themselves to taking with the euro plus pact. However, I have also said that Britain is not in the euro and will not be joining the euro, so it is right that we should not be involved in the euro area’s internal arrangements. That is why we are not intending to join the “pact” that euro area countries have agreed. It is also why I believe that we should not have any liability for bailing out the eurozone, but given the current emergency arrangements, established under article 122, we do have such a liability.

That decision was taken by the previous Government, and it is a decision to which my right hon. Friend the Chancellor specifically objected when it was taken by his predecessor after the election but before this Government took office. Frustratingly, we are stuck with it for the duration of the emergency mechanism, but that is why I ensured last December that the eurozone treaty change would carve Britain out of the eurozone bailout arrangements when the new permanent arrangements were introduced in 2013, and specifically secured agreement that, from that point onwards, article 122 would not be used for this purpose. That ends our current potential liability, and makes it clear that from 2013 Britain will not be dragged into bailing out the eurozone.

My second goal was growth. There was clear agreement at the Council about the link between action on deficits and action for growth. As the conclusions clearly state, fiscal consolidation

“should be frontloaded in Member States facing very large structural deficits or very high or rapidly increasing levels of public debt.”

We agree. It is worth noting that the UK still has one of the highest budget deficits in the EU—higher than those of Greece, Spain and Portugal—but because of the actions we have taken our interest rates are closer to those of Germany. It is also worth noting that the EU forecast is for the UK to grow in 2011 faster than France, Spain, Italy, the eurozone average and the EU average.

Just as we have a Budget for growth in the British economy, we need a plan for growth in the European economy. In advance of the Council, I organised a letter, which was signed by nine countries, making the case for specific actions to support growth: completing the single market and extending it to services, boosting trade, opening up and connecting European and global markets, reducing regulation, supporting innovation, and unleashing enterprise. That has had a real impact, not least because the argument is now being made not just by Britain but by Sweden, Denmark, the Netherlands, Finland, Poland, Latvia, Lithuania, and Estonia. As a result, the European Council endorsed much of our approach. We agreed that we should focus on concluding the Doha round and other free trade agreements in 2011. We also agreed that

“the overall regulatory burden should be reduced”,

and that micro-enterprises should be exempted from certain future regulations. That moratorium, which mirrors the moratorium on regulation for small businesses in last week’s Budget, is a positive endorsement of the approach we are taking in Britain.

Finally, the Council discussed how Europe could help Japan to recover from the devastation caused by the earthquake and the tsunami. I spoke to the Japanese Prime Minister on Friday. As the House knows, we have provided search and rescue teams, and stand ready to help in other ways. I know that everyone in the House will applaud the resilience and courage of the Japanese people during these tragic times. Looking to the future, we should show solidarity with the Japanese, and help both our economies by pushing forward with a free trade deal between Japan and the EU. At Britain’s instigation, the Council conclusions explicitly refer to the

“potential launch of negotiations for a free trade agreement .”

At this Council, Europe was faced with a choice: to rise to the challenges facing our continent, or to take the path of least resistance. On Libya, Europe chose to come together around the stand taken by Britain, France and the United States to respond to the call of the Arab League and save people on our continent’s doorstep from slaughter. On the economy, Europe chose a new direction, based on the principles set out by Britain and other member states, for stronger growth and prosperity.

For too long Europe has focused on issues of process and structure. Last week, Britain helped Europe to focus on policies and people: on creating prosperity for its citizens, and confronting a humanitarian crisis on its southern border.

I commend the statement to the House.

[Edward Miliband (Doncaster North) (Lab)]

I thank the Prime Minister for his statement.

I want to concentrate my questions on Libya, but let me first deal with the issues of economic policy and Japan. On economic policy, I welcome the Europe 2020 conclusions, the proposals on economic governance and the commitment—which I do not think the Prime Minister mentioned—to explore an international financial transactions tax. On the international financial transactions tax, may I ask the Prime Minister for clarity on the UK’s position and urge him to take forward discussions actively both with the United States and at the G20? On the 2020 strategy, we saw some welcome progress, as the Prime Minister said. The European Council also talked about the priority of “reducing unemployment”, which the Prime Minister did not mention in his report to the House. I wonder whether he shared recent UK experience with his colleagues and told them that the forecasts for UK unemployment have been revised up for each and every one of the next five years by up to 200,000—something the Chancellor failed to mention in his Budget speech. May I also ask whether the Prime Minister told the Council that he had recently unveiled a Budget for growth that downgraded growth this year, next year and the year after? Did he warn Council colleagues about the dangers of going too far and too fast?

On Japan, I share the sentiments the Prime Minister expressed about all possible help for reconstruction being given to the Government and people of Japan. The immediate priority for the UK Government will rightly be the situation of our citizens, but, looking to the future, will the Prime Minister update the House on the timetable for the report he has commissioned by Mike Weightman on any lessons that might need to be learned for British nuclear plants? It is important that this report is completed quickly, because we do not want to delay without reason the important progress we need to make on new nuclear power in our country.

Turning to Libya, may I start by welcoming the strong and unanimous position adopted by the European Council? I welcome the fact that the military operation to enforce the no-fly zone and protect civilians is showing signs of success. Now that the rebels are advancing, will the Prime Minister assure us that efforts are being made to remind them of their own humanitarian obligations to respect human rights and protect civilians at all times? Lord Ashdown raised a number of concerns this morning, and, for the record, may I ask the Prime Minister to repeat his reassurance of last week that the UN resolution is aimed at the protection of the Libyan people, not choosing the Libyan Government?

On the question of command and control arrangements for the military operation, I welcome the decision to move to the NATO command structure. Will the Prime Minister say a bit more about the governance arrangements that will now be in place for that, and in particular what the relationship will be between the North Atlantic Council and the narrower group, which I believe the French are convening, of those directly involved in military action? Given the importance of maintaining Arab support, I welcome the meeting being hosted tomorrow by the Foreign Secretary with a broad alliance of countries. What continuing role will this wider group play, and how often will it meet?

May I also emphasise to the Prime Minister another point: the importance of post-conflict planning? Whatever the eventual outcome in Libya, the peace is set to be as challenging as the conflict. Will he clarify where he believes responsibility for post-conflict planning lies? In particular, which institution, UN or otherwise, is in his view best placed to oversee this work, and does he see the case for a particular individual being asked to lead the international community’s efforts?

I think we both agree that the international community should continue with a strategy that includes non-military means. I therefore welcome the intention of the European Council to strengthen sanctions against the Gaddafi regime. The Council’s conclusions say that EU member states will be proposing the adoption of further sanctions measures at the UN Security Council. Will the Prime Minister say more about the scope and timing of those proposals? Finally on Libya, given that we have a long recess coming up, may I urge the Prime Minister to keep open the possibility of the House being recalled, should events require it?

Turning to events in the wider region, may I also welcome the words in the European Council conclusions about Syria, Yemen and Bahrain? It remains essential that we avoid the reality, or the impression, of double standards. May I therefore ask the Prime Minister what specific actions the Government are taking to attempt to prevent further repression in these countries?

Finally, may I once again pay tribute to the efforts of our armed forces? They are doing extraordinary work, protecting the people of Libya and enforcing the will of the United Nations. We owe them huge gratitude.

[The Prime Minister]

I will take the right hon. Gentleman’s comments in reverse order. First, I thank him for what he says about our armed forces. He is right to say that they have, as ever, performed with great courage, professionalism and dedication; they are extraordinarily capable and brave people and this country is lucky to have them. He asked about other countries and whether we are sending a clear message. I believe our message should be clear: the way to meet the aspirations of people in north Africa and in the Arab world is with reform and dialogue, not with repression. We have made that clear throughout and it is important.

The right hon. Gentleman asked that we keep the House up to date and I certainly intend to do that. I can let him know, because I have checked this, that in my first 10 months as Prime Minister I have made 15 statements in this House. I am told that that is more than John Major, Tony Blair, Gordon Brown or indeed Margaret Thatcher made, so I think I am doing my bit to keep the House informed.

[Edward Miliband]

Well done.

[The Prime Minister]

Thank you very much. I will certainly look at what arrangements need to be put in place for information to be regularly published and discussed in this House, because I am keen that that should happen.

The right hon. Gentleman asked about post-conflict planning and which body is in the lead. As I said in my statement, we want to make sure that the UN feels firmly in the driving seat; Baroness Amos does an excellent job and the UN should be gripping this emerging picture and working with those agencies that have managed to get through to places such as Misrata and Ajdabiya, and elsewhere. He asked about the wider group that will meet as well as NATO members. We are going to be forming a sort of contact group of friends of Libya for the future, but all the operations are now going to be run with command and control and co-ordination provided through the NATO machinery.

The right hon. Gentleman asked whether the emphasis is still on protecting people, not regime change. That is right—the UN Security Council resolution is all about putting in place the no-fly zone; protecting civilians, using all necessary measures; and, of course, humanitarian aid. He asked for assurances that we will make it clear to the rebels how they should behave in terms of civilian life. We are now in proper contact with the rebels; a Foreign Office official is having discussions with them. That is vital as we need to get to know and work with them, and make these points to them.

The right hon. Gentleman rightly refers to the fact that there was a discussion on nuclear energy at the European Council. We agreed to stress test all EU nuclear facilities, making sure that that is done by the appropriate bodies, carried out by independent regulators, properly peer-reviewed and tested. Europe must learn all the lessons from the Fukushima nuclear plant. I cannot give a timetable for the report we will be carrying out through the chief nuclear inspector, Dr Mike Weightman, but it will be done as fast as possible.

I now turn to Europe and the financial transactions tax, which was mentioned in the Council’s conclusions. We are very happy to look at this, but we believe it has to be done on a global basis. There is a great danger of a group of countries deciding to do this and just seeing financial transactions go completely out of their area, so it must be done on a global basis.

Finally, on Europe, the right hon. Gentleman made some points about unemployment. We did discuss unemployment. In Britain, as he knows, we have seen the claimant count come down and we have seen 300,000 more people in work. I would just make a point about the message coming clearly from Europe. Commission President Barroso has said:

“Without fiscal consolidation, there is no confidence, without confidence there are no investments, without investments there is no growth.”

That is a lesson the Labour party could well learn.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I just remind the House that, in keeping with the convention, Members who entered the Chamber after the Prime Minister started his statement should not expect to be called.

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

On the economic aspect of the Prime Minister’s statement, does he agree that the recent election in Germany shows that the German people have lost patience with the European Union, as have the British electorate?

[The Prime Minister]

I am not an expert in the politics of Baden Württemberg, but I suspect that this is partly about the euro and the effects of the euro. I think that there are also strong feelings about nuclear power in Germany. The point I would make is that whatever our views about the euro—I think that my hon. Friend and I agree that we should stay out of it—it is in Britain’s interests that the eurozone sorts itself out, because that is the destination for a lot of our exports. So we should support these countries in what they want to do to deal with their problems and challenges.

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

Does the Prime Minister accept that when he referred to the discussions that took place last May on the eurozone fund he gave a somewhat incomplete account of my conversation with the now Chancellor? We did indeed agree that we should do everything we could to keep Britain out of the main part of the rescue fund, but in relation to the smaller element to which the Prime Minister refers, what we discussed was not voting against, but abstention, recognising that Britain could have been outvoted—that is exactly the same thing that the Chancellor of the Exchequer referred to when dealing with Ireland. So when the Prime Minister next refers to this issue, perhaps he would give the whole account, not a partial account, of what happened.

[The Prime Minister]

Fortunately, I have had a full discussion with the Chancellor about that issue and he was absolutely clear that it was something to which Britain should not agree; nor should we. The problem is that we are stuck with this mechanism, which I have managed to get rid of once the new mechanism is introduced. That is the sort of action, frankly, that we have needed in Europe these past few years.

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

When considering any of the variety of proposals that may be on the table at tomorrow’s meeting, will the Prime Minister do all in his power to prevent the endorsement of any proposals that would enable Colonel Gaddafi to regenerate the apparatus of terror and oppression that has sustained him for too long?

[The Prime Minister]

I thank the right hon. and learned Gentleman for that question. This is a very important point. All sorts of people will quite rightly want to ensure that there will be a proper political process at some stage so that Libya can transition to democracy. It is important, however, that while such clear and flagrant breaches of the UN Security Council resolution are going on, we should do everything we can to protect people and, as a result, the Gaddafi regime will effectively be driven back.

[David Miliband (South Shields) (Lab)]

May I strongly associate myself with the Prime Minister’s words about the successes of the past week in justifying the UN Security Council resolution on Libya? The rebels’ progress more than reflects the widespread view across the House about the importance of the resolution. However, the Prime Minister did not say much about the European Union’s relations with the rest of the Arab world in future. One reason to support the resolution was the danger for the rest of the Arab world of Gaddafi’s potential slaughter. Will the Prime Minister say something about the potential for conditionality in EU engagement with the countries of the middle east and north Africa on trade, development and other matters as we go forward in support of democratic governance in north Africa?

[The Prime Minister]

The right hon. Gentleman makes an important point, which is that Europe’s engagement with north Africa and the middle east has not always been very successful in the past, particularly on the grounds that he describes. There has not been enough conditionality on the progress those countries need to make towards more open societies and the building blocks of democracy, getting rid of emergency laws and the rest of it. The European Council conclusions, like those from our emergency summit, talk about putting in place a new partnership and making a new offer to these countries with deeper economic integration, broader market access and greater co-operation and, in return for that, we should ask for more conditionality in the progress that they make. Money is not the problem; there has been plenty of money put into these areas by Europe. We need more of a focus on what we believe we should be getting out of it.

[Richard Ottaway (Croydon South) (Con)]

Will the Prime Minister use tomorrow’s summit to clarify the rules of engagement? He will be aware of the criticism of the attacks on the arms dumps as they have been considered to involve a fairly broad interpretation of the UN resolution. Does he agree that it is critical that the future of Libya is not cluttered up with acrimony among the political consensus that he has successfully built up?

[The Prime Minister]

My hon. Friend makes a good point, but I would disagree with anyone who says that destroying a Gaddafi arms dump is not in the terms of the resolution, and for the following reason. We can see very clearly what Gaddafi’s regime is doing in Misrata, in Zintan and in other places. He is using munitions to kill people—to murder his own citizens—so depriving him of weapons is not only in the letter of the resolution but in its spirit, too.

[Chris Bryant (Rhondda) (Lab)]

Further to the question asked by the former Chancellor, my right hon. Friend the Member for Edinburgh South West (Mr Darling), I am sure that there will have been an official note of the conversations between the former Chancellor and the present Chancellor. Will the Prime Minister publish that note so that we can decide for ourselves whether he or the former Chancellor is providing the more accurate report?

[The Prime Minister]

I will certainly look at the suggestion because I am absolutely clear about what the conversation was and that the current Chancellor did not support the action being taken by the previous Chancellor.

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

The Prime Minister rightly points out that the Budget last week went into some detail about the support that we were going to give to small and start-up businesses. Will he go into a little more detail about the work he did this weekend in the European Council on micro-businesses, which will clearly be important organisms for growth in employment in the years ahead, both in Europe and throughout the world?

[The Prime Minister]

My hon. Friend makes an important point. Businesses that are either starting up now or are yet to start up will provide a lot of the growth in jobs, investment and opportunity here and elsewhere in Europe. What was encouraging about this European Council was that the Commission itself, in response to the letter that we had produced with other countries, brought up its own proposals, one of which was a moratorium on certain regulations for all new businesses for a specific period. That does not go quite as far as what we have done in the UK, but to hear the Commission talk about deregulation, cutting the burden of regulation and taking regulations off new small businesses was, I thought, very good progress.

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

I welcome the references in today’s statement to the access to humanitarian help. Now that the rebels are advancing well, is it not time for coalition countries, particularly this country, to give us some idea when the Government will consider that the job is done? Also, will the Prime Minister please confirm that all possible diplomatic avenues are still open?

[The Prime Minister]

First, in terms of diplomatic avenues, it is welcome that there is now British diplomatic representation talking with the opposition in Benghazi—I think that is hugely welcome. In terms of when the job will be done, I think the answer is when the UN Security Council resolution has been secured. Let me take the right hon. Gentleman back to what the President of the United States said:

“Qaddafi must stop his troops from advancing on Benghazi, pull them back from Ajdabiya, Misrata and Zawiya, and establish water, electricity and gas supplies to all areas. Humanitarian assistance must be allowed to reach the people of Libya. Let me be clear, these terms are not negotiable”.

Of course, Gaddafi has been driven back from Benghazi and out of Ajdabiya, but he is still terrorising and killing people in Misrata and terrorising other towns, he has not allowed humanitarian access and he is in flagrant breach of the Security Council resolution. I think now is the time to press ahead—helping those civilians, making sure those lives are saved and giving the Libyan people the chance of a different future.

[Mr Douglas Carswell (Clacton) (Con)]

The Prime Minister has suggested that we are liable for the bail-out mechanism entirely thanks to the former Chancellor. In that case, will he be happy for the current Chancellor to respond to my freedom of information request and publish the advice that he received on this matter on assuming office to demonstrate that we are not liable for the bail-out billions because of any failure to grasp the small print in those first few halcyon days in office?

[The Prime Minister]

I can go into even more detail if my hon. Friend wants: article 122 was turned into qualified majority voting via the Nice treaty. My right hon. and learned Friend, Michael Howard, who is now in another place, said, as a Back Bencher, “You are making a terrible mistake here: this could be used for future bail-outs,” and the then Europe Minister, the right hon. Member for Neath (Mr Hain), said in reply:

“The use of QMV…does not undermine the no-bail-out rule set out in article 103.”—[Official Report, 4 July 2001; Vol. 371, c. 359.]

What is worrying is that the Nice treaty made the situation worse and the previous Government were warned about it but they did not pay any attention.

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

Is it the policy of the British Government to try to bring about a genuine ceasefire in Libya as apparently urged by Turkey? Is there not a danger that the manner in which allied operations are taking place means that we are getting near to regime change, which is certainly outside the United Nations Security Council resolution?

[The Prime Minister]

Of course, everyone would welcome a genuine ceasefire, but let us be frank—two ceasefires have been announced by Colonel Gaddafi, both of which were broken instantly by him, so I think we should have a heavy degree of scepticism about what this man says. I would not be at all surprised if, in advance of the conference tomorrow, he announced some all-encompassing ceasefire tonight, but we have to judge him by his actions and not his words. That is absolutely vital. I defend what the coalition is doing in terms of some quite robust ground attacks to protect civilian life. Frankly, if those things had not taken place—if we had not destroyed tanks and armoured personnel carriers—we would still see people under the lash of the Gaddafi regime in Ajdabiya and in many other towns along the Libyan coast. What we have done has really helped to implement part of the resolution, but there is still more implementation to be done.

[Mr James Arbuthnot (North East Hampshire) (Con)]

Does my right hon. Friend agree that Turkey is a key ally of the United Kingdom and a central part of NATO decision making? Is there a role for Turkey to play in the mediation process that will need to happen over the next few weeks and months?

[The Prime Minister]

My right hon. Friend makes a good point. Not only is Turkey coming to the conference tomorrow, but the Turkish Prime Minister, Prime Minister Erdogan, is coming here on Thursday for talks at No. 10. I have also visited Turkey to see him. It was one of the first visits that I made as Prime Minister. The Turks are incredibly important members of NATO, and I believe that they should also be members of the European Union. They should be intricately involved with the operations that are being undertaken in Libya. They may well also have role as a trusted interlocutor, but right now, what they want to do is get their ships involved and get humanitarian assistance involved as well. That is hugely welcome.

[Mr Denis MacShane (Rotherham) (Lab)]

I welcome the grip that the Prime Minister has on the situation, after a slightly unhappy start. When I close my eyes, I hear his predecessor but one, 10 years ago, talking about Kosovo and Sierra Leone in similar terms. On Europe, I welcome his metamorphosis into a pragmatic, fairly friendly European. Will he confirm that we will, if called upon, help our oldest ally, Portugal? When Mrs Thatcher brought the rebate back in 1984, agreed to a tripling of the EU budget, and when Labour Eurosceptics questioned her, she said, “We must help our old friend, Portugal.” Is the Prime Minister still a Thatcherite?

[The Prime Minister]

I am a great admirer and supporter of what Margaret Thatcher did for our country, and I am a great admirer of Portugal. When I talked to the Portuguese in advance of the UN Security Council resolution, they were strong supporters of that resolution and said that one of their reasons was that they wanted to be with their oldest ally. So they see the relationship in that way. On financial issues, we should not speculate about any other country’s financial situation or finances. As to what the right hon. Gentleman says about Europe, I have always believed that we should get stuck in in Europe to fight for the British interest, and that is what I do.

[Mr Roger Gale (North Thanet) (Con)]

My right hon. Friend has rightly highlighted the plight of civilians in Misrata. That concern is shared by the Libyan British Relations Council. Will my right hon. Friend ask his right hon. Friends the Foreign Secretary and the Defence Secretary to look at ways of getting humanitarian aid into Misrata by sea?

[The Prime Minister]

We are doing just that. There are a number of humanitarian agencies that are trying to get aid into the ports along the Libyan coast. As I said in my statement, we should be trying to give financial assistance to those that are successful, while helping to get the UN to co-ordinate. Obviously, Misrata is a very difficult picture. Fighting has been going on as I have been standing here. It is difficult to get access, but we should do everything we can to help it.

[Mr Dennis Skinner (Bolsover) (Lab)]

What steps is the Prime Minister taking, along with others, to avoid an inter-tribal civil war in Libya?

[The Prime Minister]

We believe that the Libyan people should be able to choose their own future. I do not believe that the only alternative to Colonel Gaddafi is some sort of tribal internecine warfare. Many people coming forward in Libya want to see a proper transition. Of course we need to know more about the interim transitional national council, but it is at least a good sign that its members want to be interim, transitional and national, rather than sectarian or tribal. We should be a little more optimistic than the hon. Gentleman sounds in his question.

[Nicholas Soames (Mid Sussex) (Con)]

May I congratulate the Prime Minister on the initiative of the letter that he signed with nine other countries in the European Union, in particular about the importance of pushing forward with a programme of deregulation in the EU? Does the Prime Minister agree that it is essential that someone takes ownership of this programme, and will he do it?

[The Prime Minister]

I certainly will attempt to do that, but as my hon. Friend knows, one of the issues is that the only organisation that has the right of initiative in the European Union is the Commission, so the key is to work with the Commission and to persuade the Commission that what is needed right now in Europe is deregulation, market reforms and completing the single market. I think President Barroso sees the world like that. There is no fiscal stimulus left to European countries; they have all run out of money. There is not much monetary stimulus left, with interest rates as low as they are. What we need is the stimulus that comes from making it easier to do business, and I think President Barroso gets that.

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

The Prime Minister referred to the need for maximum political and diplomatic unity. In that context, will he clarify the position as regards attendance at the conference tomorrow? Will all the members of the UN Security Council be there? What is the position of the British Government with regard to the remarks being made from Russia?

[The Prime Minister]

More than 40 Foreign Ministers will be attending tomorrow’s meeting, and it is a meeting of Foreign Ministers, rather than Government Heads and Prime Ministers. In terms of who is coming, it is those countries that are active in the coalition, so there will be strong European representation, but we have also secured, as I said in my statement, strong Arab representation. Countries such as Iraq, Morocco, the United Arab Emirates and Qatar will be there and the Arab League will be represented. I have also heard that the African Union Secretary-General will be there, which is hugely to be welcomed. Not every permanent member of the Security Council will be represented, but crucially Ban Ki-moon will be there, so I think that it is a good opportunity to bring the alliance together to show its strength and depth and to work out the next moves forward, both militarily and politically and diplomatically. It is about showing that the world is still united around UN Security Council resolution 1973 and that there is a group of countries that are determined to implement it in the interests of the world.

[Martin Horwood (Cheltenham) (LD)]

I strongly welcome the London summit, particularly the inclusion of Turkey, which is very important, but on the day that the Ashdown report has emphasised the importance of anticipation in humanitarian response, can I ask that, even though the outcome is still very uncertain, both the summit and the European Union discuss not only the current situation in Libya, but the future humanitarian response, reconstruction and recovery scenarios?

[The Prime Minister]

I thank the hon. Gentleman for his question, and indeed Lord Ashdown for his very good and timely report. One of the things that we have been looking at for some time is how to get reconstruction and humanitarian aid into countries faster, which is why we have been looking at trying to have a combined military and development approach in some circumstances. In terms of who does the co-ordination, it seems to me that we should be trying to persuade the UN to take a leading role in co-ordinating, but there are some agencies, such as the International Red Cross and Médecins Sans Frontières, that are already getting into the ports, and we should be helping those that have got there.

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

I noted what the Prime Minister said about completing the single market and including services. For the benefit of the House, will he clarify whether it is his understanding that, following his NHS legislation, NHS services would become subject to single market competition rules in Europe?

[The Prime Minister]

I think that the hon. Lady will find that it was in 2004 that the previous Government extended EU competition legislation to cover all aspects in the UK, and that has now been progressively extended to health as well. That is my understanding, but if I have got it wrong in any way, I will certainly write to her.

[Margot James (Stourbridge) (Con)]

I applaud the Prime Minister’s progress on deregulation within the EU, but may I draw his attention to the European Chemicals Agency’s rewriting of the guidelines on the registration, evaluation and authorisation of chemicals, which will add considerable cost to chemical intermediates manufacturers in my constituency? I urge him to support the efforts of the Department for Business, Innovation and Skills in pushing back on those costly proposals.

[The Prime Minister]

I will certainly look into the case my hon. Friend mentions. I have received similar representations from companies in my constituency that are concerned, because they had just about worked out how to comply with one set of rules before seeing another set coming down the track, so I will make sure that BIS is doing as she says.

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

Will the Prime Minister confirm whether those armed forces personnel who are either carrying out or supporting operations will now be exempted from redundancy notices?

[The Prime Minister]

What we said very clearly with regard to Afghanistan is that anyone who is about to go on operations, is on operations or has recently returned from operations would not be subject to compulsory redundancy, and I believe that that should apply in all circumstances where people are effectively involved in conflict for their country.

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

My right hon. Friend has rightly been commended for the way he has averted a humanitarian catastrophe, but will he say a little more about what will mark the end of this conflict? Ideally we would like to see Gaddafi step down, but is it possible that he could comply with the terms of the no-fly zone and the UN Security Council resolution while remaining in office and keeping the country divided, rather like a new Cyprus?

[The Prime Minister]

My hon. Friend asks the extremely difficult and very good question, because it is unclear what will happen next. People did not predict the rush to Benghazi, and nor did they predict the rush back from Benghazi. They did not predict that the rebels would be so effective at knocking the Gaddafi regime out of all those coastal towns, including the key oil installations, so it is difficult to have an absolutely clear picture of what will happen next. I think that what we should hold true to is the very strong UN Security Council resolution that is about a no-fly zone, about protecting civilians and about getting humanitarian aid in. To comply with that, Gaddafi must comply with all the things in the resolution and with what the President of the United States set out in his statement. I see no sign of that happening and, as that is not happening, we are right to go on enforcing the resolution.

[Jason McCartney (Colne Valley) (Con)]

I have a dream: I have a dream that one day our country will not be liable for bailing out the eurozone. Will the Prime Minister confirm whether we have contingency funds set aside for any bail-out that goes ahead?

[The Prime Minister]

I share my hon. Friend’s dream, but I have not had to stand on his shoulders, nor he on mine, to realise it; we both have our feet firmly planted on the ground. On that ground, we will be out of all the bail-out arrangements by 2013. That was negotiated by us in Europe, and that is a worthwhile thing that we have achieved, but we are stuck with article 122 in the meantime.

[Mark Reckless (Rochester and Strood) (Con)]

It is good that we will not be liable for bail-outs after 2013, but will the Prime Minister build on his diplomatic successes by using the fact that we have a veto over the permanent arrangements as a lever to extract us earlier—and before we are on the hook for Portugal and Spain?

[The Prime Minister]

Let me just say again that I do not think we should speculate on other countries’ financial situations; we certainly would not like it if they speculated on ours. The point is that, in return for agreeing to the treaty change that was put forward, we had an opportunity to win some benefits for the UK. We got ourselves out of all future bail-out mechanisms, and we got an assurance that article 122 would not be used again once those operations were in place. I think that that was the right approach for the UK. It was doable, it was negotiable and it was tough work, but we got it, and to say that there was some other option on the table is, if I may say so, not realistic.

[Conor Burns (Bournemouth West) (Con)]

Having prevented Gaddafi from doing to his citizens in Benghazi with guns what he did to our citizens in Northern Ireland with cash, has the Prime Minister had time to reflect on the fact that, in publishing the legal advice, in being clear and honest about the objective and in going to the United Nations, he has done a great deal to restore the faith in his office that was so profoundly damaged after Iraq?

[The Prime Minister]

I am grateful for what my hon. Friend says. It is right to have debates in the House and to do so on the basis of a proper Cabinet decision. Let me just say that we have published not the legal advice, but a note based on the legal advice, and we will stick to the convention that the Government are entitled to receive legal advice confidentially, and then to act in the terms of that legal advice. When we are being asked all sorts of questions about what is legal and illegal under a UN Security Council resolution, I think that that is the right approach.

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

Does my right hon. Friend agree that the biggest economic boost to Europe would be a successful conclusion of the Doha trade round? Was he not entirely right to keep the Council focused on that matter, and will he update us on progress?

[The Prime Minister]

The issue is about trade both internally within Europe and externally between Europe and other countries. On the first one, it is about completing the single market, and the point to remember is that the single market does not apply to four-fifths of our economy if it does not apply to services properly. On Doha, it is still extremely hard going, but if the Chinese and the Americans can agree to enlarge what is on offer, there is still a prospect of making progress this year. We really need those two countries, however, to focus on the fact that there is a benefit to both of them if they show the political bravery to re-open things and try to make the deal larger.

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

Will the Prime Minister assure the House that every effort is being made to protect the safety of UK citizens, including a number of Mancunian Libyans, still trapped in Libya?

[The Prime Minister]

I certainly give that assurance. We are still updating daily the number of British citizens in Libya and the numbers who want to leave. There has obviously been an increase, because so many journalists have gone to the country, but we do what we can with partners to try to get those people out who want to get out. Given that the Turks are now helping us with our diplomatic representation in Tripoli, there are avenues to do that, but if the hon. Gentleman has specific cases in mind, I refer him to the Foreign Secretary and his team, whom I know will do everything that they can to help.

[John Howell (Henley) (Con)]

May I return my right hon. Friend to the communiqué on fiscal consolidation? I wonder whether he would say what message it now gives to those who still oppose tackling deficits on an urgent basis.

[The Prime Minister]

I think the simplest way of putting it is this: if we cut the deficit in half in four years, as Labour proposed, that would mean that in four years’ time our deficit would be about the same size as Portugal’s today. That really brings it home to us that the problem in Britain is that much deeper because the deficit we inherited was that much bigger. That means, as the European Commission and the European Union said:

“Consolidation should be frontloaded in Member States facing very large structural deficits”.

I think they mean us.

[Mr William Cash (Stone) (Con)]

The Prime Minister knows that in the past he has promised the repatriation of laws relating to small businesses and employment and social legislation. He also knows that the Deputy Prime Minister has ruled it out. In the context of these promises from the European Council, which may turn out to be a triumph of hope over experience, as far as we can tell from the past, and with the Commission merely offering a report, would my right hon. Friend be good enough to reaffirm his policy of repatriation so that we can re-grow the British economy and pass the legislation overriding European business laws where necessary for our own national interest and growth?

[The Prime Minister]

The point I would make to my hon. Friend is that we had to come together in a coalition Government with a coalition agreement. If we are absolutely honest with ourselves, Europe is not an area where the Liberal Democrats and the Conservatives always agree, if I can put it that way. However, in the coalition agreement we came to a good agreement that we would not pass further powers from Westminster to Brussels, and that we would introduce the referendum lock so that any further transfer would be subject to referendum; and we also have the agreement that Britain is not intending to join the euro. In spite of the fact that we do not always agree on these European issues—and we are grown-up enough to make that point—I think it is a very strong coalition agreement, and one that all colleagues can support.

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

When my right hon. Friend spoke to the Japanese Prime Minister on Friday, did he receive assurances from him that everything was being done to reopen Japanese factories that provide much-needed components to the British car industry?

[The Prime Minister]

I recognise the point that my hon. Friend makes, given his interest in the magnificent Honda plant in Swindon, which I had the great good fortune to visit. Indeed, although I am not allowed to drive it any more, I am the proud owner of a Honda made in Swindon. I know of the problem. I did not discuss it with the Japanese Prime Minister because we were talking about the absolutely urgent requirements for help for the Japanese now, but it will be key for the Japanese economy, and indeed for ours, to make sure that those trade links are opened up again as soon as possible.

[Charlie Elphicke (Dover) (Con)]

Rather than bail-outs, will the Prime Minister consider putting it to the European Council that there is a better alternative, which is to get spending under control and get a really great Finance Minister like we have here?

[The Prime Minister]

My hon. Friend is right. Everyone in Europe has the same challenge: how do we get on top of fiscal deficits and what are the decisions that we need to make in terms of spending reductions and other measures? Everyone in Europe is engaged in this, apart from the Labour party.

[Duncan Hames (Chippenham) (LD)]

It is not just tanks and planes that Gaddafi uses against his own people but the poisonous propaganda on Libyan state TV carried on NileSat, which threatens to undermine hopes for future peace in that country. What can be done to ensure that all Libyans, especially those in Tripoli, can access independent media on which to base their understanding of current events?

