House of Commons

Wednesday 27th April 2011 Commons Chamber

Wednesday 27 April 2011

The House met at half-past Eleven o’clock

Prayers

Wednesday 27th April 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 27th April 2011 Commons Chamber

The Minister for the Cabinet Office was asked—

[Robert Halfon (Harlow) (Con)]

1. What steps he is taking to increase access to Government contracts for small and medium-sized enterprises.

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

6. What steps he is taking to increase access to Government contracts for small and medium-sized enterprises.

[Mark Pawsey (Rugby) (Con)]

7. What steps he is taking to increase access to Government contracts for small and medium-sized enterprises.

[Amber Rudd (Hastings and Rye) (Con)]

8. What steps he is taking to increase access to Government contracts for small and medium-sized enterprises.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

On 11 February, the Prime Minister and I announced a package of measures, including launching our Contracts Finder website, eliminating burdensome and unnecessary pre-qualification requirements from the procurement process, and introducing new ways to allow small and medium-sized enterprises to challenge contract procedures when they operate in a way that makes life difficult for them. In addition, from the end of April, all Departments will be required to publish a set of specific, targeted actions to increase their business with SMEs.

[Robert Halfon]

Will the Minister set out what steps he is taking to increase access to public contracts for smaller, grass-roots charities as well? Does he agree that for the big society to work properly, we need to build the little society too?

[Mr Maude]

My hon. Friend makes the point very well. All the measures that we are taking to enable small and medium-sized businesses to participate more fully in Government contracts will, of course, apply to the voluntary and charitable sector as well. Indeed, it is estimated that 35% to 40% of the value of the contracts recently awarded under the Department for Work and Pensions Work programme will go to organisations from the voluntary and charitable sector. We believe that that will be worth in excess of £100 million a year.

[Julian Smith]

Will the Minister take this opportunity to name and shame those Government Departments that are doing well in opening up to small businesses and those that are currently doing less well?

[Mr Maude]

I certainly do not want to shame the ones that are doing well. We have found a number of examples of procurement processes that are not meeting the new requirements. For example, Durham police recently issued an invitation to tender for a £50,000 leadership training contract. The pre-qualification questionnaire alone was 38 pages long and contained a request for 163 separate items of information plus a security vetting form. That is unacceptable, because it causes many smaller businesses to lose the will to live, and they simply do not apply.

[Mark Pawsey]

I am the former owner of a small business supplying products to the public sector. When applying to be added to a new tender list, I was often frustrated by the amount of red tape required. Will the Minister confirm that in future fewer company policies and statements will need to be provided to participate in the tendering process?

[Mr Maude]

We want to strip away all that nonsense. Under the last Government, there were 6,000 pages of guidance for some kinds of procurements. It is not surprising that smaller businesses just did not bother to apply; they knew that they were going to be excluded. There were turnover requirements and requirements for a track record of doing exactly that kind of work. The truth is that that is very bad for small businesses and we want to make things much better.

[Amber Rudd]

During a recent meeting, small and medium-sized enterprises in Hastings raised with me the difficulties not just of the paperwork, but of getting the capital requirements in this climate for procurement contracts with the Government. Will the Minister reassure us that that aspect will also be considered, as we try to make it easier for small and medium-sized enterprises to engage with the Government?

[Mr Maude]

My hon. Friend makes a good point. We are concerned that the working capital requirements should be proportionate and sensible and that the turnover requirements should be proportionate to the needs of the contract. All ridiculous requirements such as those that existed under the old regime—for example, always requiring three years of audited accounts, which automatically excluded huge numbers of new and innovative businesses—will be swept away.

[Mr Denis MacShane (Rotherham) (Lab)]

Does the Minister accept the macro-problem? In south Yorkshire, a large number of private sector enterprises depend in whole or in part on public sector contracts. So much demand is being taken out of the economy, because of the deficit reduction plans, that such businesses face serious challenges. Does he accept that small enterprises face a real problem because of his Government’s macro-economic policy?

[Mr Maude]

I acknowledge that there is a problem—and it is one caused by the Government of whom the right hon. Gentleman was a member and supported. They left Britain with the biggest budget deficit in the developed world. I am waiting for the right hon. Gentleman to apologise for that; that would be timely.

[Tessa Jowell (Dulwich and West Norwood) (Lab)]

In looking at an increased role for small and medium-sized businesses, will the Minister let the House know when his Department will publish the public services reform White Paper? It was commissioned last October to be published early in the new year. January became February, and the Prime Minister said that it was only two weeks away. Two weeks have become more than two months and there is still no sign of the White Paper. Is that the Government’s biggest pause, or have they just given up on public services?

[Mr Maude]

I am thrilled that the right hon. Lady is waiting for the document with such obvious excitement, and I can assure her that it will be well worth waiting for. This Government are committed to breaking up the old public sector monopolies and providing diversity, particularly with the growth of public service mutuals. The document will be published later this summer, and I can promise her that she will be delighted with it.

[Lindsay Roy (Glenrothes) (Lab)]

2. Whether private sector organisations will be able to make applications to the big society bank.

[The Minister of State, Cabinet Office (Mr Oliver Letwin)]

The big society bank will provide finance for the voluntary and community sector through funds to social lenders and investors. It will provide funds only to bodies that are onward lending or investing in the voluntary and community sector, charities and community groups.

[Lindsay Roy]

I thank the Minister for his response. In the light of that, can he please indicate how the bank will define social enterprise, as currently there is not a legal definition? How will he ensure that all social enterprises have access to funding but that no organisation that exists for private profit has such access?

[Mr Letwin]

Social enterprises can take a wide range of different forms, but the common feature is that they do not seek to make a profit for shareholders. I think there is a widely understood definition of voluntary and community sector groups, and the big society bank will be organised in such a way that it can identify those and make sure that the funds that it is providing to social investors and social lenders go only to those groups.

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

May I commend the intellectual ideas behind the whole concept of the big society? May I also commend to my right hon. Friend an article by Tim Montgomerie that appeared on ConservativeHome earlier this week entitled, “Conservatives can win the poverty debate but not if the Big Society is our message”? Is the big society more accurately described as a label for a collection of policies rather than a policy itself?

[Mr Speaker]

I hope that the Minister will answer with particular reference to private sector applications and the big society bank.

[Mr Letwin]

I am grateful for that guidance, Mr Speaker.

My hon. Friend is right to point out that the big society is an idea with a very wide application. The big society bank is a fund that will have a very wide application, because we believe it is extremely important that it should be able to foster all sorts of voluntary and community enterprise which, in one way or another, enormously support the alleviation of poverty—the subject of the article to which he refers.

[Jon Trickett (Hemsworth) (Lab)]

The idea of such a bank to help to develop the centre of civil society is a good one, but effective government requires a mix of big ideas and getting the details right. In this connection, has the Minister seen today’s report by the National Endowment for Science, Technology and the Arts, which suggests that if the big society bank lends purely on commercial terms, it will be

“failing to support those that it is set up to support”?

What can he say to ensure that the lofty rhetoric of the big society bank does not founder on the rock of inadequate administrative detail?

[Mr Letwin]

The hon. Gentleman is of course right to say that the big society bank could not operate as it is intended to operate if it were lending, or investing, on purely commercial terms. It will have what is often described as a double bottom line: it will seek to achieve the highest possible social returns alongside reasonable financial returns. Indeed, part of the point of the big society bank is to show that there is no conflict between achieving high social returns and achieving modest but reasonable financial returns.

[Helen Goodman (Bishop Auckland) (Lab)]

3. What recent representations his Department has received on the big society initiative.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

I am delighted to assure the hon. Lady that the Cabinet Office receives many representations on the big society from a wide range of individuals and organisations, not least many colleagues on both sides of the House who have accepted our invitation to bring in representatives from their local voluntary and community organisations.

[Helen Goodman]

I do not know whether the Minister ever gets representations from voluntary sector organisations that fold. The organisation that I used to work for folded a few weeks ago. Will he admit that that is because the cuts are too deep and too fast, and the transitional fund is too little and too late?

[Mr Hurd]

I am obviously sorry to hear about the fate of the organisation that the hon. Lady used to work for. She will know that in reality the sector cannot be immune from the necessary cuts in public expenditure, and I do not think it would have been immune under a Labour Government. The Government have tried to give the sector maximum support through this difficult period. The transition fund—£100 million of taxpayers’ money; serious money in this context—is there to help organisations that are in a hole.

[Roberta Blackman-Woods (City of Durham) (Lab)]

Yesterday, Ed Cox, the director of the Institute for Public Policy Research North, said:

“Our research shows that the Big Society will not be fair to the North without changes to government support for philanthropy and charitable giving. Good will is beginning to wear thin as people in the voluntary and community sector try to deal with budget cuts, and organisations in the North cannot turn to big corporate or high value donors to make up the gap”.

What is the Minister doing to ensure that the big society does not usher in further unfairness and exacerbate the north-south divide?

[Mr Hurd]

I understand the hon. Lady’s point. I refer her to the geographical spread of successful applications to the transition fund, with which we are pleased. She mentioned the need for further incentives for giving in this country. I refer her to what was an extremely helpful Budget in that context, which had a major initiative to encourage giving through inheritance tax and a substantial reform of gift aid to make it easier for smaller charities to receive it on smaller donations. The Government are working extremely hard to make this difficult period of transition as easy as possible for charities.

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

4. What recent estimate he has made of the number of charities and voluntary sector organisations that will be affected by reductions in public expenditure in the next 12 months.

[Paul Flynn (Newport West) (Lab)]

9. What recent estimate he has made of the likely change in the number of jobs in the voluntary sector as a result of reductions in public expenditure in the next 12 months.

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

Unfortunately, the sector cannot be immune from cuts, for reasons that have been explained. That would have been exactly the same under a Labour Government. We are trying to help the sector to manage a difficult transition, while shaping what we believe are significant opportunities for the sector, not least in terms of more public service delivery.

[Mrs Glindon]

Since the late 1980s, Wallsend people’s centre has helped hundreds of unemployed and disadvantaged people in North Tyneside to gain the necessary skills to get to work. In the past year, it has lost more than £450,000 through cuts to Government grants. Four experienced support workers will now lose their jobs. Will the Minister meet me to discuss the communication he has received from the people’s centre about its plight, to which he has not yet replied?

[Mr Hurd]

Again, I am sorry to hear that that organisation is in difficulty. I am more than happy to meet representatives from the community to discuss it. The transition fund has been made available to help organisations in difficulty. I point out to the hon. Lady that many of the funding decisions and cuts are local decisions, and that many councils across the country are taking a positive approach by maintaining or even increasing spending on the local voluntary and community sector.

[Paul Flynn]

Cutting charities reduces our ability to help one another and undermines the structures of neighbourliness that form our big society. That is the opinion of the chair of the Charity Commission, who knows about these things. Is not the Government’s big society a big confidence trick?

[Mr Hurd]

Absolutely not. The hon. Gentleman has been around enough to know that the size of the deficit means that the sector, which receives almost £13 billion a year of taxpayers’ money, cannot be immune from the reduction in public spending, and that it would not have been immune, as the Opposition have admitted, under the ghastly scenario of a Labour Government. We have to be realistic about that. We are trying to minimise the short-term damage through initiatives such as the transition fund, and to create the building blocks for a better future for the sector, not least through more incentives for giving and more opportunities for it to deliver public services.

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

5. When he expects the first payments from the big society bank to be made.

[Jack Lopresti (Filton and Bradley Stoke) (Con)]

11. When he expects the first payments from the big society bank to be made.

[The Minister of State, Cabinet Office (Mr Oliver Letwin)]

The first payments will be made in the next few months. The exact timing and amounts will be decided by the Reclaim Fund once it has assessed the amounts that it has received from the banks and the amounts that are likely to be reclaimed from depositors.

[Nadhim Zahawi]

We hear constantly from businesses and social enterprises that high street banks are unwilling to back innovative or new ventures. How will the Government ensure that the big society bank is different and that it assesses applications in such a way that it does not exclude start-ups and innovative organisations in favour of only the established players in the social enterprise and charities sector?

[Mr Letwin]

My hon. Friend is absolutely right to draw attention to that issue. The whole point about the big society bank, as I tried to indicate to the hon. Member for Hemsworth (Jon Trickett) a moment or two ago, is that it will be entirely different from a commercial bank. It will be set up precisely to achieve social return as much as commercial return. The other vital point is that it will operate through social lenders and investors already in the marketplace, so it should be able to reach out to the smallest community and voluntary groups and not just be restricted to the large groups that also play an important role.

[Jack Lopresti]

Is the latest estimate of money to be raised from dormant bank accounts still £400 million, and what progress has been made in securing an additional £200 million from the UK’s largest banks?

[Mr Letwin]

Yes, the estimated amount to be raised from dormant accounts remains at £400 million. The Reclaim Fund will now assess the exact amount that it can release in the first year, and the current estimate is somewhere between £60 million and £100 million. Then there are, of course, the negotiations that my right hon. Friend the Minister for the Cabinet Office and Paymaster General is having with the four main lending banks that were party to the Merlin agreement about another £200 million of funding. Altogether, there should be a considerable amount of funding coming through this year and in following years.

[Hazel Blears (Salford and Eccles) (Lab)]

The NESTA report referred to earlier by my hon. Friend the Member for Hemsworth (Jon Trickett) stated that the big society bank

“should not expect to achieve commercial returns on all its investments”.

By far the majority of demand for capital is for soft capital and patient capital. Why, after two months of intense talks between the banks and the Treasury, do we still not have an agreement? The banks are saying that they want commercial returns. Will the Minister confirm today that the big society bank will not be about commercial returns for the banks but about genuine support for social and community enterprises?

[Mr Letwin]

The right hon. Lady is confusing two levels of lending and investment. There is the question of what the big society bank demands of the investments that it makes, and as I have said, that will be both a social return and a modest financial return, but not the type of commercial return that one might make with a hedge fund or in another such way. Then there is the relationship between the big society bank and the main commercial banks that are party to the Merlin agreement. My right hon. Friend the Minister for the Cabinet Office and Paymaster General is currently discussing the exact terms on which that investment will be made. It will have to be compatible with social objectives and the social returns that the big society bank is intended to make.

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

10. What recent progress his Department has made on establishing public sector mutuals.

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

In August last year, we launched a pathfinder programme of 21 groups of public sector workers setting up mutuals with the help of mentors. In addition, millions of public sector employees will be given rights to provide public services as mutuals, such as those recently announced in the national health service. That will free up public sector workers to innovate and provide better and more efficient services. We have committed to funding a £10 million support programme to help such new organisations get off the ground. [Interruption.]

[Mr Speaker]

Order. I am bound to say that it is very difficult even for me to hear what the Minister is saying. As a consequence, I feel sorely under-nourished. The situation is unsatisfactory.

[Andrew Selous]

Given the evidence that productivity and efficiency increase dramatically when staff are given a role in shaping services, is not the scaremongering about the proposals on mutuals unhelpful to users, taxpayers and the staff concerned?

[Mr Maude]

Anyone who visits the pathfinder mutuals, talks to the staff—now co-owners—of those organisations and sees the excitement with which they are pursuing their new vocation will give up on the scaremongering. This is a profoundly important movement that should command support from throughout the House.

[Mr Peter Bone (Wellingborough) (Con)]

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

[The Minister for the Cabinet Office and Paymaster General (Mr Francis Maude)]

I have overall responsibility for the work of the Cabinet Office, while the Deputy Prime Minister has specific responsibility for the Government’s programme of political and constitutional reform.

[Mr Bone]

Last week on the doorstep in Wellingborough, the hot issue was the responsibility of the Cabinet Office for implementing constitutional reform. Why is it that, under the alternative vote, British National party votes and Socialist Workers party votes in my constituency would be counted twice, but Tory votes would be counted only once?

[Mr Maude]

My hon. Friend makes a powerful point. That is no doubt why, I gather, rather more than half of Labour MPs now support first past the post.

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

T3. Staff at My Civil Service Pension are concerned that plans to turn the organisation into a mutual are a step towards privatisation. The Minister said in a meeting with union representatives in March that he would not act without the broad consent of the work force. Will he tell us how he has consulted those staff and whether he yet has that consent?

[Mr Maude]

We are moving down the path of freeing up My Civil Service Pension so that it can administer in the most efficient way civil service pensions to the 1.5 million members who are dependent on them. We are exploring different ways in which that might be configured, but crucially, employees will have a meaningful stake in that entity going forward.

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

T2. Fifty business leaders have got together to offer free mentoring advice to small and new business start-ups in my constituency. Will the big society Minister meet me to see how we can roll out that initiative beyond north Yorkshire?

[The Parliamentary Secretary, Cabinet Office (Mr Nick Hurd)]

The short answer is yes. More than ever, the country needs to get behind its entrepreneurs. My hon. Friend’s local initiative sounds like an excellent one, and I would be delighted to meet him—[Interruption.]

[Mr Speaker]

Order. There is far too much noise and far too many private conversations are taking place in the Chamber.

[John Mann (Bassetlaw) (Lab)]

T5. Which Cabinet Office conferencing, translation and interpreting services have not been put out to tender for small businesses to win, and why not?

[Mr Maude]

I have not the slightest idea, but I shall find out.

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

T4. When can the House expect the Public Bodies Bill? What will be in the Bill, and can we revert to the normal practice, whereby such controversial Bills begin in this House and not in the other place?

[Mr Hurd]

The Public Bodies Bill is obviously very important—it is an opportunity to improve radically the accountability of decisions and to make significant savings from the vast number of quangos that proliferated under the previous Administration. My hon. Friend will know that the Bill is passing through the Lords, with Third Reading expected on 9 May. Obviously, it is for the House authorities to determine the programming for debate in the House, but we expect the Bill to enter Committee after the Whitsun recess.

[John Robertson (Glasgow North West) (Lab)]

T7. A recent survey of charity leaders by the National Council for Voluntary Organisations suggested that charities are not happy, because they feel that the rhetoric that was sold to them before and after the election bears no resemblance to the money that they need to ensure that they deliver the services that are required. Forget about all the waffle, will the Minister tell us exactly how he will fund those charities and how he will ensure that they do things for people?

[Mr Hurd]

There is obviously understandable concern in the sector about the impact of reductions in public expenditure, but in my experience, charities are increasingly alive to the opportunity to deliver more public services—they are delighted by the announcements in the Budget to increase giving and by the progress that the Government have made in setting up the big society bank.

[Karl MᶜCartney (Lincoln) (Con)]

T6. Will my hon. Friend the Minister please update the House on the progress of the national citizen service? Will he join me in congratulating the Lincolnshire and Rutland Education Business Partnership, which I have met on a number of occasions, on the invaluable work that it is carrying out to pilot and promote the national citizen service?

[Mr Hurd]

The national citizen service provides a fantastic opportunity for young people from different backgrounds to work together to make a positive difference to their communities. I am delighted that we are offering 11,000 places this summer in many locations throughout the country. I am also delighted that that scheme is coming to Lincoln, and that my hon. Friend is taking such an active interest in such positive opportunities for young people in his constituency.

[Kevin Brennan (Cardiff West) (Lab)]

T8. What estimate have Ministers made of the cost of the VAT increase to charities?