[The Prime Minister]

The hon. Gentleman makes a vitally important point. We want to do everything we can to try to make sure that people can access independent media, which have had a huge impact on these events. But also, frankly, we should take a tougher approach to Libyan state television, which, as far as I can see, is actually working on behalf of the regime that is terrorising and brutalising its own civilians. The hon. Gentleman makes a very good point that we should pursue urgently.

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

My right hon. Friend is aware of the relatively peaceful progress being made in the Kingdom of Morocco, in sharp contrast to the situation in much of the rest of region. Will he ensure that we give every encouragement to Morocco following the very positive speech by King Mohammed VI which outlined constitutional and judicial reform in his country?

[The Prime Minister]

My hon. Friend makes a good point. The last European Council—there have been quite a lot of them—which was specifically about north Africa, the middle east and the events in Libya, mentioned the excellent speech by the king of Morocco specifically. At a time when many countries in the area are trying to reform, we should encourage those who are engaging in dialogue and reform, and not treat all these countries in the same way.

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

The euro-plus pact, which was endorsed by the European Council and which I am pleased the UK has not joined, referred to a recently proposed directive on corporation tax, which would apply to the UK if it was adopted. Would the Prime Minister be prepared to veto that directive if it interfered with our tax sovereignty?

[The Prime Minister]

It is important that we maintain our tax sovereignty. That is one reason why I think it is right to stay out of the euro-plus pact. One of the terms of the euro-plus pact is to look at developing a common corporate tax base. If eurozone countries want to equalise their tax rates, that is a matter for them, but it is a folly in which I do not think we should engage.

[Bob Blackman (Harrow East) (Con)]

I congratulate the Prime Minister on extricating us from the eurozone bail-out mechanism by 2013. Given that Portugal, Spain and Greece are in financial trouble, most people will be concerned about what contingent liabilities we will be exposed to between now and then. What has my right hon. Friend done to assess those potential liabilities?

[The Prime Minister]

We have assessed the liabilities. Debates have been held in this House and there is a great deal of information that I can make available to my hon. Friend. The matter is complicated because as well as the article 122 mechanism, which contains a limited amount of headroom, some of which has already been used up in the case of Ireland, another facility has been put in place that does not include the UK, which has considerably more headroom. Above and beyond that, we will have the future mechanism post-2013. If he likes, I can give him the full details on what all those things are and on the relatively limited liability that the UK has under article 122. As I have said, it is a liability that we wish we did not have.

[Mr Peter Bone (Wellingborough) (Con)]

Over the weekend, my wife was saying what a wonderful job the Prime Minister was doing over the EU bail-outs, and that he was turning into a Mrs Thatcher. She wondered if he could use his immense charm and ability to persuade the euro countries not to ask us to participate in any bail-out? Will the Prime Minister satisfy Mrs Bone?

[The Prime Minister]

I am fast coming to the view that Mrs Bone is quite literally insatiable. I will—[Laughter.] I will certainly do my best, but there are some things of which it is quite difficult to persuade one’s European colleagues. I take to heart the compliments that Mrs Bone paid in the early part of my hon. Friend’s question.

[Mr Speaker]

I feel rather left out not to have met Mrs Bone.

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

Will the Prime Minister confirm that France and the other allied countries will take part in military action only through the NATO command structure, and will not prosecute separate campaigns outside that structure?

[The Prime Minister]

That is the arrangement that has been put in place. Obviously, it is both NATO’s command and control structure and its machinery that everyone has agreed to use. The point that the French have made—I think that this is important—is that we should ensure that the world knows that this is not just a NATO operation, but that Arab countries are involved and that there is a broader coalition and alliance. Given that we have the NATO machinery, it makes sense to use it. I think that one should make those practical arguments, rather than getting too caught up in the theology.

[Neil Carmichael (Stroud) (Con)]

I welcome the Prime Minister’s emphasis on deregulation and on strengthening the Single European Act. Does he agree that we should apply that logic to the whole of Europe to ensure that our businesses can operate untrammelled across Europe and that investment is able to flourish?

[The Prime Minister]

I do agree. As I said, completing the single market can sound rather technical and dull, but when one considers how much our economies are dominated by services—80% on average—and the fact that there are still so many abuses of the single market by services in so many countries, it is clear that there is a real opportunity to enlarge the whole EU economy if we take these steps.

[Mr Speaker]

I must thank the Prime Minister and colleagues for their succinctness. Everybody got in, and we did not even take up the hour that I had it in mind to allocate.

Post-16 Education Funding

Monday 28th March 2011 Commons Chamber

16:49

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

With permission, Mr Speaker, I should like to a make a statement on education after the age of 16.

Today’s statement builds on the work of my colleagues such as the right hon. Member for Yeovil (Mr Laws), the original architect of the pupil premium; the Minister of State, the hon. Member for Brent Central (Sarah Teather), who has secured additional funding for reform of early years and special needs provision; my right hon. Friend the Deputy Prime Minister, who has been leading the coalition’s radical programme of work on social mobility; and my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes), whose work as advocate for access to education has been driven by the ethical imperative of making opportunity more equal.

All of us know that an increasingly competitive world economic environment means that our children need to be better educated than ever. Sadly, however, we have been falling behind other nations in our educational performance. The OECD has reported that despite sharply rising school spending over the past 10 years, England has slipped down the international rankings from fourth to 16th for science, from seventh to 25th for literacy and from eighth to 28th for mathematics. Last month, in a new report, the OECD revealed that we have one of the most unequal education systems in the developed world. We have a system of education spending that is fundamentally inefficient, and we have an insufficient supply of high-quality vocational education.

The OECD’s challenge is underlined by the conclusions of Professor Alison Wolf’s report on vocational education. Professor Wolf has revealed that nearly half of school leavers never secure five decent GCSEs including English and maths, and that many of the qualifications that they currently secure are not respected by employers and colleges. The case for reform that she makes is unanswerable. We cannot carry on with a vocational education system that is broken, and we are determined to ensure that we have a technical education system that is among the world’s best.

Action has already been taken by my hon. Friend the Minister for Further Education, Skills and Lifelong Learning. The number of new apprentices taken on in the last quarter was 54,000, 8% up on last year, and I expect that number to rise further in the months ahead. More young people are being trained for work, and the number of young people between the ages of 16 and 18 not in education, employment or training actually fell by 15,000 in the last quarter of last year. However, we know that more needs to be done. In particular, action needs to be taken to reduce bureaucracy. That is why my hon. Friend will be working with me in the months ahead to make it easier for small and medium-sized enterprises to hire apprentices, so that we can ensure that the next generation enjoys opportunities that were denied the last.

Critically, we know that the biggest determinant of whether students can stay on is their attainment at the age of 16, and specifically whether they secure good GCSEs in subjects that universities and employers value. So to raise attainment, especially among poorer students, we have radically extended our academies programme, introduced a new, more aspirational measure of performance, the English baccalaureate, and are investing an additional £2.5 billion in the pupil premium for students who are in school to the age of 16. Today I can confirm that, building on the pupil premium, we will introduce additional funding for the education of students over the age of 16 who stay on at school and college.

We are already increasing funding for post-16 education next year to more than £7.5 billion, which is equivalent to more than 1.5 million places in schools, colleges and training. Within that £7.5 billion, £770 million is being spent on supporting the education of disadvantaged 16 to 18-year-olds. That is £150 million more than would previously have been available to schools and colleges specifically for the education of the most disadvantaged 16 to 19-year-olds. Nearly 550,000 young people will benefit from that student premium.

As we plan for more students to stay on, so we must reform how we fund the institutions that educate young people over the age of 16. I will therefore consult on a fairer funding formula for all schools and colleges in the sector. Already, thanks to the measures taken by the coalition Government, there will be more places in schools and colleges for students, particularly those who want a high-quality technical and vocational education. Because of the steps that we have taken to reduce waste and remove inefficiencies, my right hon. Friend the Chancellor of the Exchequer released in the Budget another £125 million to build new schools and colleges in England. We will double the number of university technical colleges planned from 12 to 24, and we will work with leading figures in industry and commerce to create a new generation of 16-to-19 technical academies that will support the growth industries of the future.

All schools should have the ability to benefit from a closer engagement with business, so I have today asked Bob Wigley, the chair of the Education and Employers Taskforce, to bring forward proposals that will allow every school to develop a link with local businesses through engagement with volunteer governors.

However, we must also ensure that no young person is prevented from staying in education or training for financial reasons. The education maintenance allowance was used by the previous Government to provide an incentive for young people to stay on, and it led to a small increase in overall participation, but as a report commissioned by the previous Government pointed out, there are real questions as to whether it is socially just to pay 45% of students a cash incentive to stay in learning when we could concentrate our resources on removing the barriers to learning faced by the poorest.

The social justice case for reform has already been made—by the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson), when he was Education Secretary in the previous Labour Government. He said in 2007 that the EMA was an incentive that

“we will not be using”

in future. Instead, he argued, a Labour Government would need to “divert that” EMA “money into other areas”.

“What we will need to do”,

he argued on behalf of the Blair Government, is

“offer…assistance to youngsters…from poorer backgrounds”,

which is precisely what I propose to do.

Today, I can announce the shape of the new, more targeted, student support scheme that we pledged to introduce last autumn. We have consulted extensively to ensure that we support those most in need, and I am particularly grateful to my right hon. Friend the Member for Bermondsey and Old Southwark for the work that he has done to help to secure a progressive solution.

The Government have already ensured that every household in which the family are not on the higher rate of tax, and where children stay on in school after the age of 16, will receive increased child benefit, and today I propose to increase the amount of support that we give to the most vulnerable. Twelve thousand students, those in care, care leavers and those receiving income support, including the severely disabled, should in future all receive an annual bursary of £1,200 if they stay on in education—more every year than they ever received under EMA.

I also propose that those most in need who are currently in receipt of EMA be protected. All young people who began courses in 2009-10 and who were told that they should receive EMA will still receive their weekly payments. Young people who started courses in the 2010-11 academic year and received the maximum weekly payment of £30 should now receive weekly payments of at least £20 until the end of the next academic year.

In addition, those students will be eligible for support from an entirely new post-16 bursary scheme. Our scheme will help to ensure that the costs of travel, food and equipment for poorer students are properly met, so that no one is prevented from participating through poverty. One hundred and eighty million pounds will be available for that bursary fund, which is enough to ensure that every child eligible for free school meals who chooses to stay on could be paid £800 per year—more than many receive under the current EMA arrangements.

Schools and colleges will have the freedom to decide on the allocation of the bursary. They are best placed to know the specific needs of their students, and we will give professionals full flexibility over allocating support. We will now consult on the implementation of the new scheme, so that allocations can be made for the new arrangements to come into effect from this September.

In these extremely difficult economic times, the coalition Government are prioritising the reform and investment we need across the education system. We are providing more investment in the early years to tackle entrenched poverty; tougher action to turn around underperforming schools; more investment in improving the quality of teaching, especially for the most disadvantaged; higher standards for all children at every stage, to get more going on to college and into fulfilling jobs; more academies to extend opportunity across the country; sharper accountability for how every penny is spent and how every pupil is taught; and more autonomy for all professionals, so that we can compete with the best.

We must ensure that we at last have a world-class education system in the decade ahead, and I commend this statement to the House.

[Andy Burnham (Leigh) (Lab)]

On Saturday, thousands of young people came out on to the streets to speak out against the unfair decisions of this Secretary of State. On the “Today” programme, he was dismissive of their actions:

“Evan Davis: Will the march, however big it is, change your mind about any aspect of this cuts agenda? Michael Gove: No.”

Given that so many people no longer have any faith in a word he says, perhaps it is entirely to be expected that he is here, just 48 hours later, announcing a humiliating climbdown. I do not think that we can dignify today’s announcement with the word U-turn. He has taken a successful policy that improved participation, attendance and achievement in post-16 education, and turned it into a total shambles.

I will remind the House of the background. Before the election, both the Secretary of State and the Prime Minister made personal promises to young people that the EMA would stay. Even after the election, the schools Minister, the hon. Member for Bognor Regis and Littlehampton (Mr Gibb), pledged to keep it. Then, out of nowhere, the Secretary of State cut it by 90%, and today, under pressure, he tries to put a positive gloss on a 60% cut. Whatever he says, that is what it is—a successful scheme praised by the Institute for Fiscal Studies and leading economists cut by two thirds. Young people have seen through this and will not be taken in by this Secretary of State.

The truth is that with his confused decision making, the Secretary of State has already thrown into chaos thousands of young lives. Even today, many will be none the wiser about their futures. I will take three issues. First, on the money, I have a simple question: where is it coming from? How much is coming from elsewhere in the education budget? Will this announcement not cause chaos elsewhere? Is it true that he is cutting the careers service even further to pay for it—a service already in meltdown thanks to the complete failure of Ministers to manage the transition to a new service? If new money is being provided by the Treasury, how much and why was it not announced in last week’s Budget?

Secondly, on the numbers who will benefit, the Secretary of State claims that the poorest 12,000 students will receive more than under the current scheme. What he did not say is that it amounts to 77p a week more. What has he got to say to the other 588,000 young people who stand to lose over £1,000 a year and to whom he gave a personal promise that they would keep this support? On the Opposition day debate, he stood at that Dispatch Box and promised that his new scheme would help with travel costs and equipment, and provide help for young parents, carers, those leaving care and young people with learning disabilities. Can he today assure the House that all of those promises are met by this announcement? What about the estimated 300,000 first-year students in the middle of a two-year course? He knows that a legal opinion obtained by the Labour party showed that these students had a strong case against the Secretary of State. Is it not the case that today’s partial climbdown was only prompted by the threat of legal action and the panic realisation that he was at risk of yet another reverse in the courts?

Thirdly, on how this scheme will work, we welcome the Secretary of State’s climbdown on keeping a national automatic payment system for about 2% of current recipients. Is it not the case, however, that under his proposed scheme more than half a million young people will no longer have any guarantee of the level of support they can expect? Does not that lack of clarity in this new scheme run the same risk of thousands of young people walking away from education altogether? The fact is that his proposals fail to build on the strengths of the current system. Is it not the case that college principals and senior staff will be spending a huge amount of their time administering this fund and will be placed in the invidious position of having to make impossible decisions between equally deserving claims for support? Will there be any national criteria for eligibility and, if not, are we looking at an unfair postcode lottery?

Will the new scheme replicate the weekly conditional payments that have helped to boost attainment and stay-on rates? Five months ago the Secretary of State made a decision that dropped a bombshell on young people in this country, and we are told today that there will now be a further period of consultation—more consultation! Young people are facing a difficult enough future, but still they do not know what financial support they will get. We are five months away from the start of the academic year, yet people working in education do not have the precise details.

This is yet another shambles from a Secretary of State who lurches from one disaster to another: Building Schools for the Future, school sport partnerships, Bookstart and now EMA. The pattern is always the same—a snap decision, no consultation, no evidence to support it and then a grass-roots backlash as his policy unravels before our eyes. It is becoming ever clearer that this is a Secretary of State out of his depth—who has not worked out the difference between being a journalist and being a Minister, and whose shortcomings have been cruelly exposed in office. His transformation is indeed a remarkable one—from the Tory golden boy to the coalition Mr Bean.

But the danger with this Secretary of State is that his incompetence is having a direct effect on the hopes and dreams of thousands of young people. Even after today’s announcement, with universities lining up to charge the full £9,000 in fees and youth unemployment at record levels, thousands of young people will still have to downgrade their ambitions, leave their studies and give up hope of a university education. Is that not a damning indictment of any Secretary of State for Education?

[Michael Gove]

I am very grateful to the right hon. Gentleman for those questions. I am grateful for his reference to people being out of their depth—I will of course acknowledge his expertise in this area. I am also grateful to him on behalf of my right hon. Friend the Secretary of State for Business, Innovation and Skills for once more recycling the Mr Bean joke—the copyright on that joke will ensure that the right hon. Gentleman enjoys a successful and happy retirement in years ahead.

The first question that the right hon. Gentleman asked was: where is the money coming from? The answer is that the money for all public spending comes from the taxpayer. It was on his watch that the taxpayer got a spectacularly bad deal from a Government who spent every penny and left this coalition Government with a difficult economic inheritance. He asked whether the money would be allocated by discretionary means. I pointed out in my statement that it absolutely will. He argued that college principals would face an invidious decision, but he must know that it was the Association of Colleges that argued that the new fund should be put in place on discretionary principles. Perhaps he should consult college principals before claiming to speak on their behalf.

The right hon. Gentleman accused the coalition at one point of engaging in no consultation, and of having too much at another. There was no consistency at all in the questions that he asked. There has been a certain consistency in his position in one area, however, and that is his consistent refusal to state what his alternative would be. The truth is that Labour does not have a policy on this issue or any other education issue. We know what the right hon. Member for Kingston upon Hull West and Hessle thought: he said that we should divert money from the EMA to the poorest. We know what the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) thought: that we should divert money from child benefit to pay for EMA. However, we do not know what the right hon. Member for Leigh (Andy Burnham) thinks, beyond believing that students should have money to go out for drinks with friends.

We do not know how the right hon. Gentleman would pay for his alternative to our proposal, because he has opposed every saving that we have made. We do not know what he thinks people should be studying when they are not going out, because he has opposed every reform to raise standards. He has no policies on education other than blanket opposition. No wonder he did not join the march for an alternative on Saturday—he does not have one.

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

I welcome the statement and the funding—which is greater than was originally expected—going into the new bursary scheme. I also welcome the focus on the poorest, to whom it is appropriate to ensure that that funding goes. Can the Secretary of State tell the House on what basis the money will be allocated? Will it be based on free school meals? Indeed, is that part of the consultation? Can he also confirm again that colleges will have total freedom in how they spend the money, so that they can provide directly for transport, for instance?

[Michael Gove]

The Chairman of the Select Committee on Education asks two intimately related and very good questions. On the first, I can confirm that we intend as closely as possible to mirror funding for the replacement scheme and existing funding, which was given to colleges on the basis of EMA entitlement. However, as he rightly points out, in the consultation, which will relate to the implementation of the scheme, we will take on board the points made by college principals and others, in order to ensure the fairest possible distribution of funding. Unlike with the EMA, college principals will have explicit flexibility under our scheme to be able to provide for transport, among other needs.

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

Any change from the Secretary of State’s former proposals is welcome, and we are certainly in favour of those in the greatest need getting the greatest amount of help. I recently visited Kirklees college in Huddersfield and found that what was being taken away from most of the young people there was the ability to get to college. The EMA was being spent on transport and food, and I hope that the right hon. Gentleman will join me in dispelling the myth that people were using it as spending money for drinking and parties.

[Michael Gove]

We want to ensure that those who need help to pursue their learning have that help, and that is why the money will be in the hands of principals. That arrangement will be more flexible, and the money will be targeted precisely on the need for food, transport and equipment. By ensuring that fewer people receive it, we can also ensure that those in need receive more.

[Andrew Stephenson (Pendle) (Con)]

I welcome the £194 million of transitional support for those who are currently on EMA. I also welcome the fact that the more targeted support will be delivered through schools and colleges. When I was last speaking to a group of students at Nelson and Colne college, many of them said that it was far better to have discretionary support provided by the college for transport and for course-related costs, rather than a cash payment. Does the Secretary of State agree with them?

[Michael Gove]

I am grateful to my hon. Friend for his question. I know that Nelson and Colne college has particular issues relating to transport. The new, flexible fund will enable us to ensure that those learners, particularly those most in need and who need the most help with transport, will receive timely support that will enable them to carry on learning at that highly successful institution.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

It is not much of a claim for the Secretary of State to say that the scheme he is now offering is more generous than abolition. He has caused huge confusion in the minds of young people in my constituency. In his statement, he said: “Our scheme will help to ensure that the costs of travel, food and equipment for poorer students are properly met, so that no one is prevented from participating through poverty.” How is he defining “poverty” in those specific circumstances?

[Michael Gove]

As I explained in my statement, enough money is available in the fund to ensure that every student who is eligible for free school meals could receive £800, which is more than they would receive at the moment. Of course there is a lively debate about how we should define “poverty”, but the decision by both parties on the Government Benches to target help on those eligible for free school meals seems to be a very good metric, as a starting point.

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

I thank the Secretary of State not only for his statement and for the additional financial support, but for a new scheme that seems to be a strong, grown-up successor to the education maintenance allowance. Does he agree that the evidence is clear that the wider the participation in further education is, the wider the participation in higher education will be? The new scheme will mean that no youngster from a poor family should be precluded from going to college for want of reasonable travel costs, all of which can be met under the scheme.

[Michael Gove]

Absolutely. I want to take this opportunity to underline my gratitude to my right hon. Friend for the painstaking way in which he has consulted students across the country, and for the thoughtful way in which he has put forward his proposals to ensure that our aim for a discretionary fund targeted on the very poorest can be implemented effectively. He is absolutely right to say that if we encourage more students to take part in further education, we will be able to achieve our joint aim of ensuring that more students, particularly from the poorest backgrounds, go on to college and university.

[Ann Coffey (Stockport) (Lab)]

I am very pleased that students who are in receipt of EMA will continue to get some financial support for the continuation of their course, but will the Secretary of State tell me what plans he has to monitor the new scheme to ensure that young people from lower-income families are not discouraged from entering further education?

[Michael Gove]

The hon. Lady makes a very constructive point. We are going to consult on implementation. In the process of designing the new scheme, we have worked with the Association of Colleges, the Sutton Trust and others. I will be looking for evidence on the ground to ensure that all barriers are removed, and I would be very happy to work with the hon. Lady in the future. If she encounters any specific cases of students being unable to access the support that they need, we will ensure that they receive it.

[Jason McCartney (Colne Valley) (Con)]

I welcome the Education Secretary’s statement, particularly in relation to the more targeted support for those in real need. Josh and Georgia from Huddersfield New college in Salendine Nook came to see me on Friday in my constituency office. They were concerned about travel costs, including their train and bus fares, in our rural constituency in west Yorkshire. I see that the new arrangements will come into effect in September. How soon will colleges and sixth forms have the details of how the new arrangements will help with travel costs?

[Michael Gove]

I know my hon. Friend used to be a lecturer at Leeds Metropolitan university, and he has been committed throughout his career to ensuring that students from poorer backgrounds enjoy appropriate access. I hope the arrangements announced today will give his constituents the flexibility they need to meet the specific travel costs that his rural part of Yorkshire compels students to meet.

[Dan Jarvis (Barnsley Central) (Lab)]

Given that more than 3,500 young people in Barnsley currently claim EMA, can the Secretary of State guarantee that the number of 16 to 18-year-olds participating in education will not fall?

[Michael Gove]

It is our intention to make sure that the number participating continues to increase. As I pointed out in my statement, the number of 16 to 18-year-olds not currently in education, employment or training fell in the last quarter. I hope that the number of apprenticeship starts to be revealed later this week will show that that strong trend is continuing encouragingly.

[Conor Burns (Bournemouth West) (Con)]

What message does the Secretary of State have to colleges such as the Bournemouth and Poole college in my constituency, which were so profoundly let down by the decision under the last Government to withdraw the funding for their capital project through the Learning and Skills Council? That means that young people aspiring to go to that college will now be taught in temporary classrooms. Is there anything the Secretary of State can say to reassure them about their future?

[Michael Gove]

I am grateful to my hon. Friend for reminding us that it was under the last Government that the Learning and Skills Council’s capital scheme collapsed, causing no end of heartache to many principals and students who had hoped that they would be able to enjoy handsome new facilities. The Chancellor has released through the Budget £125 million of additional capital spending for England. That money is intended to ensure that we have a new generation of university technical colleges, but some of it will go to support 16-to-19 institutions as well.

[Nic Dakin (Scunthorpe) (Lab)]

The majority of post-16 students attend colleges and are not currently eligible for free school meals. Will the Secretary of State confirm that, in line with his statement, they will be eligible for free school meals in future and will be paid the additional £800 a year that he has just announced?

[Michael Gove]

That is fair point. The hon. Gentleman was previously the principal of a very successful further education college. As he will know, many FE colleges simply do not have the facilities to be able to provide free school meals; they do not have the cafeterias or kitchens in place. What we need to do is ensure that students who are attending FE colleges have the money they need so that if they are travelling particular distances and are learning at different times, they receive the support they need—whether it be for subsistence, transport or equipment. We both know that the way in which students learn after the age of 16 is varied and does not follow the same pattern as the normal school day. That is why the provision has to be flexible in order to ensure that the very poorest receive the support they need.

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

While I welcome the Secretary of State’s announcement on targeted assistance, may I remind him that he has seen for himself the inadequate conditions in which high school pupils in Alnwick are taught. When is he going to make an announcement about the capital scheme so that a bid can be put in to help provide a new school?

[Michael Gove]

My right hon. Friend makes a fair point and we shall make an announcement shortly. I am sorry that we have not yet been able to provide additional support for the Duchess’s high school in Alnwick. As he knows, that school was not supported under the old Building Schools for the Future scheme, but we hope that the new method of allocating capital for schools, which we will announce, will allow those whose buildings were neglected by the last Government to receive support.

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

Last year, 7,700 of the poorest students in Liverpool were able to continue their studies because they received education maintenance allowance. How many of those students will receive equivalent support under the Secretary of State’s proposal to help only the very poor?

[Michael Gove]

Without knowing the precise details of the composition of that larger number, I cannot say definitively. What I can say is that it will be constituencies such as the hon. Lady’s that are likely to benefit most, while constituencies such as my own are likely to benefit least. One problem with the EMA scheme was that 45% of students received money, which meant that we were not supporting constituencies like the hon. Lady’s, which deserve the most generous support that the coalition Government can give.

[Robert Halfon (Harlow) (Con)]

Young people in Harlow and elsewhere will welcome the investment in university technical schools. Will my right hon. Friend come to visit Harlow college, which is preparing a bid for such a school and would greatly welcome a visit from him. On EMA, I ask my right hon. Friend to consider giving bursaries to students who improve their academic performance, rather than basing them only on attendance?

[Michael Gove]

I should be delighted to visit Harlow at some point to see what we can do to advance the very exciting plans for a university technical college. I am also happy to confirm that the flexibility of the new scheme will enable college principals to tailor it to the specific needs of students. It is true that the old EMA provided an incentive for attendance, but this scheme could help college principals to give more support to the very poorest students who put in the most impressive performances and whose learning needs to be supported most strongly.

[Jeremy Corbyn (Islington North) (Lab)]

Can the Secretary of State explain how the money enabling the college principals to give discretionary awards will be drawn down? Will there not be a perverse incentive for colleges not to take on pupils from poorer backgrounds because they are more likely to demand more money? Would it not be better for us to have a national scheme based on rights, with national application and national distribution? Such a scheme was pretty successful under EMA, resulting in more young people staying on at college and going to university.

[Michael Gove]

The hon. Gentleman and I disagree on many matters of principle, but he is absolutely right to say that we must support the very poorest. That has been a consistent theme of his political career. The new scheme will allow the very poorest to receive more than they did under the previous scheme, and will enable college principals to target their resources on those who are most in need. I believe that those college principals, rather than the hon. Gentleman or me, are best placed to identify the needs of students.

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

I look forward to welcoming the Secretary of State to my constituency in the near future. As he knows, I support many of the educational changes he has introduced, but he will also know of the concern that I expressed about the EMA change. I welcome what he has now announced, and I certainly want nothing to do with the pooh-poohing of EMA. However, will he assure me that, although giving more discretion to education professionals is important, safeguards will be introduced to ensure that colleges which compete for students in areas such as mine will not be able to use the fund as a bribe to encourage students to attend those colleges rather than others?

[Michael Gove]

I look forward to visiting both Lincolnshire and the east riding of Yorkshire on Friday. I recognise the concerns that my hon. Friend has raised, but I want to ensure that we trust professionals. When it comes to the admissions of pupils aged both 11 and 16, we need to ensure that schools are incentivised to attract the very poorest students, and that nothing can work against that.

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

May I first say how much City and Islington College—where 3,000 children currently receive EMA—is looking forward to the Secretary of State’s visit on 12 May? As we prepare for that visit, will he help us by clarifying something? At present, what I would term the poorest—those whose parents are on benefits and who have been given free school dinners—receive £1,170. Under the right hon. Gentleman’s current plans, only children who are in care, are care leavers or receive income support themselves will receive the maximum amount. EMA for children who were being given free school dinners and whose parents are on income support will be cut by a third. Is that right?

[Michael Gove]

No, it is not right. It is the case that we will be paying more to those who are most in need—£1,200 for 12,000 students—and it is also the case that a discretionary fund will be available to ensure that college principals can decide that students with specific needs will receive exactly what they deserve.

[Angie Bray (Ealing Central and Acton) (Con)]

Can my right hon. Friend confirm that the last Government commissioned research which had already concluded that we would need to move to a more targeted system for those in the most need?

[Michael Gove]

I am grateful to my hon. Friend for making that point. The former Secretary of State for Children, Schools and Families commissioned work from the National Foundation for Educational Research, which demonstrated that we needed to target resources more effectively on the very poorest.

[Paul Blomfield (Sheffield Central) (Lab)]

It is clear from the Secretary of State’s announcement that thousands of young people will lose out on funding as a result of the significant level of cuts. He has transferred the responsibility for bearing the bad news for those thousands to school and college heads. That is a massive task for them to undertake. How does he expect them to resource the task within individual schools?

[Michael Gove]

I am grateful to the hon. Gentleman for making his point, and I know that he has been committed to supporting better educational outcomes in Sheffield. When we consulted on this scheme, college principals themselves said they would prefer it to be discretionary, and my understanding is that both the Association of Colleges and the Association of School and College Leaders say they would prefer to be able to allocate funds in that way.

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

I welcome the announcement that children in care and care leavers who stay on in education will receive an annual bursary of £1,200. In order to ensure that they have the best possible educational experience, will my right hon. Friend consider widening the scope of the Frank Buttle Trust quality mark, under which care leavers and children in care who move on to further or higher education have the assurance that their educational establishment will meet all their needs, including their educational needs?

[Michael Gove]

My hon. Friend makes an important point, and I will ensure that the Under-Secretary of State for Education, my hon. Friend the Member for East Worthing and Shoreham (Tim Loughton), who has particular responsibility for children in care, and my hon. Friend the Minister for Further Education, Skills and Lifelong Learning take that work forward. Today’s announcement of additional support for children in care and for care leavers follows on from last week’s announcement that such children will also receive support through a new individual savings account scheme, to ensure that they can build up a capital pot to help to support them in subsequent education or work.

[Jim Fitzpatrick (Poplar and Limehouse) (Lab)]

As the Secretary of State will know, the introduction of the education maintenance allowance led to a big increase in stayers-on aged over 16 in Tower Hamlets. Has his Department assessed the impact of his proposals on boroughs such as Tower Hamlets, and if so, will he publish the results and compare them with what happens after his proposals have been implemented in September?

[Michael Gove]

As we outlined at the time of the last spending review, we sought to construct a replacement scheme that would, within the resources available, be more progressive, and we believe that constituencies such as the hon. Gentleman’s will benefit more than some constituencies represented by Conservative Members. We will keep the scheme under review, however. A quality impact assessment has been prepared, and I will be happy to talk to the hon. Gentleman if there are specific problems in supporting the many students in his cosmopolitan constituency who want to stay on.

[Mr Marcus Jones (Nuneaton) (Con)]

I warmly welcome my right hon. Friend’s statement. I also welcome the consultation, but ask him to ensure that the details of the student bursary fund, including the allocations to further education colleges, are confirmed as quickly as possible, in order to give certainty to those students requiring assistance who are looking to enter further education this year.

[Michael Gove]

My hon. Friend makes a good point. As ever, I wanted to balance the requirement to consult widely—and I am grateful to my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) for talking to so many students about what exactly was required—with the need to move on so as to provide certainty to institutions. We undertook a process of consultation beforehand and brought forward these proposals in line with principles we outlined at the time of the comprehensive spending review. We will now consult in the next eight weeks in order to make sure the proposals can be implemented fairly.

[Liz Kendall (Leicester West) (Lab)]

Some 2,200 young people at Leicester college get the maximum EMA, precisely because they are from some of the poorest and neediest families in my constituency. There is obviously going to be a great deal of uncertainty about the future, so can the Secretary of State tell the House when colleges will receive the money for the new scheme and, crucially, when students and their families will learn about the criteria, because that is very important to them in deciding whether or not to stay on?

[Michael Gove]

The first point to make is about the hon. Lady’s constituents who are already at college: if they received notice of their EMA support in the academic year 2009-10, they will receive the full amount; if they received notice in 2010-11, those who currently receive £30 will receive at least £20, and discretionary support will be available. We propose that the amount the college receives should be broadly in line with the amount it received beforehand, reflecting the level of need in the hon. Lady’s constituency, but we will be consulting on the implementation over the next eight weeks, so that the amount can be in place for distribution from September.

[Dan Rogerson (North Cornwall) (LD)]

I welcome the Secretary of State’s announcement and measures such as the money over and above what was originally talked about and, in particular, the transitional money. I also congratulate my right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) on the work he has done in his report to Government. However, I seek the Secretary of State’s assurance that he will continue to look at transport issues and ensure that sufficient money is provided in both urban and rural areas, so that transport provision is in place for people to access.

[Michael Gove]

My hon. Friend makes a good point. Some local authorities—I have mentioned before in the House Liberal Democrat Hull and Conservative Oxfordshire—do a very good job in providing transport for students staying on after the age of 16, but all local authorities need the support that this new scheme is intended to provide. I am also aware that, obviously, after the age of 16 students tend to travel further to their place of learning, particularly in rural constituencies such as the one my hon. Friend represents, and we will be working with the Association of Colleges and others to make sure they are supported.

[Lisa Nandy (Wigan) (Lab)]

The vast majority of EMA recipients are in households whose annual income is less than £21,000—no Member of this House is on anything like the same. If the Secretary of State can find money to fund his pet initiative on free schools, why can he not find money to show those young people that they are worthy of our support?

[Michael Gove]

I am grateful to the hon. Lady, who worked very hard before she came into this House to shine a light on the difficult circumstances faced by children growing up in poverty. That is why we are spending £2.5 billion more over the lifetime of this Parliament on the education of the very poorest five to 16-year-olds. Of course the amount of money available for this support fund will mean that some students who currently receive cash will no longer do so, but it will also mean that more money is being spent on the education of the very poorest 16, 17 and 18-year-olds, as well as there being more money for their support. I believe that the progressive approach we are taking to education funding will mean that those she has spent her political career fighting for will benefit more from this Government than from the previous one.

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

Vocational learning will be crucial for us in rebalancing the economy. Can my right hon. Friend confirm that the all-age careers service will radically change the quality of advice on vocational learning?

[Michael Gove]

I can confirm that because, thanks to the brilliant work carried out by the Business Secretary and the Minister for Further Education, Skills and Lifelong Learning, we have an exciting new approach to providing support and advice for those in careers. In addition, thanks to the changes that we have made to accountability measures, through such things as the English baccalaureate and the Wolf review, we will ensure that students who in the past were not able to progress on to college and on to worthwhile jobs at last have the chance to succeed.

[Ian Mearns (Gateshead) (Lab)]

Under the current system, EMA payments are related to attendance and the completion of coursework, which in itself helps to raise attainment. What steps is the Secretary of State taking in the new scheme to include that provision? How will he ensure that enough money goes to colleges in the poorest areas under the new funding mechanism?

[Michael Gove]

The hon. Gentleman makes two very good points. He mentioned, as I did, that one of the benefits that EMA brought was a linkage between attendance and the completion of coursework, and, thence, attainment. There will be flexibility for college principals to design their own schemes in order to reward not only attendance and the completion of coursework, but exceptional achievement, if they believe it is right to do so. The way in which we are weighting the allocation of funds to colleges is intended to ensure that the very poorest receive the most. The process of consultation over the next eight weeks, in which I hope the hon. Gentleman will participate, is intended to ensure that we accurately and fairly reflect the needs of the most disadvantaged.

[Jane Ellison (Battersea) (Con)]

I recently had the pleasure of visiting South Thames college, in my constituency, with the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). The comments we heard from young people that day bear little resemblance to the broad-brush rhetoric we have heard from those on the Opposition Front Bench today. What those young people did say was that they are keen to know what their options are at a much younger age. I very much hope that Ministers will give considerable thought to putting together a comprehensive package of intelligible information, to be made available to young people earlier than it is now, setting out the growing options post-16.

[Michael Gove]

My hon. Friend makes two very important points. The truth is that among the generation in receipt of EMA there is not majority support for the continuation of the old scheme; they recognise that a more targeted scheme would be right. [Hon. Members: “What?”] I am terribly sorry, but Opposition Front Benchers should pay attention to what people think rather than what they imagine people think. Had they done so, it might have helped them to stay in power.

On my hon. Friend’s other point, we do need to ensure that people receive appropriate advice. As Professor Alison Wolf pointed out in her groundbreaking report, hundreds of thousands of young people received the wrong advice under the previous Government, which is why they are not in the fulfilling jobs that they needed to be in.

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

The principal of my local college, Tower Hamlets college, recently told me that in the light of the reduction in the overall EMA funding he would have to choose one out of four students from poorer backgrounds who could qualify. In the light of today’s announcement, will the Secretary of State confirm that the other three out of the four students who used to get EMA will now qualify? The people of Tower Hamlets live in an area with some of the highest child poverty in the country and, as he can imagine, this support is desperately needed—it is £1 million that the college needs. Will he please confirm that that is now available?

[Michael Gove]

I am grateful to the hon. Lady, who has argued politely and persistently behind the scenes for the interests of her constituents. Like the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), she represents a constituency where need is greater. That is why Tower Hamlets continues to be among the best-funded local authorities for students between the ages of five and 16, why Tower Hamlets will benefit disproportionately from the pupil premium, and why I wanted to ensure that the replacement scheme supports the students she is anxious to help. I will work with her to ensure that those most in need get such help.

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

Up till now, the reform of EMA has been a complete PR disaster. How will the Secretary of State ensure that the improvements announced today will be outlined to young people to ensure that they will not be put off continuing in education post-16?

[Michael Gove]

I will rely on the effective and persuasive advocacy of my hon. Friend the Minister for Further Education, Skills and Lifelong Learning.

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

The Secretary of State said a moment ago that EMA did not enjoy the support of the majority of the young people who received it. What was the source for that claim?

[Michael Gove]

An opinion poll.

[Mr Stewart Jackson (Peterborough) (Con)]

I welcome the statement and so will students at Peterborough regional college. I would resist the churlish response from those on the Opposition Front Bench, marked out by intellectual incoherence and opportunism. Is my right hon. Friend as surprised as I am that nowhere in the comments made by the right hon. Member for Leigh (Andy Burnham) was there an apology for their record? Social mobility ossified in 13 years of Labour Government to the extent that more—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May we have a question that falls within the responsibility of the Secretary of State and this statement?

[Mr Stewart Jackson]

More people went to Oxford university in those 13 years from one noted public school than from the entire care system. Is that not a legacy of shame?

[Michael Gove]

My hon. Friend makes an excellent point succinctly and well.

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

We have already heard that students on EMA attended at a higher level than their peers and made disproportionate progress. Given that the Secretary of State has said many times that he wants to narrow the gap for those children, what measures will he put in place to monitor whether the children from the poorest families continue to have higher attendance and disproportionate progress, or will that be left to individual colleges? My question is about the specific monitoring proposals.

[Michael Gove]

The hon. Lady makes a very good point. One thing that I am unhappy with is the system of accountability for post-16 education that we inherited. I believe we need a sharper system of accountability post-16 and, in particular, that system needs to focus on outcomes for the very poorest. One problem we inherited from the previous Government was that we did not have the information necessary to see how institutions were performing. It is only now that we know, for example, that only 16% of students, in the last year for which we have figures, managed to secure five good GCSEs including English, maths, science, a modern foreign language and a humanities subject. The fact is that those students eligible for free school meals did not succeed at anything like the same level as their wealthier contemporaries.

[Justin Tomlinson (North Swindon) (Con)]

I welcome plans further to expand apprenticeships for post-16s. Does my right hon. Friend agree that small businesses could be encouraged and informed of these schemes by including promotional material in the annual business rates mailing?

[Michael Gove]

My hon. Friend makes a very good point. I understand from my hon. Friend the Minister for Further Education, Skills and Lifelong Learning that we are doing just that with the National Apprenticeship Service.

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

Has the Secretary of State made any assessment of the possible impact on the viability of colleges and college courses of student numbers falling significantly when EMA’s replacement is no longer available to many thousands of young people who otherwise might have been eligible?

[Michael Gove]

The hon. Lady has been a passionate campaigner against child poverty, but on this occasion I fear that her powers of logic are not doing her justice. The truth is that we know from all the research that was undertaken that of those eligible for EMA—45% of the total cohort—only 10% said that they would not have participated without that sum, which works out at about 4.5% overall. We will ensure that many more students than 4.5% of the total receive the support they need so that no student should be prevented from participating as a result of these changes. In fact, more of the very poorest students should be supported to participate. If there are any problems in the hon. Lady’s constituency in the operation of the scheme, I would be very happy to work with her to ensure that every student who needs support receives it.

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

Daventry has both a need and a desire for a university technical college and has had a bid before the Secretary of State for a number of weeks now that is well supported by the university of Northampton and schools and businesses in the town. Can he give us the timetable for announcements going forward?

[Michael Gove]

I enjoyed a visit to Daventry to meet my hon. Friend a few weeks ago and I hope to go again in due course to work with him to bring forward plans for a new university technical college. Although I admire his ardour, I urge him to be a wee bit patient just at the moment because we are developing plans to move from 12 to 24, and in the next few months we should be able to bring them forward.

[Richard Fuller (Bedford) (Con)]

Many young people will share my right hon. Friend’s disappointment that his opposite number, the right hon. Member for Leigh (Andy Burnham), who was part of a Government who maxed out the country’s credit card and racked up levels of debt that people will have to repay for their entire careers, has had absolutely nothing constructive to say today. Will my right hon. Friend note that in the review of EMA, one comment was that a large proportion of Bangladeshi and Pakistani students relied on it? Will his review look into that to see what can be done to ensure that their participation in higher education can continue?

[Michael Gove]

I am very grateful to my hon. Friend, who is particularly concerned to ensure that students from ethnic minority backgrounds enjoy better opportunities. One thing that we will do is liaise with college principals to ensure that currently under-represented groups, particularly Bangladeshi and Pakistani students and especially Bangladeshi and Pakistani female students, are encouraged to participate in future.

[Richard Graham (Gloucester) (Con)]

Today’s announcement will benefit the most disadvantaged youngsters in my constituency, as elsewhere, but in these very difficult times for Government spending, does my right hon. Friend agree that it is important that the fund should be spent on transport and food rather than on “time out with friends”. Will he consider allowing colleges to distribute the money through vouchers for transport and food rather than in cash?

[Michael Gove]

My hon. Friend makes a very good point. He reminds the House of the right hon. Member for Leigh’s somewhat curious suggestion that we should maintain EMA to ensure that people can receive money to socialise. In fact, what we will be doing is making sure that transport, food and equipment are provided and my hon. Friend makes a good point that in some rural areas colleges or groups of colleges might wish to work together to ensure that transport needs are met.

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

As someone who benefited from free school meals, I welcome the focus that my right hon. Friend places on encouraging pupils from poorer backgrounds to stay in education. Does he recognise, however, that free school meals are not always taken up in rural areas and will he therefore ensure that it is eligibility, rather than take-up, that counts for access to the bursary?

[Michael Gove]

That is a really good point and I want to deal with this issue. It is not only in rural areas that take-up of free school meals is lower than eligibility: that is also the case among some black and minority ethnic groups. We want to ensure that such eligibility is increasingly used as a means of targeting disadvantage and we think that the introduction of the pupil premium, which I know my hon. Friend helped to design in opposition, will ensure that more students take up their entitlements.

[Bob Blackman (Harrow East) (Con)]

Young people in my constituency have told me that only EMA enabled them to stay on in further education, but others have told me that they used the money at Tesco to buy alcohol. Clearly, we have to ensure that money is targeted at the right people, but what controls will be imposed to ensure that the transitional funding is not abused?

[Michael Gove]

We will do everything in our power, but colleges and college principals who understand the ecology of the local labour market and the needs of local students are often in a better position to tailor support than any Minister or bureaucrat sitting in Whitehall would be when developing that scheme in the abstract.

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

I strongly welcome the statement but I wish there had been a tiny glimmer of acknowledgement from the Opposition of the ground that has been shifted here. They all say that the person who never thought twice never thought once, and I want to thank the Secretary of State for thinking twice on this. Does he agree that this is not a U-turn because a U-turn takes you back to where you were before and we are not where we were before? Nobody who opposed the removal of EMA in our debate on this issue was of the opinion that it did not need to be reviewed, so I welcome the review. Will the Secretary of State give us an undertaking that there will be a review of the new proposals to make sure that we get to where we want to be—supporting children from deprived backgrounds to enable them to do what they want to do with their lives after 16?

[Michael Gove]

I always take seriously what my hon. Friend says because before he came to the House he worked very hard as a councillor in Bradford to ensure that the education of the poorest children was enhanced. I am grateful to him for his support. The point that he makes—that we need to make sure that the new regime is kept under review to ensure that it helps the very poorest—is right. I look forward to working for him. The tough questions that he asks and the constructive support that he offers are a model to the rest of the House.

[Madam Deputy Speaker (Dawn Primarolo)]

Thank you, Secretary of State and thank you all for the brisk answers and mostly brisk questions, which helped us get through a considerable number of Members’ questions.

Points of Order

Monday 28th March 2011 Commons Chamber

17:45

[Kevin Brennan (Cardiff West) (Lab)]

On a point of order, Madam Deputy Speaker. The Secretary of State cited an opinion poll in support of an assertion that he made in the course of his statement. I know that he always says he wants to back up his assertions with evidence, so I wonder whether it is within your powers to require him to place a copy of that opinion poll in the Library of the House so that we might all consult the evidence that he cited in the statement?

[Madam Deputy Speaker (Dawn Primarolo)]

The hon. Gentleman knows, I think, that it is not within my power to undertake such things, but I think the Secretary of State wishes to raise a point further to that point of order.

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

Further to that point of order, Madam Deputy Speaker. Thank you, first, for the gracious way in which you acknowledged that my memory, although it may be capacious, cannot remember everything. But on this occasion, I do remember. The opinion poll concerned was a YouGov opinion poll conducted between the 19 and 20 January, which showed that 44% of people aged 18 to 24 were opposed to the abolition of the education maintenance allowance, and 45% of people in that age group supported the abolition of EMA, which meant that there was a one-point lead for the Government position. Coincidentally, that is the lead that the Conservatives enjoy over Labour in the latest post-Budget opinion poll published in my favourite newspaper, The Guardian.

[Madam Deputy Speaker]

I am grateful, Secretary of State, but we are talking about only the one opinion poll.

[Kerry McCarthy (Bristol East) (Lab)]

On a point of order, Madam Deputy Speaker. The Government are required by law to publish their child poverty strategy by the end of March. After the issue was raised in business questions on Thursday, I gather that there was a flurry of activity by civil servants phoning round various child poverty charities, telling them that it would be published on 5 April, the day the House goes into recess. Do we have any power to compel one of the relevant Ministers to come to the House to explain to us why the Government are not complying with the law and publishing the strategy by the end of March?

[Madam Deputy Speaker]

As the hon. Lady will appreciate, that is not strictly a point of order for the Chair, but I am sure those on the Treasury Benches heard her comments and will take seriously their obligations to make sure that the report is published.

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

On a point of order, Madam Deputy Speaker. On 21 March 14 employees at the Liverpool passport office were dismissed from their permanent posts without notice because of a mistake that the Passport Service had made in their recruitment more than two years ago. Does the Home Secretary have plans to make a statement to the House, both about what happened in the Liverpool passport office and about its implications for passport offices throughout the country?

[Madam Deputy Speaker]

I have no knowledge of any notification of a statement. I understand that as the passport office is in her constituency, she is very concerned about the issue. May I suggest that she discusses with the Table Office how she might pursue the points that she wishes to have raised on the Floor of the House?

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

On a point of order, Madam Deputy Speaker. Can you help a number of Labour MPs who signed early-day motion 1146 last year, congratulating UK Uncut? I believe they might want to withdraw their names now and need a bit of advice on how to do that.

[Madam Deputy Speaker]

Nice try, Mr Heaton-Harris. I do not think we will take that any further forward. I am sure that all Members of the House will consider their position when signing early-day motions.

Protection of Bowling Greens (Development Control)

Monday 28th March 2011 Commons Chamber

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

17:49

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

I beg to move,

That leave be given to bring in a Bill to require local planning authorities to ensure that certain criteria are met before planning permission involving the redevelopment of bowling greens can be granted; to introduce a community right to buy for bowling greens in certain circumstances; and for connected purposes.

I am delighted to present this Bill to protect our threatened bowling greens. The House does not talk enough about bowling greens. We wax on about a milliard other sports, but bowling—a sport enjoyed by upwards of 400,000 people—has to my knowledge been debated only once before in the history of Parliament. We have Helen Jackson, the former Member for Sheffield, Hillsborough, to thank for that debate, and I am pleased that her successor is one of the Bill’s sponsors.

That lack of forensic debate has perhaps helped to perpetuate the common misconception that bowling is a sport exclusively for older people. Nothing could be further from the truth: there are thousands of young people in the junior and senior leagues up and down the country. Indeed, that is where I started out as a 10-year-old, tentatively gripping my first wood on my local bowling green in Sheffield. It is truly a sport for all ages and abilities, as my record of a solitary doubles trophy in all my years of youthful endeavour can perhaps attest.

However, let us be clear that bowling is what gets many older people out of the house and into the fresh air. It is the sport that keeps them fit and active long into retirement. There is the chance to listen to the gentle knock of wood on wood and there is the sense of anticipation: will my opponent go thumb or finger, and will he have the audacity to call for measures? Above all, there are the enduring social networks that make our greens not only a valuable part of our nation’s heritage but an enduring part of community life for so many, be they publicly owned or among the many that remain attached to pub and clubs across the land.

None of us is getting any younger. In fact, the nation is ageing at a formidable rate. The changing demographics should lead to a blossoming of the sport beyond the 400,000 who currently play, but not if the current threat to our dear bowling greens is allowed to pass unchecked. Let me spell out the likely impact of closures. Bowls England estimates that every time a club closes, 40% of its members on average give up the sport for good. In my constituency of Barrow and Furness, there is a sad litany of greens that have closed over recent decades. The Washington and Victoria Park hotels in Barrow have been shut down, despite local outcry. On Walney island we have lost the greens at the Vickerstown Institute and the George pub, both of which were sold for housing development.

I am sorry to inform the House, particularly Government Members, that bowlers at Dalton’s Conservative club turned up for practice one September morning the year before last to find that the electricity and water had been turned off in the club house and that the gates to the bowling green had had their locks changed. Those dastardly tactics were designed forcibly to put the green out of use and so soften it up for redevelopment. Even that skulduggery failed to save the Conservative club, because the entire premises, including the bowling green, are now up for auction. That is a fate that has befallen too many of our pubs and clubs. Faced with severe financial pressure, they opt for a short-term fix that ends up making the problem worse, depriving them at a stroke of loyal and thirsty customers, souring community relations and leaving bowlers without a home turf.

Colleagues across the House have made it clear that the loss of bowling greens is a matter of concern up and down the country. I am grateful for the cross-party support I have received for the Bill, including from the hon. Member for Leeds North West (Greg Mulholland), who chairs the all-party save the pub group, which has rightly recognised that the fate of public houses and their bowling greens are often intertwined—one cannot be sacrificed in the hope of saving the other.

It is no surprise that the draconian cuts being made to local authorities are placing publicly owned greens under threat. That threat extends even to the most famous bowling green of all, Plymouth Hoe, which symbolises the legend surrounding Sir Francis Drake and the armada. There are similar situations in Manchester, Sutton and Birmingham, Edgbaston, and my hon. Friend the Member for Sefton Central (Bill Esterson) has brought to my attention the plight of the threatened club at Duke Street park in Formby.

The British Crown Green Bowling Association points out that bowlers often want simply to be able to stand on their own two feet. They want to know that if the club is handed over to them, they can run and maintain it at their own expense simply if they are helped out with the rent. That is a solution that is being pursued in Barnsley and looked at in many other areas. However, each closure is making it ever clearer that the current planning regulations are simply inadequate for protecting even clubs that are in active and frequent use. The Bill seeks straightforward safeguards to protect our bowlers.

On the face of it, the current planning regulations ought to be pretty strong. They state that a bowling green cannot be built over unless an assessment has shown that it is surplus to requirement, but owners and developers are finding ways around this and clubs are being closed against the express wishes of the sportsmen and women who use them.

The Bill would insist that if a club is registered on a green and matches are being played on it, it cannot be deemed to be surplus to requirement unless there is a specific vote by the bowlers affected. Planning authorities would also be required to take into account the kind of sharp practices that we saw at the Dalton Conservative club. The Bill would also introduce a community right to buy for any bowling green where disposal is agreed. Where a local club is prepared to commit to keeping the green in use, it would be given the opportunity to purchase it on the basis of its market value as a sporting facility, which is often much more affordable than developers are prepared to pay. We should support bowlers who are willing to form co-operatives to preserve their prized assets. This is a field in which Supporters Direct has blazed a trail for other sports. We should set in lights the shining example of the co-op bowling club in Barrow, which has flourished since it took that route to protect its green.

Bowling has long been a sport that has enriched the communities we represent. It is said that in England one is never more than a few miles away from the cry of “jack high”. That is one of the many things that has made this country so great. We should endeavour to ensure that that remains the case for centuries to come.

Question put and agreed to.

Ordered,

That John Woodcock, Mr Graham Allen, Luciana Berger, Bill Esterson, Robert Flello, Cathy Jamieson, Helen Jones, Mark Menzies, Greg Mulholland, Angela Smith, Ms Gisela Stuart and Mr Iain Wright present the Bill.

John Woodcock accordingly presented the Bill.

Bill read the First Time; to be read a Second time on Friday 1 July, and to be printed (Bill 173).

Ways and Means

Monday 28th March 2011 Commons Chamber

Budget Resolutions and Economic Situation

Monday 28th March 2011 Commons Chamber

Amendment of the Law

Monday 28th March 2011 Commons Chamber

Debate resumed (Order, 24 March).

Question again proposed,

(1) That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance.

(2) This Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—

(a) for zero-rating or exempting a supply, acquisition or importation,

(b) for refunding an amount of tax,

(c) for any relief, other than a relief that—

(i) so far as it is applicable to goods, applies to goods of every description, and

(ii) so far as it is applicable to services, applies to services of every description.

16:38

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

It is a great pleasure to resume the debate on the Budget.

Since 1997, year on year, families have waited for that dreaded envelope: the council tax bill. Every year under Labour, it grew, eventually doubling in size, but this year something is different. As the bill hits the doormat, families and pensioners throughout England will find that it has not gone through the roof. It will save families up to £72 on a band D home, because the coalition Government are on the side of ordinary working people. I commend those councils—every single one of them—that have taken up the Government’s offer to give their residents a much-needed break, but I am very disappointed that the Opposition have opposed the measure.

In the Commons, the shadow Local Government Minister, the hon. Member for Derby North (Chris Williamson), called the measure a “gimmick”. His Lords counterpart last week also opposed it, alleging that the

“freeze builds up financial trouble for the future.”

Surely that cannot be the Labour party’s position, because it is not what Labour councils are saying on the ground.

I have a selection of quotations, and I will read out just three that will help. Sandwell’s local authority states:

“The council is very aware of the difficult times local people face, and we don’t want to add to their misery”.

On the freeze, it states:

“It would be barmy not to do so.”

Manchester city council, a local authority that we have heard a lot of recently, states:

“We recognise it has been a very difficult year for some people, and as the UK comes out of recession it is critical we offer all the support we can to Manchester residents… it is great news…that this year we will freeze council tax”.

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

Will the right hon. Gentleman give way?

[Mr Pickles]

In a moment. Let us have the full panoply before we hear from the right hon. Gentleman.

[Bob Russell (Colchester) (LD)]

He’s one of the guilty men.

[Mr Pickles]

Yes.

Bolsover council states that

“we have taken this step to freeze our share of the Council Tax because we do not feel it is fair that these are passed onto you”.

I do not recall the right hon. Gentleman freezing the council tax during his time in government, but let us hear from him.

[Mr Raynsford]

I am sure the right hon. Gentleman will recall, because he has followed local government matters, that the London borough of Greenwich, the authority in the area I am proud to represent, has frozen its council tax for six of the past 10 years—under a Labour Government for five of those six years. Has he forgotten that? Is he not aware of what councils were doing long before he took up his current position?

[Mr Pickles]

I suppose if a council sits on £130 million of reserves, that is an easy thing to do, but let him recall Hammersmith and Fulham, which, after years of considerable increases, managed not only to freeze the council tax but to cut it in each successive year.

I regret that the Labour party says one thing in the Chamber and another thing to the voters. I am proud to say that we are able to set aside—

[Sheila Gilmore (Edinburgh East) (Lab)]

Will the Secretary of State give way?

[Mr Pickles]

In a moment.

I am proud to say that we are able to set aside £3 billion to support councils with a freeze on spending, and that is despite the mess that the Labour Government made of our nation’s finances. It sounds as though some on the Opposition Benches would like to wash away the past few years and drown out their bitter legacy: record national debt; unsustainable public spending; and a crushing burden on ordinary families.

The Opposition do not like to admit that their Labour Government planned spending cuts of £44 billion by 2015. Labour’s cuts were to be front-loaded cuts, with £14 billion of cuts falling this April, and Labour’s spending plans would have made bigger cuts to housing, regeneration and local government.

On Saturday, the Leader of the Opposition should have told the crowds the extent of Labour’s cuts. That would have been much more convincing, as hon. Friends have said, than comparing himself to Martin Luther King or, more bizarrely, to Emily Pankhurst.

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

Will my right hon. Friend give way?

[Mr Pickles]

In a moment. I am sure that my hon. Friend would like to hear this point.

Perhaps that omission prompted the right hon. and learned Member for Camberwell and Peckham (Ms Harman) to say today on “The Daily Politics” that a Labour Government would have employed fewer people in the public sector. I have obtained a transcript of the interview, and the interviewer said:

“Some of the people on that march, some of those people listening to Ed Miliband, would have lost their jobs under a Labour Government. Yes or no?”

The right hon. and learned Lady was wise enough not to give a yes or no answer, and said:

“Well, I think that basically we would see, err yes, fewer people employed in the public sector.”

[Hon. Members: “Ah!”] Yes. I think “err yes” neatly covers the point.

[Nadhim Zahawi]

Does my right hon. Friend not think it bizarre that the Leader of the Opposition chose to compare his party’s struggle to that of apartheid?

[Mr Pickles]

Well, I suppose there comes an occasion, you turn up, there’s a lot of people there—and you just start to talk. These things happen, and we should be in a forgiving mood. I mean, anybody can compare themselves to Martin Luther King.

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

Who would you compare yourself to?

[Mr Pickles]

Certainly not to Martin Luther King.

Let us be clear: Communities and Local Government was the unprotected Department under Labour’s plans. Unprotected Departments would have received a larger average real-terms cut over four years under Labour than they are under the coalition’s deficit reduction plans over the spending period.

Thanks to the £18 billion of savings from our welfare reform programme and the £3 billion of savings from lower debt interest, the coalition is cutting £2 billion less from departmental budgets than the Labour party would have. Labour would have cut local government more, and, without the support for a council tax freeze, the end result would have been soaring council tax.

[Sheila Gilmore]

Will the right hon. Gentleman give way?

[Mr Pickles]

I am so sorry. I promised to give way to the hon. Lady.

[Sheila Gilmore]

Will the Secretary of State consider monitoring what happens to charges where local authorities have imposed the council tax freeze? We have had a council tax freeze in Scotland for four years now, and a 90-year-old constituent of mine has just received a charge for garden aid. It was nil under a Labour council, it became £75 and it is now £200, so she is not that impressed by the council tax freeze.

[Mr Pickles]

We will certainly look at that, but may I remind the hon. Lady that Labour councils are of the view that it would be “barmy” not to have the freeze, and that the freeze itself is “great news”? She should really get with the programme.

[Mr John Redwood (Wokingham) (Con)]

That is great news on the council tax—fantastic. Will my right hon. Friend confirm that, every year of this Parliament, total spending goes up in cash terms, so, if the public sector can control costs and inflation, the situation need not be nearly as bad as the Opposition say?

[Mr Pickles]

My right hon. Friend, as always in these matters, is absolutely correct. There is sometimes a fallacy, which the Opposition assume, that a pound cut in grant means a pound cut in services, but there are clearly better ways of doing such things.

Last June’s emergency Budget started a rescue mission. It preserved the UK’s triple A rating and helped to keep interest rates stable. This Budget shows that we are moving from rescue to far-reaching reform. It is a Budget for a strong and stable economy, marking our progress towards eliminating the structural deficit. It is a Budget for growth, rebalancing the economy away from over-reliance on the public sector towards long-term, sustainable growth based on export and investments. This is a Budget for fairness, lightening the burden on some 23 million taxpayers by lifting the personal income tax allowance.

In the past, there may have been an impression that the people in Whitehall who were responsible for the economy sat in the Treasury or in the Department for Business. Today, every part of Government has a role to play in helping to keep business thriving. I am proud of my Department’s reputation as one of the most deregulating Departments in Whitehall. The Communities Department is central to economic activity, and were it not for the cost of sign writers and stationery, I would rename it the Department for Communities, Growth and Local Government. Over the course of the past 10 months, we have cut the red tape on councils; called time on the Audit Commission’s clipboard inspectors; unravelled Labour’s home information packs; scuppered Labour’s ports tax; scrapped the Whitehall density targets for housing, which encouraged garden grabbing and a glut of flats; and binned the planning rules that encouraged councils to hike up parking charges in town centres. Today, we are going further still to create the conditions for growth.

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

The Secretary of State talked about rebalancing the economy. One of the most shocking statistics that the Chancellor quoted in his address was that in the west midlands, during a time of growth, we saw a 3% decline in private sector jobs growth. In areas such as the black country, it is absolutely essential that we deregulate and find as many opportunities as possible to drive entrepreneurship, small business and economic growth.

[Mr Pickles]

My hon. Friend makes a very reasonable point. Part of the problem is that we are now having to rebalance the economy.

Last week’s Budget was driven by an absolute certainty held by Conservative Members—that Governments can print money but only businesses can make money. We do not succeed as an economy by giving bean counters the whip hand over wealth creators. Governments need to listen to entrepreneurs about how to unlock growth.

I do not want to be terribly unpleasant about the regional development agencies, but perhaps I should on just this one occasion. They were fantastic at passing public grants from one part of the public sector to another, but very poor at creating private sector jobs and sustainable growth. After a decade of regional development agencies—my hon. Friend the Member for Halesowen and Rowley Regis (James Morris) gave figures for the midlands—the public sector still accounts for more than a quarter of jobs in the north-east, compared with less than a fifth in the south-east of England, and the number of private sector jobs grew half as fast in the north-east as the national average between 2003 and 2008.

[Claire Perry (Devizes) (Con)]

The Secretary of State said that we should have fewer bean counters and more wealth creators. Would not a few bean counters not have come amiss under the previous Government, who spent £135,000 on luxury Parisian sofas for the Department, partly under the stewardship of the right hon. Member for Don Valley (Caroline Flint)?

[Mr Pickles]

It is indeed true that we are a well-upholstered Department.

[Charlie Elphicke (Dover) (Con)]

Is not the key difference that instead of quangos such as the RDAs running amok across the country doing nothing, we will see enterprise zones and pro-business, pro-growth planning policies that will get the country going again properly?

[Mr Pickles]

My hon. Friend is absolutely correct—so much so that I am delighted to tell him that I will refer to that in a few moments.

The regional bureaucratic approach is not only costly but does not do the job it is supposed to do. Instead, we want to see business men and business women playing a leading role in the debate about their local economy, helping all parts of the country to live up to their full economic potential.

More than 90% of people in England now live in areas with local enterprise partnerships. These partnerships are a new approach to economic development, putting local councils, local communities and local business in the driving seat. The partnerships established so far have already set out plans that are high on ambition and low on bureaucracy—plans to attract investment, boost tourism and strengthen transport links. Local enterprise partnerships are going for growth, not handing out grants. The 21 new enterprise zones are an opportunity for leading partnerships to take their work to a new level. In exchange, we will let them keep all business rate growth in their zones for at least 25 years.

Businesses in the enterprise zones will benefit from a discount of up to 100% on rates and access to superfast broadband. We will work closely with local partners to make sure that the zones do not simply displace jobs and business. For example, the Boots campus in Nottingham will be a centre for science and medical research and innovation, the Manchester airport zone will be ideally placed to make the most of the local science and engineering expertise and international transport links, and Liverpool Waters will keep up the momentum of economic growth in that resurgent English city.

It is not just enterprise zones that are being helped: the Budget extends the doubling of small business rate relief for a second year. This will help small firms and small shops across the country, given that business rates are the third biggest outgoing for firms after staff and rents.

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

Can the Secretary of State say whether Coventry is going to be part of these enterprise zones, and if not, can he give me the reason why?

[Mr Pickles]

It is very important to understand that the enterprise zones will be allotted on the basis of innovation and ideas, not on the basis of Buggins’ turn. Having seen some of the industry leaders in the Coventry area, I am confident that their innovation and skills will make them a high priority in obtaining these zones; after all, Coventry and Warwickshire is one of the leading local enterprise partnerships in the country.

[David Wright (Telford) (Lab)]

The right hon. Gentleman will know that several new towns still have areas of land that are, in essence, controlled by Government. Would he be willing to put some of those land holdings into the pot if local enterprise partnerships come up with schemes to promote growth in their areas?

[Mr Pickles]

It is certainly our intention to release an awful lot of Government land.

[Kerry McCarthy (Bristol East) (Lab)]

The right hon. Gentleman mentioned three cities having local enterprise zones, but he did not mention Bristol, although that was one of the 12 listed in the Budget. It is somewhat surprising that the Secretary of State for Business, Innovation and Skills was in Bristol on Friday but did not, as far as I am aware, tell us where the local enterprise zone is going to be. Can the right hon. Gentleman enlighten me?

[Mr Pickles]

This is a very clear example of the difference between how we do business and how the Opposition did business. We are not going to tell the people of Bristol where the enterprise zones will go—they are going to tell us.

[Helen Goodman (Bishop Auckland) (Lab)]

There is confusion in the north-east because what the Chancellor said in his speech about enterprise zones—that there will be one in Tyneside—was not the same as what the Budget documents said: namely, there will be one in the north-east. There is an enterprise zone on Teesside, but the geography of the other one in the north-east is not clear. Does the Secretary of State have any insight on that?