[Mr Hurd]

VAT issues are obviously a matter for the Treasury, and I would refer that question to Treasury Ministers. As the hon. Gentleman knows—he is a former Minister—that is a long-standing issue for the sector. He will also be aware of a number of initiatives to look at how we can make the VAT regime more helpful.

[Richard Fuller (Bedford) (Con)]

T9. Will the Minister relax regulations on investments by foundations and trusts to empower them fully to support innovations such as social impact bonds?

[Mr Hurd]

My hon. Friend will know that this Government are totally committed to helping to develop the social investment market, so making it easier for social entrepreneurs to access capital. The big society bank is our major player in that area, but we are looking at a range of ideas. He will also be aware that the Charity Commission is reviewing its guidance to foundations, which have a critical role to play in that context.

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

T10. Why is the public sector mutual fund late in going out to tender, and when will it be ready to accept bids?

[Mr Maude]

We will announce details in due course. It would have been easy to go ahead and just flash money around, but there is not much money thanks to the legacy of the Government whom the hon. Gentleman supported. We need to ensure that the money is husbanded and spent wisely, for example by providing advice for groups of public sector workers, of whom there are very many who want to form mutuals, and by ensuring that the advice is made available to as many as possible.

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

In his discussions about public sector contracts for small business, will my right hon. Friend talk to the Ministry of Defence about its habit of bundling together contracts for multiple services, which means that an expert calibration firm in my constituency cannot offer the specialised service unless it also offers paperclips and toilet rolls?

[Mr Maude]

My right hon. Friend makes a good point, and I will take it up. It is exactly how contracts are bundled up and procurements are undertaken that has squeezed out so many really effective small businesses from the Government market. That is exactly what we now want to change.

The Prime Minister was asked—

[Jim Shannon (Strangford) (DUP)]

Q1. If he will list his official engagements for Wednesday 27 April.

[The Prime Minister (Mr David Cameron)]

I know that the whole House will wish to join me in paying tribute to Colour Sergeant Alan Cameron from 1st Battalion Scots Guards, who died on Thursday 31 March as a result of injuries he suffered while serving in Afghanistan last April, and Captain Lisa Head from 11 Explosive Ordnance Disposal Regiment, Royal Logistic Corps, who died on Tuesday 19 April. Colour Sergeant Cameron was an inspirational figure to his regiment, providing support to injured colleagues and their families even while he was being treated in hospital for his own injuries. Captain Head demonstrated great bravery in her work making safe improvised explosive devices to protect both her colleagues and the local population. They will not be forgotten, and our wishes and best condolences should be with their families and friends.

I am sure that the whole House will also want to join me in sending our condolences to the families, friends and colleagues of Police Constable Ronan Kerr. Those who murdered him must not be allowed to deter the wishes of the overwhelming majority of people who want a peaceful and shared future for Northern Ireland.

On a happier note, people across the country—and, indeed, the world—are getting excited about the events on Friday, and I am sure that the whole House would wish to join me in sending our best wishes to Prince William and Catherine Middleton ahead of their wedding this Friday, and to wish them a long and happy life together.

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

[Jim Shannon]

I would like to associate myself with the Prime Minister’s comments and condolences to those people who have lost their lives in Afghanistan. I also welcome the Irish Rangers and the Irish Guards back home after their tour of duty in Afghanistan.

On Easter Monday, dissident republicans held a commemorative parade in Londonderry and threw down the gauntlet to all the law-abiding citizens in Northern Ireland. The murderous thugs that are dissident republicans threatened to kill Police Service of Northern Ireland officers, both Roman Catholic and Protestant; they threatened the churches, both Protestant and Roman Catholic; they threatened politicians, both Unionists and nationalist; and they threatened Members of the Northern Ireland Assembly and MPs in this House. Can the Prime Minister assure the House that this attack on the democratic process will be met forcefully, and that those republican terrorists must be brought to justice?

[The Prime Minister]

I can give that assurance. I am sure that everyone in the House and the country would agree that scenes of people dressed in balaclavas in Londonderry are completely unacceptable. We have funded the PSNI appropriately. It is now properly devolved and working well, and I urge it to do everything it can to hunt down these people. Above all, the words that should ring in our ears are those of the mother of PC Ronan Kerr, who said she hoped that this would not prevent more Roman Catholics from joining the PSNI and doing a great job policing Northern Ireland.

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

Does the Prime Minister recognise that lending to business by banks was down £3.4 billion last month in March, and that the construction industry was down in productive terms by 4.7%? Does he see a connection, and if so, what will he do about it?

[The Prime Minister]

My hon. Friend is right about the figures today and that what is happening in the construction industry is disappointing. We need to get Britain building again, which is why we are introducing the new homes bonus. However, what is encouraging in the figures is that the British economy is growing once again, manufacturing is up, exports are up, and we are seeing a rebalancing of the economy so that we are not over-reliant on private consumption. That is good news. We also have an agreement with the banks that they must increase their lending to businesses large and small. That needs to happen.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to Colour Sergeant Alan Cameron and Captain Lisa Head. Both demonstrated enormous courage and bravery, and our thoughts are with their families and friends. I also pay tribute to Police Constable Ronan Kerr, who was senselessly murdered simply for doing his job. We should all be encouraged by the expressions of outrage that we have seen across all communities in Northern Ireland in response to this act.

I also join the Prime Minister in sending best wishes to Prince William and Catherine Middleton on their happy day on Friday. I am sure that I speak for the Prime Minister, the Deputy Prime Minister and myself when I say that we will all do our best to be suitably attired for the occasion.

On the economy, does the Prime Minister think that it is a mark of success or failure that the economy has flatlined over the last six months?

[The Prime Minister]

It is clearly a success that the economy is growing. The figures out this morning show the economy growing in the first quarter of the year. They show manufacturing and exports up, and we have 400,000 more people in work in the private sector than we had a year ago. However, the right hon. Gentleman predicted a double dip. He said that we were going to get two quarters of negative growth, so when he gets to his feet, perhaps it is time to apologise for talking the economy down.

[Edward Miliband]

What world is the right hon. Gentleman living in? What extraordinary complacency. His hon. Friend the Member for Northampton South (Mr Binley) asked what was happening to small business lending. What terrible complacency from this Prime Minister. Six months ago, what did he tell us? He told us that we were out of the danger zone. Since then there has been no growth at all in the British economy. Yesterday the Chancellor was reported to have told the Cabinet that the economy was on track, but it is not even forecast to meet the Office for Budget Responsibility’s figures published last month by the Chancellor. Is it not the case that it is his cuts that are too far and too fast, and that are squeezing living standards, undermining consumer confidence and holding back growth in our economy?

[The Prime Minister]

The right hon. Gentleman was desperate for the economy to shrink today. He had written his questions and come to the House; the only problem was that the economy was growing, not shrinking. He and the shadow Chancellor said that there would be a double-dip recession. They had talked the economy down. Now that the economy is growing, why can they not find it in themselves to welcome the growth in the economy? We should be talking up the fact that manufacturing is increasing and we are exporting more, with 390,000 more people in private sector jobs than a year ago. These are welcome developments.

The right hon. Gentleman talks about the danger zone. I will tell him what the danger zone is: it is countries such as Portugal, Greece and Ireland, which did not deal with their debts, and as a result have interest rates rocketing and real problems. We have debts, tragically, because of what we inherited and a deficit the same size as Greece’s, but we have interest rates like Germany’s. It is time for the right hon. Gentleman to admit that he was wrong about the deficit and wrong about the economy.

[Edward Miliband]

It is not me who is talking down the economy; it is the Prime Minister’s austerity rhetoric that has led to the lowest levels of consumer confidence in history in this country. He has been Prime Minister for a year. He cannot blame the Greeks, he cannot blame the Bank of England, he cannot blame the last Government—he cannot even blame the snow. Why does he not admit that we have had six months of no growth because of his decisions, his Chancellor’s decisions and his Government’s decisions?

[The Prime Minister]

The economy has grown by 1.8% over the last year, but let me tell the right hon. Gentleman this. I did a little research, and all the time that he was in the Cabinet, there was not a single quarter when the economy grew more than 0.5%—not one. That is his great record. Let me tell him something about the need to make public spending cuts. We are now in a new financial year—the year in which the Darling plan was going to start the process of cutting the deficit by half. For every £8 that we are proposing to cut this year, Labour would be cutting £7. Have we heard a single sensible proposal for making any cuts, or have we just heard blatant opportunism and talking the economy down? I think we know.

[Nadine Dorries (Mid Bedfordshire) (Con)]

Will the Prime Minister join me in condemning the appalling, disgraceful, untruthful and misleading leaflet that is being distributed by the Yes to Fairer Votes campaign, which is being chaired by the Electoral Reform Society? The leaflet seeks to diminish Parliament and therefore damage democracy, which, given the content of the leaflet, can be the only objective of the Electoral Reform Society.

[The Prime Minister]

What matters, in the week that we have left before we vote in this vital referendum, is that we get back to the real arguments about competing electoral systems. I am very clear that first past the post is simple, fair and effective and that it has worked for our country. I have to say that it is not often that I like to look out on a sea of red badges, but today it looks quite good.

[Kevin Brennan (Cardiff West) (Lab)]

Q2. Is the Health Secretary’s job still guaranteed? He is over there, by the way.

[The Prime Minister]

The Health Secretary does an excellent job. Let me draw a little contrast—[Interruption.]

[Mr Speaker]

Order. This is very discourteous and it is very unfair. It is unfair on the Prime Minister and it is unfair on me. I want to hear the answer.

[The Prime Minister]

Let me draw a little contrast between what the Health Secretary is delivering here—real-terms increases in health spending—and what is happening in Wales. The Labour-led Administration in Wales are cutting the NHS in real terms. Everyone in Wales needs to know that if they get another Labour-dominated Assembly, they will get cuts in the NHS, whereas in England we will see increases in the NHS because of the magnificent work of my right hon. Friend.

[Mr Adrian Sanders (Torbay) (LD)]

Q3. People have been shocked at the scale and extent of the phone hacking allegations against some of our most popular newspapers. In order to uncover the truth, will the Prime Minister instigate a full judicial inquiry and, in particular, look at the relationship between the Metropolitan police and News International?

[The Prime Minister]

What is absolutely clear is that phone hacking is not only unacceptable but against the law. It is illegal; it is a criminal offence, and I would urge the police and the prosecuting authorities to follow the evidence wherever it leads. That must happen first, and we must not let anything get in the way of criminal investigations.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

Will the Prime Minister explain why, if there is a genuine pause in the enactment of the Health and Social Care Bill, the inception of cluster primary care trusts that are preceding the GP consortia, including the Greater Manchester cluster PCT, has been brought forward from 1 June to 3 May? Is not this pause nothing more than window dressing? It is political manoeuvring before next week’s elections.

[The Prime Minister]

No, I think the hon. Lady is wrong. This is a genuine exercise in trying to ensure that we get the very best out of these reforms. We are looking specifically at areas such as public accountability, choice and competition, education and training, and the patient involvement aspects of the reforms. Of course we have to go ahead with driving out the bureaucracy and additional costs from the NHS. We inherited from Labour, I think rightly, a £20 billion efficiency programme, and we have got to take that through, but there is a genuine opportunity to make these reforms better still.

[Peter Aldous (Waveney) (Con)]

Q4. Suffolk is among the worst-served areas of the country for broadband, and the commonly cited final third of premises beyond the reach of commercial broadband deployment is more like a final two thirds in that area. Given that nearly one fifth of all Suffolk premises receive a speed of less than 2 megabytes per second, does the Prime Minister agree that investment in broadband in Suffolk is essential to boost our economic recovery?

[The Prime Minister]

My hon. Friend is absolutely right. We must put this investment in. We are spending, I think, £530 million investing in broadband. Particularly in rural areas, broadband is going to be absolutely vital in driving the creation of the small businesses and growing businesses that will be so important to keep the growth of employment in our country.

[Edward Miliband]

Can the Prime Minister tell us why 98.7% of nurses have no confidence in his health reorganisation?

[The Prime Minister]

Inevitably, when you make changes in public services, it is a challenge taking people with you. But that is the whole point of pausing the reforms and then trying to get them going again with greater support from doctors and nurses. What we are finding is that 90% of the country is covered by GP fundholding practices that want to see these reforms succeed. I would say to the right hon. Gentleman that if he wants to make some constructive suggestions, why not have a try?

[Edward Miliband]

Dearie me, that wasn’t a very good answer, was it? I asked the Prime Minister why 98.7% of nurses have no confidence in his policy. It is because it is a bad policy, a policy nobody voted for. It is a policy that was not in the Prime Minister’s manifesto, it was not in the Deputy Prime Minister’s manifesto either at the general election, and it was not even in the coalition agreement. Perhaps one of the reasons why nurses have no confidence in his policy is that two years ago, he went to the Royal College of Nursing and said there would be no more pointless, top-down reorganisations.

Next question: why is it that hospital waiting times fell year on year under the last Labour Government, but have risen month on month under this Government?

[The Prime Minister]

That is simply not the case. If we look at out-patient waiting times, we find that they fell in the last month, so the right hon. Gentleman is simply wrong about that, as he usually is. I have had the opportunity to study his representations about the reforms, and I have had a good look at them. He says that we are introducing EU competition policy for the first time; we are not. He says we are allowing GPs to charge; we are not. He says that patients will be left without services; they will not. Why does he not realise that instead of frightening people, he ought to make a constructive contribution.

[Edward Miliband]

Another totally hopeless answer! I asked about waiting times. The Department of Health figures are these: waiting times are 20% up for those waiting more than 18 weeks, and A and E waits are at a record level compared to six years ago. One of the reasons why waiting times have gone up is that the right hon. Gentleman is diverting billions of pounds from patient care into this costly reorganisation. Let me make this suggestion: just for once, why does he not listen to the doctors, the patients and the nurses and scrap his reorganisation?

[The Prime Minister]

The right hon. Gentleman asks me to listen to doctors, so here is one doctor I am definitely going to listen to. I hope Opposition Members will remember Howard Stoate, who was the Member of Parliament for Dartford. He is no longer an MP because he lost the election—because of the Conservative candidate, I am afraid. He is now a GP—[Interruption.] Calm down, dear. Listen to the doctor. Howard Stoate, GP, says:

“My… discussions with fellow GPs… reveal overwhelming enthusiasm for the”—

[Interruption.] I said calm down. Calm down, dear—and I will say it to the shadow Chancellor, if he likes. [Interruption.]

[Mr Speaker]

Order. Let us briefly have the answer and move on to Back Benchers, whose rights I am interested in protecting. I want a brief answer from the Prime Minister.

[The Prime Minister]

This is a very brief quote from a Labour MP who is now a GP. He said:

“My… discussions with fellow GPs… reveal overwhelming enthusiasm for the chance to help shape services for the patients they see daily”.

That is what Labour MPs, now acting as GPs, think of the reforms. That is what is happening.

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

Apologise to her!

[The Prime Minister]

I am not going to apologise; you do need to calm down. [Interruption.]

[Mr Speaker]

Order. There is far too much noise in the Chamber. [Interruption.] Order. It makes a very bad impression on the public as a whole, and others are waiting to contribute. I think the Prime Minister has finished.

[Mr William Cash (Stone) (Con)]

During the recess, a number of European issues have arisen: the Portuguese bail-out, the increase in the European budget and proposals for corporation tax at the European level. Will the Prime Minister re-coin a phrase and simply say to all those matters, “No, no, no”?

[The Prime Minister]

My hon. Friend makes an important point about the European budget. The idea of a 5% increase at a time when member states are having to make reductions in difficult public spending programmes at home is completely unacceptable, and we will make sure it does not happen.

[Phil Wilson (Sedgefield) (Lab)]

Q5. On the proposal to build the largest wind farm in England in my constituency with 45 wind turbines 100 metres or more high, just less than a mile away from two big conurbations and on beautiful landscape in the area, can the Prime Minister tell us what influence my constituents will have under the Localism Bill on the planning decision concerning this massive intrusion on the landscape? Will he ask the relevant planning Minister to meet me and a delegation of constituents to discuss it further?

[The Prime Minister]

I am happy to arrange that meeting. I think it important for local people to have a greater say in planning decisions, and that is what we are enabling them to do. However, I also believe that when wind farms go ahead, local people should see a greater benefit in terms of the finance that goes into the area, and our plans will achieve that as well.

[Dr Sarah Wollaston (Totnes) (Con)]

In 2007, the Labour Government implemented the Medical Training Application Service, or MTAS. Junior doctors will remember what a disaster it was. That large-scale, disruptive and untested system had disastrous consequences for junior doctors in training. Is the Prime Minister aware that there are concerns that the current proposals to reorganise medical training and work force planning could have similar unforeseen consequences?

[The Prime Minister]

I must say to my hon. Friend that she is a lot better at getting them to shut up than I am. I think that she is a future Speaker in the making.

I can absolutely guarantee to my hon. Friend that we will not make the mistake that the last Government made in respect of medical training. They created an utter shambles.

[Bill Esterson (Sefton Central) (Lab)]

Q6. Eddie Kay from Maghull received excellent treatment when he was in hospital recently, and I am glad to say that he is recovering well. However, while he was in hospital his operation was cancelled four times, and he was also told of bed closures and nursing redundancies on his ward. Does not Mr Kay’s experience show that the Prime Minister was wrong to claim that he would not cut the NHS?

[The Prime Minister]

Of course things go wrong in our national health service, which is one of the reasons why I think that we need to reform and modernise it. The fact is, however, that at the last election only one party said that it would increase the NHS in real terms, and that is exactly what we are doing. If the hon. Gentleman is worried about NHS cuts, he should have words with his colleagues in Wales who are proposing to cut the national health service—not in cash terms, but in real terms—and he should help us to put a stop to that.

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

Q14. Across the country, 2 million families are on waiting lists for social housing. Nearly 1 million homes lie empty, and the average age of a first-time buyer is 37. Does the Prime Minister acknowledge that there is a housing crisis in Britain, and will the Government publish a strategy to tackle it?

[The Prime Minister]

We do acknowledge the very difficult situation that we inherited. House building was at a 60 or 70-year low. We need to introduce ways of ensuring that local communities see more houses built. The old top-down system did not work, but I believe that the new homes bonus and the incentives that we are giving local authorities will mean that extra housing goes ahead.

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

Q7. Rather than losing his rag because he is losing the argument, will the Prime Minister explain why waiting times have been rising in my constituency and across the country?

[The Prime Minister]

The hon. Gentleman is simply wrong about waiting times. I quoted the figures. Waiting times have been broadly stable over the last couple of years—that is a fact.

The key point that I would make to the hon. Gentleman, who is meant to be a moderniser, is that if he wants to see waiting times come down and stay down, the best answer is a system that involves greater choice, and enables patients to choose where they are treated and establish how quickly they can be treated. The hon. Gentleman used to be a moderniser; there is still time to get on board.

[Fiona Bruce (Congleton) (Con)]

Q15. I am engaged in a consultation with my constituents in east Cheshire on an issue that is of great concern to them: the commercialisation and sexualisation of childhood. As a parent, does my right hon. Friend agree with my constituents that action needs to be taken to find real solutions to this challenging issue, and to give every child the childhood that it deserves?

[The Prime Minister]

I completely agree with my hon. Friend. As a parent of three little ones, I know that it is incredibly worrying to see what is becoming available in some shops and other places. We are, effectively, asking our children to grow up too early. I think that there is a lot more that we can do, which is why we have asked the chief executive of the Mothers’ Union to conduct an independent review of this vital area. We are looking at a range of specific issues including television, video and other pressures that are put on people, and we expect the report to be published in a few weeks’ time.

[Ian Lucas (Wrexham) (Lab)]

Q8. The Prime Minister has described hospices as one of the great successes of the big society, so why, as a result of his Government’s increases in VAT and cuts in gift aid, is Nightingale House hospice in my constituency paying an extra £20,000 to his friend the Chancellor of the Exchequer this year? Will he give it the money back?

[The Prime Minister]

The point I would make to the hon. Gentleman is that the hospice movement is a fantastic example of the big society and we should see it expand, and my right hon. Friend the Chancellor has increased gift aid so that more people can give more money more effectively. As the hon. Gentleman is another Welsh Member of Parliament, let me put this point to him: why is he supporting an NHS cut in Wales that will hit not just hospices but hospitals, GPs and community services? That is what is coming out of this Question Time. Labour is cutting the NHS; you cannot trust Labour with our national health service.

[Jonathan Evans (Cardiff North) (Con)]

Q9. The whole House will be aware that younger women drivers face a massive hike in their insurance premiums next year as a direct result of a European Court judgment. In that context, does my right hon. Friend share my disappointment that this judgment has been warmly welcomed by London’s Labour MEP Mary Honeyball, who has indicated that she considers it to be admirable and the price of equality?

[The Prime Minister]

Well, I have to say to my hon. Friend that that shows that some of the loony left is still alive and well in our country. [Interruption.] I think you’ll find it’s over there. Frankly, insurance premiums ought to reflect risk, and my hon. Friend is, as ever, displaying common sense, whereas the European Court did not.

[Mr Jamie Reed (Copeland) (Lab)]

Q10. It is now almost 12 months since the Prime Minister visited the West Cumberland hospital in my constituency in the wake of the shooting atrocities that took place there. It is, I believe, a matter of profound regret to Members on both sides of the House that the Government have chosen to do nothing on gun laws in the intervening period, but while the Prime Minister was at the hospital he also visited the accident and emergency clinicians and other clinical service providers, who are now facing the prospect of their services being removed as a result of GP commissioning. Will he do them and my constituents a favour by removing GP commissioning from the Health and Social Care Bill?

[The Prime Minister]

First, I well remember visiting the hospital in the hon. Gentleman’s constituency. It is a fantastic hospital and it did brilliant work during those incredibly tragic times about which he spoke. I can absolutely reassure him that he does not need to worry about the future of the West Cumberland hospital. I understand that he has met the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), to discuss the concerns, and they are in agreement that issues need to be resolved swiftly. The Department of Health is working closely with the local NHS to produce proposals to redevelop the hospital. That is what is going to happen: investment will be going into the NHS because of the commitments we have made, whereas, sadly, I am afraid that the hon. Gentleman’s party—[Interruption.] Luckily, he is not in Wales, where Labour is cutting the NHS, but I suspect it would do the same in England as well.

[Richard Harrington (Watford) (Con)]

Q11. My right hon. Friend the Prime Minister will be aware that this country lost 1.7 million manufacturing jobs under the last Labour Government. Will he explain what plans the Government have to make sure this decline is reversed?

[The Prime Minister]

We have already seen over the last year an increase in manufacturing output and in manufacturing exports. I was up in Bedford last week at the GM plant, which is massively expanding. It is creating more jobs and bringing £150 million of offshore contracts back into the UK. We are backing that with low tax rates, deregulation and more apprenticeships. This is a Government who are pro-enterprise, pro-jobs and pro-manufacturing and who are going to dig us out of the mess the last lot left.

[Paul Flynn (Newport West) (Lab)]

Q12. Does not the nightmare of Fukushima mean that the planned renaissance of nuclear power will be stillborn? Should not the Prime Minister be planning for a future that will be free of the cost, fear and anxiety of nuclear power, and rich in renewables that are British, that are green, and that are inexhaustible and safe?

[The Prime Minister]

Of course we have to learn the lessons from Fukushima but, as I have said before, that is a different reactor design in a different part of the world with different pressures. The British nuclear industry has a good safety record, but, clearly, it has to go on proving that, and doing so in the light of the new evidence, such as it is, that comes out of Japan. That is what must happen, and the head of the nuclear inspectorate will do exactly that.

[Ian Swales (Redcar) (LD)]

The Prime Minister is a vociferous opponent of the alternative vote system and reserves special disdain for the idea that someone might win after coming second in an early round. Will he therefore stand aside in favour of the right hon. Member for Haltemprice and Howden (Mr Davis), who beat him to the post in 2005?

[The Prime Minister]

I seem to remember that my leadership contest ended up with the two of us touring the country and it was a popular vote. I am pleased to say that, unlike in some parties around here, the person who won actually won.

[Mr Ben Bradshaw (Exeter) (Lab)]

Q13. Given that our recovery has, in effect, stalled since he became Prime Minister, does the right hon. Gentleman stand by what he said to this House after his first Budget last June, which was that unemployment will fall “every year” in this Parliament?

[The Prime Minister]

I was quoting the Office for Budget Responsibility, but the fact is that 390,000 more people are in private sector jobs than there were a year ago. I would have thought with the economy growing, with exports up, with manufacturing up and with more people in work, the right hon. Gentleman should be welcoming that, instead of joining the doom-mongers on his Front Bench, who can only talk the economy down.

[Mr Lee Scott (Ilford North) (Con)]

Will the Prime Minister join me in calling for an independent international review following the UN report into the crimes committed by the Sri Lankan Government against the Tamil people?

[The Prime Minister]

My hon. Friend raises an important point. There are still unanswered questions from that period, and I will look closely at what he says and write to him.

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

The service of our armed forces in Afghanistan and elsewhere deserves to be recognised at the highest level and all the time, as the Prime Minister has often said. Why on earth, therefore, have the Royal Irish Regiment and the Irish Guards been denied a homecoming parade in Belfast? Will the Prime Minister intervene and talk to colleagues to ensure that this process of recognition for our troops and appreciation by the citizens of Northern Ireland can rightly take place as soon as possible?

[The Prime Minister]

First, let me thank the right hon. Gentleman for raising this issue, because the bravery of the Royal Irish Regiment and the Irish Guards in Afghanistan has been outstanding and, sadly, both regiments have suffered loss of life during their recent deployments. As I understand it, a number of homecoming events will be taking place across Northern Ireland. We are discussing with Belfast city council and others how we can give recognition to their tremendous bravery. No decision has yet been made and I will make sure he is fully involved in those discussions. It is also worth noting that because they are actually stationed in north Shropshire, they have already had a very successful homecoming parade in Market Drayton, and I am sure that they will have many others besides.

[Henry Smith (Crawley) (Con)]

Will the Prime Minister join me in congratulating Crawley borough council on freezing its council tax this year? Can he say how many other local authorities across the country have frozen their council tax, against the advice of the Labour party, which described that policy as a “gimmick”?

[The Prime Minister]

I am pleased to announce that in spite of the fact that Labour dismissed it as a “gimmick” and that the leader of the Labour party said that councils ought to be able to charge more, every single council in the country has given their hard-pressed council tax payers a council tax freeze. We all remember what happened over the last 10 years when council tax doubled. It was the tax of choice of the Labour party, taking money out of people’s pockets. We are freezing that council tax to give people a break, and they deserve it.

[Several hon. Members]

rose—

[Mr Speaker]

Order. We must now move on and we come to the ten-minute rule motion. I ask right hon. and hon. Members leaving the Chamber to do so quickly and quietly, extending the same courtesy to the hon. Member for Wigan (Lisa Nandy) as they would wish to be extended to them in such circumstances.

Pleck Library (Walsall)

Wednesday 27th April 2011 Commons Chamber

Valerie Vaz (Walsall South) (Lab)

- Hansard - - Excerpts

The petition is from the users of Pleck library, Walsall. The petitioners wish to prevent the closure of Pleck library and therefore request that the House of Commons urges the Government to take all possible steps to protect Pleck library for the future. There are 1,108 signatories to the petition in similar terms.

The petition states:

The Petition of users of Pleck Library, Walsall,

Declares that the Petitioners wish to prevent the closure of Pleck Library. The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to protect Pleck Library for the future.

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

[P000916]

Export Credits Guarantee Department (Regulation and Reporting)

Wednesday 27th April 2011 Commons Chamber

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

12:33

[Lisa Nandy (Wigan) (Lab)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to impose certain requirements on the Export Credits Guarantee Department, including the publication of an audit of all sums owed to the Department, an annual impact assessment and a real-time disclosure policy on all supported projects; to prohibit the support of certain activities by the Department; to provide that debt cancellation by the Department cannot be defined as official development assistance; to prohibit companies from receiving support from the Department for a period of at least five years following a relevant conviction of corruption; to introduce a duty of care provision which must be followed in the Department’s operations to provide access to justice for those affected by supported projects; and for connected purposes.

We are in the midst of an economic crisis caused in part by a lack of transparency and regulation in a system that thrived on excessive risk-taking for short-term profit without regard for the wider implications or the impact on people’s lives. It is now, I hope, widely acknowledged that private enterprise is bound by the same moral codes that bind us all and that activity in all areas of the economy should be both sustainable and accountable. We have obligations to one another and that is true for business as much as it is true for individuals. That is why I seek to introduce this Bill today: to shine a spotlight on a Government Department that uses taxpayers’ money to fund business activities overseas some of which are neither sustainable nor accountable and that have, in the past, caused significant damage to people and the environment.

The Export Credits Guarantee Department falls under the Department for Business, Innovation and Skills and acts as the UK’s export credits agency. It uses Government money to support private exporters in winning contracts overseas in countries where alternative support is not readily available to those businesses. It spends a huge amount of taxpayers’ money—in 2009-10, it issued guarantees of more than £2 billion—yet it operates entirely in a moral vacuum. Campaigners have unearthed countless astonishing examples of projects that cause significant damage to people and the environment, such as the sale of weapons to General Suharto in Indonesia that were then used to suppress his own people; a power station in India, which was significantly overpriced and now lies dormant because the electricity that it generated was too expensive for the Government to buy; and a hydroelectric dam in Lesotho that was overseen by a chief executive who was later jailed for 18 years for taking £3 million-worth of bribes.

It is worth dwelling on one more example: the Baku-Tbilisi-Ceyhan pipeline in the Caucasus. From the very beginning, non-governmental organisations voiced significant concerns about the project. Its design, they said, violated World Bank and European safeguards on human rights and the environment on more than 170 occasions, yet the ECGD went on to ensure the construction of the pipeline by the BP-led BTC consortium, providing credit totalling £150 million. Part of the deal was a series of “host Government agreements” with the countries involved. Those agreements take precedence over all national laws, except the constitution, and prohibit improvements to human rights or environmental regulation through new laws if they might affect profits. In effect, the deal puts profits above people, sometimes with the most appalling consequences.

As Amnesty International has pointed out, the deal created a “rights-free corridor” and during its construction much of the route was militarised. In all three countries, local people and international investigators were harassed, detained and arrested and there were allegations of torture. The UK Government have since conceded that the consortium broke international rules governing human rights, but it surely cannot be right that we are facilitating such activities not only without ensuring that human rights can be upheld but while human rights are actively being prevented from being upheld.

Those actions potentially put the UK in breach of international law and are certainly at odds with our human rights obligations, but for recipient countries the implications are much worse. If the deal falls through the exporter is paid anyway and, in the short term, the UK taxpayer foots the bill, but in some cases the ECGD goes on to re-designate that fee as a debt owed by the recipient country. An astonishing 95% of developing country debt owed to the UK has been generated by ECGD-backed operations. Those countries could have spent that money on developing their own economies, but instead they are forced to pay for a service that often does little for their people. Sometimes they are paying for damage inflicted on their people and their country.

I have a personal interest in this matter. Before I entered the House, I had the privilege of working with a group of remarkable children who had suffered appalling abuse and poverty overseas. I feel incredibly strongly that as a country we should be doing everything in our power to prevent the harm that is done to them, yet instead, in some cases, we are underwriting it.

The situation appears to be getting worse. The standards the ECGD applies are, in the words of the Jubilee Debt Campaign, “weak and getting weaker.” In 2010, the previous Government removed mandatory screening of child and forced labour for ECGD-backed projects. Between 2009 and 2010, the ECGD backed £21 million-worth of unscreened projects. In comparison, the OECD recently pointed out that all the UK’s major competitors and the vast majority of export credits agencies screen all the projects that they fund. The UK should be leading the way on this most important of issues, but instead we are trailing further and further behind.

Most of what we know about the ECGD comes from campaigners because it is neither transparent nor accountable. There is no legal requirement on it to publish a list of the projects that it supports and it does not reveal which outstanding debts relate to which projects. Indeed, requests for such information have been repeatedly declined. The ECGD has no duty of care at all to people who are affected and there is no grievance mechanism for those who are affected. Lender responsibility is disregarded and all the repercussions are borne by importers, even if there has been no, or limited, benefit to those countries. That is precisely the opposite of social responsibility.

My Bill would require the ECGD to adopt a list of prohibited activities and proactively to publish information on the projects it supports, including impact assessments, consultation and the monitoring and evaluation of projects. It would also prevent companies that have been convicted of corruption from receiving support from the ECGD for five years after the date of conviction. I want to make it clear that I am not attempting to stifle support for British business, which needs and deserves support from the Government now more than ever, but we should be supporting sustainable trade that is of long-term benefit, that safeguards human rights, that protects the environment and that at the very least does not exacerbate poverty.

Currently, the ECGD supports a handful of large companies that operate in just a few sectors. In the past year, for which we have figures, virtually all its support went to one company alone, Airbus, which hardly represents the diversity of the British economy, and that does absolutely nothing for the small and medium-sized businesses that we are all so keen to support. The ECGD could instead support and promote new, green industries and make productive investment that would generate jobs and prosperity. Renewable energy, public transport projects and low or zero-carbon industries should all be considered for support. Instead, we support proportionally more carbon-intensive industries than any other EU country. A credit line of £50 million, which was rightly ring-fenced for renewable energy in 2003, has not been touched to date.

Reform of the ECGD is backed by Members from the Conservative, Labour, Liberal Democrat, Green and Scottish National parties. Indeed, the right hon. Member for Twickenham (Vince Cable), who is now the Secretary of State with responsibility for the relevant Department, proposed reform of the ECGD just two years ago. There is clear consensus that the most urgent task facing the Government is the recovery of the economy but that can and must be achieved through sustainable and productive investment. We should be promoting the best of British business to the rest of the world and we should be leading the way in our commitment to human rights and the environment.

Question put and agreed to.

Ordered,

That Lisa Nandy, Zac Goldsmith, Roger Williams, Caroline Lucas, Tony Cunningham, Anas Sarwar, Dr Eilidh Whiteford, Sheila Gilmore, Bob Russell, Dr Julian Huppert, Teresa Pearce and Yasmin Qureshi present the Bill.

Lisa Nandy accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 11 November, and to be printed (Bill 182).

Points of Order

Wednesday 27th April 2011 Commons Chamber

12:43

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

On a point of order, Mr Speaker. I seek your guidance on a matter relating to ministerial accountability to Members of the House. I recently sent a letter, at the request of a constituent, to the Chancellor of the Exchequer, whose office then notified me that it was being forwarded to the Department for Education for reply. Today, I received a reply from the Department—from the permanent secretary. This is the second time I have received such a letter. The matter about which I wrote was politically controversial, so the permanent secretary has, whether he wished it or not, been drawn into party political controversy by expounding and defending Government policy. This clearly is not satisfactory, Mr Speaker, and I shall be grateful for your guidance on how we should deal with such a situation and prevent its recurrence.

[Mr Speaker]

The right hon. Gentleman has been in the House for 40 years—I think he is in his 41st year of service in the House—so he will know that how Ministers respond to questions is principally a matter for them. However, I certainly think the point that he has raised warrants a ministerial response. For my own part, I will stick my neck out and observe that when a Member of Parliament tables a question, the Member of Parliament wants a reply from a Minister, not from an official. It might even be thought a little unwise to respond to the right hon. Gentleman, of all people, in the way that was done, but I am sure the Secretary of State will have something to say about the matter.

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

Further to that point of order, Mr Speaker. I am grateful for this opportunity, as I am determined at all times to ensure that my Department responds promptly and fully to questions from colleagues across the House, and the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman) is a particularly assiduous correspondent on behalf of his constituents. I have had the opportunity in the past to reply personally.

On some occasions it is appropriate when responding to parliamentary questions and to correspondence to enlist the support of those who do such a good job in the civil service and in arm’s length bodies. It is always a matter for ministerial discretion, but if any Member of the House is unhappy with any reply that they have received, I would be delighted if they would write again to me. In almost every case where a parliamentary question has been answered or parliamentary correspondence has been received, there has been a note from a Minister stressing that if the reply and the information contained therein is unsatisfactory, Ministers would of course be delighted, as I am at any time, to provide further information.

I am also delighted and grateful to you, Mr Speaker, to be able to say that the backlog of correspondence that we inherited has now, thanks to the generous and energetic work of officials in the Department, been cleared. I hope that in the future I will be able to answer all questions from all parts of the House as promptly as Members deserve.

[Mr Speaker]

I am grateful to the Secretary of State. That closes the matter on the subject of questions and correspondence. I invariably receive personal replies in the form of letters from the Secretary of State, and I have come to look forward to them with eager anticipation.

Opposition Day

Wednesday 27th April 2011 Commons Chamber

[15th Allotted Day]

Sure Start Children’s Centres

Wednesday 27th April 2011 Commons Chamber

12:47

[Andy Burnham (Leigh) (Lab)]

I beg to move,

That this House believes that improving the life chances of children and young people from all backgrounds should be central to Government policy; recognises that the Sure Start network of 3,600 Children’s Centres, introduced by the previous administration, is crucial in delivering high quality early education and early intervention for children, as well as support, advice and specialist services for parents and carers; notes that the funding to local authorities for the Early Intervention Grant in 2011-12 represents a real terms cut of 22.4 per cent. nationally, compared to the 2010-11 allocations before in-year cuts to area based grants; recognises that, in the context of this cut to early intervention funding, the large, front-loaded cuts to other local authority funding streams, and the removal of the ring-fence around Sure Start funding, Sure Start Children’s Centres will inevitably be put at risk; notes that before the General Election the Prime Minister promised to protect and strengthen Sure Start; and therefore calls on the Government to protect the Sure Start network of Children’s Centres by thinking again about their deep cuts to Sure Start funding, to monitor the evidence and, if local authorities are choosing to disinvest in Sure Start centres, to commit to reinstating the ring-fence for Sure Start funding to ensure that vital and valued services are not lost.

How tempting it might be to continue the discussion that just took place. The record of the Department in answering parliamentary questions and letters is pretty lamentable: 90% of named day PQs are not answered on time. That gives a glimpse of the chaos that reigns in the Secretary of State’s Department. But I note your ruling, Mr Speaker, that the matter is closed for now, so we will turn to Sure Start.