[Mr Pickles]

There is one in Teesside and an additional one within the northern area. In truth, it is up to the local enterprise partnerships to put the thing together. [Interruption.] The hon. Lady wants to control everything from here, but I have to say that she was not very successful in doing so. What is wrong with an approach in which rather than us down here in Whitehall telling the people of the north-east what to do, the people of the north-east tell us how they will do things?

We are taking measures to help get the house building industry firing on all cylinders. Every new home supports four jobs in house building and two more in related industries. The availability of new homes helps people move around the country for work. Getting the housing industry moving again is key to restoring growth. Under the new Government, house building starts are up 23% and construction orders for new private housing are up 50% compared with Labour’s last year. But we need to go much further. There are about 200,000 granted planning permissions out there in the country, but the homes are not being built.

The answer is not targets; it is addressing the root causes. First, there is a tight mortgage market, so we will introduce a new form of support that will help first-time buyers get a foot on the ladder: a 20% equity loan, co-funded by Government and developers. That will put ownership within the grasp of 10,000 first-time buyers. We will reform the stamp duty land tax rules on bulk purchases of new homes to boost equity investment. We will help to reduce the sector’s reliance on mortgage funding.

Secondly, there is the problem that elements of the planning system are holding up the building of new homes. Let us go back to the 200,000 granted planning permissions. It is fair for councils to agree a contribution to the area where developers are planning to build to ensure that the development is sustainable, perhaps by providing a new park or playground, or by paying for road widening. However, what looked like a reasonable request three or four years ago may no longer look quite so reasonable if it stops necessary development happening altogether. If those commitments make it simply too expensive to build, we need to be realistic. Councils should not compromise on the essentials to make a development acceptable to the local area, but unrealistic agreements negotiated in the boom times should be reviewed to help new developments move forward quickly.

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

I am grateful that the Secretary of State mentioned Liverpool, but what is happening with Liverpool Waters is nothing to do with his Government. I read a statement that said, “Pickles was always happy and obedient, and would often roll over and have his tummy tickled.” Although the statement was about the dog called Pickles who found the World cup in 1966, does it not describe exactly what he did when negotiating his Department’s budget?

[Mr Pickles]

I suspect that when the hon. Gentleman was putting that question together in front of his shaving mirror, it seemed more of a tummy tickler than it actually was.

[Chris Bryant (Rhondda) (Lab)]

One of the big issues in many former mining constituencies is that a large proportion of people live in their own homes, but there is no work in the area any more. People do not want to make the decision to move to a place where there is work, but where they cannot afford the price of homes. How does the Secretary of State propose to get round that vicious circle, in which many people in my constituency and in the constituencies of many Opposition Members are stuck?

[Mr Pickles]

The hon. Gentleman will know that we have just put £30 million into the former coal homes area.

[Chris Bryant]

The former coal homes?

[Mr Pickles]

Into the former colliery areas. That £30 million is more than the hon. Gentleman’s party had put in. We will certainly do our best to ensure that there is sustainable development in that area.

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

Has the Secretary of State had discussions with the Department for Work and Pensions on the reforms to housing benefit, under which it will become impossible for someone who is under-occupying their house to get full housing benefit for that house? He talks about building new homes, but what proportion of them will be one-bedroom homes, because a large number of people who will be looking for property under the new housing benefit rules will be looking for such homes?

[Mr Pickles]

The hon. Lady will be aware that we have abolished the density targets, which led to a glut of flats. We will ensure that the market decides a reasonable mix. That seems to be a more sensible and reasonable way of going about the process.

For too long, the planning system has been a source of friction between councils, communities and businesses.

[Dr Alan Whitehead (Southampton, Test) (Lab)]

Will the Secretary of State give way?

[Mr Pickles]

In a moment. The purpose of the planning system is to ensure that the country benefits from the right kind of development—not to frustrate and delay, and generate endless paperwork. The Budget therefore confirms fundamental changes. By the end of the year, we aim to condense the morass of unwieldy national planning policies into one concise, easy-to-use document.

At the heart of our approach to planning is a presumption in favour of sustainable development. We need a system that consistently and predictably says yes to the right kinds of development. We will consult on plans to streamline the information required to support planning applications. We will introduce a planning guarantee so that no planning application will spend more than 12 months with decision makers, when a timely appeal is made. We will consult on proposals to bring empty commercial buildings back into use as residential properties. Let us cut the red tape and make it easier to turn run-down old eyesores into much-needed new housing. At the same time, we will maintain protection for the environment, including by safeguarding the green belt, which was under threat from Labour’s regional plans.

[Dr Whitehead]

rose—

[Bob Russell]

Will my right hon. Friend give way?

[Mr Pickles]

I will give way to my hon. Friend, and then to the hon. Gentleman.

[Bob Russell]

Will my right hon. Friend confirm that the third and sixth paragraphs of chapter 4 of the coalition’s programme for Government on communities and local government will form part of the planning legislation? I believe that they will, but I would like that to be put on the record.

[Mr Pickles]

The coalition agreement is not quite holy writ, but it is pretty close to it, so of course those paragraphs will be included.

I apologise to the hon. Member for Southampton, Test (Dr Whitehead) for not giving way earlier.

[Dr Whitehead]

Does the Secretary of State consider that his abandonment of the code for sustainable development and the target for zero-carbon home building by 2016 will aid sustainable development, build more houses or merely build less worse houses?

[Mr Pickles]

The hon. Gentleman is entirely wrong. We have included zero-carbon homes, and that will take effect from 2016. [Interruption.] We most certainly have done that.

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

I ask the Secretary of State to look at paragraph 2.12 of “The Plan for Growth”, which states that where an authority does not have a development plan or where such a plan is not up to date, there will be a presumption that an application “will be accepted”. That sentence does not mention sustainability, but just that such applications will be accepted. Does that mean that where there is an up-to-date plan, a developer will have less chance of getting an application through than in an authority without a current local development framework that is still operating on a unitary development plan? In other words, will there be a two-tier and differential planning system in this country, which we have never had before?

[Mr Pickles]

The local plan will have to reflect the presumption as well. It will be reflected in the national planning framework, which in turn will be reflected in the local plan. If a plan is ambiguous or out of date, that presumption will take effect, but there might be an existing plan that conforms to the presumption in favour of sustainable development. Members will now understand why planning is such fun.

Our planning reforms, like the new roles for local councils and entrepreneurs, are there to drive growth, just like the council tax freeze for hard-working families. They show that localism and economic growth go hand in hand. Those who think that the key to getting Britain growing again is for Whitehall to seize control should learn the lesson of history, which is that it repeats itself because no one was listening the first time round.

Let us compare two years, 1924 and 2009. There are many parallels. In 1924, Lenin is dead and Stalin is planning to take absolute power; John Logie Baird is demonstrating a prototype of his latest invention, the televisor; in New York, theatre audiences are getting their first sight of a dance called the Charlton—[Hon. Members: “Charleston!”] Charleston. I do beg your pardon. Also, house building in the UK reaches an all-time low.

[Chris Bryant]

Will the Secretary of State give way?

[Mr Pickles]

No.

In 2009, pleasingly, Lenin is still dead and the Soviet Union is no more; multi-channel TV is available in most homes; and “Strictly Come Dancing” becomes almost compulsory viewing. What is Labour’s contribution to this wave of nostalgia for the roaring twenties? A dance revival such as bringing back the Black Bottom? Introducing a flapper to speak from the Dispatch Box? No, a record fall in the number of new builds. The Labour party rails against the system and the machine, ups its target and achieves absolutely nothing. That is what central control brought us—growth constraint, innovations stifled and an economy needlessly held back. This is a positive Budget, a Budget for stability, balanced growth and above all fairness, and I commend it to the House.

18:32

[Caroline Flint (Don Valley) (Lab)]

I begin by saying that the violence of a handful of anarchists and attention seekers at the weekend was an absolute disgrace, and I hope that prosecutions will follow. However, I have to add that none of their yobbish and illegal behaviour could detract from the biggest demonstration of British feeling for eight years. People wanted to tell the Government that their cuts are going too far and too fast, and that their lack of plans for jobs and growth just make the pain worse.

[Bob Russell]

Will the right hon. Lady give way?

[Caroline Flint]

I will shortly, but I want to make a little progress.

What the Secretary of State’s rhetoric today has revealed is that the Government have no plans for jobs or growth and no plans for the future. If he wants to talk about the economy that they inherited, let me tell him a thing or two about the legacy that we left. They inherited an economy in which growth had returned, inflation was low, unemployment was falling and borrowing was lower than forecast. I am proud to say that Labour increased funding for local authorities, built or refurbished 4,000 schools and 100 new hospitals and left the nation’s public housing stock in better shape than it had been in during our lifetime. If the Secretary of State got out of his office a little more often, he would see that Britain’s major towns and cities had been substantially regenerated.

Even when the worst recession in our lifetime was visited upon our country, bringing half the banks in the UK and Europe to their knees, we still had fewer repossessions, fewer business collapses and a lower rise in unemployment than during the Tory recession of the 1990s. Today we have an economy that is not growing at all and in which inflation is up to 4.4%, unemployment is at a 17-year high and borrowing will be higher this year, next year and in every year for the next five.

[Bob Russell]

I am glad that my intervention was delayed, because I had not recognised the utopia that the right hon. Lady has just described. Does she accept that the last Government had any responsibility for the financial situation that the UK is now in?

[Caroline Flint]

We were part of a global crisis that affected countries around Europe and the world, but it is interesting that before the international crisis hit, we had the second lowest debt of any G7 country. We had brought overall public sector net borrowing down, and the now Prime Minister and Chancellor committed themselves to Labour’s spending plans. In 13 years, we created 1.1 million enterprises, and in the past two years, which included our last year in government, the World Bank ranked the UK fourth in the world and first among European countries for the ease of doing business.

[Chris Bryant]

I am particularly glad that my right hon. Friend has reminded that lot over there on the Tory Benches that they fully supported Labour’s spending plans up until the end of 2008 and promised to spend the additional benefits of growth on the economy, which they never seem to remember. That lot on the Liberal Democrat Benches, when they were sitting over here on the Opposition Benches, urged even greater levels of spending, so we are not going to take any hypocrisy from them.

In addition, will my right hon. Friend remind that lot over there of one further piece of history? In 1924, George Lansbury—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. You have to be much shorter, Mr Bryant.

[Caroline Flint]

If my hon. Friend was going to point out that when we go into recession we have to ensure that we do not go into a depression, that is exactly what the Labour Government did. Things may look rosy from the leather seats of the Secretary of State’s new Government Jag, but for ordinary people, the Government’s plans are hurting but they are not working.

[Mr Pickles]

Mine is a second-hand ex-Labour Jag.

If the Labour Government were doing such a good job, why did the right hon. Lady resign?

[Caroline Flint]

For goodness’ sake. I have always put on record my pride in what the Labour Government did to ensure that this country recovered from 18 years of Tory rule. Whatever my disagreements with them, I will never take that away from any of our leaders of the past 13 years.

This Budget has offered more of the same. The Government claimed that it was a Budget for growth, but we got nothing of the sort. Only a few weeks ago, the Chancellor told us that it would be an “unashamedly pro-growth Budget”, as though economic growth was something that he would normally be embarrassed about. What the Government should really be embarrassed about is that as a direct result of their policies, the Office for Budget Responsibility has downgraded its growth forecast not once but twice. Now we know that growth was down last year and will be down this year and next year. The only things that are growing at the moment are the prices in the shops and the number of people out of work.

[Nadhim Zahawi]

Let’s try again. Does the right hon. Lady think that, in the court of public opinion, people blame Labour for the economic mess that we are in?

[Caroline Flint]

I think we are doing quite well in by-elections, but I do not take the public for granted, and I know that they believe the deficit should be tackled. That is quite right, and I absolutely agree. However, as every day goes past and people see the choices that the Government are making, they say that they are going too far and too fast. That was expressed on Saturday, and it will be expressed on 5 May.

[Claire Perry]

Does the right hon. Lady share the opinion of her esteemed colleague, the very sensible right hon. Member for Salford and Eccles (Hazel Blears), who recently said that Labour could be much more

“explicit about where we had plans to cut…The public…are worried that we haven’t been as clear as we ought to be.”

[Caroline Flint]

I will come later to the position that Labour put before the electorate at the general election, which we stand by today.

[Nadhim Zahawi]

rose—

[Caroline Flint]

I have already given way to the hon. Gentleman, so I am going to make some progress.

I turn to some of the measures announced in the Government’s plan for growth. I think we would all agree that the planning system shapes the places where people live and gives character to our communities. It helps us to protect our natural and historic environment, and it should ensure that everyone has access to green space and unspoiled countryside. It is crucial for growth, because it supports economic development, helps to create jobs and contributes to our prosperity as a nation. I have never shied away from the fact that we as a country need to build more homes, and that our planning system has to support that. When the Government were elected, they promised bold, radical reform of the planning system that would speed it up, reduce bureaucracy and support growth. Let us look at what has happened.

Following the Government’s chaotic and botched reforms to the planning system, there has been a dramatic fall in the number of planning permissions for new homes, which are now at a near-record low. The figure for the third quarter of 2010 was the second lowest seen in the past 19 quarters, and in the last quarter of 2010, new planning permissions were down 22% on the previous year. It is no good the Government blaming the previous one, because things have got worse and not better since they came to power. The biggest drop of all came just after the last general election. In the first quarter of 2010, before the election, more than 40,000 planning permissions were granted to developers for new homes, but by the third quarter, after the election, that had fallen to just 30,000.

The Chancellor sought to address that last week, but I am afraid that in doing so, he sounded the death knell of localism. I offer my condolences to the Communities and Local Government Secretary for the demise of localism, because after months of the Government pledging power to the people—neighbourhood plans, communities in the driving seat and so on—the Chancellor blew localism out of the water in a single sentence. He said that

“from today, we will expect all bodies involved in planning…to prioritise growth and jobs, and we will introduce a new presumption in favour of sustainable development, so that the default answer to development is yes.”—[Official Report, 23 March 2011; Vol. 525, c. 956.]

I cannot recall cheers from Government Members when that was said. While the Secretary of State trumpets devolving power to local people and promises to give them a real say in the development of their area, the Chancellor wants to make it easier for developers to bypass the planning system altogether. They cannot both be right, which reinforces the confusion that has paralysed the planning system in the past 10 months.

[Annette Brooke (Mid Dorset and North Poole) (LD)]

Did the right hon. Lady support regional spatial strategies, which imposed on my constituents a brand-new town on green belt that was not supported by any democratically elected person? Does she prefer that to the Government policy that she describes?

[Caroline Flint]

I am afraid that if the Chancellor gets his way, nobody will be consulted.

No community can thrive if the system is biased against change. Every community must look to create new homes, workplaces and jobs. A planning system that is devoid of obligations to provide for the future and that just protects the present is destined to fail, but a fair and open planning system that involves local people, and that leads to better decision making and greater consensus on development, is important. Although the Government promise to give local people more of a say, their policies do exactly the opposite. Ten months in, their record on planning is one of incompetence and broken promises. Government Members who represent our green and pleasant land must be in mourning, for although existing controls on green belt will be retained, the Chancellor made it very clear that the Government

“will remove the nationally imposed targets on the use of previously developed land.”—[Official Report, 23 March 2011; Vol. 525, c. 956.]

Forgive me for putting that in plain English. More developers will be given a yes, but as there will be no obligation to develop brownfield sites, by definition, more greenfields will be developed. I do not hear any cheers from Government Members for that one.

We can add to the chaos in the planning system the fact that plans for more than 200,000 new homes have been dropped. Under Labour, more than 2 million more homes were built in England, including 500,000 affordable homes; 1.5 million social homes were brought up to a decent standard; 700,000 new kitchens, 525,000 new bathrooms and more than 1 million new central heating systems were installed; 1 million more families were able to buy their own homes; help was provided to more than 130,000 first-time buyers through shared-ownership schemes or equity loans; and even in the teeth of the recession, the previous Government were building 55,000 new affordable homes, which is more than this Government will build in any of the next four years.

[Charlie Elphicke]

On a non-partisan basis, I caution the right hon. Lady against many of those numbers, because many of them apply to flats, which are quick and easy to build, but which left us with a shortage of family housing.

[Caroline Flint]

They still had people living in them. The hon. Gentleman should come to the constituencies of Labour Members to see the investment in social homes, and the partnerships that were developed with the private sector to ensure that we had social homes alongside private developments. The previous Government were putting an end to the division whereby social homes were in one part of the community and private homes were built in another. That is the Labour way, and I am very proud of it.

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

The story the right hon. Lady tells is not one that I recognise in my constituency, which had the worst quality council housing in the whole country. Seventy per cent. of our housing was not up to the decent homes standard, and it has taken a Conservative-led coalition Government to deliver the £21 million to bring them up to standard over the next four years.

[Caroline Flint]

People throughout the country benefited from the decent homes programme and other housing initiatives that helped them to get on to the property ladder and to ensure that they had choices. In the first six months of 2010, before the election, the number of new homes built went up by more than 20%, but in the last six months of 2010, after the election, the number of new homes started fell by nearly 20%. If the Secretary of State wants that debate, I am always happy to have it with him—or with any of his colleagues.

The country wants to know what the Secretary of State and his Government will do to help to build the homes for which communities up and down the country are crying out. Whatever he pretends, the reality is that the Budget brings very little good news. It promises help for first-time buyers. The Opposition welcome the Government’s U-turn—their decision to bring back Labour’s homebuy scheme, which they insist on calling “Firstbuy”—but less than a year ago, the Minister for Housing and Local Government described that policy as an “expensive flop”. That was not what thousands of first-time buyers thought about it or what the housing industry made of it. The Home Builders Federation said that it

“was judged a major success by the industry”.

Only a matter of months later, with his customary humility, the Minister has been forced to admit that he called it wrong. We have wasted 10 months in which we could have ensured that people had a better opportunity to own their own homes. He has done too little, too late, and the measure does not go far enough, because while more than 3 million hopeful first-time buyers try to get a foot on the property ladder, the measure helps only 10,000 of them.

No one is convinced that the new homes bonus is the panacea to the housing crisis that the Government believe it to be, least of all the 21 Tory council leaders from the south-east who wrote to them earlier this year warning that they were not convinced that the plan provides enough of an incentive to communities for them to welcome development. The Budget was crying out for measures to support housing, but they did not happen. All it comes up with is the idea of allowing commercial properties to be turned into homes without requiring planning permission. When the Government get around to establishing exactly which sort of commercial properties will be allowed to turn into residential properties and under what conditions, we will look at their proposals carefully, but if the Secretary of State really believes that the answer to the country’s housing crisis is turning some empty offices into luxury penthouses, or asking people to live in disused out-of-town business parks or derelict industrial estates, he had better think again.

The biggest disappointment is the failure to address the deeper problems of housing supply and the lack of available mortgages. In their submission on the Budget, the Home Builders Federation is absolutely clear that mortgage availability

“is the biggest immediate constraint on demand and house building.”

Figures from the Council of Mortgage Lenders published as recently as 18 March show that mortgage lending has stalled. It says that lending is

“weaker than a year ago”

and that the housing market is “stuck in a rut”, but on that, the Budget is silent.

Before we move on from housing, let us remind ourselves of another matter on which the Government have not lived up to their promises. Just a few weeks ago, the Minister for Housing and Local Government told the Zero Carbon Hub annual conference:

“The commitment to Zero Carbon remains in place—there’s no ambiguity about that”,

but when reading the small print of the Budget, we discover that that is just another broken promise, because from 2016, new homes will no longer have to source all their energy from carbon-neutral sources, which goes back on a commitment that the Conservatives made in opposition and repeated in government. Those standards were about not only protecting our environment, but driving innovation and creating new jobs in the green economy. The Government’s failure on that undermines not only their green credentials, but the ability of our economy to compete for new jobs, new investment and new industries.

Let me deal with the underlying economic nonsense at the heart of Government policy. They hope that the UK economy will be saved by an export-led recovery, which I call Osborne’s see-saw, because the Chancellor views the public and private sectors as opposite ends of a see-saw. He thinks that the harder, deeper and faster he cuts the public sector, the sooner the private sector grows to fill the space and suck up the unemployment. One does not have to be an economist to know that there is no reason why cutting home helps, police officers and council cleaners will lead to the UK selling more electrical equipment, cars or IT services abroad. However, I do know that if we cut public investment in roads, regeneration and house building, and shred the school building programme, the private sector takes a huge hit. The construction industry nose-dives and hundreds of thousands of skilled workers and those who manufacture and supply to them lose their jobs.

[George Freeman (Mid Norfolk) (Con)]

Has the right hon. Lady noticed the International Monetary Fund’s recent figures showing that Britain is running interest rates 3% lower than those in countries with similar deficits to us? Is that not a fundamental result of our programme for the deficit?

[Caroline Flint]

I notice that the economies of the USA, France and Germany grew in the last quarter of 2010, but that of Britain shrank by 0.6%, and that the German and US economies are forecast to grow more strongly.

This is the first ever Budget for growth to downgrade its own growth forecast, yet the Government’s answer is not to continue Labour’s plan to manage the deficit reduction, but to go faster and further and hammer public spending harder. Then they blame everyone but themselves when growth forecasts fall and when Government borrowing rises. Hundreds of thousands of people tried to tell the Government on Saturday that it is hurting but not working, and they are just not listening. For this Government, giving a tax cut to the banks was more important than supporting the construction industry, keeping people in work or building new homes.

The Budget shows above all else how out of touch the Government are. With more people out of work, inflation rising and people facing the biggest squeeze on their living standards in a generation, we hear the Secretary of State make much of this year’s council tax freeze, which every Labour council has implemented, despite receiving much steeper cuts than Tory and Liberal Democrat councils in far wealthier parts of the country. However, with the Deputy Prime Minister busily coming up with a thousand and one new taxes and the Business Secretary desperately trying to resurrect the idea of his mansions tax, it remains to be seen whether the Secretary of State will be able to say the same next year.

A council tax freeze helps only so much. It is a £72 saving versus a VAT increase that will cost a family £450 extra this year, and it is coming at a time when families are losing tax credits and facing a freeze in their child benefit, when pensioners are seeing winter fuel payments cut, and when the Government’s cuts are undermining our recovery and costing people their livelihoods. They give with one hand but take with many more from the communities that we represent.

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

The right hon. Lady will be aware that the Darling plan commits her party to £14 billion of cuts, beginning in a few weeks, which is only £2 billion less than the Government are committed to. Will she tell us where those cuts would fall under her party’s Government?

[Caroline Flint]

It is amazing how Conservative MPs are picky about which part of our budget they want to suggest would go different ways. On the one hand, the hon. Gentleman claims that the difference between our budget and theirs is £2 billion, and on the other hand, the Chancellor boasted in the previous Budget that there was a £40 billion difference between our plan to halve the deficit over four years and his plan to eliminate it entirely. They cannot have it both ways. We need a Budget for growth, and a few facts tell us all we need to know.

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

Government Members have mentioned export-led recovery. Only last week, in the Budget debate, the right hon. Member for Wokingham (Mr Redwood) warned the Front-Bench team that such an export-led recovery will peter out very soon and for the next two years, as credit contracts in China, India and Brazil, among other countries. However, does my right hon. Friend agree that at the heart of the Budget and the growth strategy lies the privatisation of the Royal Mail, the privatisation of the NHS and the attempted privatisation of the forests?

[Caroline Flint]

They have already U-turned on the forests; let us see how much they respond to the elections in a month when the people of this country will make it loud and clear what they think of the past 10 months. The sad thing is that we have had to wait 10 months for a so-called plan for growth. In those 10 months, we have seen unemployment and borrowing rise and growth fall. That does not bode well for anybody in the country, be they those with families, those in the public or private sectors, those with a business trying to grow or those trying to start up a business.

[Nic Dakin (Scunthorpe) (Lab)]

Does my right hon. Friend not agree that what we need in order to promote growth is demand in the economy? However, with public spending being cut and people losing their jobs, which will cut private spending, where will the demand come from to fuel private sector growth?

[Caroline Flint]

My hon. Friend makes a very good point. I could not make it better myself.

The fact is that this is not a Budget for growth. We have the highest unemployment rate in nearly two decades, with nearly 1 million young people out of work and inflation spiralling out of control. Even Moody’s credit rating agency, which all of us have heard so much about from Government Members, are warning that our triple A credit rating could be at risk. What is the price of this failure? It will be another £43.4 billion in borrowing. Yet all the Government can come up with is more of the same: the same old excuses; the same failed policies; and the same old stories from the same old Tories.

No number of excuses can hide the fact that the Government have cut too far and too fast, hitting jobs and growth, and putting our recovery at risk. However, there is an alternative. We could get our country’s finances back on track by halving the deficit in four years; we could give families and businesses real help by scrapping the VAT increase on fuel; we could repeat last year’s tax on bankers’ bonuses, and invest the money in building 25,000 new homes and getting 90,000 young people into work; and we could boost the regional growth fund by £200 million.

With the Government’s first major elections just weeks away, this Budget sets out a very clear choice: between Labour, which will do everything it can to protect jobs and the services people rely on, and this Tory-led Government imposing cuts with barely disguised relish; between Labour, which knows that there are difficult decisions to be made, but will make them in a way that is fair and open, and the broken promises and underhand tactics of the Tories and the Liberal Democrats; between Labour, which will support people into work and get our economy back on track, and a Government who are taking a reckless gamble with the economy that is hurting but not working. In one month’s time, people up and down the country will have their chance to send the Government a very clear message—and their voices will be heard.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I remind Members that speeches are limited to six minutes, although I might look to reduce that to four. A huge number of Members wish to speak, and there is a lot of pressure today and tomorrow, so we might have to reduce the limit to four minutes.

18:56

[Nicholas Soames (Mid Sussex) (Con)]

I draw the House’s attention to my entry in the register.

I warmly welcome the Budget and my right hon. Friend the Chancellor’s broad judgment of the economy. I particularly commend him for sticking to the plans he had outlined earlier, so that—painful though it may be, and mindful, as we must be, of the difficulties—we can deal properly and speedily with the appalling state of the economy bequeathed to the Government by their thoroughly irresponsible predecessors. Measures are now firmly in place to repair the economy, to ameliorate the gross waste of public money, to pay down the deficit and to put in place the architecture for a growing and expanding enterprise economy, with all the opportunities for jobs, increased competitiveness, substantial improvement in the effectiveness of essential and greatly valued public services and support for wealth creation.

Clearly major challenges and difficulties lie ahead, but the Chancellor has set out a clear vision for growth, with the aim of creating in the United Kingdom the world-class businesses of the future, of all sizes and in all activities, and consolidating a way ahead for all our industries and commerce. I was taken today with a letter in the press from some of Britain’s most successful business men that said that the steps taken

“will be a massive boost for start-ups, and will help entrepreneurs to secure finance to get their ideas off the ground.”

That is just so. It is exactly what is required.

Of course, I welcome the announcement on apprenticeships, but as I have made consistently clear to Ministers on many occasions, all the good will in the world cannot replace the over-bureaucratic burden currently in place that often makes it difficult to take on apprentices. If these targets are to be achieved, the process must be made a great deal easier. These are matters with which the Department concerned must deal with great vigour. The opportunities to expand the skills of our young work force are real and vital, and I hear from businesses on all sides their desire to get on with this matter in a speedier manner. To this end, I strongly urge my right hon. Friend to pay careful attention to the views of Professor Alison Wolf, who has developed some very good ideas on these matters, and the excellent work done by my right hon. Friend Lord Baker of Dorking.

I welcome the steps taken on deregulation, and I was pleased to see that the Government’s earlier work has been built on in the Budget in a number of areas. However, those steps are nowhere near good enough yet, and progress across Whitehall is extremely patchy. For my part, I believe that greater authority and impetus should be given to the war on unnecessary, debilitating and grinding red tape, which holds back so many of our businesses and infuriates so many of our best people, who have great ambitions that they cannot fulfil because of the burden that the state places on enterprise.

[Helen Goodman]

Will the hon. Gentleman give way?

[Nicholas Soames]

No, I am very sorry; I am afraid that I cannot.

I call on the Chancellor and the Prime Minister to bring back Lord Young, who understands such matters well, knows the grislier ways of Whitehall and is ideally qualified to lead a tough, cross-departmental effort to enforce the measures needed to reduce onerous administrative burdens, particularly on our small and medium-sized businesses. I know that many Ministers are aware of the importance of doing that, but from the Back Benches making progress often feels like wading through very deep mud. The sometimes apparent weakness of the civil service, judicial activism, thickets of regulation, and an infantilised and often financially illiterate press can all make it impossible to progress. The Government need to make a big effort to move on the issue.

On taxation I need say only this. A more competitive, simpler and more stable tax system will be better for everyone, rich and poor alike. Such a system would also go a long way towards restoring our badly lost international competitiveness, to which the last Government did such terrible damage.

Finally, let me briefly say a word about banks and the language of relentless negativity that is doing great harm to the City of London, which is one of the greatest assets that this country has. That language—particularly of the Opposition, but also of much of the press—is self-defeating, illiterate and often infantile. It needs to stop, and the debate needs to grow up. Many new jobs in banks headquartered in London are now being located overseas. That is very bad news. The Chancellor has averted a fiscal calamity. I am optimistic about the future of this country, but we face a long, hard slog.

19:02

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

Let me start by saying that I did not recognise the Secretary of State’s position. In my county of Northumberland, we have just cut £44 million, with more to be cut next year and hundreds of people sacked throughout the United Kingdom, and we have cut services—or, if we have not cut them, we have charged people for them. Unfortunately, he never mentioned that, so I thought that I would put that one to right.

Let me talk about the enterprise zones. We have seen them in the north-east, where we had them last time, under Thatcher—they were called “Thatcher zones”. Although they were partially successful, they were not all successful. I would say that, at a good guess, most of them stood empty. They were not filled by anyone—in fact, anyone who went around the north Tyneside and Newcastle area today would find that a lot of the buildings are still empty.

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

Is my hon. Friend aware that during the period of the last enterprise zone in Newcastle, there was a jobs increase of only 0.7%, whereas in eight years of the last Labour Government, there was an increase of 18%?

[Mr Campbell]

Of course that is right, and that is part of my point. I would like the zones to be targeted in unemployment blackspots, which we have in the north-east. Unfortunately for Blyth Valley and Wansbeck—my hon. Friend the Member for Wansbeck (Ian Lavery) is not here—those zones did not come into our areas. If they are going to be in Tyneside, we have to get the people from our area into Tyneside, but the only transport we have is buses and people’s private cars—we have a rail link, but we do not have a train on it. If we target those blackspots, the enterprise zones might see some success.

Let me turn quickly to what I have heard since this Government came to power about how the last Government are to blame for the mess we are in. We hear all the time—we have heard it this evening—about the bankers’ mess, and that is indeed what I would call it: the bankers’ mess. The one thing that we never hear from the Government Benches is any criticism of the banks and the crisis that the bankers put us in. This country was going on wheels until 2008, when the bankers created the crisis. Government Members are not blaming the last Labour Government for the crisis in America, the crisis in Greece, the crisis in Spain, the crisis in Portugal or the crisis in Ireland. They are not blaming the Labour Government for all that—or would they in fact want to blame them for it?

I will tell the House why Government Members are not blaming the bankers: because since the Prime Minister was selected as a candidate for the leadership of the Tory party, the City has put £42 million into the Tory coffers to fight elections. That is why we do not hear anything from the Government side about the banks. That is why the banks and the bonuses are allowed to flourish, because the Tories are in the pay of the bankers. Make no mistake about it: that is a fact. The fact is that the Conservatives are in their pockets, and the banks are in their pockets.

[Andrew Bridgen]

rose—

[Andrea Leadsom (South Northamptonshire) (Con)]

rose—

[Mr Campbell]

No, I am not going to give way; I do not have time.

What happens when the Conservatives are in the pockets of the banks? Where does the bill for the bankers’ crisis fall? Yes, you’ve got it: it falls on the working people of this country. We are seeing that now, with sackings all over the place and wages cut.

[Andrea Leadsom]

I thank the hon. Gentleman for giving way. Does he recognise the fact that 1 million people in this country are employed by those banks in one way or another, in financial services, accounting for 3.5% of employed people in total? Is he blaming all those individuals?

[Mr Campbell]

I am blaming the bankers for the way they invested their money in the crisis that they caused. They caused it—they knew what they were doing, and they will all say that. They all came to the Treasury Committee and apologised, if the hon. Lady remembers.

As I was saying, the bill for all this falls squarely on the working people of this country, with the sackings that we have seen and the wage cuts. Wages are 2.2% below the average. That is what they are: they are not above. In fact, we had to take a pay cut ourselves last week. We all did it, and most of them on the Government Benches are in the pay of somebody—some board or some consultancy—so they will be all right when they get a pay increase from them.

What else is being cut? Pensions are being cut. Look at the furore. I am sure that hon. Members have had letters from servicemen, policemen, teachers and local government workers about their pensions. The Government are murdering their pensions, and what are they doing about it? Absolutely nothing. The Government are going to sink them with their pensions—[Interruption.] Never mind looking at my lot: your lot are in power. They are in charge, and they have to deliver the pensions that those people are entitled to have.

We can go even further, because we can look at those who are in their pockets—the pockets of Government Members—who also evade tax. There is £16 billion out there in evaded tax, with people running off to the Cayman islands, or some island where they can put their money under a sack and hide it. That is what is happening today. What are the Government doing about it? Absolutely nothing. They will tax the people of this country, but they will not tax those who run away to another country to put their money in a sack. That is what they will do, and they always have.