It is not always the case that policies debated and voted on in the House become universally accepted as a good thing in the country at large, but occasionally, between us, we get it right. Every now and again an idea comes along that is right for its time, addresses a real need, makes life better for many people and slowly becomes part of our national fabric. It acquires a broad appeal across the Benches of the House and its longevity becomes secured. Sure Start, it seems, is in that rare category of policies.

Last year, a survey by the Institute for Government considered the most successful policies of the past 30 years. Sure Start was judged to be the fifth most successful, beaten only by the national minimum wage, devolution, privatisation and the Northern Ireland peace process. Such a commendation for a flagship policy of the last Labour Government gives rise to a deep sense of pride among Labour Members today, but we are realists too. We know that other Labour achievements, such as the national health service, the Open university and the national minimum wage, will endure only if we convince all parts of the House that they are right.

It did not go unnoticed just over a year ago when the then Leader of the Opposition, now the Prime Minister, gave this pre-election manifesto statement to the National Childbirth Trust:

“We are strongly committed to Sure Start Children’s Centres and will strengthen this service”—

a clear promise to parents when the Prime Minister sought their votes. We have called this debate today to hold him and his Government to account for it.

This is not our first recent opportunity to discuss Sure Start. Seven weeks ago, the House had an excellent debate about the subject, but back then councils were still setting budgets and making choices. Today, we are in a much better position to make sense of the emerging picture on the ground, and we can judge the oft-repeated claim from the Secretary of State and his Ministers that they have given councils enough funding to keep all Sure Start centres open and, in the words of the Secretary of State at the most recent Education questions in an answer to my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger), that they have given them

“sufficient to guarantee every child a high-quality place.”—[Official Report, 21 March 2011; Vol. 525, c. 697.]

Today, we can test the claim made by Ministers from the Dispatch Box that councils have enough money to do both. Does the claim hold water?

[Robert Halfon (Harlow) (Con)]

Is the right hon. Gentleman not pleased to know that in Harlow all the Sure Start centres remain open and are as strong as ever? Given that councils throughout the country have £10 billion in reserves, should they not use some of that money to strengthen their Sure Start centres?

[Andy Burnham]

I certainly say, “Good old Harlow”. The hon. Gentleman sits on a very fine inheritance from Labour in that constituency, and I trust that he will look after it well. Indeed, he follows a very distinguished former Member.

[Gordon Henderson (Sittingbourne and Sheppey) (Con)]

I hope that the right hon. Gentleman does not consider Kent to be a bastion of Labour support, but all the children’s centres in the county are being kept open.

[Andy Burnham]

We will judge a week on Thursday whether Kent can return much Labour support, and we look forward to that judgment, but again I pay tribute to those local authorities that in difficult circumstances are doing their best to keep the Sure Start infrastructure intact. They deserve credit for that, because they are making some difficult decisions, and later I will go through some local authorities and list those examples that the House will be interested to hear.

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

Westminster council is also seeking not to lock the doors of its 12 children’s centres, but it is achieving that by implementing an 18% cut in funding through reduced outreach services and reduced services for child development, and by ensuring that smaller centres no longer provide any help for families seeking employment. How does that fit with the Government’s objective of getting mothers back into employment?

[Andy Burnham]

My hon. Friend makes an important point, and I look over her local authority’s border into Hammersmith and Fulham, where even more worrying steps are being taken, steps that my hon. Friend the Member for Hammersmith (Mr Slaughter) has skilfully exposed. I will come to those issues later, because there is a real issue about whether, in keeping open a centre, the service to parents in local authorities throughout the country is being destroyed. That is the key issue for the House to consider.

Let me, however, give the Government credit where credit is due—most unlike me, but here we go: they have certainly talked a good game on early intervention. To show just how committed they were to the issue, they commissioned not one but two distinguished Opposition Members to advise them on it, and the Field review—I am pleased to see my right hon. Friend the Member for Birkenhead (Mr Field) in his place—and the Allen report found common ground.

First, each report sets out a persuasive case for investing public resources heavily in the early years of a child’s life. They argue that doing so will help us to tackle the root causes of poverty and to build true social mobility in Britain. Only that will challenge a society where, in the words of my right hon. Friend,

“at the age of three but certainly by five, the die of life is set for most children.”—[Official Report, 2 March 2011; Vol. 524, c. 320.]

We all must seek to work together to challenge such a world.

Secondly, their recommendations are based on the assumption that the existing 3,600 Sure Start children’s centres throughout the country, one to serve every community, should be the essential infrastructure—indeed, the delivery system—if the vision of high quality early intervention is to become a reality. That is the key question that we need to consider today.

The departmental Select Committee in the previous Parliament found that Sure Start had begun to make an appreciable difference to children’s lives. It stated:

“Parents in Sure Start areas relative to those in non-Sure Start areas reported using more child and family-related services…and their children were socially more competent. These results seem to show that programmes are becoming more effective over time, particularly in their work with the most disadvantaged, and that children are feeling the benefit of longer exposure to the programmes.”

That is a ringing endorsement.

In essence, Sure Start built into the early years universal comprehensive education. Its strength is that it brings together parents, of all backgrounds, who may not have known each other before. Instead of providing only state support, Sure Start, by bringing those people together, helped them to create self-sustaining support networks in the community, through one parent working with another, and in that way it gave all young parents the extra support that they need. That is a fundamental strength of Sure Start, and it must not be lost.

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

My right hon. Friend will be pleased to know that Labour-controlled Tameside council has committed to keeping open all its children’s centres, despite a tough financial settlement, but did not the Conservative spokesperson on children and families let the cat out of the bag on the front page of the Tameside Advertiser this week, when she said that Sure Start should not be a universal provision serving every community?

[Andy Burnham]

That absolutely does let the cat out of the bag, and I am about to go through some examples of Conservative spokespeople in local government who do not seem to have read the Prime Minister’s words before the election last year.

I congratulate Tameside council, however, because it has dealt with a disproportionately larger cut to its early intervention grant than other authorities in Greater Manchester—Trafford, to name but one, which Government Front Benchers routinely mention. In Tameside, for every young person aged under 20 years old there has been a £70 per child cut in the early intervention grant.

The council is working in those circumstances to keep the network of Sure Start centres open, and that is why I congratulate Tameside, and I hope my hon. Friend will take my congratulations back to his friends. Owing to all the benefits that I have described, it is not surprising that the Field review concludes:

“Local Authorities should aim to make Children’s Centres a hub of the local community”.

My right hon. Friend describes them as a “targeted universal service”.

Two authoritative reports delivered to the Government advocate the importance of children’s centres, but now we get to the heart of the matter. We will soon discover whether the Government really wanted to hear the views of my esteemed friends on that crucial subject, or whether they were brought in for presentational reasons—as a piece of theatre to send a desirable political message.

To be fair to the Prime Minister, I remember well how about a year ago, during the election campaign, some Labour Members doubted the sincerity of his commitments to Sure Start. I looked back to what he said, however, because I remembered it from the television debates, and on 5 May 2010, on the very eve of the general election, readers of The Independent sent in questions to the then Leader of the Opposition. A questioner asked:

“As a parent who relies heavily on Sure Start centres for the educational and social needs of my child, I would like to know whether these centres will continue to receive funding.”

The Prime Minister replied:

“Yes, we back Sure Start. It’s a disgrace that Gordon Brown has been trying to frighten people about this. He’s the Prime Minister of this country but he’s been scaring people about something that really matters.”

That is what the Prime Minister said last May. In some ways, his anger was reassuring because it looked as if the Government-to-be were genuinely committed. I wonder how the Prime Minister feels today, given that it has turned out that those things that, as he said, “really matter” are under serious threat.

Evidence is emerging of widespread disinvestment by local authorities in Sure Start children’s centres. That seriously challenges the deliverability of the vision set out by my right hon. Friend the Member for Birkenhead.

[Henry Smith (Crawley) (Con)]

I am happy to join the cavalcade of other Conservative authorities that have already been mentioned; in West Sussex, no Sure Start centres are closing. Indeed, there is a greater desire to improve the services for early years. Surely that is at odds with what the right hon. Gentleman is saying.

[Andy Burnham]

It is a mixed picture. We will get to the bottom of the true picture on the ground as we get into the debate today. If Conservative local authorities are not just keeping the centres open, but protecting the services within them, I will of course recognise that that is what we want and what the Government said they would do. If that is the case, then good. But other Conservative-controlled authorities are not doing that. My question back to the hon. Gentleman is: what are he and his Front-Bench colleagues saying to Conservative authorities that are disinvesting from Sure Start and siphoning the money out? I look forward to an equally fulsome answer on that question.

If the Government accept the vision in the review that they commissioned my right hon. Friend to produce, I put it to the House that it must urgently consider what is happening on the ground and ask the Government to change course to preserve the network of children’s centres and services. As I will show today, children’s centres are closing right here, right now. Highly trained staff are being made redundant. Some children’s centres are keeping the lights on, but no more. That is the reality on the ground that the Prime Minister must urgently confront.

[Bill Esterson (Sefton Central) (Lab)]

I draw my right hon. Friend’s attention to what is going on in Sefton. The council faces 30% cuts in its budget and it has had to review all 19 of its Sure Start centres. A Conservative-Liberal Democrat coalition has made that decision, which emphasises my right hon. Friend’s point about the cuts being made by Conservative-run or led authorities. Families in Sefton are clear that they need the entire network. It is essential for people from all the different parts of the community that the network should be maintained. People from different parts of the community need different elements of the service.

[Andy Burnham]

My hon. Friend points out that coalition councils are not acting to protect Sure Start. He has come to an important point. The Government will have to decide. When the Prime Minister made promises last May, was he promising to keep Sure Start as a universal service? If he was, he really has to act. If, however, he had decided to let it become a targeted service—available in some communities and not in others, available to some parents and not others—he needs to be honest about that. He needs to say that and it needs to be clear that that is the Government’s policy.

The Government built a clear expectation among parents that they were preserving Sure Start as a universal comprehensive service that would give all children the best start in life. Indeed, at the last Education questions, the Secretary of State said that he would guarantee all children a high-quality place. The Government will have to live up to that promise.

If today the Prime Minister believes as strongly in Sure Start as he appeared to on the eve of polling day, he must act to save it. He must stop the disinvestment in Sure Start by councils and reinstate the Sure Start ring-fence in the next financial year, as our motion suggests, to protect a service that is still very much in the early years itself.

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

Will the shadow Secretary of State also congratulate Medway, an authority that is retaining its 19 Sure Start centres? It is going beyond that and showing the Government’s commitment to helping and supporting the young ones in their early years. I have a letter from the Department for Education dated 13 March 2011. It says that the Government are giving an additional £275,000 to Medway to increase provision to two-year-olds, three-year-olds and four-year-olds. That shows the commitment from local councils and the Government.

[Andy Burnham]

I am not in a position to judge the decisions of Medway council. What I can say to the hon. Gentleman is that the cuts introduced by the coalition since the last election have led to a £40-per-child cut in the early-intervention grant in Medway. If the council is making the best of a bad lot, I say good luck to it; I hope that the hon. Gentleman will encourage other councils to do the same.

[Robert Halfon]

Will the right hon. Gentleman give way?

[Andy Burnham]

I have given way to the hon. Gentleman once. I will now make some progress.

There is a dissonance between commitments given from the Dispatch Box by the Prime Minister and the Secretary of State and the actions of councils on the ground, which are dealing with the reality—the hand of cards—that the Government have given them. How did we get to this position? First, let me examine the issue of national funding to support Sure Start. In his statement to the House on the spending review, the Chancellor said that he had found

“more resources for our schools and for the early years education of our children.”—[Official Report, 20 October 2010; Vol. 516, c. 964.]

On that day, we said that that was a highly questionable statement. But ever since, the Secretary of State and his Ministers have stuck loyally to the line that the Government have given councils enough money to maintain children’s centres and services—that is, until the debate led by my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) a couple of weeks ago on estimates day. I do not know what possessed him, but the Secretary of State intervened on a point being made by my hon. Friend and for the first time broke the discipline that Government Front Benchers had been observing so carefully. He said:

“The hon. Lady was kind enough to mention earlier that by her own calculation ring-fencing Sure Start within the current early intervention grant envelope would mean that other services would have to go. How will she protect those other services? Will she raise taxes, cut spending elsewhere or, as she said earlier, simply cross her fingers and hope for the best?”—[Official Report, 2 March 2011; Vol. 524, c. 359.]

That is a revealing statement, for implicit in the Secretary of State’s words is the admission that the Government have not given councils enough money in the early intervention grant for everything that they need to pay for to sustain both Sure Start and other crucial services, such as short breaks for disabled children, teenage pregnancy services and the children’s social care work force.

The Secretary of State could not have been clearer—we cannot have both: ring-fence Sure Start, and face cuts to some of those essential services for children. At least we saw a degree of honesty from the Secretary of State, but his problem is that his statement directly contradicted the Prime Minister’s a few weeks earlier; that is not a good career move for a man in his fragile position.

In February, at Prime Minister’s questions, the Prime Minister claimed the polar opposite of what the Secretary of State said. He said:

“On Sure Start, the budget is going from £2.212 million to £2.297 million. That budget is going up. That is what is happening.”—[Official Report, 9 February 2011; Vol. 523, c. 293.]

To be fair to the Secretary of State—and I do not often say this—on this occasion he has a much better grip on the detail than his boss. The £2.212 million referred to by the Prime Minister is the early intervention grant for 2011-12. The Prime Minister conveniently took 2011-12 to be his baseline year—and yes, between 2011-12 and 2012-13 the contribution goes up in cash terms. However, not for the first time at the Dispatch Box, he was playing fast and loose with the figures. The only way to show what has happened to Sure Start and early intervention since the change of Government is to compare 2011-12 with the financial year that has just ended—that is, 2010-11. A departmental ministerial statement dated 13 December 2010 said that in 2011-12 the amount to be allocated through the early intervention grant

“is 10.9% lower than the aggregated 2010-11 funding through the predecessor grants.”—[Official Report, 13 December 2010; Vol. 520, c. 67WS.]

The Prime Minister said that the budget was going up; the Department explicitly says that the budget is going down. That is not acceptable. In fact, it is worse than that because the Department’s calculation leaves out in-year early cuts after the general election to the area-based grant that many local authorities, particularly in more deprived areas, used to receive.

New research from the Library gives us the full picture. Its figures show that the equivalent EIG at the start of 2010-11 was £2.794 million, meaning that this year’s £2.212 million represents a real-terms cut of 22.4%.

[Duncan Hames (Chippenham) (LD)]

The implication of what the right hon. Gentleman is saying is that under a continued Labour Government the cash settlement for all these services would have remained the same, yet in the Labour manifesto there was no promise to ring-fence the Sure Start grant, the Department for Education or the Department for Communities and Local Government. Given that the previous Chancellor intended to make savings across Departments, where does the right hon. Gentleman believe that this money would have come from?

[Andy Burnham]

Sure Start was ring-fenced—that was the policy of our Government. The Labour manifesto talks of strengthening early intervention. I am holding the Prime Minister to account for what he said when he was seeking the votes of people in this country. He said, in terms, that he would strengthen Sure Start, so I am saying that we should look at the evidence on the ground. Is Sure Start strengthening or weakening? When I read the hon. Gentleman some of the evidence, I hope that he will make an honest judgment on whether the service is getting better or is under threat.

The research from the Library tells us that in England the average cut in the EIG between 2010-11 and 2011-12 is £50 for every child in this country. Altogether that is absolute proof that the PM, who is undoubtedly a good talker—a PR man—is dangerously cavalier with the facts at the Dispatch Box, as Oxford university recently found to its cost. He said at the election that he would protect Sure Start, but in fact he has cut it, in real terms, by about a quarter. This takes us to the crux of the matter. The Government have not had the guts to be honest about the cuts that they are making to Sure Start. Instead, they have cut the budget, removed the ring fence, and offloaded the problem and the responsibility on to local authorities up and down the country, some of which face invidious choices in cutting essential services for children—child safeguarding and other important services. That is a terrible position for local authorities to be in, be they Conservative, Liberal, Labour or in coalition. Some other councils are cutting way beyond what would have been the ring fence. They are cutting into funds that were given by the Government for the purposes of Sure Start, siphoning them off and spending them elsewhere.

[Ben Gummer (Ipswich) (Con)]

The right hon. Gentleman talked about cavalier language. At the last election, Harriet Harman, the Member for—

[Mr Speaker]

Order. May I remind Members that they should not name other Members? The reference should be to the constituency represented; I think that the hon. Gentleman was about to get on to that.

[Ben Gummer]

Thank you, Mr Speaker, for correcting me.

At the time, the lady of whom I spoke came to Ipswich and told my constituents that children’s centres would be cut in Ipswich. Since the election, every single centre has stayed open and two more have been added. The right hon. Gentleman is a decent man. Will he apologise on her behalf for having misled people, because I have tried to get her to apologise and she has refused to answer my letters?

[Andy Burnham]

I will happily look at what is happening on the ground in Ipswich. However, there is an important difference that I point out to the hon. Gentleman. It is possible to keep a children’s centre’s lights on and keep a receptionist and a cleaner, but what is going on inside? Is he satisfied that an appropriate level of service is being provided to support the parents of Ipswich? That is the judgment that he has to make. It is not just a case of whether he can come to the House and say that Ipswich is keeping the lights on—it needs to do more than that. Indeed, his own Government have funded it to do more than that. Suffolk, which is the local authority concerned, has had a huge cut of £40 per child in its area. He has to ask his Front Benchers whether that is acceptable for his constituents.

Let me go around the towns and point out what is happening on the ground. Derby, home to a Tory-Liberal coalition, seems like a good place to start. Surely there, if anywhere, people would implement coalition policy to the letter, would they not? Well, perhaps not, because we find that in Derby six children’s centres are threatened with closure. In a BBC news report on 10 March, Kelly Jennings, daughter of the Tory leader of the council, Harvey Jennings, said:

“I voted for the Conservatives because I thought there was going to be more help for the NHS. Now they are cutting that off and locally they are cutting off the Sure Start centres which single parents like myself rely on.”

We have been very pleased to welcome Kelly into the Labour party because she sees that in these tough times only Labour will be the voice of people and stand up for the services on which people depend. [Interruption.] Conservative Members laugh, so let us look at some Tory authorities. We have heard wonderful praise for many local authorities today; let us look at a few others. Are they working hard, like other authorities, to implement the Prime Minister’s clear pre-election pledges?

In Hammersmith and Fulham, we saw the first use of an interesting tactic that my hon. Friend the Member for Westminster North (Ms Buck) mentioned earlier. Many of its 16 children’s centres were under threat of closure. My hon. Friend went to the council meeting to see it discuss the issue. Then we heard the news that six would become hubs and 10 would remain as spokes. Only when we dig a little deeper do we find that nine of those so-called spokes will receive £25,000 a year. What is that enough to pay for—a receptionist, a caretaker, a bottle of bleach? Is there much more that it would pay for? I do not know, but it could not be very much. At the last Education questions, my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) recalled the hospital without patients in “Yes Minister”. This coalition may be remembered for a more modern equivalent —a children’s centre without any children in it. That could be the Secretary of State’s legacy. I do not know about hubs and spokes, but there are certainly plenty of mirrors and smoke when it comes to presenting the facts about Sure Start.