Then there is the argument that there was no money. That’s funny—we had £7 billion to give to Ireland when Ireland went under. Why, we saw the Chancellor jumping up at that Dispatch Box and saying, “Not a problem, Ireland. We’ve got plenty of money—there’s £7 billion,” yet we kept being told that there was no money. Now what have we got? We have got this Libya crisis. Not a problem for Britain. Tomahawk missile? Not a problem, even when one Tomahawk missile costs £900,000, and we are firing them left, right and centre. That is another expense for the British people. Ministers are not saying anything about that at the Dispatch Box, but I am waiting for it, and it may come.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. If people are going to intervene regularly, I am going to have to drop them down the list, because we are really struggling to fit everyone in.

19:09

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

The business of the Government is not the government of business. The growth that this country needs, which will provide jobs and higher living standards for all our citizens, is generated by businesses, not by the Government. This Budget takes a modest step towards setting enterprise free in this country. I welcome these measures, but I also wish to sound a note of caution.

I want to talk first about the fiscal squeeze and the way in which inflation is squeezing Britain’s businesses. The Chancellor of the Exchequer is rightly lionised for being the deficit reducer of the western world. Contrary to what the Opposition might think, we do have the biggest peacetime borrowing requirement in the history of this country, and national debt was doubled under the Labour Government. It is also the case that £120 million a day is being spent on debt interest, which is more than we are spending on schools, the armed forces, criminal justice and police. Those are the facts.

The Chancellor’s rules are clearly correct, and he is setting about implementing them with real purpose and due ruthlessness to eliminate the structural deficit in five years, and thereafter to ensure that debt as a share of national income falls. The Chancellor’s excellent fiscal policy is in safe hands but, sadly, monetary policy is not. The good work done by the Budget will be threatened by monetary policy. We all know that the Bank of England has let inflation out of the box. It has lost control of inflation. Consumer prices index inflation is now 4.4%, and retail prices index inflation, which many people feel is a truer measure of the cost of living, is now 5.5%. Too many letters have been sent to the Chancellor by the Governor of the Bank of England explaining why, yet again, he and the Monetary Policy Committee have missed the inflation target.

Our higher-than-expected inflation has had the following consequences. Our debt interest payments are £4.6 billion higher than forecast in November for the simple reason that inflation has fed through to gilts, one third of which are index linked. We have also seen increases in the spending totals for social security and public sector pensions. This has led to an overshoot in the public sector borrowing figure, not for this year but for next year, of £4 billion. For 2012, there will be an overshoot of between £10 billion and £12 billion on the borrowing numbers that we forecast last autumn.

Higher inflation has another pernicious consequence. It will make cuts in public spending deeper, assuming that the Chancellor sticks to his cash totals, which I have every confidence he will. The Office for Budget Responsibility has forecast that average earnings will not grow faster than inflation until 2013, but the real worry in the OBR report is that inflation will not be tamed, and that the Bank of England does not tighten monetary policy in such a way as to get inflation under control. The report sets out a very gloomy scenario. It is that, in 2012-13, inflation could be stubbornly trading at around 4%. In those circumstances, real earnings would need to tick up. They will tick up, and there will be upward pressure at that stage for the Bank to jack up interest rates. According to the OBR’s gloomy scenario, it could be as bad as having a 6% base rate by 2013. That would result in the mother of all squeezes—much worse than the one we are already contemplating. That is why I suggest that, when we look at the macro-economy, we pay more attention to what the Monetary Policy Committee is doing. It is the duty of this House to scrutinise exactly how the committee is ensuring that monetary policy works together with, and supports, fiscal policy. At the moment, it is not doing so.

Because of the pressure on living standards, I am particularly pleased that the Chancellor has decided to lighten the burden on ordinary hard-working families. Taking 1p a litre off fuel duty, abolishing the escalator and introducing a fair fuel stabiliser are at least a nod towards helping household finances and giving some stability to the cost of fuel for each household. By 2012-13, the allowances for income tax will rise so that the average cash gain will be in the region of £326 a year for every working household. Those measures will take 106,000 people out of tax in the east of England, and they will benefit more than 2 million in the region. There is also the council tax freeze, which will be worth about £72 for a band D property.

We seem to have made a sensible start on unleashing the forces of enterprise in this country, but it is my contention that we need to keep a watch on inflation. We need more deregulation, and quickly, and we will also need deeper tax cuts when the economy can afford them.

19:15

[David Wright (Telford) (Lab)]

Last week’s Budget was delivered by a Chancellor who was quite frankly in denial about the impact of his Budget last year. He used to accuse the former Chancellor of the Exchequer and Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), of being in a bunker, but the current Chancellor has not only gone into the bunker but has had it sound-proofed and cut off the phone lines. He is not listening to what is going on in the economy at all.

In my speech in last year’s Budget debate, I cited the example of Japan and the problems that the Japanese economy has had over the past 10 to 15 years. Of course our hearts go out to the people of Japan after what has happened to them over the past few weeks, but it is interesting to see how their economy has behaved over the past 10 to 15 years. We have seen a series of growth figures that just bump along the bottom. There has been no significant stimulus in the economy there, and this country is in real danger of following Japan’s example.

It is clear that the Chancellor has not taken into account the impact of last year’s Budget on confidence in the economy, on the housing market and on the jobs situation in constituencies such as mine. He has gone on to build on the problems that he has already created in the UK economy.

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

Will the hon. Gentleman give way?

[David Wright]

I will not.

In the Budget, we have seen that growth estimates have gone down for last year, this year and next year. Borrowing is up by £43.4 billion, and debt interest will be £17.6 billion higher. According to the Chancellor’s forecast, unemployment will go up by up to 200,000 every single year until 2015. That is a significant price for people to have to pay for what I believe are the sado-monetarist views of this Chancellor.

We have seen a massive squeeze on living standards right across the board. The hon. Member for Bury St Edmunds (Mr Ruffley) rightly spoke of the impact of inflation on the economy. People see it every time they go to their local supermarket as the costs of the core products that they buy rise significantly. There is an impact on the cost of food, as well as significant rises in the cost of fuel. It is interesting that the Chancellor’s much-heralded policy for cutting fuel costs was destroyed within two days of the Budget, when I saw a gentleman arguing with the staff in my local Sainsbury’s filling station. He said, “Hasn’t the price of petrol gone down?” and they said, “Yes, it went down on Budget day, but we put it back up again the day after.” That policy was blown out of the water as soon as it was announced, and, anyway, the Chancellor had already put a 3p a litre rise in the price of petrol into the system through the VAT increase.

It was interesting to listen to the Chancellor’s speech. It contained a complicated segment at the beginning on tax thresholds, which he went through very quickly. That was because it contained all the clawbacks relating to the changes in tax thresholds, following the debate on the consumer prices index and the retail prices index and the announcements of all the cash that he was giving out—actually, he did not give out that much cash; he gave out a bit. All the cash that went out had already been clawed back in the measures announced at the start of his speech. The impact of his decisions in last year’s Budget was that the average family with a child would be paying about £450 a year more in VAT anyway, so he had already wiped out any goodies to be given away in this year’s Budget by the approach he took last year.

There has been much debate about youth unemployment. The corporation tax cut from the Chancellor is one way of proceeding for a Budget strategy, but I believe he could have done something far more radical: instead of giving away that corporation tax cut, he could have spent the cash on a massive programme of employment, training and support for young people in the economy. He could have made that choice and, as I say, invested the money in training and skills for young people.

The Red Book is useful for looking at the Government’s overall strategy. The table on page 12 is headed “International consensus on fiscal consolidation”. It shows that we are up there as consolidators-in-chief with France, Turkey, Canada and Spain. There is, however, a significant outlier on this table—it is the United States. The table suggests that the US is going to move its fiscal consolidation position significantly next year, but I have my doubts. Let me explain what I think is going on.

I believe that the US is looking more carefully at where its economy is and is planning significant investment to lift its people out of recession. Obama’s programme on public spending and expenditure right across the board shows that he is not pursuing a strategy of significant fiscal consolidation, and I doubt whether he will next year either. He is trying to ensure that his economy recovers throughout this period of downturn and that it does not go into significant levels of depression.

Finally, the enterprise zones are positive, but infrastructure investment has to be put in place alongside them; otherwise, they will not work and local economies will be blighted. This is a Chancellor who has got it generally wrong in the Budget. He needs to change his strategy and adopt a plan B very—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order.

19:22

[Annette Brooke (Mid Dorset and North Poole) (LD)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

I start by welcoming the increase in income tax thresholds. It is important that 1.1 million people, including a number of part-time workers, are being taken out of tax altogether. That will make a great deal of difference to them. In addition, up to 25 million people are likely to receive a rebate, which will, of course, be some help in these difficult circumstances. I would also like to welcome the many measures to help small and medium-sized enterprises, through incentives to invest and innovate, reduction in taxation and, most importantly, cuts in regulations that have been such a burden on our small and medium-sized firms.

We are where we are, and there is no doubt that it is growth in the private sector that is going to take us out of this situation. We are already seeing growth in manufacturing and growth in exports. That has to be where the growth comes from, rather than in the public sector. In his Budget speech, the Chancellor identified our current planning system as a chronic obstacle to economic growth in Britain. I would like to make a few comments on some of the proposals for planning.

First, on making it easier to convert commercial premises to residential ones, I am pleased this is going out to consultation as I can see some instances where it would be beneficial and others where it would be detrimental. The overriding question for me is how this fits in with localism, local decision making and indeed the proposed neighbourhood plans.

Developing an office block left empty for many years owing to a lack of demand for such facilities because of new ways of working sounds like a good idea, but let us suppose that that office block overlooks Poole harbour. It could be right for a second home, so what conditions could be placed on it to make sure local that housing needs were met and that there was an affordable component? My own district shopping centre has suffered from estate agent creep, takeaway café creep and, of course, charity shops, so I hope its viability will be secured through a neighbourhood plan, but will this proposal present another threat? I welcome residential accommodation above shops, but there is often a conflict with noise and other side-effects from the retail use, which would need to be considered.

Although more flexibility about the level of control over change of use is generally to be welcomed, I am wary about any top-down national measures that would impede local people from shaping their local or town centres. Councils and local residents need to decide when and where the relaxing of rules would be advantageous. The new presumption is in favour of sustainable development so that the default answer is yes. Again, my worry is how this will fit with localism and the proposed neighbourhood plans. What is sustainable development? Presumably, it will be defined in the national policy framework. Housing amidst shops is sustainable in one sense, but not in others—the viability of a local shopping centre, for example.

Having fought long and hard against centralised targets, the south-west regional spatial strategy and the last Government’s plans that would have destroyed valuable green belt within my constituency and that were not supported by any locally elected person, I welcome the commitment to protect the green belt. Naturally, I welcome the removal of nationally imposed targets, but with this presumption, can valuable green spaces, which are not green belt, be protected within a neighbourhood plan? It is particularly important in an urban setting to protect those green lungs and to be mindful of densities. High density works in some settings, but not in others. Will this new presumption be a trump card over local plans?

The infrastructure must be there. We need the right balance with housing. My local council seems to be pursuing its core strategy and trying to put the plan in place, but is still working to the housing targets set by the last Government.

I shall comment briefly on something that affects housing in my constituency. I represent an area with a great deal of valuable heath land, of which I am very proud. Natural England, however, has a policy that no development can take place within 400 metres of the valuable heath land. That is right for a large development, but when it comes down to infilling in an already built-up area, sometimes with dual carriageway between the housing and the heath land, I feel that it is too restrictive and should be looked at again. I do not want to jeopardise our valuable heath land, but I am sure that this policy, as it stands at the moment, is too restrictive.

It is important to achieve growth. There has to be some scope for speeding up the planning process, for empowering our councils to prioritise employment and housing opportunities and for giving them the tools to do so. That seems to me to make sense because we should have local decision making—on how we work, how we live and how we play.

19:27

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

It is well documented that the west midlands has been one of the worst hit regions during the recession. That is one reason why I raised the issue of enterprise zones in an earlier intervention. Those zones would certainly affect Coventry in a major way.

There is widespread concern in the west midlands about these cuts, but it is important to remember how this started. Some of us were here when the economic crisis blew up. It blew up in America. I realise that Government Members are probably in denial about this, but the fact remains that it started with Lehman Brothers in America. As Members who have followed these events will recall, there are still some charges against them. A Senate investigation took place into why Lehman Brothers collapsed. Some believe that the American Treasury could have done a lot more to help Lehman Brothers out. Be that as it may, it did not happen. We should all remember how this started.

People might have short memories, but the situation became so bad that even a Republican President and tax cutter like George W. Bush ended up pumping billions of dollars into the economy in the last month of his presidency. He realised the seriousness of the situation. It is not true to suggest for a moment that the Labour Government created this problem. It was an international problem, and that has been demonstrated.

It is equally important to say that we were never in the same position as Greece or Portugal—or Ireland, for that matter. We kept our triple A credit rating, although people tend to forget that. If we cast our minds back, we will remember that we had to restructure the banks. Anyone who watched the collapse of Northern Rock night after night on the television would know that there could have been a major run on the banks. The previous Government acted decisively and quickly. The last Prime Minister flew out to America in an attempt to secure international agreement on how to control the banks. The widespread absence of such agreement was one of the major problems. The Prime Minister tried to secure it in Europe as well. To say that we created the present problem is to deny the truth, in my view at least.

As I have said, we had at least 14 years in which to repay our debt—unlike Greece, and unlike other European countries such as Ireland. If we can underwrite Ireland’s debt, or help Ireland and promise to help one or two other countries, that suggests to me that our country has not been as badly off financially or economically as the Government parties have tried to make out. There certainly were economic problems, as I have demonstrated, but not to the extent that the Government’s solution suggests. We said that we would probably halve the deficit over about four years, but the present Government want to eradicate it, and I cannot think of any United Kingdom Government in recent history who have eradicated a deficit. Governments have tried, but they have not been able to do it.

We should bear in mind that when Labour came to power in 1997, 50p in every pound of taxpayers’ money was used to pay off debt. People also tend to forget that, after consultation with industry and the trade unions, we introduced the car scrappage scheme, which brought the motor car industry out of the doldrums. That was a long, hard-fought battle. We would certainly have reduced the deficit over those four years.

Coventry has benefited from significant redevelopment and regeneration, and the public sector has been crucial to that process. What concerns us now is the possibility that the Government’s cuts in the public sector will cause it to return to the days of the late 1970s and 1980s. Members may recall that, during the 1970s and the 1980s in particular, the motor car industry in Coventry and manufacturing in the west midlands were almost annihilated. The Government talk of balancing the economy. The last Conservative Government were balancing the economy at the time, but they were balancing it in favour of the service sector. The present Government criticise the excessive emphasis placed on that sector, but the Conservatives started it.

Rising unemployment is also a growing worry. The latest figures from the House of Commons Library reveal that there are nearly 10,000 unemployed jobseekers in Coventry, and the position is likely to worsen in future years. Coventry is famous for car manufacture, but public sector workers are driving much of the local economy under the present Government.

As some Members will recall, one of the Government’s first actions, last June or thereabouts, was to abolish the British Educational Communications and Technology Agency and the Qualifications and Curriculum Development Agency. They also abolished Advantage West Midlands, which was one of the most successful regional development agencies in the country and had created hundreds of thousands of jobs throughout the midlands. It created Ansty technological park, of which the Government are now very proud. What a strange coincidence. When we created a business park at the university of Warwick at the same time, we were told that we had no business to be in the area, but later the Government tried to take the credit.

I will end my speech now, because I know that others wish to speak. There is a time limit anyway.

19:33

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

Last year’s emergency Budget and the comprehensive spending review laid the foundations for rescuing our economy and restoring our public finances to balance. Now reform is needed to steer our country to prosperity, and at the heart of the reforms that are necessary is the knowledge that less interference and regulation from central Government is the natural precursor of growth and efficiency. It is essential that we make it as easy as possible for our firms to succeed, expand, and employ more people, and it is imperative that we send a clear message that this coalition Government are on the side of innovators and entrepreneurs.

I am fortunate to represent Chester, which is a successful, popular and thriving constituency. However, like most places, we could do better. I am in the enviable position of watching companies queue up to move in and invest, but our problem is that we have nowhere for them to move into. For years after the millennium, we had a planning moratorium that was designed to discourage investment in Chester and Cheshire and direct it towards Merseyside or Greater Manchester instead. I have no problem with encouraging investment in our metropolitan city centres—indeed, I welcome it—but that must be done by making them more attractive to investors, rather than simply stopping investment in other areas and hoping it will spontaneously start up elsewhere. The two-pronged approach announced by the Chancellor on Wednesday will help to solve both problems.

First, enterprise zones will create areas that are more attractive to investors, developers and those who wish to start up companies. I am delighted to note that Liverpool Waters has been selected on Merseyside. That will create jobs and investment, which will help people in the whole sub-region, including my own city of Chester. Unlike many Members over the past few days, I am not going to call for an enterprise zone in my own constituency, but I wholeheartedly support Cheshire West and Chester council’s proposal for one in neighbouring Ellesmere Port. A manufacturing-based enterprise zone there would complement the existing manufacturing industry—including Vauxhall and Shell—and because workers no longer live next door to the factories in which they work, it would create jobs for people in Chester as well.

Secondly, Chester will benefit from the relaxation of planning regulations. Planning is rightly considered to be a sensitive issue in Chester. Ours is a small historic city with a heritage and archaeology that make new development in the city centre very difficult. We are also tightly surrounded by green belt. All Members will be aware of the difficulties caused by proposed green belt development. However, that does not mean that we should have a planning system that places even more hurdles in the way of investors, developers and wealth creators. Reforms involving streamlining, fast-tracking, removing bureaucracy and time-limiting are long overdue, and they will have one simple consequence: they will facilitate growth.

I also welcome the Chancellor’s announcement that the Government will consult on the potential benefits of merging income tax and national insurance. It does not make sense that people’s earnings are subject to two separate taxes that are deducted directly from income. Let us not sit here and pretend that there is one pot of money that goes towards paying the state pension or unemployment benefits, and a completely different pot for general Government expenditure. Income tax and national insurance are contributors to the same kitty. Of course we must take great care to ensure that there is no unfair impact on those of state pension age whose earnings are not currently subject to national insurance deductions, but if the system can be simplified, it should be simplified.

Those of us who have run businesses are all too aware of the burden that the current system places on business owners, especially owners of small businesses that do not have the advantage of large payroll departments. It was obvious from the cheers on the Government side of the House on Wednesday that many of my colleagues had had such experiences, but as we cheered, the blank looks on the Opposition Benches told a different story. It dawned on me that many Opposition Members had very little idea of the difficulties involved in running a small business. They seemed unaware of the impact of this unnecessary complication on businesses up and down the country.

We should be doing all that we can to reduce the burden of bureaucracy on businesses and to help them to invest their time, energy and money in growth, ingenuity and development. That is what this proposal will help to deliver. If we want to stimulate our economy and help business and private enterprise to grow, we need to cut costs, cut regulations and cut bureaucracy.

Last week the Chancellor said:

“We want the words:

‘made in Britain, created in Britain, designed in Britain, invented in Britain’ to drive our nation forward.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]

Only a simplification of regulations will allow such an overhaul of our economy, and I believe the measures outlined in the Budget are the first steps towards achieving that goal.

While the cuts in public services have been directly caused by the disastrous economic legacy of the last Government, these cuts in bureaucracy, waste and red tape are entirely our own, and will provide the foundations needed to help our economy to grow for decades to come.

19:39

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

It is a pleasure to follow the hon. Member for City of Chester (Stephen Mosley).

I want to start by welcoming three aspects of the Budget. The first of them is the confirmation on page 54 of the Red Book of the announcement made the day before the Budget that the Government intend to fund a new system of savings accounts for children in care. The previous system was lost when the child trust fund was abolished last year. I have been campaigning with Barnardo’s and Action for Children for a new system to improve the prospects of those leaving care, and I am grateful to the Financial Secretary, who is in his place, for the constructive approach he has taken and welcome the Government’s announcement.

Secondly, I welcome the decisions to put on hold this year’s increase in air passenger duty and not to move to a per plane tax. High levels of APD are having an impact on regional airports such as Manchester airport in my constituency, including by putting off airlines from making connecting flights to regional airports. A per plane tax would be even worse, of course. I therefore welcome the consultation the Government have begun, and I encourage Treasury Ministers to look very closely at the regional variations proposal made by regional airports.

Thirdly, I welcome the announcement that Manchester’s airport city is to be one of the new enterprise zones. Politicians, and certainly Opposition Members, hold various and different opinions about enterprise zones, but I welcome the prospect of the rate reliefs that will be available and the superfast broadband. More particularly, having zone status will give airport city the energy to turn the ambitious plans that have been drawn up into reality. Airport city could certainly produce jobs—perhaps as many as 15,000 in total—when all the plans are worked out.

There are two issues on which I seek reassurance, however, and if there is not time to address them in the winding-up speech I would appreciate a letter following the debate. First, it is essential that the zone is shaped and led by its key local partners: Manchester airport, the city council and the University Hospital of South Manchester. Manchester’s international airport will clearly be an attraction for international investors, and the hospital also has an ambitious plan, known as medi-park, which would attract global players in the life sciences industry. These organisations must be allowed to define the zone for themselves, and to get on and make progress. We must hold the Secretary of State to his statement earlier that this will be bottom-up, not top-down. We need a reassurance that that will indeed be the case in practice.

Turning to the second reassurance I seek, airport city is one of the bids being considered for regional growth funding, and it is crucial that funding is made available and that we begin to put the infrastructure in place that will make the zone possible. A particular feature of the Manchester bid is the idea that public money should not simply be spent but be recycled and reinvested as the market develops and progress is made. I hope that that aspect of the Manchester bid model will find favour with Ministers.

The ultimate question about airport city is whether it will benefit the people in my constituency and the surrounding communities who still face severe hardship and disadvantage, and whether they will get the support, training and opportunities they will need to be able to connect to the jobs that will be created. I give an assurance that we at local level will do everything we can to make this a reality, but, frankly, there is little in the Budget that offers us encouragement. The growth estimates are down and the estimates for unemployment and social security spending are up, yet the message from the Chancellor is, “No change. Carry on as normal. Carry on with the cuts.” We have no prospect of new investment in social housing, and even with almost 1 million young people now out of work and on the dole he is not prepared to invest in a proper, quality jobs programme for young people such as the future jobs fund, of which I am very proud, and under which 8,000 young people in Greater Manchester found work in the last year alone, including hundreds from my constituency.

Let me give one example. It concerns the STARS—student tourist ambassador recruit—project run by Manchester airport. Out of 40 young people, 32 now have permanent employment as a result of their going through the future jobs fund, but we have no prospect of that now. All we have is the pale imitation that is on offer: the work experience scheme that will last a maximum of two months. Most worryingly of all, even now, on the eve of a catastrophic loss of jobs and public services, the Chancellor is not prepared to revisit the public spending decisions.

In the days that follow any Budget, we are treated to a mass of statistics, trends and distributional detail, but in the few seconds remaining to me I want to take Members on a journey to a small street in Benchill at the heart of my constituency, so that they can learn what the Budget and this Government’s policies mean for communities such as those I represent. Benchill is a community that knows real poverty through experience, but through previous investment in schools, community infrastructure and housing the trend has been reversed. I recently met the mother of a 14-year-old boy who was destined to be on a programme that would have given him work experience leading to an apprenticeship, but that has now gone because of the cuts. I also met a man who has worked for 25 years in the youth service in Manchester, and who was given his redundancy notice last Friday, and a young woman who works at the local Sure Start centre, and whose job goes in September.

That is the reality of what is happening. The Conservatives think that when the economic prospects improve, all communities will benefit, but that is not true. Particular communities need particular help, and I urge a rethink on the Budget in that respect.

19:45

[Andrea Leadsom (South Northamptonshire) (Con)]

The measures our coalition Government have taken in the Budget make something of a silk purse out of the sow’s ear left by the previous Government, and I was very reassured by the letter published in today’s The Daily Telegraph today from venture capitalists about the fact that these measures will be very attractive to business start-ups. Some 99.9% of enterprises in this country are small and medium sized, 60% of private sector employment comes from that sector, and there are 500,000 new start-ups each year. In my constituency, there are many small businesses, some focused on motor sport or high technology, and they are exactly the sorts of businesses this coalition Government are determined to support. I welcome the many measures we took in the Budget to try to encourage the development of such new businesses.

I recently had a meeting with my Northamptonshire business club, at which business people told me that the single biggest problem they face is funding. Bank finance is still not being made available to them at prices they can afford. The figures show that between 2009 and 2010 small businesses with a debit account turnover of less than £1 million per year suffered a 19% drop in total lending made available by banks. The problem is not just the lack of availability of funding, however; it is also the terms, such as the time scales, which have been much shorter—sometimes just a year—and very difficult to achieve for small businesses. The arrangement fees have been much higher too, and the margins have increased by an average of 60 basis points. Funding for small and medium-sized enterprises has therefore been extremely difficult, and remains so in spite of the excellent Project Merlin agreement this Government put together, which I thoroughly welcome.

I want to make the following suggestion to Ministers. United Kingdom Financial Investments Ltd, which holds the taxpayers’ investment in the banks, should look at the shares we own and consider whether it might restructure some of the shareholdings in Northern Rock, Bradford & Bingley, RBS and Lloyds HBOS with a view to creating new banks out of the bank shares. In other words, it should consider restructuring some of those shareholdings to create, at a stroke, new competition in the high street and particularly in the SME lending area. While we remain significant shareholders in those banks, I believe there is a huge opportunity to improve funding availability and banking competition.

The Treasury Committee recently took evidence that showed that up to 90% of SME finance comes from just five banks in the UK. It is absolutely true that conservative lending is the way forward, and banks will not be able to afford to make loans at such cheap rates as in the past, but there is plenty of evidence to suggest that these enormously concentrated market shares are creating enormous pressure for SMEs. Indeed, Mervyn King told the Treasury Committee that

“we should try to encourage new entrants into the banking system because they will not have the same problems of legacy balance sheet difficulties.”

He also said:

“We have to make sure there are other sources to which those SMEs can turn for finance.”

This Government have been incredibly generous and creative in their support for SMEs, and I urge Ministers to consider this idea, because it is only through revitalising our private enterprise in an SME-led recovery that we will put our economy back on track.

19:50

[Helen Goodman (Bishop Auckland) (Lab)]

I am pleased to have the opportunity to contribute to this year’s Budget debates. Last Wednesday, the Chancellor of the Exchequer had a choice to make. He could have corrected the judgment he made last summer in the light of December’s stall in growth and the huge instability in the oil market, but he made a different choice: he chose to continue with his £81 billion of public spending cuts. Notwithstanding the remarks made by the hon. Member for South Northamptonshire (Andrea Leadsom), I fear that the Government’s supply side measures will not produce a revolution in entrepreneurialism. The evidence for that is the Chancellor’s own growth forecasts. The forecasts for the early years have been reduced by far more than those for the later years have been increased, and that is because everything is dwarfed by the massive fiscal retrenchment. The cuts are deeply unfair and they are a strategic blunder.

I wish to focus for a moment on the cuts to the poorest families: the cuts to the social fund. At the beginning of March, the Department for Work and Pensions announced an immediate end to crisis loans for cookers and beds. Why? Before the election, the hon. Member for Thornbury and Yate (Steve Webb), who is now a Minister of State at the Department for Work and Pensions, said:

“People who apply for crisis loans are desperate and have nowhere else to turn…The Government has got to practice what it preaches to the banks and make more cash available through these loans to help families through hard times.”

Now he prioritises sticking to the Budget and says:

“We need to ensure that crisis loan support is correctly targeted at those who need it most”.

Does he honestly believe that bedding is not essential? Does he think that mothers of disabled and incontinent children do not need beds and bedding? Can Government Members imagine how a mattress smells after six months’ use by an incontinent child?

[Claire Perry]

Yes.

[Helen Goodman]

The hon. Lady says yes, so she obviously thinks it is satisfactory for poor children to live in that way—a way that I am sure she would never allow her own children to live.

Do Government Members think that children in poor families should have only cold food—even in winter? Would they like to say to their small child on a cold afternoon in November, “Oh you can’t have baked beans on toast. You’ve got to have a cheese sandwich”? No wonder DWP Ministers are not having an outing on the Treasury Bench during these Budget debates. Clearly they do not want to face the criticism they know they would get from Labour Members.

In answer to questions, the DWP has told me that last year crisis loans for cookers and bedding totalled some £27 million. Where are people supposed to turn instead? Are they supposed to turn to the voluntary sector? I recently met families in my constituency, all with disabled children, who had benefited from that excellent voluntary sector organisation the Family Fund. Last year, the Family Fund helped 55,000 families with items such as cookers and bedding and its total budget was £35 million. Are the Government going to increase the grant to the Family Fund by £27 million to make up for the cuts to the crisis loans? Last year, the Family Fund included a picture of the right hon. Member for Witney (Mr Cameron) in its annual report—I wonder whether it will do that next year too. I am sorry that the hon. Member for Colchester (Bob Russell) is the only Liberal Democrat Member here to be reminded that the Minister responsible for this is the hon. Member for Thornbury and Yate.

The problem that this country faces is not that it is bankrupt; the problem this country faces is that it has a Government who are morally bankrupt. This is hurting, but is it working? Taking the four years from 2010 to 2014 together, the independent Office for Budget Responsibility forecasts that growth will be down, unemployment will be up, the social security budget will be up and net public sector borrowing will be up by a massive £40 billion. Already this looks like a catastrophic error of judgment and a strategic blunder. There is an alternative: a sensible path to fiscal consolidation as set out by my right hon. Friend the Member for Edinburgh South West (Mr Darling), which was about bringing down the debt, promoting growth and keeping people in work. There is an alternative, and on Saturday 300,000 people came to London to demonstrate in favour of it.

19:55

[Graham Evans (Weaver Vale) (Con)]

Before I dive into my speech, I just want to provide clarity on a matter that has caused considerable trouble for Labour Members. In last Thursday’s Budget debate, the shadow Chancellor rightly referred to Members getting confused between debt and the deficit, but one of the worst offenders is the hon. Member for Streatham (Mr Umunna). Given his extremely confident exterior, his no doubt lengthy experience of working in the City and his position on the Treasury Committee, one would not expect him to be so easily confused about basic economic terms, but he has talked about “paying down the deficit”. For his benefit, let me explain: you can pay off or pay down debt, but you cannot pay down a deficit. The deficit is the gap between income and expenditure, and therefore the level of borrowing required. This is not just pedantic semantics, because it really matters when the Labour party confuses debt and the deficit. It makes a policy of halving the deficit over the course of this Parliament appear reasonable, but it is in fact a policy that involves continuing with massive levels of borrowing well beyond 2015, and saddling our children and grandchildren with even more debt. That is why a structural deficit is something that we need to eliminate and why two political parties have come together to achieve this goal by the end of this Parliament. I am very pleased that this Budget keeps us on track to do this.

Having got that off my chest, may I say that I am delighted to speak in this Budget debate and I am delighted at the announcements made last week by my right hon. Friend the Member for Tatton (Mr Osborne)? My constituency stretches from the border with Tatton in mid-Cheshire all the way to Runcorn and Merseyside. As I have mentioned before, I am the only Government Member with a constituency on the Mersey estuary, so I am very pleased to welcome this Budget, which does more for Merseyside than any of Labour’s 13 Budgets between 1997 and 2010. The plans for enterprise zones in both Merseyside and Greater Manchester are great news for my constituents, who commute to both cities in large numbers. Along with the reduction in corporation tax and increased relief for small businesses, the zones will bring investment, help boost growth and create jobs.

I am also thrilled about the decision to invest £100 million in science capital development, with a substantial share going to the Daresbury science and innovation campus, in my constituency. That investment provides a sharp contrast with the Labour years, when funding was taken away from Daresbury and the north, to be put into alternative centres in the south-east. Many Members may be growing tired of my constant references to this world-class facility, but I will continue to support it in any way I can, and I welcome the creation of thousands of high-tech local jobs.

The timing of that investment also happens to be rather helpful for me. Just two days before the Budget, Rob Polhill, the Labour leader of Halton borough council attacked me in the local paper, asking:

“What new money has he actually won for Halton since he became the MP?”

Councillor Polhill has been very quiet since the Budget. But to be fair to him, he is not the only Labour politician struggling to respond to the Budget. The Leader of the Opposition’s Budget response last week was the most astonishing performance I have ever seen in this Chamber. He talked for 15 minutes but said nothing. Labour lack any credibility on the economy. Despite their leader ordering Front Benchers not to make any unfunded spending commitments in February, they went on to make £12 billion of spending commitments in just four weeks. The Labour Party has not changed: it is still suffering from spending diarrhoea—or, to use the correct medical Latin, “Balls-itis”.

I could list every welcome measure in the Budget, but I would run out of time. So let me focus on three areas that will help to reduce the burden on families. The 1p cut in fuel duty and the scrapping of Labour’s fuel escalator is very welcome. Many constituents have got in touch to express their concerns about rising prices, and I know that the cost of running a car falls particularly heavily on those with children. I have three young children and “Mum’s Taxis” takes them to football, cricket, rugby, jujitsu and parties. When we bought our Vauxhall Zafira five years ago, it cost £30 to fill the tank and it is now nearly £60. I congratulate the Government on the action they have taken; if Labour were still in power, people would be paying 6p a litre more in fuel duty. Labour is the party that punishes the motorist at every opportunity.

I welcome the help for home owners and the help on to the property ladder for first-time buyers. The Firstbuy programme of equity loans is an excellent initiative. When I knock on doors in my constituency, I regularly hear people’s worries that their children or grandchildren will never get to own their own home and will have no choice but to move away from Cheshire, so I am proud to support a Government who are taking practical steps to encourage more house building and to help people on to the property ladder. Finally, I congratulate the Government on raising the personal tax free allowance again. That is a big help for many people and has now taken more than a million of the lowest earners out of paying income tax altogether.

I shall finish by giving my full support to this excellent Budget, which boosts growth, helps families and is exceptionally good news for my constituency.

20:01

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

It probably comes as no surprise that I was deeply disappointed by the announcements in last week’s Budget. The Chancellor was strong on rhetoric but short on action that will deliver a sustainable economy, quality jobs, and a fairer society. Despite the Budget’s being hailed as a Budget for growth, the OBR growth forecasts were revised down for last year, this year and next year and although the OBR has revised medium-term growth prospects slightly upwards, it is entirely unclear why less growth now should somehow automatically lead to higher growth later.

The OBR concluded that the effects of the Budget’s so-called growth measures—the cut in corporation tax, the relaxation of planning laws and the creation of 1980s-style enterprise zones—would be minimal and unlikely to raise the trend growth rate of the UK economy. We already know from evaluations of similar and comparable enterprise zones, not just in this country but in Europe, that there has been a zero net increase in growth. There tends to be a relocation effect, but that is about it. I am glad that many of our colleagues have had positive experiences, but the overall evaluation shows quite the opposite.

Once again, the Government are ignoring evidence and pushing ahead with ideologically driven policy. Not only is the Chancellor ignoring evidence, but he is failing to listen to the British people. The Chancellor made little reference to public spending plans—his Budget stuck rigidly to the public spending plans set out in last October’s spending review. It was as though he thought if he did not mention the cuts, nobody would notice them. Well, the people have noticed and in addition to sending clear messages to the Government in the recent by-elections, mine included, on Saturday more than 250,000 people also voiced their objections to these disastrous cuts to vital services—the police, social care, education, and our NHS.

Despite what the Government say, such cuts are affecting our NHS. One of my constituents, Peter Thornborrow, was diagnosed with cataracts last year. He is a 50-year-old precision engineer and he has had his cataracts operation refused. Cuts are going on and are affecting his ability to work. That is obviously not what we need. My surgeries are full of the tragic consequences of the Government’s policies as services are cut or rationed.

In addition to the human tragedy resulting from the disastrous cuts to public spending, the spending plans will also continue to crimp UK economic performance. The irony is that the deficit will increase as a result of what the Government are doing, but they say the cuts are needed to reduce the deficit. The Government are now expected to increase the amount of borrowing—the amount of debt—by an additional £45 billion over the coming years. Last week, as we have already heard, the credit ratings agency, Moody’s, warned that slower growth combined with

“weaker-than-expected fiscal consolidation”

could put the UK’s triple A credit rating at risk. In other words, the Chancellor might be stumbling into exactly the situation he says he is trying to avoid.

Alongside the downgrading of growth and the cuts in services and jobs, prices have and will continue to rise faster than expected and wages slower, dampening the recovery even further and adding to the deficit, not to mention the spectre appearing to home owners of an increase in their mortgage interest rates. The rise in inflation to 4.4% announced last week—that is the consumer prices index, which is much higher than the EU average of 2.8%—and the revised upward projections, coupled with average earnings going down, mean that the squeeze in living standards is set to intensify this year and next.

Most alarmingly, forecasts for unemployment have been revised up and it is now expected to reach more than 8% this year. In my constituency, we have seen unemployment nearly double over the past few years, with one in five young people affected. That is simply unacceptable—we cannot have another generation of young people consigned to the scrap heap as we saw in the 1980s and 1990s. I was a community worker in the 1980s and I can remember how the young people I worked with felt abandoned and written off. The Chancellor is proposing more work experience opportunities for our young people, but will that help young people like those with whom I used to work? I remember one young woman whom I took to job interviews for work experience and she rocked backwards and forwards in her first interview. It was tragic and it took five interviews before an employer was willing to take her on and months of hand-holding before she increased her confidence and self-esteem so that she could go on to secure permanent employment.

On the surface, the proposals to increase work placements and apprenticeships seem positive but those must be high-quality programmes that cater for young people’s range of needs, including the needs of people like the young woman I have spoken about. However, the most important way to reduce unemployment, including youth unemployment, is to get the economy going again.

The Chancellor has claimed that the Budget is fair. I do not know what definition or test of fairness he is using, but the Institute for Fiscal Studies analysis shows it is not fair. I think that most people will consider that the Budget means, for example, that disproportionately more young women and young people will lose their jobs and that pensioners will be affected.

20:07

[Angie Bray (Ealing Central and Acton) (Con)]

Let me start by saying how welcome the Chancellor’s measures to remove red tape are. By freeing up small businesses and start-ups from the burden of excessive regulation, we will encourage a new generation of entrepreneurs and create for them the conditions in which they can thrive and kick-start our economy again. So often, it is young, creative and dynamic people who are penalised for their endeavours by becoming entangled in too much red tape. I am really pleased that the Government are taking steps to put their trust in these people and I am sure that we will soon reap the rewards.

It must be said too—I know many of my hon. Friends agree—that this is hardly the easiest time to produce a Budget to cheer us all up. With the problems in the middle east, tragic events in Japan and worrying developments again in Portugal, producing such a balanced, fiscally neutral Budget, which none the less contains a number of positive moves, is a feat in itself.

Lest we forget—as I note many on the Opposition Benches are still wont to do—we are still in the big old mess inherited from the previous Labour Government. It was a faintly depressing experience to listen to the Leader of the Opposition as he moaned on in response to the Budget statement, constantly barracking us for taking difficult decisions and suggesting that we enjoy imposing hardship on communities across the country. That is just childish politics that does nothing to further the public debate.

It is quite scandalous that Opposition Members now absent themselves from any responsibility for the spectacular mess the Government have inherited. They desperately avoid the fact that we faced the same banking crisis as every other country, but, separately, we were left with the largest deficit in the G7. It is because of the Labour party that Britain is spending £120 million a day just on servicing the interest on Labour’s debt.

The Chancellor has shown that we remain firmly committed to turning the country around. His decision to double the first cut in corporation tax is a huge step forward and comes on top of measures to help smaller businesses, such as extending the business rate relief for another year. Those proposals, plus the 50,000 extra apprenticeships that will bring the total funded by Government to 250,000 over the next four years, demonstrate a Budget with a vision for growth. The 1p cut in petrol duty, on top of the cancellation of Labour’s extra 5p tax on fuel that was in the pipeline, is also a welcome relief for hard-strapped motorists and businesses. The reduced freight costs should also help to bear down on inflation, but shame on those petrol stations that are not passing on the cuts.

The introduction of the new enterprise zones only further confirms the Government’s intention to make it as easy as possible to start up and grow new businesses, but I must throw my hat into the ring and stand up for my patch on this issue. London is to have one enterprise zone in the royal docks area and the Mayor has announced that he is going for another two—one in Croydon and one in Tottenham. My question, as the Member of Parliament for Ealing Central and Acton, is, what about west London? With the focus on the Olympics in east London, other parts of London have missed out on regeneration programmes and I hope that City Hall will soon start to look west once again.

Moving to a smaller, but significant, aspect of the Budget, I welcome the removal of the requirement on charities to document gift aid for donations of £10 or less. That will be of considerable assistance to churches, along with all charities, around the country. Those beautiful buildings are maintained without support from the Government or the Church Commissioners, often by small bands of dedicated people within their parishes. The move could mean, even for smaller churches, a positive gain to cash flow of £1,000 or more. In many cases, it will make all the difference between keeping them open or having to shut them. This measure is clearly a big shot in the arm for the big society. Allied with the Chancellor’s promise to cut the inheritance tax rate by 10% for those who leave 10% of their estates to charity, which could benefit charities by as much as £300 million, it firmly underlines the Government’s commitment to supporting volunteering, philanthropy and social action.

In conclusion, I support the Budget proposals at a time when the whole country is still struggling to emerge from Labour’s recession. The measures are not individually huge, but put together they provide good reasons to be a little more cheerful during these difficult days. After all, the Government have also taken decisive action to lift more than 1 million people out of paying tax altogether and have restored some sanity to prices at the petrol pumps up and down the country—and let us not forget their initiative to freeze council tax across the country. The measures in the Chancellor’s Budget point the way towards a far stronger economy—a rebalanced economy with a successful private sector powering ahead. We should not forget that without a thriving private sector, we can never afford efficient and sustainable public services.

20:12

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

Across Britain, our low-carbon firms, our green groups and millions of concerned citizens had high hopes for this Budget. They have heard the Prime Minister say that this will be the greenest Government ever—an ambition that was restated in the Chancellor’s Budget statement—so they might therefore have expected this to be a Budget for green growth and green jobs and a boost for green firms, but those hopes have been cruelly dashed by Ministers as it was not a Budget for green growth, green jobs or green firms. There have been so many promises, but so little action.

I want to address three important areas, the first of which is the reduction of household emissions. Ministers have announced the green deal for householders and tenants to make their homes energy efficient, but a closer look at the scheme shows that it is at serious risk of being bungled and botched. A battalion of accredited energy assessors and installers will be needed, but where will they come from and what are the incentives for home owners and tenants? How will consumers be protected from cowboys and what happens if the cost of energy efficiency measures is not met by the savings? Who will pick up the bill? The Government claim that up to 14 million households will benefit by 2020, so every one of the people living in those homes has the right to demand answers.

What about the Government’s ambition to make all new homes zero-carbon? In an article in The Guardian on 6 December 2010, the Minister for Housing, whom I am sorry to see has left his place, wrote,

“very soon I’ll be setting out our progress towards achieving a zero carbon approach”.

At the zero carbon hub annual conference on 1 February—just under two months ago—the Minister for Housing said:

“The commitment to Zero Carbon remains in place—there’s no ambiguity about that”.

There is no ambiguity because buried on page 117 of the Government document, “The Plan for Growth”, contrary to what we have heard from the Secretary of State for Energy and Climate Change, who should perhaps look more closely at those elements of the Budget that affect his Department, Ministers have killed that commitment stone dead. The WWF described the announcement as

“years of work and ambition swept away.”

The second area that I want to discuss is the green investment bank, which Department of Energy and Climate Change Ministers have heralded in every speech and utterance. The Energy Secretary has staked his political reputation on it and green businesses up and down the country are crying out for it, so where is it? That the green investment bank will not be able to borrow its own capital until 2015—four long years away—and only then if the Government’s debt target is met, makes me wonder when a bank is not a bank and when it is merely a fund run by officials. Surely, a bank has staff, a board and a headquarters building. I have been asking Ministers about the set-up of this so-called bank for a while, but we are still waiting for the answers.

The fund that has been announced will total £3 billion, but Ernst and Young calculates that Britain needs £450 billion between now and 2025 for low-carbon investment. Ministers claim that up to £1 billion will come from selling Britain’s third share in URENCO, the uranium enrichment company. Perhaps Ministers can tell us what the URENCO share price is today compared with a year or two ago? If it can be done in 2015, why can it not be done this year? Do Ministers really believe that we can take our time? I keep hearing time and again from green companies that the window of opportunity is closing and that green business needs stability, but all they get from the Budget is uncertainty.

Thirdly, what does the Budget do to boost green research and development? No one should seriously doubt that without research and development into low and no-carbon technologies there will be no green revolution in Britain and Britain’s good green ideas will be developed abroad. Research into biofuels such as algae biofuels, which can be developed on arid land and could considerably reduce aviation emissions, has been cut, not boosted, by the Government. They have cut funding to the Carbon Trust and support for geothermal, tidal and other renewables has also been slashed. They have taken an axe to the very research and development that would yield the new green products and jobs for the future—how unlike other countries, which have increased their support for those infant technologies.

Britain can be proud of its environmental and renewables firms, including companies such as Eco Environments on Merseyside. We can also be proud of our leadership in low-carbon firms such as our video games development industry, which is the third largest in the world. In 2010, UK sales of video games totalled £1.53 billion. Those are the kinds of low-carbon sectors that deserve our support, but this Budget is unambitious: it does not deliver for low-carbon enterprise, it does not deliver green jobs and it does not deliver growth. Judged by deeds, not words, this Government fail every test. Ministers talk green, but is not the simple truth that this Budget sets Britain’s environmental progress back years?

20:18

[Guto Bebb (Aberconwy) (Con)]

It is a privilege to speak in this Budget debate. First, I should like to touch on some of the comments that have been made so far, especially the opening comments of the Secretary of State for Communities and Local Government, who stated categorically that English council tax payers were enjoying a council tax freeze. Unfortunately, that is not the position in Wales where the Labour-Plaid Cymru Assembly Government have decided not to ask the local authorities in Wales to play a part in the sacrifices being asked of the population of Wales, and as a result people in constituencies such as mine are facing council tax increases this year.

It has been said that the council tax saving is nothing compared with the cost to individuals of the increase in VAT. I was in a public meeting in Penrhyn bay in my constituency on Friday night where a large proportion of the population are pensioners. Often, pensioners’ biggest expenditure will be on food, heating and council tax, and there has been no effect on their food budget from the VAT rise because food is zero-rated. In the same way, there has been no increase in the cost of heating, because VAT on household fuel is remaining at 5%. But, under a council that is operated in Wales by the Labour party, we have had an increase in council tax, and it is fair to make that point.

We hear a lot from the Assembly Government about the fact that Wales is treated very badly by the coalition Government in Westminster. That is not the case. In a fiscally neutral Budget, the consequentials through the Barnett formula for the Welsh Assembly was £65 million. Over the weekend I took part in a number of television and radio programmes. Not once did I hear a single member of the Labour party or Plaid Cymru say a word of thanks for the fact that Wales is benefiting to the tune of £65 million as a result of the changes announced in the Budget.

The main feature of the Budget is that it is a Budget for growth. The proof of the pudding is in the attitude of small businesses to the Budget. I was delighted—elated even—on Friday morning to go into my office and receive an e-mail from a business in my constituency in the town of Llanrwst. That business man had been communicating with me regularly since Christmas, asking, “When will this Government show their commitment to small businesses?” He wrote to me on Friday morning, stating that he now felt confident that the Government would stick to their promises to support enterprise. As a result of the Budget, he had undertaken to invest £160,000 in his business and to give his staff a pay increase for the first time in three years, because he felt confident enough to make such a decision.

In a constituency such as mine, where 70% of employment is in the public sector—a statistic that would have embarrassed the East German Government in 1989—and there remains such dependence on the public sector, it is imperative that we get the private sector moving. In a Welsh context, the private sector means small businesses. I welcome the fact that we are reducing the corporation tax rate in the Budget. I also welcome the fact that the small companies corporation tax is going down from 21% to 20%, but in my constituency the vast majority of small businesses are owned and operated by sole traders and in partnerships. The fact that we are increasing the personal allowances makes a real difference to such businesses. It means that they can retain and reinvest more of their profits.

I am delighted with the announcements made in the Budget, but we can go further. By that I mean that we need to look at the burden of regulation on small businesses. For example, the Food Standards Agency is looking to increase dramatically the costs on small abattoirs throughout the United Kingdom in relation to food hygiene rules. It is moving towards full cost recovery from abattoirs. That sounds technical, but in a Welsh context that means an increase in cost to small abattoirs in the region of £4.3 million at a time when they are struggling to survive. These regulations cost money for small businesses. Although the fact that we are getting to grips with regulation is welcome, we must go further and faster. I see no reason why profitable businesses in my constituency should be under threat as a result of regulations and the cost of regulation.

We want small businesses to grow in constituencies such as mine. By “small” I mean micro-businesses. One of the issues that we still need to deal with is VAT. I notice from the Red Book that we are increasing the threshold for registration from £70,000 to £73,000, and again, I am delighted that that change is happening, but we need to get to grips with the fact that VAT can be such a throttle on the growth of small businesses. Small start-up businesses reach a turnover threshold of about £68,000 or £70,000, and then those business people have to ask themselves, “Do I grow and, as a result, probably see my profits reduced, or do I decide to stay put?”

When one goes into Llandudno in my constituency and sees cafés and bed-and-breakfast businesses closed for winter, that is not because those people are lazy. They work extremely hard, but because of the VAT threshold, they make a conscious decision to close their businesses over winter, not to grow their businesses. Surely any tax threshold which has that impact on entrepreneurship and on the need to grow must be changed.

20:24

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

I am pleased to be called to speak in the debate on the Budget resolutions. In January, the Chancellor was fiercely critical of what he called the forces of stagnation holding back economic recovery. With last week’s Budget, which fails the test of growth, strips demand from our economy, and hardwires unfairness and higher living costs into our society, he has joined those forces. Rather than being a Budget for growth, it is a Budget that now depends on growth.

If the OBR’s growth forecast proves overly optimistic, and the resulting lower tax receipts further impede the Government’s ability to encourage growth, what will drive the economy? Before the Budget statement, the OBR was expecting total receipts to exceed non-investment spending by 0.3% of national income by 2015-16. It now expects instead a deficit of 0.2% of national income by then. On Thursday afternoon, the Institute for Fiscal Studies at its post-Budget seminar gave its verdict on the Chancellor’s failure—his spending cuts will now be even more dramatic than planned in last June’s emergency Budget because of surging inflation, cutting 1% deeper over the next four years.

The Chancellor says that only his programme of fiscal consolidation and no other can save the economy from collapse. He talks of the need for confidence in the markets. Emulating Lady Thatcher and Lord Lawson, he tells us that there can be no alternative. But on Thursday morning, the ratings agency Moody’s said that a combination of slower growth and lower than forecast tax receipts could endanger the UK’s triple A credit rating.

This Budget sees growth downgraded for last year, for this year, and for next year, with the price of the Chancellor’s failure on growth being £43.4 billion in extra borrowing, higher debt interest payments to the tune of £17.6 billion between 2010 and 2016, and higher benefit costs of £12.6 billion by the end of this Parliament. The Chancellor’s headline measures, such as the 1p cut in fuel duty, were described by the OBR last week as having at best a minimal effect on the stagnant level of growth that his policies are set to deliver.

Given the appalling UK trade deficit recorded in the last quarter, it becomes even clearer what an error the Chancellor committed in slashing investment and capital allowances inherited from the previous Government. Although the Budget contains some small-scale measures such as on the research and development tax credit for small and medium-sized business, and on the enterprise investment scheme, they are no substitute for a comprehensive strategy on supply-side reform.

Many credible voices, both national and international, have warned the Government that taking £81 billion out of public spending, as they propose, is cutting too far and too fast. Higher unemployment, a slump in consumer confidence and lower growth are the likely results. As Paul Krugman, the Nobel prize-winning economist said in The New York Times last week, after the Budget the downgrading of the economic forecast plus the upgrading of the deficit forecast is evidence that

“slashing spending in the face of high unemployment is a mistake”.

Whereas we should have had a Budget for jobs to reverse soaring youth unemployment now approaching 1 million, we instead had a Budget which directly increases unemployment in each of the next two years by 130,000, and will increase the International Labour Organisation measure of unemployment by 0.5%. The IFS, in its green budget last month, found that Labour’s plan to halve the deficit by 2015 would have restored the public finances to sustainable levels. There is an alternative to the Chancellor’s raid on the winter fuel payments of pensioners from next winter, when the bonuses of the bankers who exacerbated the economic crisis have been left so feebly undertaxed.

Most feeble of all was how the self-proclaimed greenest Government ever completely failed to fulfil the green economy’s potential to generate growth. As the UN environment programme’s report “Towards a Green Economy” concluded recently, green investment

“will result in the long run in faster economic growth.”

On the green investment bank, there will be no independent borrowing powers until 2015 at the earliest, and again that is dependent on growth not being further downgraded and the national debt falling. There are no green ISAs or green bonds underpinned by the Government to promote small investor participation in the renewables sector.

The Chancellor said that his Budget would put fuel in the tank of the economy, but instead he has put the engine into reverse. He has fired up the Quattro and is taking Britain back all the way to the 1980s. There is inadequate help for the construction sector and no plan for jobs for young people. Our country deserves better than this reckless, deflationary gamble, which is hurting but not working. This is the no-growth Budget from the out-of-touch Chancellor.

20:29

[Bob Russell (Colchester) (LD)]

Until the Labour party acknowledges the problems it left the country and its financial mismanagement, it will never be taken seriously by the British people. The stark reality is that the previous Government took Britain to the brink of bankruptcy—just one more move and we would have been in the same boat as Ireland, Greece and Portugal.

Not everything in the Budget meets with my approval. There are things in it that I wish were not, and things not in it that I wish were. However, it is a Budget of hope, and it is pragmatic after Labour’s years of hopelessness. Among the good things is the fact that I am blessed in Colchester with the most incompetent Conservative party in the east of England, which is matched in incompetence only by the local Labour party. Although I welcome the Budget, it will come as no surprise to Members on the Government Benches to hear that, having spent 40 years opposing the Conservatives, I have not changed my spots. The Budget is more Aldi than Waitrose.

Some Members have referred to their constituencies, and I believe that on occasions such as these we need to remind people that national Budgets have local consequences. They affect local pride and civic leadership. In that respect, I want to state with great honour that last Wednesday Colchester borough council voted to apply for city status, a civic honour granted by Her Majesty the Queen under the royal prerogative. The qualifying guidelines for making such an application state:

“Any local authority… which considers that its area deserves to be granted the rare honour of city status on this very special occasion is welcome to enter the competition… The places to be honoured for the Diamond Jubilee should be vibrant, welcoming communities with interesting histories and distinct identities.”

On that basis, Colchester ticks every box. It is Britain’s oldest recorded town and the first capital of Roman Britain. It is the home of the university of Essex, the most international university in the country, and of which Mr Speaker is a graduate. As a super garrison town, it is also the home of 16 Air Assault Brigade, which is currently serving in Afghanistan. An additional reason why I hope Colchester will become the UK’s newest city is the fact that this is being driven from the ground upwards by an organisation called Destination Colchester, which is bringing together organisations, local businesses and the people of the town. This is the big society in operation.

Among the aspects of the Budget that I am unhappy about are those relating to planning. I urge the Government to look again at the VAT on old buildings, because although converting old buildings to housing is welcome, the 20% VAT levy is a penalty. I hope that they will look at that again. Colleagues will recall that I intervened on the Secretary of State for Communities and Local Government earlier to mention chapter 4 of the coalition programme for government, which relates to communities and local government. The third point states:

“In the longer term, we will radically reform the planning system to give neighbourhoods far more ability to determine the shape of the places in which their inhabitants live, based on the principles set out in the Conservative Party publication Open Source Planning.”

The sixth point states:

“We will… create a new designation—similar to SSSIs—to protect green areas of particular importance to local communities.”

I am delighted that the Secretary of State has agreed to visit Colchester to see the fields of west Mile End, which developers want to put under a housing estate of 2,200 dwellings, against all the wishes of the local community.

I will conclude on beer duty, which was an opportunity lost by our Government. I hope that they will look again at the issue, because our towns and cities are troubled by binge drinkers, and one way to address that would be to put up the beer levy by 10p a pint or thereabouts in the supermarkets and the mega-pubs and to reduce it by 10p a pint in our community pubs, traditional pubs and village pubs. In that way, our local communities—the localism aspect of the licensing industry—would receive the boost. At the moment, the supermarkets and the mega-pubs are able to outdo the local, community pubs, and we all know that the consequence is drunkenness in town centres, so I urge the Government to look again to see whether we can have a lower beer levy for our community pubs.

20:35

[Dr Alan Whitehead (Southampton, Test) (Lab)]

This Budget trumpets much about growth, and indeed accompanying it we have a whole White Paper, “The Plan for Growth”, which claims to set the seal on those aims so loudly trumpeted. In truth, however, the Budget contains very little that, in the real world, stimulates economic activity or, in a time of deficits or depression, shows any sign of moving the economy forward so that the Government can tackle the deficit other than by just cutting everything they can lay their hands on.

That is a conundrum. Unless all those measures are a cynical put-on, the Government obviously believe that they are setting out a path for growth. They have, as a default position on the economy, chosen a particular path that they believe will, if followed, lead to growth. In technical terms, that assumption is called the Ricardian equivalence: the assumption that Government borrowing is essentially deferred taxation; and that, even in a depressed economy, it is important to send out a signal that the Government will not borrow, so that people discount what they had set aside to cope with what they saw as deferred taxation and, instead, invest and spend, thereby miraculously bringing about growth, deficit reduction and so on. In reality—and in previous depressions—the opposite is usually the public’s reaction, but we will pass that by.

Then, the public, once they are cured of the unhealthy habit of holding money back to deal with perceived deferred taxation, must also have regulations and other matters stripped away if they are to invest and spend. Hence it is necessary to pull apart regulations, collapse planning impediments and so on.

This Budget sets out that false premise admirably, although some of the zeal with which it is being pursued is, to say the least, a little alarming, especially as I imagine the Government still believe that growth should be low-carbon growth in order for them to be, as the Prime Minister has stated “the greenest Government ever”.

The removal of most housing targets and the new announcement of the removal of any prescribed level of house building on brownfield sites, which I am sure is bad news for the hon. Member for Colchester (Bob Russell) and the fields near his constituency, both follow from the philosophy of pulling down regulation so that the private sector can supposedly rush in to invest where the public sector has withdrawn. That must come as a shock, however, to anyone who believed for example that being the greenest Government ever implied some view about the merits of arbitrarily concreting over at a random cost to the environment and to carbon emissions targets.

Two other planning and investment decisions in the Budget must come as a similar shock. The green investment bank has been downgraded to a “fund” for the foreseeable future, so even the merits of the private sector investing in the bank have been eschewed in favour of its functioning as a bank only, as the Budget papers state,

“once the target for debt to be falling as a percentage of GDP has been met.”

In other words, “After all these good people have rushed in and invested to replace the loss of public sector funds, then we might consider some public sector-based funding, even if it is with private money, at a point when the prime need will have passed anyway.”

Not the most significant measure, but perhaps the most shocking—indeed, the measure in the smallest print—is the decision to remove the target to require homes to be built on a zero-carbon basis by 2016, as the Government say:

“To ensure that it remains viable to build new houses”.

Not green, not worried about quality or longevity—anything goes so long as the theory of Ricardian equivalence is upheld. The Government are also apparently holding discussions with industry to see how the principle of the green deal can be extended to new homes. The code for sustainable buildings has been taken out and shot, and B&Q is now going to come in and put the roof on our houses once they are built. Even if that supposition were to be taken just a little seriously, then the signal that has already been loudly given out that spending is to be cut savagely and that the fear of deferred taxation is no more should have started to bear fruit. However, it has not, and that, among other things, is why the Government have had to downgrade their growth forecast so significantly. Consumer and business confidence has collapsed and stays at a very low point. Unemployment is rising, house prices are uncertain or falling, and we had negative growth in the fourth quarter of last year.

Let me give a palimpsest. In my constituency, virtually all the day centre schemes for the elderly are to close in mid-April because the money has been cut. According to Ricardian equivalence, that is a signal to get these old people on their feet and investing in their own facilities—perhaps a private entrepreneur could come in and invest in a gap in the market—but of course that is not going to happen. Jobs are being lost, old people are staying indoors instead of going out and about, and ill-health among elderly people is likely to increase. In short, it hurts but it certainly will not work. No amount of flannel to disguise what an empty set of propositions this Budget, this plan for growth and this massacre of planning and sensible regulation consists of will pass muster. It really is time for plan B, or at least to start reading rather more sensible economists.

20:41

[Harriett Baldwin (West Worcestershire) (Con)]

I rise to speak in support of my right hon. Friend the Chancellor’s historic and pivotal Budget. Today we have heard Conservative Members give examples of what a difficult hand the Chancellor has been dealt in producing a Budget. We have heard about the £120 million a day—£840 million a week—that the Government have to pay in interest. We have heard that interest has, in effect, become one of the biggest Government Departments. That is why it is so important to point out the difference between the deficit and the overall debt. In setting out the path that he did, my right hon. Friend still has to live with the fact that debt will be rising in every year of this Parliament until the last one. That means that the debt interest bill is still growing, despite the tighter economic conditions that he has imposed.

I think I am probably somewhat different from other Members of this House in that I did not aspire to come here when I was a student. Indeed, I managed to survive the first 40 years of my life without it ever crossing my mind that I should stand for Parliament. Shortly after Tony Blair’s second election victory in 2001, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) gave another historic Budget in which he departed from Conservative spending plans for the first time. At the same time, that Government were beginning to evaluate whether the conditions might be right to enter the euro. Those two horrors were the impetus for me to seek election to this place. I vowed, as a mother, that I wanted to ensure that my children did not grow up in a country that was facing bankruptcy, and yet I failed to get here soon enough to stop the rot. I am therefore very grateful to the Chancellor for having finally set out a path that will enable my children—and one day, I hope, grandchildren—to enjoy opportunities of the kind that I enjoyed when I left university.

Enough of me; I think I should talk about the Budget. I welcome the Budget’s focus on growth and the private sector. When the right hon. Member for Morley and Outwood (Ed Balls) was an adviser to the previous Prime Minister, he set out something called a neo-endogenous growth strategy. Again, I realised quite early on that the problem with such a strategy is that before long the marginal impact of increased Government spending decreases, and one runs out of money. We therefore need to focus on private sector growth, which is why this Budget is so pivotal. A lower tax rate for businesses will bring in higher tax returns.

[Mel Stride (Central Devon) (Con)]

My hon. Friend makes a powerful point about the importance of lowering taxation on businesses to provide growth. Does she agree that the Chancellor was immediately vindicated the next morning, when Sir Martin Sorrell was on the “Today” programme explaining that WPP, the world’s largest advertising agency, would consider relocating to the UK as a direct result of the Budget?

[Harriett Baldwin]

Those sentiments were echoed by businesses in my constituency, where entrepreneurs welcomed and cheered the measures set out in the Budget. I also received a communication from a non-dom in west Worcestershire—I did not think we had one, but we do. He is so pleased with the clarity of the Budget that he is going to bring lots of money in on a remittance basis to invest in businesses in the UK.

I have a couple of questions for those on the Front Bench. I do not think that we can enjoy sustained economic growth until we resolve the problems with our banks. I agree with the hon. Member for Telford (David Wright), who said that Japan suffered from slow growth for many decades because it did not do anything about its banking sector. The sooner we get rid of the state’s ownership of so much of the banking sector, the better it will be for the health of the economy.

Given that the Financial Secretary is on the Front Bench, I will take this opportunity to read a passage from the Budget speech:

“from April, we are going to impose a moratorium exempting all businesses employing fewer than 10 people, and all genuine start-ups, from new domestic regulation for the next three years.”—[Official Report, 23 March 2011; Vol. 525, c. 956.]

I ask the Financial Secretary to raise this point with the Financial Services Authority, which we know is the regulator of many small, independent financial advisers. I suggest that he take this opportunity to suggest that small IFAs employing fewer than 10 people might be exempt from the increased regulation in the retail distribution review.

In conclusion, I believe that this Budget will be seen as historically pivotal, because it will create real jobs, real growth and real prosperity. Such real prosperity can come only from investment in business and from exports. There will be exogenous growth—the exogenous growth of the private sector. I look forward to supporting the Budget in the Lobby tomorrow.

20:47

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

This could be a Budget for growth—reduced growth. A few weeks ago, the Chancellor blamed the snow. Now we have the old chestnut, “When in doubt, blame the planners.” There is the idea that everything that is wrong with this country is down to our planning system. I accept that some proposals in “The Plan for Growth” may be helpful. Speeding up the consideration of planning applications is generally beneficial. However, I have four areas of doubt in which I want to urge caution.

First, developers want certainty. Consistently tinkering with the planning system leads to uncertainty and is likely to discourage development. Secondly, good developers want good quality development. If they are concerned that on the site next door to them, tin sheds could go up unrestricted, they will be less likely to put their money into good quality development. The Royal Town Planning Institute has cautioned against a return to tin-shack Britain. Thirdly, not only might more houses be built on greenfield sites; if restrictions are not properly applied to applications, out-of-town superstores might rear their heads again, which would go against the policy of the previous Conservative Government of a “town and district centre first” policy for retail development. Finally, we have had enterprise zones before, and last time each job cost an average of £26,000 of public money. There is concern, which the Secretary of State for Communities and Local Government referred to, about jobs simply being transferred to enterprise zones from other areas. He said that that would be controlled, but it is difficult to see how. It is even more difficult to see how we can control the problem of development that would have been undertaken elsewhere going to an enterprise zone instead, at a cost to public funds.

There is a real housing problem in this country. We can welcome the Firstbuy housing programme that the Government have introduced, although it looks very much like HomeBuy Direct, which they have just abolished, by another name. The real concern is the chronic shortage of housing in this country. We hear that from people in our surgeries such as young couples who cannot buy their first home, people who need social housing and are on the waiting list and people in overcrowded accommodation.

What the Government have done in the Budget has to be considered alongside a 50% cut in money for new social homes in the next four years, and alongside the catastrophic fall in the number of planning applications for new homes that are being approved. There is concern that as individuals’ economic circumstances improve in three or four years, as they probably will, when they feel more confident about buying a new home and mortgage availability improves, the houses will not be there to buy because they will have been stopped in the planning system.