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

I hope that my right hon. Friend might have an opportunity to look at what else is happening in Hull, controlled by the Liberal Democrats, which has seen a 32% cut in the children’s budget across the board and a 50% cut in the money going to children’s centres. Of the 20 children’s centres that we had under the Labour Government, 13 have effectively been mothballed by the Liberal Democrats and will have very few services.

[Andy Burnham]

I am glad that my hon. Friend raises that important point. As she says, the budget for Sure Start in Hull has been cut by 50% from £9 million to £4.5 million. During a previous Opposition day debate on the education maintenance allowance, the Secretary of State stood at the Dispatch Box and advocated that people should vote Liberal Democrat, particularly in Hull, pointing to some excellent provision that was available. I wonder whether we will hear that again or whether he will revise that advice to the electorate in advance of next Thursday. A 50% cut—can that be what the Prime Minister had in mind when he said he would strengthen Sure Start? This is the decimation of services on the ground.

Let us talk about some more Tory authorities before we get on to the Liberal Democrats. Tory-controlled Barnet is removing funding from eight of its 21 children’s centres, making £6.4 million of savings. Tory-controlled Bromley is closing 13 of its 16 centres. How can there be a service for the whole borough when just three centres are left? Are Ministers really saying that every parent in Bromley can access those centres and their services? I doubt that very much.

In Hampshire, 28 of the 81 children centres are set for closure. However, we should not worry because help is at hand. The right hon. Member for Eastleigh (Chris Huhne) has signed a petition against the changes. Thank God for that!

[Caroline Dinenage (Gosport) (Con)]

I would like to correct the right hon. Gentleman on his facts, unfortunately. Hampshire county council has pledged to protect all front-line Sure Start services and only back-office costs will be cut.

[Andy Burnham]

Well, there was a plan to close 28 children’s centres. I was led to believe that the council was considering the plan and consulting on it. I do not know when it had a change of heart. Perhaps it was because of the force of the representations of the right hon. Member for Eastleigh. We will have to find out. I am tempted to ask the Liberal Democrats to relay back to their colleague that rather than sign the petition, it might have been better for him to speak up in Cabinet to oppose the Secretary of State for Education and his cuts to the early intervention grant. Would that not have been a quicker way of resolving the matter, whether or not the local authority has had a last-minute change of heart with the local elections looming?

I do not know what to make of the behaviour of the right hon. Member for Eastleigh. Am I alone in finding his behaviour increasingly strange and Cable-esque? For the past 11 months, he has sat with his Lib Dem colleagues in Cabinet as the Tories have put various questions before them. They were asked, “How about trebling tuition fees and creating a market in higher education?” They said, “Why of course, be our guest, go and do it.” The Secretary of State for Education asked, “How about scrapping EMA?” “Please do,” said the right hon. Member for Eastleigh, “and why not decimate the careers service while you’re at it?” They were asked, “Shall we cut Sure Start?” “Please do,” said the right hon. Member for Eastleigh, “it will give me a good campaign at local level. Please get on and do it.” However, when the Tories ask, “Won’t AV mean we spend a little more on counting machines and the cost of elections?” all of a sudden, there is talk of resignation, legal challenges and Lord knows what. I struggle to understand that response from the right hon. Member for Eastleigh.

Does that synthetic rage not expose once and for all the absolute moral bankruptcy of today’s Liberal Democrats? When the interests of millions of young people were at stake in Cabinet discussions, they sat on their hands, but when their self-interest is challenged because they might not win a vote on a change to the voting system, it is time to bring down the coalition. That tells people everything they need to know about the Liberal Democrats: their politics are flaky, unprincipled and cynical, and their disloyal Ministers are preparing for life beyond the coalition.

There have been increasingly desperate statements from the Deputy Prime Minister. What has he said about Sure Start? At the Lib Dem spring conference he said:

“I cannot tell you how proud I am that not a single Liberal Democrat-led council is closing a single Sure Start children’s centre.”

Liberal Democrat Members have gone quiet. Are any of them prepared to back up that statement today? Stand up now. Does anyone hold to that statement?

[Dan Rogerson (North Cornwall) (LD)]

indicated assent.

[Andy Burnham]

You do. So the Liberal Democrats all think that that is a correct representation and stand by it.

Let us consider Kingston upon Hull, where there is a 50% cut in the Sure Start budget. [Interruption.] The hon. Member for North Cornwall (Dan Rogerson) says that that is not true. Perhaps somebody has more up-to-date information and will beg to differ. Kingston upon Thames is another interesting and revealing example. Channel 4 FactCheck picked up the suggestion from the Deputy Prime Minister that the Lib Dems were not closing any centres and Cathy Newman went to Kingston upon Thames to look at whether any centres were being closed. Indeed, one was being closed in Hook. [Interruption.] The hon. Member for North Cornwall says that it is not a Sure Start centre. Well, when Cathy Newman went there, she found a plaque on the door that read, “children’s centre”. How can it not be a children’s centre, I ask the hon. Gentleman? I am struggling with this defence.

I acknowledge that Labour councils, too, are taking difficult decisions. We have heard coalition Ministers target Liverpool and Manchester. Liverpool is losing £90 per young person and Manchester £80. Both are working to keep service reductions to a minimum. Hampshire, by contrast, is losing just £30 per child and plans to close 28 centres. How does that work?

[Stephen Twigg (Liverpool, West Derby) (Lab/Co-op)]

I am grateful for what my right hon. Friend said about Liverpool. Will he join me in congratulating Labour-led Liverpool city council, which has not closed any children’s centres and is desperately trying to keep them all open? I hope to intervene on the Secretary of State to ask for his support for that.

[Andy Burnham]

I do congratulate Labour-led Liverpool city council and its leader, Joe Anderson. Sure Start is clearly close to his heart, as he said when he set the budget. I am delighted that it is working to keep all its centres open.

Perhaps our calling this debate has led some people at local level to have a change of heart. Perhaps it has led to some U-turns at local level, of the kind we have become familiar with from the Government. The hon. Member for Gosport (Caroline Dinenage) mentioned Hampshire. [Laughter.] The Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton) laughs, but only yesterday, Hampshire decided that its centres would remain open, but that the budget would be cut from £17 million to £11 million. [Interruption.] I do not read the Hampshire local press every day. Does the Under-Secretary? The council had a plan to close—

[Mr Speaker]

Order. I will say two things. First, it is not necessary for the Under-Secretary to behave like a child to demonstrate his empathy for children. That is not a requirement of the job. Secondly, although I am very much enjoying the right hon. Gentleman’s geographical tour of the United Kingdom and always relish his exchanges with the Secretary of State, I am conscious that Back-Bench Members also wish to contribute. I am sure that those on the Front Benches will take account of that and apply a certain self-denying ordinance.

[Andy Burnham]

I agree, Mr Speaker, and will bring my remarks to a close.

Liverpool is doing well, despite facing difficult budget cuts of £90 per child. Hampshire is losing just £30 per child and is in a mess at local level, as is clear. These are the real politically motivated cuts. Hampshire is cutting its budget from £17 million to £11 million—a council in a more affluent area siphoning funds out of Sure Start and away from children who are facing the biggest challenges.

The evidence is racking up. Sure Start is being starved and is shrinking. Coalition policy is turning a much-loved, universal service into a patchy postcode lottery, which breaks the Prime Minister’s promise to parents. The ministerial team are making a mess of this successful policy in precisely same way as they mangled EMA and school sport partnerships. The Government say that they accept the Field and Allen recommendations, but the rhetoric does not match the reality. Early intervention services are under intense pressure as councils wrestle with impossible choices. Later this week, Labour will publish a survey of 70 directors of children’s services, which reveals a worrying picture of the quality and coverage of child safeguarding services in the current climate. It is becoming increasingly clear that Sure Start will not survive if the removal of the ring fence continues.

The motion makes the reasonable request for the Government to consider the emerging evidence and change course. We were right about school sport and we were right about EMA. If the Government care about the promises they have made, it is time for another U-turn and the reinstatement of the ring fence. I hope that they will listen, but somehow I doubt that they will. The decisions to shrink Sure Start fit entirely with the direction of Government education policy: at every stage of the education journey, they are making life harder for those who face the biggest challenges. They are breaking the promises that they made. We have heard what is happening to pre-school education, despite the fact that the programme for international student assessment has shown that all the best school systems in the world are based on the most extensive pre-school provision.

On four-to-16 education, the Chancellor stood at the Dispatch Box on the day of the spending review and promised more resources for schools, and said that the pupil premium would be “truly additional”. Heads know how hollow those words were, as they have to use a static or falling budget to buy back central support services previously provided for free by the local authority. Most schools are facing 80% cuts in their buildings budgets, as the Secretary of State showers extra money on his free schools.

On 16-to-19 education, the Prime Minister made a personal promise to young people at a further education college to keep the education maintenance allowance, but the Government scrapped it. Even the OECD has recently called on the Government to reinstate it. The effect of scrapping it will be that education and the route to a better life will now be closed off to many young people.

On higher education, holier-than-thou promises from the Government that £9,000 fees would be the exception rather than the norm have proved utterly false, as we will debate later today. Universities such as Cambridge are left to say what the Government will not—that state school pupils will start to drop off and find it harder to gain access.

What is the combined effect of all those misguided education policies? I can almost hear the sound of falling aspiration in my constituency and in former industrial areas where so much was done to lift expectation, and I can tell the Secretary of State that it terrifies me. The Government are breaking their promises to parents and young people, and the effect will be to reinforce disadvantage at every stage of the education journey. Families with a little extra money will probably be able to insulate themselves from the worst of the changes, but the combined effect on the children who have least will be that the odds are stacked even further against them by an old elite, slamming the door in their face and kicking away the ladder.

What about when young people try to move from education into today’s more competitive workplace? The Deputy Prime Minister made a feeble promise to open up work experience and internships, and days later the Prime Minister laughed in his face and reassured his old network that it would be business as usual.

The coalition’s true colours are slowly being revealed, and what we see is the same old ruthless Tories. Promises were made to soften their image—“We will look after the NHS.” “EMA will stay.” “Sure Start will be strengthened”—but they have all been cynically abandoned after less than a year in office. The Government are acting as though they got a mandate last May. They did not, but we have a Liberal Democrat party that is letting them behave as though they did. Last May, the Liberal Democrats sacrificed everything and sold the shop for a referendum on the voting system, a change that they want in their own electoral interests. Now we see how viciously they are prepared to fight to secure that self-interest, while we remember how meekly they sold down the river millions of young people whose votes put them in Parliament.

Children and young people deserve a lot better than this. Labour will stand up for young people and give them all a fair start in life, and we will be their voice in tough times. I commend the motion to the House.

13:33

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

In this post-Easter season, there is cause for all of us to celebrate, because a number of gloomy predictions have been confounded. At the beginning of the football season, some of us might have imagined that the dominant team on Merseyside would be Everton, but in fact, thanks to Kenny Dalglish’s inspired leadership, the reds are five points ahead of the blues. The gloomy obituaries that were being written for that great team have had to be put back.

[Kevin Brennan (Cardiff West) (Lab)]

Who do you support?

[Michael Gove]

QPR, as it happens, but I admire Liverpool, and particularly Kenny Dalglish. [Interruption.] We are top of the league, you know.

Another gloomy prediction was made by Labour Members, but it has not come to pass—that of a double-dip recession. That was the mantra at the top of the Labour party, from the right hon. Member for Morley and Outwood (Ed Balls), the Leader of the Opposition and the Labour election co-ordinator, whatever his name is. The news today, however, is that our economy is growing once more—another gloomy prediction confounded.

We also heard a series of gloomy predictions from Labour Members about what would happen to the network of Sure Start children’s centres in this country. We were told by the hon. Member for Hammersmith (Mr Slaughter) that we would see a reduction in the number of children’s centres in Hammersmith and Fulham, but actually, as the right hon. Member for Leigh (Andy Burnham) almost acknowledged, not only are all the existing Sure Start children’s centres being protected but a new one is being built. There is an increase in the number of Sure Start children’s centres in Hammersmith and Fulham.

The right hon. Member for Leigh told us halfway through his speech that Hampshire was going to close all its children’s centres. Sadly, that slur—[Interruption.] It was a slur. That slur on Hampshire county council was very effectively rebutted by my hon. Friend the Member for Gosport (Caroline Dinenage). The council is ensuring that every single children’s centre will remain open. The right hon. Gentleman did not have the grace to acknowledge either that it was a Conservative local authority that was keeping them open or that he had got it wrong. I admire his passion, but he must get his facts right before he comes to the Dispatch Box and attempts to tarnish the good name of an effective local authority that is doing a great job for children and young people.

In a spirit of generosity, I have to say that a great many Labour local authorities are doing a good job and ensuring that Sure Start children’s centres remain open. There are also Liberal Democrat local authorities doing a good job. One of the most disappointing things about the right hon. Gentleman’s speech was his attack on the Liberal Democrats, which I felt was mean-minded and beneath him. I understand that as an election co-ordinator, with just a week to go before he shores up the Labour vote that is collapsing in Scotland and evanescent elsewhere, he has to pick what he thinks is an easy target, but he has picked the wrong target.

My right hon. Friend the Deputy Prime Minister, with whom I do not always agree, was right when he said that Liberal Democrat authorities were keeping all their Sure Start children’s centres open. We can look at what is happening in Kingston upon Hull, where all the centres are remaining open and services are being delivered from all of them. The same is true in Kingston upon Thames. The Liberal Democrat councillors in those authorities represent a party that I would not vote for, but they are doing the job a darned sight better than the Labour councillors who used to run Hull when it was the worst local authority in the country according to the Audit Commission. It is now the most improved.

[Andy Burnham]

rose—

[Michael Gove]

Talking of room for improvement, I give way to the shadow Secretary of State.

[Andy Burnham]

Before we leave this matter, let us get to the bottom of the point about Hampshire. There was clearly a change of heart yesterday—[Interruption.] Will the Under-Secretary of State, the hon. Member for East Worthing and Shoreham (Tim Loughton), hear me out? If there was a change of heart, the news had not reached me, and I welcome it. However, we must ask, a change of heart to what? The Sure Start budget there is going from £17 million to £11 million, a 35% cut. Is the Secretary of State applauding Hampshire for making a cut on that scale? He has just applauded the local authority and invited me to do the same. Is he saying that such a cut to Sure Start is acceptable and that the local authority should be applauded for cutting the service by more than a third?

[Michael Gove]

The right hon. Gentleman has not misled the House—he never misleads the House—but I am afraid that he has got himself in what we call in Scotland “a bit of a fankle”. He asserted that Hampshire was going to cut children’s centres, and then he was caught short by the facts. I know that he has more respect for the House than to want to put himself in a position of having inaccurate facts in front of him, so all he needs to do, as graciously as is his natural custom, is acknowledge that Hampshire is keeping its children’ centres open and congratulate it on that.

One reason why Hampshire, Hammersmith and Fulham, Kingston upon Hull, Kingston upon Thames and many other Conservative and Liberal Democrat councils, as well as Labour ones, can keep their Sure Start children’s centres open is that there is enough money. I can make that assertion because of the evidence that has been put forward by two of the people who have the best understanding of the early years. Anne Longfield OBE, chief executive of 4Children, has said that the Government are

“continuing to provide adequate funding to keep centres open and councils should resist the temptation to use this money to plug gaps elsewhere.”

Anand Shukla, the acting chief executive of the Daycare Trust, has said:

“The Government has allocated sufficient funding for the existing network of Sure Start Children’s Centres to be maintained”.

The money is there—independent witnesses say so—and well-run local authorities all over the country, represented by councillors of different parties, are maintaining that network. Therefore, every single plank of the right hon. Gentleman’s argument has collapsed beneath him, and I have been on my feet for only six minutes.

[Ms Buck]

What does the Education Secretary say to parents in my constituency, which has the seventh highest child poverty in the country, in the light of Westminster city council’s briefing? The briefing states:

“As you may have heard in the media, central government funding for Sure Start Children’s Centres nationally has been reduced, which means in Westminster we have to save 17% from our Children’s centre budget”,

meaning a saving of £715,000, including roughly £250,000 off early learning and child support, and £400,000 off outreach and family support. Children’s centres will be bricks and mortar without the staff even to ensure that services can be run safely.

[Michael Gove]

The hon. Lady is a highly energetic constituency MP—indeed, I was represented by her for a brief period, and I know how passionately she takes up such causes. However, Westminster, like many other local authorities, is succeeding not just in keeping the Sure Start children’s centre network open, but in providing an enhanced service for children and young people. The question that she and every Opposition Member must address is this: if they believe, as I do, that Sure Start is a valuable service, and that it is a good thing that the Government have set up an early intervention grant, and that we are devoting resources and intellectual energy to the early years, will they support the coalition in the steps that it is taking, or do they have an alternative plan? Do they believe that money should come from other areas of Government expenditure to spend more on any of those services? If they believe that we should spend more than we are spending, can they explain which services they would cut or which taxes they would increase? I am very happy to give way to any right hon. or hon. Member who can enlighten me on Labour’s economic policy, including the hon. Member for Hammersmith.

[Mr Andy Slaughter (Hammersmith) (Lab)]

Let us deal with the figures. If the Secretary of State has come along simply to give incorrect figures, he does not help the debate at all. Hammersmith and Fulham was spending £3.983 million last year; this year it will spend £2.206 million. Most of the nine Sure Start centres will have their budgets cut. Some will receive £19,000 to be satellites—the £19,000 is for the upkeep of the premises, but services will be delivered on-site by another children’s centre. The Secretary of State must stand by his words if he says that that means he is keeping the centres open. However, his stance in this debate and making such assertions does him no credit. He should at least live with the consequences of his actions.

[Michael Gove]

The consequence of the Government’s actions is that we have ensured, as both Anne Longfield and Anand Shukla have pointed out, that there is enough money to maintain that network. In addition, under Conservative leadership, Hammersmith and Fulham has been singularly successful in reducing the council tax burden on its ratepayers, and in diversifying the sources of funding it receives to support education and care for children and young people. It is a superb local authority. Instead of continually talking down the service that is provided by public servants in Hammersmith and Fulham, it would be nice to hear from the hon. Gentleman some sunny, uplifting words, rather than grim predictions of disaster, which as we have just heard, turn out never to be true.

[Andrea Leadsom (South Northamptonshire) (Con)]

Will my right hon. Friend join me in congratulating Northamptonshire county council on deciding to go ahead with its plans for 50 children’s centres in the county, and on its support for my proposals to introduce a Northamptonshire parent-infant project in children’s centres, which will provide a parent-infant psychotherapy service for the families most in need who are struggling to bond with their new-born babies?

[Michael Gove]

I am delighted to congratulate Northamptonshire, where not a single children’s centre is closing. It is also the home of the innovative Pen Green children’s centre. More money is coming from central Government to help that council to develop news ways of providing support for children in their earliest years.

[Valerie Vaz (Walsall South) (Lab)]

I have some sunny words for the Secretary of State. Sure Start Palfrey in my constituency was one of the first in the country to get an “outstanding” rating from Ofsted, which it gained because it did a lot of outreach work, including through a fathers’ club—84 fathers came to one session. However, there are rumours, which the Secretary of State might like to quash, that the staff will be replaced by health visitors, which moves the centre into a medical model rather than an educational model. Will he confirm that those specialist workers will not be replaced by health visitors?

[Michael Gove]

The hon. Lady makes an important point. To be fair to Labour Members, I want to emphasise that Sure Start has been a success in the past, and we hope it will be an even greater success in the future. However, one matter on which it has not been as successful in every part of the country as it should have been is in outreach, particularly to the most disadvantaged. The Government believe that health visitors, as trusted faces of the state, can be one of the most effective ways in which we can increase outreach. We also believe that local authorities that have innovative solutions that succeed in ensuring that children in hard-to-reach communities receive those services should be supported. The coalition Government believe in supporting local authorities that are innovative in their use of resources, which is why we removed the ring fence, created the early intervention grant, and allowed a greater degree of innovation to flourish at local level.

[Diana Johnson]

The 50% cut is set out clearly in Hull city council’s budget to children’s centres—it is a fact. The centres cannot provide the service that they provided before that 50% cut. They have abandoned the local authority’s early years service team, and no one is doing early years service planning in that authority. The cut means that services are not the same as they were under the previous Government. Surely the Secretary of State must recognise that.

[Michael Gove]

First, we are entering the financial year in which cuts would have been made if we had stuck to the plan of the previous Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling). However, I have heard not a single word from the hon. Lady or anyone else about where those cuts would have been made. Secondly, she and others—I understand that she is electioneering, which is fair enough—said that children’s centres would close, but in fact they have remained open.

Thirdly—I did not want to repeat this but the hon. Lady compels me to do so—the Audit Commission said that Hull was one of worst local authorities in the country when Labour ran it, and it is now the most improved local authority. I know that those three points are uncomfortable for her to deal with as she tramps the streets of the east riding attempting to drum up Labour votes, but they are undeniably true. That is why she is shaking her head—in anger at Labour’s record.

I specifically wanted to address some of the questions on the importance of outreach raised by the hon. Member for Walsall South (Valerie Vaz). The broader question is this: what do we want to achieve in the early years? A consistent theme in constructive questions from Opposition Back-Bench Members has been that the bricks and mortar are being preserved—that concession, for which I am grateful, is in stark contrast to the scaremongering that we have heard from Opposition Front Benchers—but what is happening in Sure Start children’s centres? Are we improving the quality of service that is provided to children and young people? That is a tough challenge.

One thing that we are doing—the right hon. Member for Leigh did not refer to this—is increasing resources to ensure that early education and child care are provided not just for three and four-year-olds, which the previous Government introduced. We have already extended the number of hours of free early education and child care from 12.5 to 15 hours for all three and four-year-olds—we implemented that and increased expenditure to do it—but we are also increasing the number of hours for the most disadvantaged two-year-olds. The plan under the previous Government was for 30,000 of the most disadvantaged two-year-olds to receive 15 free hours, but we are ensuring that 130,000 do so. That is an investment of up to an additional £300 million in the early years at a time when we have to make uncomfortable budget reductions elsewhere because of the desperate economic mess that we inherited. That is a sign of our determination to do best by the early years. It would only be fitting for the right hon. Gentleman to acknowledge that.

[Henry Smith]

The state of the country’s finances that was bequeathed to us by Labour was appalling. Is it not remarkable that the amount of interest that we are paying on Labour’s deficit is 39 times the Sure Start budget?

[Michael Gove]

My hon. Friend is absolutely correct that the interest we are paying on our debt is 39 times the Sure Start budget under the previous Government. If we really cared about our children’s future, would we have saddled them with a debt at that level? Clearly not. I am afraid, however, that the right hon. Gentleman and his colleagues in the last Labour Cabinet were happy to spend, spend, spend without any thought to whether future generations would be saddled with an enormous debt. It is to the great credit of the Prime Minister and the Deputy Prime Minister that they were prepared to ensure that a coalition Government took the responsible steps necessary to deal with the dire economic mess, and it is to the discredit, I am afraid, of the current shadow Cabinet that not a single constructive suggestion has come forward for how to deal with the deficit. In just a few days’ time, when people think about how to cast their vote, I hope that they will reflect on which parties are acting responsibly in dealing with the national crisis, and which parties prefer posturing, irresponsibility and the emptiness of eternal opposition.

[Mr Frank Field (Birkenhead) (Lab)]

rose—

[Michael Gove]

I would like to exempt one person from that stricture, however, and it is the right hon. Member for Birkenhead (Mr Field), to whom I am happy to give way.

[Mr Field]

The whole House welcomes the re-announcement by the Secretary of State that the number of poor two-year-olds who will receive nursery education will rise from 30,000 to 130,000. To ensure that it occurs, will the Government ring-fence the money?

[Michael Gove]

I believe that money additional to the early intervention grant has been budgeted for to cover the years 2012-13 to 2013-14, and we are currently discussing with the sector how to ensure that the money is spent most effectively. Rather than having a top-down approach to delivering support for children in the early years, we need to work in partnership, not just with local government, where there are many brilliant leaders, but with those in the voluntary and charitable sector who have a huge amount to add.

I mentioned Anand Shukla and Anne Longfield, but I am also very grateful to people such as Bernadette Duffy, who runs the Thomas Coram children’s centre, which has helped the coalition Government to move forward in developing a framework to ensure that children in the foundation years receive the support that they really need. For example, all of them have worked with us on the response to the report by the right hon. Member for Birkenhead and the interim report produced by the hon. Member for Nottingham North (Mr Allen). In both reports a compelling case was made—this argument was also made eloquently in the first half of the speech by the right hon. Member for Leigh—that investment and the right interventions in the earliest years can have a dramatic effect in closing the opportunity gap that has grown up in this country.

All of us will have been struck by some of the figures released by the coalition Government and analysed by the Financial Times this week that show that social mobility in this country is still not moving in the right direction. In particular, we see evidence in some of our most deprived areas of children who have not reached an acceptable level of child development by the age of five. In those deprived areas, children who are falling behind continue to do so. I want to ensure that as much as possible we have a cross-party approach to dealing with that problem. Again I have to say that steps were taken by the Deputy Prime Minister, in the launch of his social mobility strategy, to outline exactly what we need to do to tackle these problems. All of his suggestions, particularly the emphasis on intervention at every stage in the life cycle and the prioritisation of early years, would seem to commend themselves to people of good will in every party.

[Andy Burnham]

I want to make it clear that I welcome some of the steps that the right hon. Gentleman is taking, particularly on two-year-olds, which builds on something that we were talking about. However, I want to ask him a serious question. I am listening carefully to what he is saying, and he is itemising some of the individual things that the Government are dong, but I want to know about the big picture so that I can understand his position on Sure Start. He talked about how Sure Start will develop in the future. A simple question: does he envisage Sure Start as a targeted service or a universal service?

[Michael Gove]

I envisage Sure Start as a universal service. [Interruption.] Second question? It is an interview. I almost feel like I am on “The Andrew Marr Show”—I will come to him in a moment. I believe that Sure Start is a universal service, but it is also important to recognise that there are children in greater need on whom we should target greater resources. The original Sure Start programme started out targeting areas with the greatest need, and subsequently, as it moved to phase 3, it became universal. Even within that, it is an example of what one might call “progressive universalism”. Yes, the service is there for all, and yes we recognise that disadvantages exist, even in some of our apparently wealthier communities. That is why the service should be universal. Nevertheless, we know that there are areas of real deprivation, such as the constituency that the right hon. Gentleman represents, and we need to ensure that our resources and energy are targeted in that area.

[Several hon. Members]

rose—

[Michael Gove]

A number of hon. Members want to intervene. I am happy to give way to the hon. Member for Redcar (Ian Swales).

[Ian Swales (Redcar) (LD)]

Does the Secretary of State share my regret that last year the National Audit Office found that Sure Start centres had completely failed to address inequality in our disadvantaged communities?

[Michael Gove]

The hon. Gentleman, who represents brilliantly a constituency with real deprivation, is absolutely right. Yes, Sure Start has the potential to make a significant difference, and yes on the ground it was already making a real difference, but we need to build on that by ensuring that we have the targeted interventions that help those children in the most difficult circumstances.

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

I note that the shadow Secretary of State spent 45 minutes on quantitative issues, so I welcome the Secretary of State’s emphasis on quality. Does he agree that we should be showcasing the really good interventions and effective use of money across the country? I regret that we have cuts, but surely we must be celebrating and giving confidence to the sector.

[Michael Gove]

That is the best intervention yet. The hon. Lady is absolutely right. I and my departmental colleagues are anxious to point out that there are many committed professionals in the early years sector with a greater level of expertise in developing evidence-based interventions, all of which can help children in difficult circumstances. I have been impressed by how people have worked constructively across the sector, and I have been particularly impressed by the fact that, as the hon. Member for Nottingham North pointed out in his report on early intervention, we now have a better body of evidence that allows us to identify what works. We should celebrate the fact that some of that innovation has been operating at a local level in children’s centres run by exemplary local authorities.

[Several hon. Members]

rose—

[Michael Gove]

I would like to make progress, because I am conscious that Members would like to speak after me. However, I took in vain the name of the right hon. Member for Edinburgh South West, so I am happy to give way to his former Parliamentary Private Secretary.

[Ann Coffey (Stockport) (Lab)]

I understand that there are proposals for developing a payment-by-results scheme for children’s centres. I think those proposals have great merit: they will ensure the proper examination of which interventions work, and will lead to better outcomes for children. What is the Secretary of State’s thinking on this, and has any progress been made on developing such a scheme?

[Michael Gove]

That is a very fair question. The answer is yes. We are examining this matter with the sector to establish which successful interventions we can encourage and incentivise to be spread more widely. Building on the point made by the hon. Member for Mid Dorset and North Poole (Annette Brooke), I would add that some children’s centres are hugely successful at outreach. The hon. Member for Walsall South (Valerie Vaz) referred to how a children’s centre in her constituency has succeeded in tackling some hard-to-reach families. We know that some families resent and resist what they see as state intervention and coercion in their families’ lives, but actually they desperately need that support, so we must incentivise those children’s centres that are good at outreach.

There is something else that is critically important. There is sometimes an understandable confusion between the provision of child care to ensure a higher level of female participation in the work force, which is a good thing in itself, and child development. Those are allied but separate issues. I would like to see a renewed emphasis on child development. The original Sure Start proposals, which the Treasury developed, had a real focus on child development, and through the work that Dame Claire Tickell has led, we have sought to look at the existing early years foundation stage and build on what is good about it. The focus of the foundation years should be on ensuring that children arrive at school school-ready and effectively socialised. That will sometimes require interventions to support parenting and to raise the quality of staff. However, we can identify and support good practice, and indeed support many of the voluntary organisations, such as 4Children, that are already doing a fantastic job.

I want to stress that the changes we are talking about depend on having in place the staff capable of leading our children’s centres in the right direction. We have provided funding specifically to ensure that the National College for Leadership of Schools and Children’s Services can ensure that there is a trained cadre of at least 400 highly qualified individuals with a new depth of training in running children’s centres, and that we move broadly in the direction hinted at by hon. Members towards a vision of children’s centres leaders as people who enjoy the same prestige and esteem as head teachers. We should see what is happening in children’s centres as part of the seamless process of education that should start at the earliest possible age and, in my view, continue for as long as possible, in order to prepare people for the world of work and progression.

At a time when we have to make economies, I recognise that it is difficult to concentrate on some of these areas of debate, but we have made a good start in the last 12 months. The constructive approach taken by the right hon. Member for Birkenhead and the hon. Member for Nottingham North, along with those in the sector, is something on which we can all build. It is often tempting to knock local government, but I have been hugely impressed by the way in which the Association of Directors of Children’s Services, with its outgoing president Marion Davis and the incoming president Matt Dunkley, has engaged with the coalition Government to operate constructively.

I know that many hon. Members will want to use their speeches to make points in advance of the local elections—that is fair enough; it is that time of year—but I hope that in the remainder of this debate, their speeches will continue in the tone so admirably set by the hon. Member for Mid Dorset and North Poole. We all recognise the great work done by professionals in early years. I hope that we will all give some thought in the hours that we have left to how we can build on those successes and ensure that children, who are our first care and concern, can have the best possible start in life.

14:01

[Mr Andy Slaughter (Hammersmith) (Lab)]

It does not help the House if the Secretary of State comes here to defend the indefensible or to use what is essentially wrong information to do so. I will therefore correct some of the figures and facts that he got wrong—and, for the record, I will be doing so for the third or fourth time. I should also say that I do not have any local elections in my constituency. Indeed, it is somewhat insulting to say that Members who have supported their networks of children’s centres and been proud of them—that probably goes for Members from all parties in this place—have come to this debate simply to score cheap political points. That is not the case. I do not know whether my words will influence the outcome of the alternative vote referendum—if they lead to a yes vote for AV, then all well and good—but I assure the Secretary of State that that is not my intention today.

Hammersmith and Fulham council began on 10 January this year with a report, passed in full, that said:

“At present H&F has a network of 15 children’s centres…We are looking at options to restructure this provision in line with the likely levels of efficiency and grant reductions expected…However, it is not likely under this scenario that LBHF could continue to directly fund more than 6 Children’s centre teams.”

The cut in grant is about 13%, whereas, as I said in my intervention, the cut in the budget is about 45%. It is therefore no good Hammersmith and Fulham hiding behind the cut in grant. It is right to say, however, that as soon as that announcement was made public—albeit shortly after Christmas—there was, shall we say, a lively reaction in the constituency and the borough. A lot has happened in the three months since, partly because the local authority realised that it might be in breach of its statutory duties, which were quite properly introduced by the previous Government.

Those duties are such that either, first, the council would have had to return the nine centres that it was closing—those whose grants it was cutting entirely—to the Department for Education, or would have been liable to do so; secondly, it had not performed its statutory duty to consult before making the decision; or, thirdly, it was no longer clearly providing a network of children’s centres. The local authority’s response was based on trying to bring itself within the law, not on recognising it had made a mistake about levels of provision. Every one of the minor and incremental changes that it made was more to do with PR than with the service or keeping all the centres open. The general amount given to the nine centres that were, in fact, closing was £19,000. The council said that after consideration and consultation—it was a substantial consultation, with many thousands responding in fairly clear terms—it would increase the budget. In some cases, the budget was increased by £1,000 a year, so a budget that was £19,000 became £20,000, where previously it had been £250,000. Clearly the Secretary of State has been briefed in same propagandist way—“Yes, we’re going to open a new centre.” However, the new centre is one of the libraries that the authority is closing, and it will also receive a grant of £19,000, so we will have another empty building.

The third thing that happened was a substantial protest from my constituents. There were many demonstrations, including one attended by my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson), the shadow Children’s Minister. We reciprocated by bringing a party of Hammersmith and Fulham parents to the mother’s day protest outside No. 10 Downing street and presenting 2,000 signatures from parents in my constituency against the Sure Start closures. When the inevitable decision was finally made on 18 April to go ahead with the closure programme, 150 parents with buggies again turned up to protest.

I pay tribute to Ruthie Walsh and those involved in Hammersmith and Fulham Parents Unite for organising those protests, not because they are politically motivated, but because they care about their children and they absolutely value the service. Many say it is a lifeline, helping them through relationship break-ups, or loss of job or income, or even helping them to get back into work, providing not just child minding or play services but high quality support, particularly for children with developmental difficulties or special educational needs. That is what Sure Start provides and what, however we dress it up, we are losing when we close nine centres in Hammersmith and Fulham. After all the protests, all the jiggery-pokery and all the propaganda, the net effect is that the budget is indeed being cut by 45%, from almost £4 million to just over £2 million, that the number of Sure Start centres in Hammersmith will now be six, rather than 15, and that the number of children served by those centres will go down by two thirds, to no more than 2,000. That is the reality, with the spin removed, about the services that will be provided.

It is no coincidence that the pattern of Sure Start cuts fits the pattern of cuts in other children’s services. Four of the borough’s seven youth clubs have been closed in my constituency, along with after-school services, of which we are very proud, play services and a complete network of dedicated services. That has all been shut down, and because of Government cuts, the playbuilders scheme and the Building Schools for the Future programme have also been cut. The impact of local government cuts, as well as those directed through local government from central Government, unavoidably bears down overwhelmingly on children and people on low incomes in my constituency.

One of the most shameful things—this might be unique to Hammersmith and Fulham—is that rather than say, “This is regrettable, but it’s to do with finance and matters of that kind,” the local authority has tried to rubbish Sure Start as a programme. In its most recent report on the cuts, the council said that

“no Sure Start Local programme effects emerged in the case of ‘school readiness’ defined in terms of children’s early language, numeracy and social skills needed to succeed in schools.”

So there we have it: the reason for the almost 50% cuts in children’s centre budgets and the two thirds cuts in provision for children is that they do not work. Is that the Government’s attitude? Despite the protestations, do they actually think that we are talking about a wasteful service that should not be provided, or that pre-school services should be provided only to those who can afford to pay for them? To give the council credit, that is clearly the view of Hammersmith and Fulham, but it is not the view of my constituents, irrespective of income or background.

I do not want to take up too much time, but I want briefly to mention some of the Sure Start centres in my constituency that cater for and care for thousands of children every year in Hammersmith and Fulham. Cathnor Park family centre was the first to open in 1998, and the council now describes it as a “super spoke”—it is much better than a satellite: it is a super spoke. The centre receives £50,000 in funding, as opposed to the £473,000 it received last year. The same goes for Broadway family centre, which also received £473,000 last year, but which will receive £19,000 this year. The funding for Wendell Park, my local Sure Start centre, has been cut from £250,000 to £25,000, and that of the Bayonne family centre has been cut from £250,000 to £19,000. The Normand Croft centre’s funding has been cut by the same amount.

Those centres are popular, well used and well loved by everyone who uses them. They have established themselves and they believed that they would continue because they were told by politicians of all parties that they were providing a wonderful service to the parents and children of the borough. However, they will all be gone. We do not know about closures in children’s services yet, but we know about the closures of youth centres and play centres. Not only are the services being closed, but the buildings are being sold off. The assets are being disposed of, so, if there is another Labour Government, or another Government who are more enlightened than this one, or a local authority able to provide the services, it will not be possible to recreate them. They will be gone for good. That will be the legacy of this Government, and it is the legacy of the Conservatives in local government in London.

These decisions are ideologically driven. If they were driven by the need to save money, we would be seeing what the Minister of State promised us when she responded to debates on the subject—namely, cuts at a level that would allow the networks to survive. I have said this before to the Secretary of State: he should intervene on those local authorities that are choosing to close their children’s centre networks or not to provide such networks. They could be in breach of their statutory duty, and there will certainly be a legal challenge in Hammersmith and Fulham. There has not been proper consultation, and we have heard nothing but spin and disinformation, which, to his discredit, the Secretary of State has repeated today. The Government purport to believe in children’s centres and early years development, yet local authorities are cutting services to the bone and closing them down, to the extent that nothing remains except the shell of the building. The Government should intervene to stop them.