We can argue about the abolition of the regional spatial strategies, but it leaves a vacuum behind and there is no evidence at all that the new homes bonus will generate housing development. If it does not, we could be left with a spike in house prices in four or five years’ time, which again will price young people out of buying their first home and force more people back on to the social housing waiting list. That is a real concern, and I do not think the Government are beginning to address it.

When people in my constituency look at the Budget, they will be concerned that it does nothing to address the fact that their real wages are falling or that their benefits and pensions are not going up as fast as inflation. They will also be concerned that the Government have done nothing in the Budget to cushion people from the attack on front-line services caused by the cuts to local government spending.

Local government is taking a much bigger hit than Government Departments, and cities in the north, such as Sheffield, are being hit harder than places in the south, such as Dorset. The front-loading of the cuts is having a real impact. The Secretary of State for Communities and Local Government has said before, “It’s all right, because cities like Sheffield are managing better”. That is not true, despite the fact that the Deputy Prime Minister has said that it is all okay because Sheffield city council is cutting only 200 jobs. Its own website shows that 731 jobs are to go. As it has a high level of outsourcing, many hundred more jobs in the private, third and voluntary sectors will also be cut.

Voluntary sector organisations such as the south-east Sheffield citizens advice bureau are facing 15% cuts to their budgets this year, nearly twice the level of the cut in the council’s funding. That is completely contrary to what the coalition Government said should happen. There are unspecified cuts in the council’s budget, such as £1.3 million for library services. The council is not saying which libraries will close, which books will not be bought or which libraries will have their hours reduced. It is achieving its proposals only by reducing balances to what the chief executive has said is a low level at a time of considerable risk.

Sheffield council is facing up to exactly the same problems as other northern cities are facing. Unfortunately, it is choosing to delay its cuts until after the local elections, when either that deferral of the cuts will help win the election, as it hopes, or more likely the problem will be passed on to a new, Labour council. It is hiding the reality of the cuts from the people of Sheffield. In reality, Sheffield council is facing the same funding reductions as councils in similar cities, and will therefore face the same cuts to front-line services and the same loss of jobs, not merely in the public sector but in the private and voluntary sectors. The Budget will do absolutely nothing to address the situation.

20:53

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

As a nation, we borrow almost £150 billion a year. That is £12.5 billion a month, £410 million a day or an incredible £4,745 every second. By the time I sit down, we will have borrowed another £1.7 million. That is the economic reality that we face, and the reason why balancing the books and business growth are so vital to our country. As an entrepreneur and business man I feel that I have some knowledge of what will damage and what will encourage growth in business, and I am delighted to say that the plans set out in the Budget are most certainly of the latter variety.

I ask Members to imagine, if they will, that we are a group of men and women who are considering setting up or expanding a business. Times are tough, but there are now a number of incentives that can help us make up our mind. One of our earliest decisions is where to site our business. In the early stages, we want to make our capital and that of our investors go as far as possible, so we settle on an enterprise zone, where we get up to a 100% discount on business rates, new, superfast broadband and, as a manufacturing firm, access to enhanced capital allowances, giving us relief on investment in plant and machinery.

At the beginning, like many businesses, our budgets are tight and banks are unwilling to lend, so we look to angel investors for support. The enterprise investment scheme offers tax relief to those investors, and thanks to the Budget the income tax relief on an investment has been increased from 20% to 30%, and the amount that an individual can invest in our business has been increased by 400%. Those changes will make investing in our business, which is an obviously excellent proposition, even more attractive.

[Heather Wheeler (South Derbyshire) (Con)]

Does my hon. Friend agree that businesses in my constituency will grow because of the reductions in corporation tax in the Budget?

[Nadhim Zahawi]

My hon. Friend is absolutely right, and I shall come to the effect of corporation tax in a moment.

As a result of the measures in the Budget that I described, our business has raised early stage finance and begun an expansion programme. As a small company, our R and D tax credit will increase from 175% to 200% this April, and to 225% this time next year. That will allow us to invest in products for the future, helping us to carve out a real niche in the market and to sell our products to the rest of the world. That is crucial. In the real world, that helped me and my business, as we evolved YouGov and invested in its future.

Often the smallest things such as changes in regulation, red tape, and complicated tax and health and safety rules greatly affect businesses.

[Charlie Elphicke]

Does my hon. Friend also welcome the Budget because it represents a vast crackdown on regulation? That will help businesses in Dover and Deal as much as those in his constituency?

[Nadhim Zahawi]

My hon. Friend is absolutely right. That is exactly what the Budget would do for our imaginary business. Three hundred and fifty million pounds’ worth of regulation will be scrapped, the dual discrimination rules in the Equality Act 2010 will be ended, Lord Young’s recommendations on health and safety will be enacted, and new business regulations for the smallest business will be stopped. That is a great starter for 10 from the Chancellor.

As my hon. Friend the Member for South Derbyshire (Heather Wheeler) rightly pointed out, our corporation tax has been reduced by 2% this year, and by 2014 we will be paying the lowest corporation tax in the G7—16% lower than in the US. Many say that that is just a tax cut to line the pockets of business owners, but I disagree. Business owners know that every extra £1 paid in corporation tax is £1 less to reinvest in their business to support growth and job creation, which the Labour party seems never to have understood.

Lowering corporation tax is vital in attracting new, overseas business to the UK. Corporation taxes are not the sole attractor, but they and tax certainty are important in attracting overseas investment. The fact that chief executive officers, such as that of WPP, have announced that their companies are coming back to the UK is testament to that, and today’s letter in The Daily Telegraph from the leading private equity houses reiterates the point.

Let us go back to our little business, which is growing, employing more people, and making more and selling more to the world. However, the cost of fuel is hurting us, and we watch our costs and those of our suppliers increase with transport costs. Luckily, the Government are listening. They feel our pain, and decide to deal with the high petrol price. Under the previous Government, our fuel duty would have shot up by 6p in three days’ time. After all, by the end of their 13 years in power, 75% of the cost of fuel was taxation.

For the employees of our company, the 45p per mile allowance is another huge milestone. The allowance has been 40p for so long that most young people in work cannot remember it ever increasing. That amount was out of step with economic reality. This increase not only makes sense, but is vital for those in business who use their own vehicles, and is particularly helpful to the self-employed. It also, by the way, helps voluntary organisations such as Voluntary Action Stratford-on-Avon, whose volunteer drivers provide such an excellent service.

I return to our little business. What happens if we are successful, and if through our hard work and entrepreneurship it grows, and another business wants to buy us, or we want to float our company? Thanks to the Budget, our capital gains tax relief for entrepreneurs has been doubled to £10 million, increasing the reward for our hard work and investment, and encouraging more individuals to invest in their own business. As you can see, Mr Deputy Speaker, our hypothetical company, like millions of real-world start-ups, will have been aided by the announcements in this Budget. It is a Budget for growth, and through it many start-ups and small firms will get a fighting chance to be a great success. I commend the Budget.

21:00

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

I want to declare an interest. From 2004 to 2010, I worked for a regulator—the bogeyman of Conservative Members. I worked for Ofcom. Working in that area, I was very aware of the dangers and limitations of regulation. However, I am also influenced by my time spent in the private sector in countries that have little or no regulation. It would make for an interesting reality show-type experiment to take Conservative Members who decry all regulation and place them in an entirely unregulated environment to see how they would fare without established property law, civil protection, guaranteed quality standards, working rights, planning control or health and safety.

But enough fantasy. I want to focus on why we need better regulation and the role of regulation in growth. All Governments promise to reduce regulation. I am quite sure that every Byzantine emperor came to power on a platform of less regulation. When Labour was elected in 1997, one of the first things we did was set up the Better Regulation Task Force, and later the Regulatory Enforcement and Sanctions Act 2008 put in place a requirement to remove unnecessary regulation. However, regulation often has unforeseen consequences or is interpreted in bureaucratic and inflexible ways. The solution is not to call for a war on all regulation, but to examine existing regulation imaginatively and to ensure that more public servants have experience of business.

Having worked for a UK regulator with European regulators, I know that we often translate into English law and then interpret European directives in ways that are much less flexible and more burdensome than those in other countries. I welcome evidence-based proposals, therefore, to reduce and/or improve regulation. The improvements to clinical trial regulations proposed in the Budget should lead to better regulation, which is good for business and innovation. However, the sleight of hand by which the Government have delayed green building regulations will actually add to the uncertainty in the building industry and reduce our energy efficiency.

We should not forget that the financial crisis would have been even worse had Labour heeded Tory calls for more deregulation of the City. As the shadow Chancellor has said, we should have been tougher with the City, but the Conservative party was certainly not calling for more regulation in that case. Since coming to power, the Department for Business, Innovation and Skills—the self-styled department for growth—has introduce 26 new regulations in six months, of which several will impose a burden and substantial costs on businesses.

The Government’s repeated calls for reduced regulation are yet another example of their rhetoric exceeding their reach. We know that the Government are recklessly cutting too far and too fast, but they are also entirely failing in leadership. Labour believed that the Government had a duty not to pick technology winners, but to deliver the coherent business, academic and political environment in which the best can win.

Recently I visited a small but growing, innovative high-tech manufacturing company, Kromek, which is developing colour X-rays for security applications. It is based in NETPark—the North East Technology Park—in County Durham, a business park supported by the RDA and the local authority. However, the company is finding it hard to get the talent that it needs, because of the Tory Government’s visa policies—an example of new regulation preventing growth. As the north-east chamber of commerce recently said:

“Since the Government came to power, business have seen the reversal of plans to recycle Carbon Reduction Commitment revenues; the Feed-In Tariff capped; and a delay to the expected start date of the Renewable Heat Incentive. These changes are delaying investment in low carbon technology.”

That regulatory uncertainty means jobs being lost in new industries, including in the north-east. As NESTA—the National Endowment for Science, Technology and the Arts—said when discussing regulation:

“Removing barriers to innovation is important, but on its own it is not enough. Innovation happens in an ecosystem and Government has a role to play in constructing that environment.”

To conclude, rebalancing and growing our economy requires vision, leadership, regulatory imagination, coherent policies and targeted investment. This Government are offering up a few regulatory sacrificial lambs to distract from the vacuum at the heart of their strategy for growth.

21:04

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

I am grateful to follow the hon. Member for Newcastle upon Tyne Central (Chi Onwurah), who was trying to make some positive comments about regulation, as was the hon. Member for Sheffield South East (Mr Betts), who spoke previously. Unfortunately, however, what we have heard from the majority of Opposition Members is this line about how we are cutting too far, too fast. It would really help their presentation to the country, including my electorate—or at least their presentation to us—if they said which cuts they would be prepared to tolerate, because to my electors their position just sounds bogus and false. The Opposition have lost the argument about how we got into this problem, but it would be really useful in the argument about how far we cut to know their position. I can say from my attendance in the Chamber that they have opposed every one of the Government’s proposed cuts. We would therefore love to hear one or two suggestions from the Opposition about where they would be by now.

Like most Members, I suppose, I spent the weekend trying to find out what constituents really feel about this Budget, on the political proviso that we should be careful on the first day, and then see how it sinks in on the following days. We are now five days in, and if I can sum up the general view by quoting one of my electors, he said of the Chancellor—in true Lancashire fashion, of course—that he did not think that the lad had done too badly, given the poor hand that he had been dealt. I have found that to be pretty much the general impression.

As for growth, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) is absolutely right. Indeed, the north and western Lancashire chamber of commerce has said:

“Overall there is a lot in this Budget for Business,”

and specifically mentioned the corporation tax reduction and cuts in fuel duty. From the workings-out that I have seen, the Federation of Small Businesses gives the Chancellor eight and a half out of 10, welcoming the measures on fuel duty, the fair fuel stabiliser, apprenticeships, deregulation, enterprise zones and small business rate relief, and the doubling of entrepreneurs’ relief and the increase in the R and D tax credit for SMEs.

In the few minutes remaining, I want to pick up on something that my hon. Friend the Economic Secretary said last week when she talked about regional imbalances. Anyone who goes to the Fleetwood end of my constituency and asks people there what their view is of economic policy over the last 13 years, would simply be told that Fleetwood had been forgotten—a port now without a ferry service; a train line without a train on it. Yet behind all that—to return to the point made by the hon. Member for Newcastle upon Tyne Central—all that small businesses talk about are the regulations that prevent them from taking on more people. I have food processors in my constituency that export all over the world, but they are trapped by regulation. They want to take on more apprentices, and they hope that something will come from the measures in the Budget.

The interesting thing about Labour policy on the regional imbalance over the last 18 years is this. The Office for National Statistics uses a measurement called gross value added, which measures the contribution to the economy of each individual producer, industry and sector. It showed that there was decline in the north every year for the past 13 years as growth in London and the south-east increased. Lancashire’s rate of decline was twice that of the whole of the north over the past 13 years. The figures are consistent for every single year.

What has gone wrong? My right hon. Friend the Secretary of State for Communities and Local Government has suggested that the regional development agencies were not working, and I support that view. I sat on the board of the London Development Agency for four years. I have to be careful what I say, because I see my hon. Friend the Member for Ealing Central and Acton (Angie Bray) in the Chamber, and she was instrumental in getting me on to that board as the lone Conservative. But why did London need such an agency in the first place? It had all the bureaucracy and office-led systems of any other development agency. It also claimed that every person employed across the whole of London was employed as a result of its actions. I could never quite make that connection, because I thought that perhaps the City of London Corporation and the development in the docklands might also have had something to do with people coming to London.

There is a general view in my part of the world that people in London think that the north-west begins and ends with Greater Manchester and Merseyside. I am therefore not surprised that each of those areas is to have one of the new enterprise zones, but I hope that Ministers are listening and will perhaps decide that there will be room for one of the 21 zones announced in the Budget in part of Lancashire.

During my four years on the board of the London Development Agency, I learned that, while it is possible to spend money on all kinds training schemes, as the Opposition have proposed, infrastructure is the key. This Government have made a commitment to major transport improvements. I also hope that the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) will look into the proposal in the Liberal manifesto for regional stock exchanges. Given the problems with banks and investment, they might encourage greater investment by local people in local businesses. The Chancellor should look into that. A great practical step forward would be the announcement of a Lancashire-wide stock exchange based in Lancaster.

21:12

[Nic Dakin (Scunthorpe) (Lab)]

It is always a pleasure to follow the hon. Member for Lancaster and Fleetwood (Eric Ollerenshaw), and I will try to respond to his challenges.

The Budget statement treads water while this reckless Government cut too fast and too deep. While the Deputy Prime Minister confides that there will be nothing for him to disagree with the Prime Minister about in future television debates, the nation suffers. Indeed, the nation is bracing itself for worse to come. I was proud to join more than 250,000 honest Britons on the march for the alternative on Saturday. That was the big society in action, rising up to say no thank you to the Government, and I am happy to spell out what the alternative is. Strangely, it is the very alternative that the British people voted for last May. Let us be clear: no individual party won the 2010 election. The British people essentially said, “A plague on all your houses.” One thing is certain, however: they roundly rejected the Conservative argument that there was a need to clear the deficit in double-quick time over four years. That argument was well put by the Tory party and the Tory media, but the British people gave it a resounding no. Instead, more people voted for candidates who argued that the deficit needed to be reduced more carefully and more slowly.

As someone who has run an organisation employing more than 250 people, I well know the difference between making cuts of, say, 8% and 16%. Chief constables said that they could manage a cut of up to 12%, but that anything greater would harm front-line services. The front-loading of cuts in public expenditure will also make the situation far worse. There are many of us in the Chamber who have run real organisations in the real world, and we know that savings can be more intelligently and better made when they are properly planned and actioned over time. There is a massive difference between the quantum of the service reductions being recklessly driven forward by this Government and the approach that Labour has argued for.

Alongside cuts in spending and tax increases, there is a need for growth to address the deficit. The Government’s plan for growth is this vacuous document, and in its four-point plan, it is silent on how to stimulate the biggest driver for growth—demand. That is not surprising as the actions of this Government have been to machete demand. With consumer confidence in free-fall, unemployment rising exponentially and inflation fuelled by a VAT hike, living standards are being eroded and the economy is contracting. All this is before the cuts in public expenditure hit next month and we see record job losses in the public sector and the lowering of demand for goods and services in the private sector. It is not, I am afraid, a pretty picture.

[Charlie Elphicke]

I have been listening carefully to the hon. Gentleman’s argument. I am unable yet, however, to understand or hear what alternative he suggests. Will he tell us what his alternative is?

[Nic Dakin]

The alternative is to go much more slowly and much more carefully so that things can be managed out there in the real world. [Interruption.] I am sorry that Conservative Members just do not understand the difference between double and half. They simply do not understand it, but perhaps that will get through to them over time.

[Nadhim Zahawi]

rose—

[Nic Dakin]

I turn to deal with aspects of regulation and economic reform.

[Several hon. Members]

rose—

[Nic Dakin]

I am not giving way, as other Members want to speak.

Let me welcome the decision to defer the fuel duty rise in line with what Labour called for. It is disappointing, however, that the rise in VAT on fuel means that even allowing for a 1p reduction, people still have to pay 2p more a litre.

There is potential merit in the incentives for further charitable giving, but these are limited in their scope. I hope that the Government will examine carefully the proposals brought forward, with strong cross-party support, in my recent ten-minute rule Bill. It is designed to ensure that charities taking over the delivery of services from the NHS—for hospice care, for example—are treated in the same way as the NHS in respect of the application of VAT to non-business supplies.

The Budget’s proposals to increase support for technical innovation and research and development are movements in the right direction, as are the faltering steps forward for the green investment bank. However, I am disappointed not to see greater emphasis placed on ensuring that future investment in energy infrastructure will be carried out and supplied by UK-based companies. Such an approach would support the sort of renaissance that is needed in steel-based manufacturing supply chains.

I am further concerned about the introduction of the carbon floor pricing. It is not only steel manufacturers such as Tata in my Scunthorpe county constituency that are sceptical, but organisations like Greenpeace, which said:

“The carbon floor price will put up bills, deliver a windfall profit for existing nuclear power stations and yet it won’t drive investment into clean energy and improved efficiency. It’s not so much a green tax as a stealth tax and it’s exactly the kind of measure that gives green levies a bad name.”

The proposals on planning law are confusing when set alongside the direction outlined in the Localism Bill. At first glance, these are Janus-like policies, pointing in two directions. As the hon. Member for Mid Dorset and North Poole (Annette Brooke) pointed out, they present mixed messages to an already confused world.

Finally, there is nothing in this Budget to support getting young people into work and much to create greater worklessness. The investment in apprenticeships is to be welcomed, but the key issue around apprentices is not student demand—there is plenty of student demand out there—but employer supply. As the Federation of Small Businesses says, small businesses

“are willing to take on apprenticeships given the right incentives.”

This remains sadly unclear. There was also disappointment that the Government had chosen not to extend the graduate internship scheme.

To conclude, this is a Budget that disappoints rather than inspires. It leaves the UK economy charging pell-mell in the wrong direction. It is a helter-skelter ride of falling demand, rising joblessness and falling living standards. I hope the Government will listen to the people, take stock and pause—before it is too late.

21:19

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

I thank all Members for the speeches that they have made this evening. We have heard a bit of knockabout and a few partisan comments, and of course that is all good fun in the Chamber, but I want to shed some light on the issue. I want to draw attention to the writings of one Hamish McRae, the economics correspondent of The Independent—a newspaper which, if truth be told, has not always expressed a favourable opinion of Conservative Members.

From about 2005 onwards, Hamish McRae’s weekly columns highlighted the fact that the then Chancellor was quoting his famous golden economic rules less frequently, until he eventually stopped referring to them, in much the same way as he stopped using the word “prudence”. In later years, Mr McRae pointed out that the Chancellor had continued to borrow money even when tax receipts were fairly plentiful. Despite Tony Blair’s best efforts to stress economic credibility and use the term “prudence” from the beginning of the last decade, the Labour Government abandoned Conservative spending plans and resorted to type, which meant spending money. Labour Members cannot help it: in the end, they always think that they can cure society’s ills and promote social mobility by throwing money at a problem.

The present Government have produced a pro-growth and pro-aspiration Budget. First and most important, it outlines a strategy for growth, a strategy for reducing the national debt, and a strategy for continuing to restore confidence in our once broken economy. We must never shy away from supporting businesses by offering competitive levels of taxation, and we in the House of Commons must send out the message that the country is once again open for business.

Over the last decade, many high-profile companies have left the UK to escape our complicated tax system and our higher than average rate of corporation tax. Given the increased mobility of capital and people, Britain must be an attractive place in which to work and live. We must be a beacon for investment from around the world and the jobs that it will bring. With this Budget, we can once again start to attract the kind of investment that the country needs. Britain must be able to compete to attract the brightest and the best, and enterprise zones, lower corporation tax and other measures outlined in the Budget will achieve that.

I am proud to be able to speak about what I feel is the most important part of the Budget, the part that deals with enterprise zones. I know that the black country has already been allocated an enterprise zone, and I am delighted that the Chancellor has made that decision. I have in mind Wolverhampton and my constituency of Wolverhampton South West when I say that I hope and believe that the reintroduction of enterprise zones will offer the black country an opportunity to rebalance the regional economy and provide the building blocks for future prosperity in areas that have missed out on capital spending projects over the last decade. I grew up in the shadow of Merry Hill. I remember the original site, and I saw with my own eyes the power of ambition and aspiration being tangibly enhanced as the buildings rose up in a sea of regeneration.

The recovery must be led by the private sector, and the Budget outlines how we will be able to achieve that. The growth of small businesses employing a handful of people will be central to our future economic prosperity. They are the engines of our economy, employing 60% of the private sector work force and contributing half the United Kingdom’s annual turnover. Lower taxation, planning simplification and less bureaucracy will provide an ideal cocktail of measures to kick-start local economies and encourage the growth of that vital sector.

Let me end by briefly discussing another of Labour’s legacies. Labour created an environment in which young people feel unable or unwilling to take the first steps in creating their own businesses. On Friday I visited a number of sixth-form politics and economics students. When they were asked whether they wanted to set up their own businesses, none of them said that they did. I was struck by their reaction, which suggested that future generations would not be inspired to go out into the world of business. Indeed, that supports the finding of commissioned research that 50% of young people do not feel that they are encouraged at school to be entrepreneurial. Changing that culture is vital to our economic future. Children in our education system need to be challenged and encouraged to take employment into their own hands. We need to invest in and develop talented young people, supporting them in the first steps on the difficult journey towards creating their own businesses and ultimately becoming successful.

Perhaps more pernicious is the Opposition’s determination to play politics and present the most draconian picture of the responsibility measures taken by the Government. Indeed, the Leader of the Opposition compared the demonstration on Saturday to the struggle for civil rights and the suffragettes. In 2009-2010 Government spending was £669 billion; by 2014-15 it will be £647 billion, a few percentage points leaner. Even more tellingly, in 1999-2000 it was £343 billion, and had it followed inflation, it would have been £438 billion by 2009-2010. In fact, expenditure increased by over 50% in real terms during the current decade. Labour just cannot help itself: it will always be in its DNA to spend other people’s money. Thank goodness we on this side of the House are implementing measures to return the country to good economic governance and responsible spending.

21:25

[Kerry McCarthy (Bristol East) (Lab)]

The Government have had to face up to two challenges in this Budget. The first was to do with growth, on which the news presented to the Chancellor as he drew up his Budget was not good. The UK economy shrank by 0.6% in the last quarter and the Office for Budget Responsibility was forced to revise downwards its growth forecast for the next two years. Unemployment is more than 2.5 million, a 17-year high, and is rising rapidly, and again the OBR has had to raise its forecast. The Chancellor must know in his heart of hearts that it is simply not possible to reduce the deficit while the economy is shrinking, tax revenues are falling and the number of unemployed people is rising.

[Angie Bray]

Will the hon. Lady give way?

[Kerry McCarthy]

I am afraid I do not have time, as I want others to be able to speak.

Instead of listening to the mounting evidence that the plan is not working and preparing a fiscal plan B, the Chancellor is not for turning. He has stuck to his plan of cutting too far and too fast, and instead of a plan for growth that would create jobs, he has gone back to the failed Thatcherite ideology of the ’80s—that by simply removing regulations and lowering taxes, the private sector will rush in and save the day.

I welcome the announcement of a local enterprise zone for Bristol, of course—this Government have so little to offer us that we have to grab what we are given—but how long will it be before we see the benefits of such a move, and how will we ensure that this does not simply displace investment from other areas that need it just as much? The Work Foundation says that up to four fifths of the jobs created by enterprise zones in the 1980s were merely shifted from other areas. It also says the cost of creating such jobs was in today’s money £26,000 per person. We should compare that with the £6,500 cost per job created under the future jobs fund, which, as I recall, not very long ago the Conservatives were decrying as a waste of public money.

With the regional development agency axed, where is the strategic overview for the wider city region of Bristol to come from? Where are the sources of match funding? Where is the focus on, or funding for, our infrastructure needs? On infrastructure, may I once again make a plea for an integrated transport authority for the Bristol area, as that is badly needed? On housing, I agree with the National Housing Federation, whose representative said:

“Removing regional spatial strategies, without putting anything in their place, was a short-term mistake”.

The NHF has estimated that local authorities have already scrapped plans for more than 200,000 homes as a result of that, and that there may be no new social homes built until 2015. In Bristol alone, 9,600 planned homes were scrapped by the city council. Shelter says that only 39% of housing need is met in Bristol. Last year, about 10,500 people were on the waiting list for social housing, and with transfers included, the number was as high as 15,000, but only a few thousand people a year are being rehoused. There is a clear need for a strategic level of planning to ensure that local need is met.

The Government now promise a presumption in favour of sustainable development in the planning system, but neither that nor the promised national planning framework were set down in the Localism Bill, and that presumption would appear to be at odds with the Localism Bill itself, which gives nimby power to small sections of a community to block developments in a local area. It is therefore unclear whether or not local people have been given more say over planning decisions in their area.

I welcome the Budget’s proposal to speed up major planning decisions. Developers in Bristol have in the past complained to me that it takes a long time—years sometimes—to get approval for their big projects and that it is simply not financially viable to hang on in there and wait. I accept that the planning authorities do need a rocket put under them, but that must not lead to decisions being railroaded through without local people being given a proper say.

The second challenge the Chancellor faced in his Budget was to deliver help for ordinary people, and again he comprehensively failed. The economic crisis began in the financial sector, but ordinary working families are paying the highest price for it. The cost of living is now rising by over 5% per year on the retail price index measure. That is in no small part due to the Government’s decision to raise VAT. Meanwhile, average wages grow at just 2.3%.

At the same time, cuts to services are also affecting the quality of life of ordinary people. Councils are grappling with cuts to their formula grant of 28% over four years. The Communities Secretary said that councils should be able to find efficiency savings rather than make front-line cuts, and the Deputy Prime Minister said that

“they shouldn’t immediately start issuing redundancy notices for savings that they can phase in over four years”,

but the Local Government Association believes councils will make 140,000 redundancies next year across the UK, and the Liberal Democrat-controlled Bristol city council is making 340 people redundant next year alone, and it is reported that 600 jobs are now under review. The Communities Secretary told councillors last year:

“You are now in charge of something like £38 billion every year, no strings attached.”

He also said that they were back

“in charge of the decisions which matter”,

but in fact the only decision that councillors are now empowered to make is the decision to slash services on which local people rely.

The Chancellor could have chosen to implement a real strategy for growth by keeping people in work, building homes and infrastructure, and investing in businesses and industry. Instead he is cutting too far, too fast, and his Government have removed the strategic mechanisms for delivering the investment we think is needed. Even staying within his fiscal plans he could have chosen to put a greater share of the tax burden on the banks by reintroducing the bankers bonus tax. That money could have been used to create jobs and homes, as we suggested. He could have chosen to smooth the cuts to local authority budgets and protect the most vulnerable groups from sudden front-line reductions, rather than front-loading the cuts. The Chancellor is not listening. I predict that in time he will wish that he had.

21:31

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

I welcome this Budget as the first step in a much overdue reform of our economy and our tax system. It is not a sustainable position to expect the private sector, at 50% of the economy, to support itself and the other 50%, which is the public sector. The rebalancing of our economy is not a nice optional extra or a Government whim: it is absolutely essential to our country’s current and future economic survival in an increasingly competitive world. It will be by promoting enterprise that we grow our way out of the disastrous position left behind by the last Labour Government and their debt-fuelled economic model, which has been proven to be totally unsustainable. They borrowed even in the boom years of 1997 to 2004, when the national debt rose by an eye-watering £74.9 billion.

I welcome the announcement of the extra 1% cut in corporation tax to 26% this year, making it the lowest corporation tax rate in the G7, which is accompanied by commitments to reduce corporation tax further in future years. That positive move will let international businesses know that Britain is truly open for business. In addition, there are many signposts that if someone is prepared to take risks to generate wealth and pay taxes, the rewards will be worth while. The doubling of the size of the entrepreneur’s relief, for instance, ensures that if someone creates wealth and employment, they will not be overly punished by the taxman when they exit their business.

Other measures taken in this Budget are a welcome start on the road to regulatory reform and will be of encouragement to employers in my constituency and across the country, especially those with fewer than 10 employees—90% of the businesses in this country fall into that category. The announcements on incentives for charitable giving and the rise in personal allowances should be welcomed and supported by Members on both sides of the House.

I also welcome the announcement that the 50p tax rate is to be reviewed by Her Majesty’s Revenue and Customs, and the revenue raised from the new rate calculated. I have written at length about the damage the measure has done to our economy. Hon. Members will recall that when Nigel Lawson cut the top rate of tax from 60p to 40p in 1988, the tax take rose and the top earners actually paid a larger share of it. When the Treasury recently decided to set the rate of capital gains tax at 28%, it stated that studies it had conducted concluded that this was the rate that maximised the tax take. If that is correct and the optimum rate for unearned income is about 28%, it is very unlikely that the optimum top rate of income tax should be nearly double that level. I look forward to the report in due course.

On a personal basis, on behalf of North West Leicestershire, I very much welcome the news that the per plane tax plan is to be dropped. East Midlands airport is in my constituency and the jobs dependent on both the airport and air distribution are a significant part of my district’s economy and employment base. There is nothing more international than air transport and if we had acted alone with the per plane tax, those jobs would have been threatened. Cuts in fuel duty are also particularly welcome for North West Leicestershire, as one in three of our private sector jobs are either in distribution or distribution-related.

I believe the Budget will act as a signpost that the Government will take action to reform our taxation system and our economy. Labour left our economy in a totally unsustainable state—imbalanced in so many ways, whether that meant the proportion of the economy made up by the public sector, our decline in manufacturing or our reliance, or over-reliance, on financial services and housing bubbles. There is no doubt that Labour’s economic model was and still is unsustainable. The attitude of the Opposition to the record deficit they bequeathed the coalition Government is both startling and opportunistic. In opposing all the coalition Government’s saving reductions but still claiming to be in favour of deficit reduction, they are failing to act in their duty of being a credible Opposition on this topic.

This is a good Budget for growth, a good Budget for jobs and a good Budget for North West Leicestershire, and I support it enthusiastically.

21:35

[Sheila Gilmore (Edinburgh East) (Lab)]

A very interesting thing happened in my city in 2009. For the first time since the 1960s, the number of affordable rented homes built exceeded the number of private homes—55% of all new build was affordable rented homes, subsidised by public spending. That subsidy helped the private builders who otherwise would have had to shut up shop for a while—as many have had to do—and meant that some at least could stay in work, and that gave work to the skilled work force who would otherwise be sitting at home watching daytime television because there was no work. When those people are at work they are contributing to our economy and paying taxes—[Interruption.] I do not know why that is so funny for people who want to reduce the deficit, because if people are paying taxes in, that is far better than their simply taking benefits out.

That was a good thing. It showed the weakness of the private sector, however, that it was affordable rented homes that had to be built in the numbers to keep some people in work. I look out from my constituency office at a regeneration scheme that has stalled because the private sector is not leaping in to build new homes and to bring offices or any other kind of business into the area. I look out on land. There is no shortage of land, but there is a shortage of investment to make all this development happen. We ought to invest in housing and build a real shared equity scheme, rather than providing a meagre amount of money that will be available for only one year, as we learn if we read the detail. The scheme is not sustainable: for one year there will be £250 million.

Shared equity has certainly helped to keep the house market going in my city—it is very important—but it needs subsidy. What is wrong is the constant juxtaposition of the private and public sector as though they are at war. In fact, the two are constantly interrelated.

[George Freeman]

Will the hon. Lady give way?

[Sheila Gilmore]

No, I will not.

The private and public sectors are constantly interrelated, because public sector stimulus has kept the economy going since the recession began.

History has been rewritten, and I find it deeply perplexing and upsetting that the Liberals have been prepared to be complicit in that. I am not surprised that the hon. Member for Colchester (Bob Russell) took us along the byways of Colchester becoming a city, because it was a diversionary tactic. He did not want to talk about his party’s real economic policy. It reminded me of when I was working from home—suddenly, cleaning the kitchen became quite attractive because I could not settle down to do the work that required a bit more effort. That is what is happening with a party that went into the election telling people that it would be downright dangerous to cut public spending too quickly. That is not just some sort of Labour notion, as the Conservatives seem to think. It was the policy of two of the parties that went into the election and that, together, won a majority of public support. It is not true that the public supported the financial disaster that the Conservatives are now wishing on us.

I said in a previous finance debate that the proof would be in the outcomes and that if the Conservative party was right and economic growth was driven by their policies, I would concede that, but so far we are seeing nothing of the sort. Our position would not be too far, too fast—

[Mr Speaker]

Order.