14:11

[Dan Rogerson (North Cornwall) (LD)]

This Opposition day debate has been billed as one that would land a big blow on the Government on a crucial issue. The shadow Secretary of State gave us a number of examples in his lengthy trip around the country, but they were perhaps not the killer blow that he was hoping to land. He prefaced his remarks by saying that there was a great deal of recognition on both sides of the House of the good that Sure Start has done. I share that view, having seen what Sure Start has achieved in my constituency and elsewhere. Notwithstanding the issues raised in the National Audit Office’s report, to which we might return later in the debate, the programme has great strengths. All things can be worked on and improved, but the programme’s fundamental objectives of reaching and supporting people who need help, and encouraging people to work together to support each other, have been achieved in many children’s centres. Of course we welcome and support that.

Speaking as a rural MP, I believe that delivering such services in places such as North Cornwall is different from delivering them in urban areas. There has always been a hub and spoke approach in rural areas, because of the many village Sure Start children’s centres that we have. I see that as a strength, in that some services travel around all of them. I would caution the shadow Secretary of State against saying that there must be a fully staffed suite of people just hanging around in case someone walks in through the door. Instead, we should be looking at the best way of using resources.

[Andy Burnham]

I agree; that is a reasonable and fair point. The hon. Gentleman mentioned the examples that I gave. I think that he is the Back-Bench education spokesperson for the Liberal Democrats, and I would like him to give us a straight answer today. We have heard from my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) that Lib Dem-controlled Hull city council is cutting the Sure Start budget by 50%. Does the hon. Gentleman support that move?

[Dan Rogerson]

We are in a period in which people are getting used to a coalition Government, and I am certainly not a Front Bencher here. I am speaking as a Back Bencher, and I am sure that you would be the first to jump on me if I claimed to be a Front Bencher, Mr Deputy Speaker. I and a number of other Liberal Democrats have a Back-Bench group in which we discuss many of these issues with other people inside and outside the party. We are also able to talk to the Minister of State, Department for Education, my hon. Friend the Member for Brent Central (Sarah Teather), who, as a Minister in the coalition Government, is at the heart of taking these decisions and leading policy forward, along with her other colleagues. My view on what is happening in Hull is that it now has a council that has taken over what was the worst council in the country under Labour and turned it around. It is in challenging financial times—I want to return to that subject later—but it has managed to ensure that all its children’s centres will remain open.

As I said earlier, the hub and spoke model, which is already operating in other parts of the country, can be successfully undertaken. The shadow Secretary of State also referred to a postcode lottery. That is one way of saying that locally elected councillors should be able to take decisions that affect their local areas and, having talked to the local community, use the money available in ways that the community believes will be most effective. That is my view of how local democracy should work. Instead of talking about a postcode lottery, we could talk about the young people in my constituency who had £300 less than the national average for their education under the Labour Government. Cornwall is recognised by the European Union as one of the most economically disadvantaged areas of the country. Those are the issues that we should be looking at, rather than at the way in which different councils take decisions about the money at their disposal.

I welcome the Government’s commitment to early years provision. As we have heard, they have involved Opposition Members in the debate, and I am delighted to see the right hon. Member for Birkenhead (Mr Field) in his place today. The Liberal Democrats have always placed a strong emphasis on early intervention, and I pay tribute to my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke), who is no longer in her place, for the work that she has done over the years, inside and outside the party, and for chairing the all-party parliamentary group on Sure Start children’s centres. She makes a significant contribution to the debate.

The shadow Secretary of State attempted to say that the only thing that the Liberal Democrats were worried about was next week’s referendum. It is absolutely clear, however, that the coalition Government will continue, whatever the result of the referendum. I would point to the commitment to investing in child care and early years education for two-year-olds from disadvantaged backgrounds as something that my party has been arguing for. I also believe that the pupil premium, which the right hon. Gentleman has real problems with, will deliver real change and real investment for disadvantaged young people up and down the country. I would also point to the review by Dame Clare Tickell, and the aspiration to simplify and streamline the bureaucracy around the early years foundation key stage. That was in the Liberal Democrat manifesto. I am sure that the Secretary of State and Conservative colleagues will want to emphasise their own credentials when it comes to tackling bureaucracy, but those measures were certainly in our party’s manifesto. I therefore have no problem with running through the Government’s programme and looking at all the Liberal Democrat priorities that are being delivered in it.

The key point that I want to make is that we are in difficult financial circumstances and, yes, the money going to local government has been restricted and efficiencies are having to be made. As other hon. Members have pointed out, a pot of fairy gold seems to exist in the minds of Opposition Members, along with the belief that, were they in charge, all the financial problems would be solved. However, the cuts programme that they set out when they were pretending to be responsible in government has now disappeared. They said that billions of pounds of cuts would be necessary, but they are now not being at all specific about where those cuts would have been made. It is tiresome that, time and again in these Opposition day debates, whatever the subject, all we hear from them is, “Of course we know that cuts have to be made, but we wouldn’t do it there or in that way.” They never tell us what their alternative would be.

It will become increasingly obvious as this Parliament progresses that that refrain just will not do. When that refrain is tied to a motion such as the one before us, which seeks to scaremonger before a local election about the closure of a service on which people rely, it is even more unfortunate. It is also unfortunate that the “killer statistics” that the right hon. Member for Leigh (Andy Burnham) was hoping to present have not emerged; the picture is different.

Sadly, some jobs will go, which is absolutely to be regretted. I look forward to continued investment in early years education and leadership programmes that might provide something for people wanting to move from one job to another and allow them to carry on using their skills and make a contribution. I also welcome the Government’s Green Paper on special educational needs, particularly the strong aspiration to tie in health spending on matters that perhaps previous were seen as solely the responsibility of the Secretary of State for Education. There are lessons to be learned from Sure Start. In its early days, there were programmes to support breastfeeding, for example, which a primary care trust sometimes struggled to fund, given that supporting children’s centres was not part of the Department’s core area of responsibility. That was a controversial matter at the time.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

I note the hon. Gentleman’s support for early intervention, but I only wish that he had been more enthusiastic in the Education Bill Committee in supporting my proposals for achievement-for-all partnerships. In view of his point about Sure Start, does he share my concern that local authorities such as mine in Waltham Forest are having to make terrible decisions because of the funding cuts? Fantastic projects such as the Hamara family project—provided by Barnado’s for work with children with special educational needs—and the outreach buses on the Attlee Terrace estate are having to be cut in order to keep the centres open. These services are going and we will not have the centres to maintain them.

[Dan Rogerson]

The hon. Lady has managed to put on the record references to a number of projects in her constituency; as an assiduous local MP, it is absolutely her right to do so. It is for her local authority to consider and to reach a conclusion about what happens to these services. The local electorate will look at those decisions and no doubt respond accordingly—not this year in the hon. Lady’s area, but in other parts of the country. My point was about trying to get health spending brought more closely together with what the Department for Education does; further gains could be made from that approach, which is why I greatly welcome investment in health visitors, for example, during this Parliament. We will have extra professionals on the ground to deliver these key priorities in early intervention and support for people who, without it, might find it difficult to keep the family together. It is important to support young children in those crucial years.

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

I am pleased to hear from my hon. Friend that, whatever the outcome on 5 May, I can continue to work with him for the greater benefit of the coalition in Cornwall in righting some of the terrible wrongs that have been left, especially the underfunding of education for Cornwall’s younger people. Does my hon. Friend agree that health visitors, particularly in remote rural areas such as Cornwall, will play an increasingly important role in supporting families with young children?

[Dan Rogerson]

It is crucial to ensure that programmes that sometimes seem specifically targeted at urban areas also deliver in more rural areas. Sometimes there is a misunderstanding that all rural areas are prosperous communities and that money should be targeted elsewhere. That is not the main thrust of what I am saying, however, so I do not want to get drawn further down that road. Of course I look forward to working with my hon. Friend the Member for Truro and Falmouth (Sarah Newton) to ensure that Cornwall gets its fair share of spending and investment.

Sure Start has done a fantastic job of reaching out to people in communities, but there are questions about whether all the money has been spent efficiently. When the hon. Member for Kingston upon Hull North (Diana Johnson) pointed to projects under threat in her constituency, she specifically referred to a planning team. I am not aware of how much on-the-ground work that planning team does—it might be crucial—but it does not sound to me like a front-line service that is, as her Front-Bench team seek to imply, for the chop.

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

Before the hon. Gentleman moves on, will he comment on—and, hopefully, dissociate himself from—his colleague who intervened and quoted one part of the Audit Commission’s report totally out of context, suggesting that the Audit Commission had said that early years intervention through children’s centres was a waste of money?

[Dan Rogerson]

I do not think it was said to be a waste of money. The argument was that things can always be done better, which is what the National Audit Office said. I hope that all Members agree that where issues have been identified independently and targets and aspirations for a policy have not been met, we can look for ways to do it better. My fundamental point is that, despite the financial situation, good councils up and down the country will prioritise children’s centres and keep them open to ensure that services have a reach—even if there is no insistence on having full-time workers in every specialism in every centre, which is what I would like to see if the money were available to fund it.

[Diana Johnson]

Of course all Members would agree that if efficiencies can be made, it is all to the good and we should see it happen, but is the hon. Gentleman honestly saying that a 50% cut to the children’s centre budget in Hull can be seen as a good thing and that services will improve because it is an efficiency saving?

[Dan Rogerson]

Of course I am not saying that spending less on a service is desirable. If we have the money in the first place, I would like it to be spent on front-line services, but I am not in a position to comment on how every single penny has been spent in Hull. I am pleased to note that my Liberal Democrat colleagues running the city council are keeping the children’s centres open and will provide services at them, which will reach across all the communities of Hull.

I conclude on that note. I hope that the debate will proceed by focusing on the positive aspects that Sure Start has delivered and the opportunities to continue delivering them.

14:27

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

A year ago during the general election campaign, a woman in my constituency asked me what Labour had done for Gorton. We were standing outside the St James Sure Start centre on Stelling street, where she was waiting to collect her child. That lady, like many constituents of mine, will be wondering what is going to happen to that centre, which she took for granted as though it had always been there, archetypally provided by some heavenly intervention. It fact, of course, it was created by the Labour Government and was one of their most successful innovations. Incidentally, when Parliament was considering the Sure Start proposals, the then Conservative Opposition did not support them.

In a city such as Manchester, which has many areas of deprivation, Sure Start made a hugely positive impact. We have 14 major centres, of which several excellent ones are in my constituency. One in Farrer road in Longsight was built anew at a cost of £3.25 million and provides an exceptional environment where parents can take their children and be confident that they will be looked after. Throughout my constituency—from Gorton right through to Whalley Range—my constituents have come to rely on Sure Start and take it for granted. That is true not only of the centres, but the other facilities provided by Sure Start. In several parks, such as Platt Fields, they provide play areas and playgrounds that were not there before.

Sure Start is very well used and enormously valued. That was shown when my constituents, along with those of other Labour Members with Manchester constituencies, came down to London a few days ago to present a petition to 10 Downing street—to which we have so far had no response—asking for Sure Start to be protected.

Some of the petitioners came from the Levenshulme area in my constituency, and a couple of weeks ago we held a special meeting in Levenshulme to discuss with local parents what they wanted to happen now that Sure Start was under threat as a result of the Government’s policies. Mothers listed a number of reasons why Sure Start had made a difference to their lives and the lives of their families. They spoke of a cohesive approach, and said that Sure Start had given them points of contact with other parents. They said that, as well as providing facilities and services, Sure Start had given them an opportunity to make friends and establish links with peer groups. They said that it was particularly valuable to those who did not have much family support, and that it was very important to single-parent families. They also said that it gave parents the power of choice, but that power of choice is now being undermined and placed in jeopardy by the huge cuts being imposed by this joint Liberal Democrat-Conservative Government. The city of Manchester is one of the top four cities in the entire country to have suffered cuts in local government funding from this Government. Next year the cut will be £109 million, and the following year it will be £170 million.

[Andrew Bingham (High Peak) (Con)]

The right hon. Gentleman is painting a good picture of the work done by Sure Start in my constituency, but I wonder whether he and his fellow Manchester Labour Members will make representations to the city council about the £95 million cash reserves that it is holding, and about one or two jobs that it is advertising. For instance, it is offering annual salaries of £38,000 for a communications manager and £128,000 for a creative graphic designer. Would that money not be better put towards Sure Start?

[Sir Gerald Kaufman]

The hon. Gentleman reads out some brief that has been thrust into his hands and talks about Manchester. I can tell him that he knows nothing whatever about life in Manchester and nothing whatever about the lives of my constituents, a huge proportion of whom have already lived in deprivation and are now living in worse deprivation as a result of what is being done by this Conservative Government. The latest unemployment figure is 9.4%. Let the hon. Gentleman not be briefed by his Whips to tell me about Manchester, because my constituents sent me to tell the House about Manchester, and that is what I will continue to do.

[Andrew Bingham]

rose—

[Sir Gerald Kaufman]

If the quality of the hon. Gentleman’s first intervention is anything to go by, I think that the House will be better off without a second intervention from him.

However, the problem is not simply the cuts in Manchester’s overall funding but the cuts in the early intervention grant, which helps to fund Sure Start. My right hon. Friend the Member for Leigh (Andy Burnham) said that nationally the cuts amounted to £50 per head. In Manchester, the figure is £80 per head: that is what this Government have done to the city. Manchester city council is utterly determined not to close any of our Sure Start centres, but because of what the Government have done—because of the disproportionately high cuts in the early intervention grant—the service that we have been used to in Manchester, and which the council wants to go on providing, will no longer be available.

The council is examining options, not one of which it would prefer to consider. It will have to withdraw from its current role as a provider of services and become a “commissioner of provision”. That means that it will try to provide services which are of sufficient quality and properly targeted, but because of the Government cuts it will not be able to continue to provide the service that a Labour Government enabled my constituents to take for granted as something that they would always have. When I was electioneering for the local elections—

[Michael Gove]

Ah!

[Sir Gerald Kaufman]

Oh yes. I shall say more about the local elections in a minute.

When I was electioneering for the local elections last Friday, a constituent came up to me and asked, “Why are the Government doing this to us in Manchester? We did not want this Government in Manchester, but we are stuck with them, so why are they discriminating against us?”

The best that we can do is not to close any centres and to engage in a consultation process. However, as my right hon. Friend the Member for Leigh has pointed out, on this as on so many other issues, what was said before the general election by both the parties that comprise the present Government bears no relation to what they are doing now to service after service. The present Prime Minister said:

“we back Sure Start, but we will improve it, because at the moment the people who need Sure Start the most—disadvantaged families—are not getting enough of the benefit. So we’ll contract independent organisations that have a proven track record in helping families”.

One of the huge values of Sure Start was that it was socially cohesive. It did not discriminate socially between those who were more affluent and those who were in employment, and those who were less affluent and those who were not able to get jobs—and heaven knows, those who are not able to get jobs constitute an increasingly high proportion of the people I represent. But if the Prime Minister really wanted to approach Sure Start in the right way and to help disadvantaged families more, that is being breached to an even worse extent. The statistics show that constituencies such as mine are being penalised and targeted by the Government, whereas the families who, according to the Prime Minister, do not need Sure Start as much are suffering much less from cuts.

As I said earlier, the early intervention grant in my city has been cut by £80 per child. In Surrey, Buckinghamshire and Wokingham, it has been cut by £30 per child. The Government have decided to discriminate in favour of the affluent Tory-voting south, and against deprived constituencies like mine which need Sure Start. The Prime Minister himself needs Sure Start. But it is not only the Prime Minister who deceived the country before the general election. The leader of the Liberal Democrat party said:

“My party will protect existing child care entitlements and Sure Start”,

and:

“Sure Start is a really important programme that has made a real difference to millions of parents. Difficult decisions are going to have to be made in public spending but Sure Start is one of the best things the last Government has done and I want all these centres to stay open.”

That is what the leader of the Liberal Democrats says, whose party is conniving at undermining Sure Start and taking its valued facilities away from parents in my constituency who need them.

I have mentioned the local election campaign and what people are seeing happening, and I say this: a week tomorrow we in Manchester will be able to pass our verdict on the Liberal Democrats. There is no point in our passing our verdict on the Conservatives because we do not have any of them on the council, but we will be able to pass our verdict on what they have connived at in the abolition of—[Interruption.] I see a Minister grinning at what the Government have done to the deprived people in my constituency—at what they have done on education maintenance allowance and on Sure Start, at the £100 they have deducted from the winter fuel payment, at the deprived and the poor and those who need money having it taken away from them while the bankers’ bonuses go on soaring and soaring. We will decide in Manchester, and this House has got the right to debate these issues, and we will go on debating them until we have shamed this Government out of existence.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Before I call the next speaker, let me say that 11 Members still wish to speak and the wind-ups will start at 3.40 pm.

14:41

[Caroline Dinenage (Gosport) (Con)]

I start by addressing the sunny side that we have been aiming to get to today by talking about the benefits of Sure Start. It has been fantastic for many of my constituents. At the age of 17, one of my constituents found herself pregnant with twins as a single mum. She had to deal with the challenges of that without the help of a loving family around her, and the burden of those challenges led her to self-harming. I am pleased to be able to say that she is now the proud mum of healthy, happy five-year-old twins, and she maintains that that is all down to the help and support she received from Sure Start. It led her to gain the right medical help that she needed and to gain the parental skills necessary to cope with the challenge of twins—which, let us face it, we would all struggle with. Sure Start put her on the right track and taught her how to be a responsible parent, giving her the skills required to be self-sufficient—so much so that she now acts as a mentor to young mothers in my constituency. She is a bright, shining example of why Sure Start is a good thing. The fact that people who were previously on the edge of society can come back in that way shows the great value of Sure Start.

My husband is in the military, so I know at first hand the difficulties involved in trying to bring up a family effectively as a single mum while a partner is away on duty. Two weeks after the birth of my second child, my husband was deployed overseas. Fortunately, I had a strong and supportive family around me to help, but I know that others are not so lucky. On my visits to local Sure Start centres throughout my constituency, I have met many mums with partners in the military who are living in married quarters that are miles away from their home town and from the support network of family and friends that those with young children sometimes need. All of them have emphasised the importance to them of Sure Start. It provides support for mothers to come together and gain the help and advice they need, and it provides them with a welcome opportunity to talk to someone over the age of five.

Sure Start centres provide important services for children and families and they must not be undermined. A recent independent review found that 54% of current incidents of depression in women and 58% of female suicide attempts can be attributed to adverse childhood experiences. That hammers home the great importance of the early years of our childhood to our future prospects. Research has shown that a child’s development at 22 months is an accurate indicator of educational outcomes at 26 years of age, while boys deemed to be “at risk” at the age of three have almost three times more criminal convictions in adulthood than their peers. This is why we must support children from the very start.

It is important to remember that Sure Start was initially introduced to provide a haven of support and advice for our most vulnerable families in particular, yet Ofsted reports that, under the last Government, half of Sure Start children’s centres were not reaching out to the most vulnerable. Therefore, it is crucial that these resources are protected in order to help those who are most in need of help—from the children, whose health and well-being is improved, to the young parents, who are given the support and parenting skills that may have been lacking in their own lives. I know how much they gain from this lifeline.