21:40

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

My hon. Friend the Member for Edinburgh East (Sheila Gilmore) was making her point so well, and I commend her analysis of this Budget, as well as those of my hon. Friend the Member for Coventry South (Mr Cunningham), my right hon. Friend the Member for Wythenshawe and Sale East (Paul Goggins) and my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger), for Newcastle upon Tyne Central (Chi Onwurah) and for Telford (David Wright), among others. They all made the point that it is a no-growth Budget that is hurting many people and that certainly will not help our economy in the years ahead.

We do not have to look far to see the cracks emerging. Setting aside the scepticism that some might have had about the Office for Budget Responsibility, a cursory flick through its detailed analysis shows that the Budget has had a dilatory effect on our economy. The first line of chapter 3 on page 31 of its report cites a squeeze on household disposable incomes in the coming months weakening consumer spending growth. The OBR states on the same page that

“we have revised down our central forecast for economic growth in 2011 from 2.1 per cent to 1.7 per cent.”,

as my hon. Friend the Member for Southampton, Test (Dr Whitehead) has pointed out. Page 53 of the report says that real household incomes will “fall further in 2011”, and page 54 states:

“We have revised down our forecast for consumption growth…from 1.3 per cent to 0.6 per cent”.

Page 62 tells us that the medium-term forecast for exports needs to be revised downwards and page 72 states:

“We expect unemployment to rise over the next few quarters,”

with unemployment 80,000 higher in 2012. On page 75, the OBR downgrades forecasts for average earnings and output growth and on page 76 it tells us that aggregate wages and salaries will be

“around 1 per cent lower by 2015-16 than expected”—

and on and on it goes.

Economic growth matters, but that simple fact is lost on the Chancellor. I asked the Library about the cost to the Exchequer of that infamous quarter 4 reduction in economic growth in the last few months of 2010 when the economy shrank by 0.6%. It estimated that that reduction has caused a £3 billion reduction in Treasury revenues—£3 billion that might have been anticipated in revenue if performance in quarter 4 had been anything like that in quarter 3. That significant sum would have been enough to offset the need for the freeze in child benefit or the cuts in capital allowances for business investment that the Chancellor announced.

There is a symmetrical irony in that the OBR says, on page 125 of the report, that an

“increase in the claimant count”

will lead to “higher benefit payments” in 2012-13. As my hon. Friends the Members for Bishop Auckland (Helen Goodman) and for Glasgow North East (Mr Bain) have pointed out, the OBR has forecast an increase in social security costs of

“approximately £3 billion per year from 2012-13 onwards”.

When economic growth is driven down and unemployment is increased, those costs and the deficit are both going to be increased, as the eminent economist Paul Krugman has pointed out this week. This obsession with deficit reduction to the exclusion of all else—this fetishism—is a very narrow view of the world and ignores the impact that the Government’s belligerent strategy is having on the real economy.

The other document that was published with the Budget, “The Plan for Growth”, has also failed to convince anyone that the Government understand the importance of the real economy. The OBR’s reaction to the policy measures, when it had totted up all the Chancellor’s announcements, was that

“we do not believe there is strong enough evidence to raise our trend growth assumption”.

That is its response to the measures in the growth plan. As my hon. Friend the Member for Scunthorpe (Nic Dakin) so eloquently put it, the Government have taken a machete to growth—that is exactly what has happened. Their growth plan is riddled with confusion, fudge and contradictions.

Enterprise zones sound interesting at face value, but when they were tried in the 1980s they took jobs from surrounding areas. My hon. Friends the Members for Blyth Valley (Mr Campbell) and for Oldham East and Saddleworth (Debbie Abrahams) tried to be as optimistic as they could when looking at those enterprise zones, but we have seen that the Government give with one hand and take away so much more with the other. Any improvements to capital allowances on the margins are taken away by a factor of 10, with the cuts in capital allowances of £5 billion announced for the next five years.

There are in the growth plan allusions to weakening employee rights, as though that is the avenue we have to go down to boost growth. There is an allusion to clarity on the national minimum wage. We will have to see where that goes. There is opposition to improvements in maternity and paternity rights—typical Tory fare. There are some interesting vignettes on legal reforms that the Government want to make. For example, injured parties will have to deduct their legal costs from their compensation, instead of those costs falling on the negligent party. The Government want fewer food safety inspections at takeaways, as some hon. Members mentioned this evening.

There are references to abolishing money-laundering regulations and reducing corporate accounting, but hold the front page! Many people may not have got as far as page 121, where the Government say—this is absolutely serious—that they will review the Outer Space Act 1986. Presumably they will give us a clue what planet they are living on. One assumes it is planet Redwood, but who knows?

As we can see from the discussion that we have had today, the cuts have been significant and they are having an effect on the real economy. We can see that the unprecedented reductions in local government expenditure will harm local economies. My hon. Friend the Member for Sheffield South East (Mr Betts) mentioned that 737 jobs are being lost in Sheffield alone. The Government are facing both ways when it comes to local government reform. The set of proposals in the Localism Bill is hardly deregulatory, with 142 order-making powers. The Government are facing both ways on business rates. They promise local freedoms to councillors, but when businesses object, they say, “We will have national certainty when it comes to business rates.”

There is a looming crisis in residential housing and property finance. On planning policy, as my hon. Friend the Member for Sheffield South East said, so much for localism, when the Government’s clear expectation is

“that the default answer to development is ‘yes’”.

We will see how far localism goes in each of the constituencies of those on the Government Benches.

My hon. Friend the Member for Bristol East (Kerry McCarthy) pointed out that although the planning process needs to be speeded up, the supposed guarantee of a 12-month closure, including the appeal, is incongruent with the 35% cut in the planning inspectorate’s budget—35%. We will see whether the Government can live up to that guarantee. They are abolishing the Infrastructure Planning Commission, but they will have to recreate a major infrastructure planning unit within the planning inspectorate. They say they will get rid of top-down guidance, but the growth plan refers to five new national guidelines.

It must be recognised that there are significant problems with the Budget, one of which is the risk of a lost generation of young people. Youth unemployment is up 30,000 in the first quarter of this year to just under 1 million claimants between the ages of 16 and 24, the highest since comparable records began in 1992. We know that in the 1980s—the Secretary of State for Communities and Local Government has joined us as a shibboleth for that era—the Government neglected the risk of unemployment. We know the story.

Now, again, a younger generation is forgotten by the Government. Young people are losing their education maintenance allowances, their tuition fees are being trebled to £9,000 per year if they go to university, and opportunities to get into work or on to the career ladder will be rare. There is insufficient emphasis in the Budget on work experience and apprenticeships. The Government should have repeated the bank bonus levy that we implemented last year to raise resources to target job creation, but no; instead, they have scrapped the guarantee of apprenticeship places for 16 to 18-year-olds—a massive backward step.

What hope do young people have of getting on the housing ladder with the rather puny Firstbuy scheme, which Shelter says will help less than 1% of first-time buyers? As my hon. Friend the Member for Sheffield South East mentioned, there is a 50% cut in the new social homes construction budget. On top of that there are cuts to housing benefit. Even on pensions, young people are penalised should they dare to want to save for the long term. The Government assume that they can get away with pulling the rug from under young people, perhaps because they do not vote, but the mood is changing across the country. There is a profound sense of unfairness in cutting young people adrift. It is foolish economics to consign a generation to poorer prospects and less prosperity than their parents enjoyed. The Budget’s adverse impact on young people will penalise and alienate those in their teens and 20s. It is a catastrophe in the making, and the Chancellor will rue the day he neglected the younger generation.

21:49

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

We knew that the Labour party was in denial about the deficit and the difficult decisions that the country has had to take as a consequence of its legacy, but every one of the 16 speeches we heard from Opposition Members today reiterated that same denial. They claim that 250,000 people were out at the weekend to find an alternative, but there is clearly no alternative from those on the Opposition Benches. In speech after speech, Labour Members denied the reality of the economic situation they left the country. They have forgotten that when they were in Government the manufacturing sector halved in size while financial engineering replaced real engineering, and that our share of world trade fell as we failed to take advantage of growth in the global economy. The gap between the north and the south grew on their watch, and under their stewardship red tape, whether regulation or the length of the tax code, ballooned, acting as a dead weight on business. Their legacy to this country is an economy that needs reform if we are to have stable and sustainable growth, if every part of this nation is to prosper and if we are to compete with the best in the world. That is the agenda of reform that we set out in the Budget last week.

We want the UK to become the best place in Europe to start, finance and grow a business, but in the past decade alone countries such as Germany, Denmark and Finland have overtaken us in international rankings for competitiveness. In our plan for growth we have therefore taken action to abolish £350 million-worth of specific regulations, to implement in full Lord Young’s recommendations on health and safety laws and to impose a moratorium, exempting businesses employing fewer than 10 people and all genuine start-ups from new domestic regulations for the next 10 years. These measures were welcomed by my hon. Friends the Members for Aberconwy (Guto Bebb), for Mid Dorset and North Poole (Annette Brooke) and for City of Chester (Stephen Mosley). No longer will British business be tied down by wasteful red tape.

We are going to tackle what every Government have identified as a chronic obstacle to economic growth in Britain but have never done anything about: the planning system. Councils are spending 13% more in real terms on planning permissions than they did five years ago, despite the fact that applications have fallen by a third. Yes, communities should have a greater say in planning, but as a result of the Budget we will expect all bodies involved in planning to put jobs and growth first, and we will introduce a new presumption in favour of sustainable development so that the default answer to development is yes.

We will protect the greenbelt, but we will also remove the nationally imposed targets on the use of previously developed land. We will streamline the planning process. I welcome the support from the hon. Member for Bristol East (Kerry McCarthy), who wants to stop applications being bogged down for years, which I think will free up the economy. I am pleased that there is at least one measure in the Budget that Labour Front Benchers will support. No longer will cumbersome planning rules and bad regulation stand in the way of job creation up and down this country.

There has been a lot of talk about enterprise zones. The hon. Member for Nottingham East (Chris Leslie) was dismissive of them, so I think that he should speak to his friends the hon. Members for Blyth Valley (Mr Campbell), for Telford (David Wright) and for Coventry South (Mr Cunningham), who all want to see enterprise zones in their constituencies because they want to see the benefit that will flow as a result. We have already announced four new enterprise zones: Mersey Waters in Liverpool; the Royal docks in Newham; Manchester city airport, which was welcomed by the right hon. Member for Wythenshawe and Sale East (Paul Goggins); and the Boots campus in Nottingham. There are 17 more to follow. The only Member who did not call for an enterprise zone in his constituency was my hon. Friend the Member for Colchester (Bob Russell), who went one further and called for Colchester to become a city. I do not know whether city status will offer the same benefit as enterprise zones, but I wish him well in that bid.

There was some discussion among Opposition Members about the problems of youth unemployment. We know that under the previous Government youth unemployment increased. Let me remind the House what the Chancellor announced in the Budget last week: 80,000 additional work experience placements and a doubling of the number of university technology colleges from 12 to 24. He announced 50,000 additional apprenticeships, taking the number introduced by this Government to 250,000 in total, compared with the plans left us by the previous Government.

We also need to make sure that we have a competitive tax system. Britain used to have the third lowest corporate tax rate in Europe; now we have the sixth highest. At the same time, our tax code has become so complex that it has overtaken India’s to become the longest in the world. As my hon. Friends the Members for Mid Sussex (Nicholas Soames) and for Wolverhampton South West (Paul Uppal) said, we have to address that issue.

Our taxes should be efficient and support growth, be fair and predictable, simple to understand and easy to comply with. That is why from April the corporation tax rate will be reduced not just by 1 percentage point as we announced last June, but by 2 percentage points, and by 1 percentage point for each of the next three years, taking our rate down to 23%—16 percentage points lower than in America, 11 lower than in France and 7 lower than in Germany, giving us the lowest corporation tax rate in the G7.

A competitive tax system is not just about lower rates, however; it is also about the way in which we make tax policy and cut the cost of compliance. That is why last July we set up the Office of Tax Simplification to give advice on how to reduce the complexity of the tax system; and that is why we are going to reduce no fewer than 43 complex reliefs, from Black Beer to Angostura Bitters and late-night taxis to luncheon vouchers. We are ridding the tax system of unnecessary legislation and taking out 100 pages from our tax code, which is a good step towards creating a simpler tax system and reducing the cost of compliance for small businesses.

We need to go further, however. For decades, we have operated separate systems for income tax and for national insurance, with two completely different systems of administration and two different periods and bases of charge. That imposes unnecessary costs on our country’s employers, and that is why this Government will consult on merging the operation of national insurance and income tax to create a simpler, more competitive and more stable tax system that is an asset to our economy.

Several hon. Friends talked about the importance of small businesses having access to finance, and we should not ignore the problems that businesses face in that regard. Small businesses in particular have been innocent victims of the credit crunch. They have seen the flow of affordable credit dry up, their overdrafts squeezed and lending conditions deteriorate. That is why we have agreed with the nation’s banks a 15% increase in the availability of credit to small businesses.

But that is not the end of the story. As my hon. Friends the Members for Stratford-on-Avon (Nadhim Zahawi) and for South Northamptonshire (Andrea Leadsom) said, we need tax incentives to encourage entrepreneurial activity, and that is why it was good to see Sir Ronald Cohen and a number of venture capitalists and business angels praise the measures we announced in the Budget last week to double the size of entrepreneurs relief to £10 million and to increase income tax relief to 30%. That is how we will provide finance to the nation’s small businesses in order to help them to grow and create the jobs that we will need in the future; and that will help Britain to become the best place in Europe to start, grow and finance a business.

The issue is not just about financing start-ups and smaller businesses. We are pleased that the banks have agreed to increase the size of business growth funds to £2.5 billion, and to provide more equity investments for small and medium-sized businesses that want to grow and become the best in the world.

This Government are looking to right the wrongs of the past. We are going to reverse the trend of the past decade, a decade that saw manufacturing shrink, businesses tied down by red tape imposed by the previous Labour Government, the south grow faster than the north and growth balanced precariously on a mountain of debt. We will not repeat the mistakes of the previous Labour Government. We want to see growth built on firm foundations, with reforms that make our country more competitive and more business-friendly, with an economy exploiting new opportunities in the manufacturing, life sciences, digital and creative industries.

That is why the Budget has been greeted with acclaim throughout the country by business organisations that recognise the measures we have taken. That is why the strategy that my right hon. Friend the Chancellor set out, of tackling the deficit, has been supported by the OECD, the International Monetary Fund, the European Union, the CBI, the Institute of Directors, the Bank of England and 35 business leaders who wrote in support of our plans at the time of the spending review last year. Who can the Opposition claim in support of their plans? The Guardian. Is it not typical that, when this country needs far-reaching economic reform, the only answer that the Labour party has is a policy, which it knows is illegal, to cut the VAT rate on petrol?

We have set out measures to ensure that we tackle the mistakes of the past, that build a more dynamic, prosperous and sustainable economy that this country—

22:00

The debate stood adjourned (Standing Order No. 9(3)).

Ordered, That the debate be resumed tomorrow.

Business without Debate

Monday 28th March 2011 Commons Chamber

Private Members’ Bills

Motion made,

That, notwithstanding the provisions of Standing Order No. 14(4), Private Members’ Bills shall have precedence over Government business on 9 September 2011, 21 October 2011, 25 November 2011 and 20 January 2012.—(Mr Alistair Carmichael.)

[Mr Speaker]

As there is an amendment not supported by the Member in charge, I will follow the practice of my predecessors and treat it as an objection to the motion. Objection taken.

Human Rights (Joint Committee)

Ordered,

That Mrs Eleanor Laing be discharged from the Joint Committee on Human Rights and Rehman Chishti be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Bus Services (Hartlepool)

Monday 28th March 2011 Commons Chamber

22:00

[Mr Iain Wright (Hartlepool) (Lab)]

I rise to present a petition on behalf of my constituents who are concerned about the loss of bus services, particularly evening bus services and those on socially vital routes.

The petition states:

The Petition of residents of the borough of Hartlepool,

Declares that the petitioners are concerned that residents in areas of the borough such as The Headland and Burbank, as well as villagers in Dalton Piercy, Elwick and Greatham, have been left isolated and without transport following the decision of Hartlepool Borough council to cut public subsidy to private bus companies.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Transport to work with the Secretary of State for Communities and Local Government, residents of the borough, Hartlepool Borough Council and bus operators immediately to reinstate the services and then to secure a financial settlement and a regulatory framework which provides a comprehensive, reliable and cheap system of bus transport in Hartlepool, designed to address the social and economic needs of passengers in both the urban and rural areas of the borough, rather than the narrow interests of private bus companies.

And the Petitioners remain, etc.

[P000909]

Sustainable Communities Act

Monday 28th March 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Alistair Carmichael.)

22:02

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

I should like to thank hon. Members remaining in the House for their interest in the Sustainable Communities Act 2007. I will begin by explaining why the Act is so important. A successful first round of proposals has been made under the Act, but delays with implementing the 2010 amendment to it are creating unacceptable delays for future proposals, and I want to focus on that as well.

The Act is important essentially because, in so many ways, our communities are unsustainable. In the past decade, Britain has lost a quarter of all its post offices, a quarter of all its independent newsagents and a fifth of all its bank branches. In my constituency, thankfully, there is still a thriving local economy with local traders and businesses fighting off incursions on to the high street by the big chain stores and supermarkets, but we are unusual in being successful thus far, and there are certainly many battles still ahead. In particular, we need more powers to restrict the number of large chain stores that pose a threat to the unique character of our city of Brighton—for example, powers to stop the expansion of supermarkets given that we already have about 56 major ones.

Our city is home to about 10,000 small and medium-sized enterprises, which form the backbone of our economy as well as being a major element in Brighton’s attractiveness to holidaymakers in terms of the services that they provide, such as bars and clubs, and the retail experience that they create. In fact, the city remains home to the largest concentration of independent traders on the south coast. Of course, we also have the well-established reputation of Brighton’s leisure and tourism industry, which attracts more than 8 million visitors a year and has remained a large source of employment in Brighton and Hove despite the recession.

As I said, however, we are bucking the trend, and the relentless march of the high street clones is taking its toll, as are the prevalence of out-of-town shopping centres, the push to run public services such as our post offices for private profit, and the legacy of gaping social inequality. Increasingly, there are signs of disengagement from the political system. Evidence such as the POWER inquiry shows that people want to be engaged and to get involved, but that they do not bother because they perceive that they cannot really change anything.

The Sustainable Communities Act 2007 aims to reverse those interconnected problems. It recognises that community decline is an ongoing national problem. Evidence such as the New Economics Foundation’s “Ghost Town Britain” research demonstrates that and shows that it will get worse if nothing is done. The best efforts of local citizens and communities are not enough to reverse this overwhelming national trend. The Prime Minister has placed enormous faith in what he calls the big society, but without adequate resources it is unreasonable to expect that people will have the capacity, skills, time and wherewithal either to plug the gap left by cuts to public services or to provide the intensive input required to facilitate genuine community development. Of course, we all know of inspiring individuals who make a difference in their neighbourhoods and of projects that turn lives around, but that is not the same as the kind of infrastructure that allows for long-term, community-controlled sustainable engagement in the transformation of our society.

Government should help and Government can help, but communities are the experts on local problems and the solutions to them. The actions that Government take to help them should therefore be decided by communities, not by those in Westminster and Whitehall. A mechanism is needed whereby local people can drive Government action to reverse community decline and create local sustainability. The 2007 Act creates precisely that mechanism and enshrines it in statute. Putting local people in the driving seat is a crucial aspect of the Act. For the first time, it sets up in law a bottom-up process. Communities and councils are invited to make proposals for Government action to reverse community decline and promote local sustainability. Central Government then have a duty not only to consult, but to co-operate and reach agreement with an independent selector body on which of the proposals will be implemented.

The Act became law in 2007 as a result of a long and widespread grass-roots mobilisation campaign organised by Local Works, a coalition of more than 120 national organisations. The campaign inspired tens of thousands of citizens to urge their MPs to back the Sustainable Communities Bill. It struck a chord with communities who were fed up with seeing the decline of the places where they lived and worked, but who felt powerless to do anything about it.

I spoke at a large public meeting in Brighton in 2004, when the Bill had only just entered Parliament. Local Works organised more than 100 such constituency public meetings across the country. The turnout stunned MPs. The meetings drew average crowds of 250 people, with some attracting as many as 300 or 500 members of the public. In 2006, another huge meeting was held in Brighton, to which more than 250 people came to urge the city’s three MPs of the time formally to back the Bill in Parliament. A year later, when the Bill was in its final parliamentary stages, London’s Green MEP, Jean Lambert, spoke before 1,000 people at a public meeting that the campaign had organised in Westminster. I give these examples because they give a clear sense of the level of public support for this campaign and this Act.

The Green party was the first political party to back the Bill formally, and the campaign continued to call for cross-party support. That was eventually achieved and the Act became law in 2007 with the support of all parties across the House. In early 2010, Local Works successfully campaigned for the Sustainable Communities Act 2007 (Amendment) Act 2010. The 2010 Act ensured that the process would be ongoing, and allowed parish and town councils to submit proposals to central Government directly.

It is important to look back to see what has happened since. Have the opportunities promised by this groundbreaking legislation been realised? Back in October 2008, the Government of the day launched the first invitation for proposals under the 2007 Act. Local Works held many more public meetings across the country, where communities lobbied their councillors to resolve to use the Act. A hundred local authorities responded. Together with their communities, they drew up 300 proposals for Government action and submitted them to the Local Government Association, in the role of selector, by 31 July 2009.

The proposals were wide ranging and included measures to protect local post offices, shops and trade, and pubs; measures to increase the production and sale of local food; measures to promote local renewable energy, microgeneration and energy efficiency; measures to protect local public services; and measures to increase democratic participation.

The people of Brighton and Hove successfully urged the council to opt into the Act, and then many got involved in coming up with the proposals that would help the area become a more sustainable place. Of those proposals, eight were shortlisted by the LGA. Examples include allowing food grown in allotments to be sold locally, introducing feed-in tariffs for local renewable energy and empowering councils to have more flexible business rates to encourage local trade and jobs.

The LGA’s selector panel shortlisted 199 proposals in total and submitted them to the Government in January 2010. On 15 December 2010, the Government announced that they had reached agreement with the LGA’s selector panel on all the shortlisted proposals, and they published the results. Some proposals were to be implemented and some were rejected, with reasons given, while others were compromised on or deemed unnecessary because powers already existed.

I am pleased that as a result of that process, the Government will make it easier to introduce renewable energy schemes by bringing in permitted development rights for small-scale renewable and microgenerational energy. They have also agreed to legislate to establish a community right of purchase, which will allow communities to bid to take over local assets. A moratorium on the sale of listed assets will give community groups time to prepare a bid. The planning rules are due to be amended to exclude gardens from the classification of “previously developed land”, and the Government have backed community calls for a ban on the sale of alcohol below cost price, preventing supermarkets from selling alcohol below a certain price floor.

Those are positive outcomes, with local communities having a direct say in shaping their futures. But what happens next? The Government have set up a barrier-busting website as the portal for submitting future proposals under the Act. They have also invited community groups and councils to submit proposals directly through the website. Local Works has welcomed that, and I do too. However, the 2010 Act requires that the Government introduce regulations that will govern the process of making proposals and deciding on them in future. The consultation that they must run before finalising those regulations has not yet been published.

Following repeated requests for information, officials at the Department for Communities and Local Government initially advised that the consultation would be published in the summer of last year. Since then the date has been continually revised, first to the end of 2010, then to the end of January 2011 and then to before the mid-term recess in February, and now we are not being given any time frame at all. Parliamentary questions tabled by the hon. Member for Gower (Martin Caton) and me asking when it would be published both met with similar responses, stating that it would be soon and that a statement would be made “shortly”.

Community groups and organisations, councillors and officers who want to get involved in the Act are now all asking what on earth is going on. To them, this looks like deliberate stalling by the Government. I have to say, I am minded to agree. The fact that the early-day motion on the subject currently has the second highest number of signatures, with 236 hon. Members supporting it, suggests that people in the House are also very concerned about the future of the Act. That is true not just of people here in the House but many people outside, too. I shall give just a sample of what is being said.

Ruth Bond, chair of the women’s institute, has stated:

“The Women’s Institute is looking forward to encouraging our members and others in our communities to be involved in the Sustainable Communities Act and to use it to help and protect the vibrancy of our villages and towns. However, the delay in the consultation on the future regulations for the Act is holding us all back. This delay has been ongoing since early January this year and still we have no date for when the consultation will be published. We therefore hope the government will make an announcement urgently.”

John Walker, the national chairman of the Federation of Small Businesses, has made a similar point, stating:

“We are looking forward to seeing the consultation on the new Sustainable Communities Act regulations. The long delay in seeing this consultation has been frustrating as it is holding back our members and branches on the ground from engaging in the Act to help keep trade local and promote and protect local businesses and jobs in their communities.”

I have a whole stack of further quotations from many organisations, including the Campaign for Real Ale, Age UK, Sustrans, the Public and Commercial Services Union, the Woodland Trust and others. All of them make the very same point—that extensive delay to the consultation is extremely frustrating and, worse, risks local people becoming disillusioned with the whole process.

The Sustainable Communities Act has enormous potential, and its emphasis on community control and empowerment should surely be in keeping with the Government’s professed support for localism. I therefore hope very much that the Minister can tell my constituents, me and the many others who are still waiting to hear about why progress has stalled, what his plans are to get it back on track and when we can look forward to action. I hope he will also take this opportunity to reiterate his full support for the Act and its processes.

22:14

[The Minister of State, Department for Communities and Local Government (Greg Clark)]

I warmly congratulate the hon. Member for Brighton, Pavilion (Caroline Lucas) on securing this debate. I am happy to give her my full commitment to the Sustainable Communities Act 2007, which is one of the most important Acts that this House has passed. The fact that it was passed with cross-party support underlines its continuing significance to how we govern ourselves in future.

For my money, the Act is one of the most important Acts of the past decade, because it contains, as the hon. Lady knows, two important principles: first, that communities should have the right to know what is done by public bodies in their area on their behalf; and secondly, that communities, armed with that information, have the right to suggest alternative, better ways that might enable them to thrive, as she described. The Act is a seminal piece of legislation, and I congratulate our predecessors who campaigned long and hard for it, and the coalition led by Local Works, which did so much in the community.

The hon. Lady describes her long association with the campaign. When I was selected as a parliamentary candidate in 2004 and first went canvassing on the doorstep, almost the first question I was asked—from Mr Philip Clarkson Webb, a constituent whom I have come to know—was whether, if elected, I would support the Sustainable Communities Bill. I told him that I did not know but that I would find out, and it is a thrill to speak at the Dispatch Box now in support of the Act.

I hope to reassure the hon. Lady on some of her points. The Act is seminal in other ways, because of its impact on other legislation. Its principles of dialogue, collaboration, and genuine, bottom-up democracy are a recurring theme in the coalition agreement, and unite both parties to the coalition. Those principles wholly permeate, and to a significant degree have inspired, the Localism Bill, to which she drew attention, which completed its Committee stage earlier this month.

The principles of dialogue, collaboration and bottom-up democracy also underpin our consultation on the new regulations to govern the Act’s implementation. I can tell the hon. Lady that we will launch that consultation tomorrow. I also welcome the opportunity of informing her and the House of how we intend to proceed. First, we are keeping the essential character of the previous approach, but trying to make it more streamlined and effective, and easier for communities to take up. The Act is about inspiring ideas from local communities and engaging with them in open, honest dialogue; it is not just for councils. It is not about councils saying to their communities, “We want to do this, do you agree?” but rather about councils asking their communities, “How would you like us to improve our area?”

As the hon. Lady said, the Communities and Local Government Secretary invited councils to begin that process on 15 December 2010, which was the second invitation under the Act. The first invitation was made back in 2008, which generated a range of ideas from around the country on how best to put power where it belongs, and how to put control into the hands of local people.

Many of those ideas—getting rid of the regional spatial strategies and giving local councils much more discretion on spending public money—were reflected in the actions that the Government took in our first months in office. The hon. Lady mentioned three examples from Brighton, which as one would expect contributed some of the more lively, ambitious and creative proposals. There was a recommendation to introduce feed-in tariffs, for which she and many constituents in Brighton have campaigned for many years, and now we have them, and it is possible to introduce business rate discounts under the Localism Bill. We looked very carefully at the possibility of allotments selling surplus food, and we have clarified—I hope to her constituents’ satisfaction—that those powers exist. If she finds any frustrations in exercising them, she has only to come to me, and we will make sure that anyone who doubts them is told what the reality is. I want the second invitation under the Act to be even more successful in provoking local debate, energy and imagination. It is a good opportunity to reinvigorate local democratic discussion between councils, community representatives and individual members of communities, and to bring forward great ideas and translate them into practice wherever possible.

I have always been clear that the best ideas are not to be found cooked up by Ministers and officials in Whitehall. They come from people in communities who have practical ambitions to make their communities better than they could otherwise be. One of the great things about the Act is that it sets a challenge for government to open itself up to ideas from communities in a way that in the past it has been too reluctant to do, and in that sense to turn government upside down, so that it can truthfully serve the interests of the people and follow their initiative, rather than governing them in the traditional way. The Act introduced the important concept that local and central Government should try to reach an agreement on what local people want. We are keeping this fundamental principle. We made it the centrepiece of the December invitation, and we will make it the centrepiece of the regulations when they are published in draft tomorrow.

The core principles behind the Act and our intentions remain the same. However, the difference I have set out is the first of several differences between the first invitation and the second, all of which are designed to improve the process. I have been grateful for the helpful suggestion that the Local Works coalition has made in helping us to frame these changes. There was some frustration, as reflected by the hon. Lady, about the fact that some of the processes were rather slow, bureaucratic and cumbersome. In the second invitation, we are seeking to be much more open, responsive and bureaucracy free. More action and less paper is what people want from us.

We want the second invitation to put people firmly in the driving seat. As the hon. Lady knows, under the first invitation, we saw only a fraction of the ideas that people put forward—those put forward by the selector for the Government to try to implement. This time, we have made a commitment to consider everything. We guarantee that we will try to help with any genuine problem raised. We do not want to filter out good ideas just for the sake of having a smaller number. Anyone can now e-mail one of the barrier-busters we have established in my Department with an example of how red tape or some other regulation or practice is preventing people from improving their area, and we will do our level best to resolve it.

Under the first invitation, people submitted their idea, but then, as the hon. Lady pointed out, had to wait a year or more for a decision to be taken, with no way of keeping track of progress. If people were concerned because they did not know where their idea was, they wondered whether it had been forgotten about altogether. This time, anyone who submits a request through the barrier-busting site will have a tracking number, like with an internet order, so that the person can tell where it is in the system, and they will have a dedicated person to call to check on progress.

The first invitation was time limited and burdensome on councils, but this time there is no deadline. Councils can ask for people’s ideas at any time and in any way they want. We will not presume to know better than them how they should talk to their local communities and whom to involve. The first invitation also set out a rather restrictive role for the selector—the body tasked to keep the Government honest in their handling of the Act. The selector was asked to reduce the number of suggestions and to prepare a pared down list. This time, however, we will give the selector as well as the people proposing the ideas more freedom than ever before. They will be able to choose which ideas to champion and will get involved only when they feel the need to. People will have the right directly to address the Government. They will also have help from an advisory panel to assist them. I am pleased to announce that it is our intention that Local Works and the National Association of Local Councils, both of which have been vital, will join the Local Government Association in providing a really top-notch advisory panel to the selector.

Because there might be times when, despite our best efforts, it will not be possible to reach agreement between Whitehall and councils on the way ahead, councils that go the extra mile—those that want to champion people’s ideas under the 2007 Act, but are told that we cannot remove the barrier stopping them—will get an extra route of appeal. We will reform the role of the selector, so that it can resubmit that request for help and require us to discuss that request with it before we come to a decision.

Finally, let me mention another difference that I regard as an improvement, and which I hope the hon. Lady will too. The first invitation, before the amendment, excluded parish councils. We are very keen indeed for parish and town councils, which represent their communities so successfully, to submit suggestions and proposals under the 2007 Act. That is one of the reasons why we are keen for the National Association of Local Councils to be included in the work of the selector. We will ensure that the duty to “try to reach agreement” with the selector will apply to requests from parish councils, not just higher or upper-tier authorities, as they are referred to.

All in all, the changes are designed to make the process easier, more open, less bureaucratic and more effective at making change happen—and, I hope, more inviting for people in communities up and down the country. With the barrier-busting services, the support and advice to which Ministers have access will now be increasingly available to people in communities. If we regard people in communities as having good ideas, it is incumbent on us to give them help and support in turning those ideas into reality, just as Ministers count on officials to help them turn their ideas into legislation. It has been my ambition in proposing these changes to turbo-charge the 2007 Act.

My final point is that, through the consultation, the Government are listening for further suggestions and changes that might be made, which we know are most likely to come from people in communities. The consultation on the regulations is a genuine consultation. If there are things that we have missed out or if suggestions are made during the consultation, we will do our level best to take them into account. The operation of the 2007 Act should go along with the spirit of the Act, and should be driven by communities.

I hope that those points will have brought the hon. Lady up to date on our intentions for the 2007 Act. I hope that she will welcome the fact that the publication that she was hoping for will happen tomorrow, in a written statement to the House. I would welcome the chance in future to discuss with her and hon. Members from up and down the country how we can put real power into the hands of local communities, and in so doing make our country and those communities better.

Question put and agreed to.

22:27

House adjourned.