Sure Start was one of the few positive legacies we inherited from the previous Labour Government, and it surprises me that it is the Labour-run councils up and down the country who are seeking to save money by closing these valuable centres almost as a first resort.

[Andy Burnham]

Which ones?

[Caroline Dinenage]

I will go on to give a couple of examples.

Some of these councils are cutting valuable front-line services to save money, while protecting the pay packets of the council hierarchy. There are some bizarre—and, frankly, ridiculous—job titles, including a creative director at the county council of the right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), earning £120,000 a year. Labour-run Liverpool city council is closing four Sure Start centres, and its record is a prime example of the wasteful spending that has plagued the effectiveness of our front-line services as, meanwhile, it has an astonishing 23 employees earning over £100,000 a year. Its recently retired chief executive earned more than double what the Prime Minister earns.

Labour-run Manchester city council has put question marks over its Sure Start centres, as the right hon. Gentleman outlined, despite having paid 18 employees over £100,000 a year, having cash reserves of £95 million, as my hon. Friend the Member for High Peak (Andrew Bingham) pointed out, and having the highest levels of funding per head in the area. The recent efficiency measures will provide the councils that have been reckless in their spending with an opportunity to reform their strategies and, as a result, function in a more streamlined and effective manner.

[Julie Hilling (Bolton West) (Lab)]

Does the hon. Lady understand that councils whose areas suffer the greatest deprivation, and which are therefore mainly Labour-run, have faced disproportionately large cuts from the Tory Government, and does she accept that the biggest cuts are taking place because they have received less grant from the Government?

[Caroline Dinenage]

I cannot comment on the councils in the hon. Lady’s area. I can only speak about my own area, which has some of the highest levels of social deprivation in the south of England, and highlight the fact that our country would not be in this situation—spending 39 times the Sure Start budget on the deficit—if the previous Government had not left us in such a pickle.

[Andy Burnham]

Will the hon. Lady give way?

[Caroline Dinenage]

Much as I would love to give way to the shadow Secretary of State, he will have plenty of time to say what he wants when summing up.

Hampshire county council has been discussed a lot in the debate. There were plans to keep the number of individually managed centres at 81, but to reduce the number of management hubs to 53. There were never plans to reduce the number of centres. No Sure Start centres in Hampshire were ever planned to be cut; it was just the management of them that was considered. I can well understand why the Opposition struggle with the concept of reducing bureaucracy, management and red tape even though not doing so would be at the expense of front-line services.

Hampshire county council is making £6 million-worth of savings while protecting front-line services. It is even planning to increase the number of family support workers but outsourcing some of the IT and admin from the county council in Winchester and merging some of the management structures of the smaller centres that are closer together. No front-line Sure Start services will be cut, nor will any family support worker posts. From speaking to the mums who use the Sure Start centres, I know that the most important thing for them is that the service will continue in the same way. In fact, they have all identified that savings can be made, while front-line services can be protected. I have given them my absolute commitment that I will continue the dialogue with Hampshire county council to ensure that that is what happens to front-line services and that no mums or families suffer in any way. That is why I called on the Prime Minister in a recent Prime Minister’s Question Time to endorse proposals that protect front-line services, and that is why I criticised the mischief-making that has resulted in Sure Start being used as a political football. It is, was, and always will be, far too important for that.

Sure Start transforms lives in areas such as Gosport, and I have been inspired by the work of our local centres in dramatically improving the well-being, educational achievements and health of children.

14:49

[Mr Frank Field (Birkenhead) (Lab)]

I wish to pose a question at the beginning of my short contribution: why are we attaching such importance to today’s debate? I say that because Sure Start is part of a wider area of concern, which the Secretary of State rightly called the “foundation years”. There are two reasons why the House is concerned about this area and what is happening to it, how it will be developed and how it might be affected by any cuts programme. The first is that over the past decade or so we have been given a great deal of new knowledge about how brains develop. In the past, we looked to schools and universities to make good class differences, but development in neuroscience suggests that we need to start much earlier and take action as children develop from the womb and until the age of five. So if we are really concerned about widening life chances and ensuring that people can move from their early years into education and into work, we need to prioritise the foundation years.

Much of the concern of Labour Members has been about what has been happening to Sure Start, and I want to pose some questions about that and end with a suggestion. We are not going to persuade the Government to go back on their non-ring-fencing, much as we would like them to, and so I make a plea to them. Other programmes and public expenditure reviews will take place during this Parliament and I hope that before the Government embark on their second, and probably last, public expenditure review for this five-year Parliament, they will question whether, with hindsight, the non-ring-fencing of some of these key services has been a good idea. The Secretary of State needed all his skills to avoid answering questions from Labour Members today, because real losses are clearly involved when local authorities with reduced budgets have to make choices on what they think is most important in the area covered by the intervention grant.

If the Government are to make real sense of the foundation years during this Parliament, they will need to change their attitude towards non-ring-fencing. I intervened earlier to ask whether the money for the new initiative of very significantly increasing the number of poor children between two and three who will receive nursery education will be ring-fenced, and the Secretary of State gave us the good news that it would be. So we can conclude that although the Government are not going to say in public that, with hindsight, they were probably wrong not to ring-fence, it is clear that in any future settlement they will prioritise those areas where they believe the greatest gains for taxpayers can be got from spending their money. I suggest that, in the next review, foundation years spending is one area that needs to be ring-fenced.

The second question that I wish to pose applies particularly to Labour Members, but also to those on the Government Benches. We are all anxious to present Sure Start in the best possible light. It is true that it has established itself as a universal service that is non-stigmatising and offers help, but I question whether we have the information at our disposal to be so confident that all Sure Start centre budgets are being spent in the best way possible. When Sure Start began in Birkenhead 10 years ago, I sought in vain to gain from our four local centres information on the number of children in their area, the number of children that they were contacting and whether they were ensuring that the greatest help went to the most-deprived children—I never received answers. Now that Sure Start centres know that things are up for grabs and that, for example, the schools in Birkenhead are probably going to bid for the centres, people are of course anxious to talk about what their services might provide.

In an age in which there is less money in most areas for Sure Start, it is more important that the money is spent on the poorest children, not the richest. Adam Smith’s hidden hand seemed to work at the doors of Sure Start, in that the doors were opened most widely to those bushy-tailed mums who are confident about themselves and who saw what a wonderful service it was and went in—they have benefited fully. I still ponder about the number of mothers in my constituency who are very poor, who are suffering from post-natal depression and with whom nobody makes contact. That is the group that Sure Start needs to be most involved with.

[Dan Rogerson]

Does the right hon. Gentleman think we could ensure that the more resource-intensive activities that take place in the children’s centres could be targeted while also ensuring that they can still be used in other ways to encourage everybody to come in, to work together and to learn from each other and support each other? Does he think we can get the balance between those two things?

[Mr Field]

My report tries to suggest how we can keep the service universal while also concentrating help on those in greatest need. That is crucial if in the next 10 years we are to see not only a development of the Sure Start budgets, but a significant increase in the budgets for foundation years—that is where any new money should go. It would help Sure Start to meet that objective if the Government were to move as quickly as they could to ensure that foundation years provision overall, and Sure Start in particular, was paid by results. In that context, we need to consider whether more children are better ready each year to start school as a result of expenditure in this area. I have asked heads in my constituency, where we have had Sure Start for 10 years, and they have said that that is not so.

The collapse in parenting may be occurring at a greater pace in some areas than it is more generally throughout the country—this problem is not a particular one. One of the great reasons why we support the foundation years is that more children are less well nurtured now than was the case 10, 20 or 30 years ago. One of the great things that Sure Start is about is trying to ensure that those young people who did not have good parents and who did not learn the ropes from them find from somebody else the best way of ensuring that their children are really fit to start their first day of school.

I hope that the Government have learned the lessons about ring-fencing. We will see this in their actions, because I do not expect a Minister to say at the Dispatch Box, “I think our approach was wrong, but next time it will be played differently.” Secondly, I hope that we all agree that whatever our framework for Sure Start, we want to ensure that the most vulnerable children are helped most. I wish to make a brief suggestion about the next stage of this policy. The Government have accepted all the proposals that they could immediately accept from my report, but one proposal relies on the Chancellor of the Exchequer. I suggested that each time the Chancellor considers whether to increase benefit rates for children, he should consider whether in that year it would be more appropriate to spend some or all of that money not on benefit increases, but on building up foundation years provision.

Some Labour Members are slightly apprehensive about that suggestion, because we have been committed to abolishing child poverty, as defined in monetary terms, by 2020. Those on the Government side are also committed to that and I think that Labour Members fear that if the Government decided to move moneys from benefit increases to services, we would lose that goal of abolishing child poverty as we defined it when we were in government. I wish to suggest that that clash does not exist. A couple of years ago, the Joseph Rowntree Foundation supported research examining the most effective ways to ensure that more children live in households with incomes above the target of two thirds of median earnings. It found that that was done not by increasing benefits, but by increasing the amount of child care. In fact, if we attended to that and ensured that child care was of high quality, up to half of those children who are now deemed to be poor would not be poor because their parents would be able to combine the work and tax credits that are available to give them an income that would take them out of our definition of financial poverty. I suggest that the Government consider significant increases in child care and that they finance that by holding back on some benefit increases for children in future years. We will not only achieve more quickly the goal of abolishing the numbers of children in financial poverty but, by ensuring that child care is of the highest quality, we will also ensure that many of those children are better prepared to start school and that their lives will be very different from those of their parents.

I chair the new academy in Birkenhead and we have been debating what should be in our contract with the town. I think that one part of our contract will be that we will run an academy that will ensure that children coming to our school will have the opportunity to get better jobs than their parents did when they had to start work. That is what most parents mean by social mobility, and I hope that I have shown today that if we consider the amount and quality of child care, we might not only lessen the amount of financial child poverty in our country but significantly open up the life chances of our poorest children.

15:01

[Richard Fuller (Bedford) (Con)]

I have listened with great interest to the debate. Speeches seem to have fallen into two categories: they have shown Sure Start as a shared success on which today’s debate gives us an opportunity to improve and they have made it a partisan issue and an opportunity to score points. We just heard from the right hon. Member for Birkenhead (Mr Field), a man whose comments are always listened to very attentively by Members on both sides of the House, and his speech was a classic example of the first of those two categories. He made some very good points, one of which I shall comment on—that is, improving and taking Sure Start to the next level. Of course, we have heard other speeches, most notably that made by the hon. Member for Hammersmith (Mr Slaughter), that are more partisan and point-scoring.

I felt that the shadow Secretary of State’s speech was uncharacteristically ineffectual today. I always look forward to listening to his speeches, but I felt that it fell somewhere in the middle, as though his brief told him to make some electioneering, rallying, partisan points but his heart told him that Sure Start was far too important to be brought down to that level.

I want to try to address some of the points and try to avoid some of the partisan claims. My first point concerns the closure of Sure Start centres. I know that many of my right hon. and hon. Friends went through the general election confronted by Labour party smear stories about our intentions for Sure Start. It was a disgraceful smear then and it is a disgraceful smear when we hear it repeated, albeit in a muted way, today.

I am glad to have heard Members on both sides of the House talk about those councils that, even in very difficult times, are showing their commitment by maintaining Sure Start centres and to have heard the commitment on that point from my right hon. Friend the Secretary of State. When we hear that councils such as Harlow and Kent, which my hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) mentioned, and, I understand, Liberal Democrat Councils and Labour councils such as Tameside have committed to maintaining Sure Start centres, surely that shows that this is truly a shared commitment for all parties. Why are other councils closing Sure Start centres? What have they done to find other savings? What sorts of overpaid jobs are they protecting? How analytical have they been about their budgets? Are we sure that they are not playing politics with children’s futures? I do not care what their political stripe is—I ask the Minister whether, through this process, he will pay close attention to the reasons why those councils are closing or threatening to close Sure Start centres.

[Julie Hilling]

Can the hon. Gentleman explain how a local authority such as Bolton can cut 25% of its budget without harming any of the services it provides?

[Richard Fuller]

That will definitely be a challenge. I know that the hon. Lady has deep experience in youth affairs and youth matters from her previous role, but people in Bolton have a higher level of public expenditure per head than we have in Bedford, where the deprivation level is about the same. When there are sharp reductions, that will cause some issues. That is an issue for her council to consider and it is crucial that services should come first for her council and for other councils. The methodology for delivering those services is where resources need to brought back into the budget.

[Sarah Newton]

Cornwall council is keeping all 40 of its Sure Start centres by using innovative methods involving consulting parents or federating the centres under the advisory boards or school boards. That will lead to reductions in management costs without reducing services. Does my hon. Friend agree that that is a good example of a council that is not cutting front-line Sure Start services?

[Richard Fuller]

My hon. Friend makes a good point. I do not want to get too distracted by the issue of public expenditure, which I shall come to a little later. I am not sure that we want to tie our views about the future of Sure Start specifically to this period of deficit reduction measures and their consequences for local councils.

One benefit of being smeared by the Labour party about our intentions on Sure Start during the general election—a smear that has been proven to be completely without foundation—was that I got the great opportunity to visit a number of children’s centres in my community of Bedford. I must reinforce some of the points made by Members on both sides of the House about what a tremendous venue they are for networking and experience sharing between young mothers and fathers. In my home community, which is marked by a tremendous amount of ethnic diversity, when one goes to a community centre such as the neighbourhood centre in Queens Park and sees the Sure Start centre and the children’s services offered there, one really sees people from different communities mixing. That would not have happened without Sure Start—or, at least, not in such a great way—and we all want it to be maintained.

Many comments have been made about ring-fencing and about its role. In response to a question from the hon. Member for Chippenham (Duncan Hames) we heard that neither the Conservative party nor the Labour party continued to commit in their manifesto specifically to ring-fencing this budget. It is important, however, as the right hon. Member for Birkenhead just said, to see what the consequences of getting rid of the ring fence will be on our budget. I am not sure that I would come to such a definitive conclusion as he would, if there are examples of where the loss of ring-fencing has led to closures. This period of reduction is quite exceptional and considerable benefits can be found by putting the responsibility for determining the budgets for Sure Start centres down into the local communities. As councils reinforce their commitment to Sure Start centres in difficult times, that opens up more opportunities for examples of best practice to come to the fore and broadens the service offerings that local councils will seek to put in their centres.

Let me return to the issue of the overlap between cuts to public expenditure and the commitment to Sure Start. This is not good territory for the debate. As I mentioned, it is incredibly difficult for councils to match their budgets in difficult times but the issues about the future of Sure Start need to go beyond the short-term deficit reduction measures that councils are having to take. Importantly, we should remember when we hear speeches about committing more money to something that we lead ourselves down a false path if we think that that always leads to better outcomes. Commitment is not shown by how much money is spent. That kind of thinking leads to profligacy, waste and ultimately to a complete mess of the finances, as we have seen with the situation of general government. Thinking that money is our indication of commitment is more sinister because it sets up expectations of what will be provided far beyond what it might be possible to commit to. It stifles innovation, creativity and opportunities to make more out of less and it also withdraws a commitment to volunteering.

Volunteering is an area in which we are already seeing, in many of the Sure Start centres in Bedford, a significant number of volunteers coming forward to expand the role of the services offered. That should surely be most welcome in all areas and communities. Volunteering reinforces the networking value that we get from our centres and enables us to do more effective outreach into our communities, particularly hard-to-reach communities, in all our towns and constituencies.

Today has been a good opportunity for us to identify ways in which Sure Start centres can be improved beyond the measures already identified by the Government in terms of expanding early-years provision. However, progress must be based on a recognition by all parties that there is now a shared commitment to Sure Start, which is being reinforced and not threatened in these tough times. I hope that all Members on both sides of the House will support the Government’s endeavours in that regard.

15:11

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

It has been a good debate. I have been interested in early years for a long time. When I became the Chair of the then Select Committee on Education and Skills, the very first report I did was into early years. Some Members who were on the Committee during that inquiry are still in the House. We thought it was pretty groundbreaking of us to hire at the beginning of the inquiry someone with a PhD who was expert in the development of the child’s brain. We had the benefit of wonderful research people such as Professor Kathy Sylva, who was a significant influence in understanding that a child’s life chances are largely determined by early-years stimulation before 22 months. That is quite startling and was very new thinking 10 years ago.

I have always been absolutely committed to the idea that what we do for children in their early years is of the utmost importance. It sometimes irritated me, as the years went on, when we did inquiries about every other bit of education right through to higher education, that we seem to live in a strange world in which we take things for granted and spend less on early years and more as children get older. I heard a small voice constantly telling me—you will remember sharing this view in your former role, Madam Deputy Speaker—that we should be spending more money on the earlier years and tailing off spending in later years. The amount of resources we put in does matter, but I agree with the hon. Member for Bedford (Richard Fuller) that what is important is how that money is spent and the quality of the spend.

Interestingly, the very last inquiry I did as the Chair of the Committee was also on Sure Start and early years. In parallel to that last inquiry we did another into NEETs—those not in education, employment or training. There is a very strong relationship between what happens to a child in their first months and years and whether they are likely to end up as a NEET. That link is vital. Stimulation is important and it is sad to go into a school or other setting and be told by people there that they can identify pretty accurately very early in the life of a child whether that child is a potential NEET. That is depressing. I am sure that everyone in the House would agree that, although we came into politics for all sorts of strange reasons, most of us share the belief that all human beings ought to get the chance to develop the potential and the skills that they were born with. For me, that is what the Sure Start and early-years stimulation debate is about. I am sure that we all want to ensure that potential is developed to the full and that we do not want talent to be wasted. We live in a competitive world and I am unashamed to say that I want our country and our economy to be successful. I want it to grow and do wonderful things. If I were to speak in the next debate, I would say that there is a clear link between what happens in a child’s early years and their potential to go to university and make the most of their life.

This issue is partly about resources and partly about spend, but it is also about quality and how it is monitored. It is very difficult to find really good experience and then to spread it fast. That is even more difficult given that the nature of poverty is changing. I know that I am in danger of boring the House on this point because I keep coming back to it. For so many people in the House and outside it, their idea of poverty is a concept from 30 or 50 years ago—a kind of static poverty. When I go to early-years settings and schools up and down the country I find a dynamic poverty. I am talking about children not being in the same school for very long and moving on as their parents move. I am talking about a dynamic in which people come from other countries and do not have the English language at home, perhaps having a foreign language on their televisions. I am talking about children who get very little support from the home environment. The nature of poverty has changed and, like all human beings, we tend to live a little in the past. We have to recognise the nature of poverty today, the challenges of deprivation that a child in poverty has today and the fact that they are different from the past.

One inspiring thing about the work on early years is the fact that the quality of research is better than any educational research I have come across. I have often criticised the quality of educational research in some of our universities. There are complex reasons for that, such as a lack of good salaries and a lack of attraction to those areas of research, perhaps because there are much better salaries for those who stay on and become successful head teachers or principals. The quality of early-years research has been outstanding and we have to build on that.

We also have to be able to evaluate success. It is not good enough to go along anecdotally and say, “I saw this wonderful example of a Sure Start centre” in Southampton, Huddersfield or anywhere else and think that it is easy to replicate. So many of the successful systems that one looks at are difficult to replicate because they involve excellent people who have shown leadership and built successful teams. That is not impossible to clone—it is not impossible to have a system—but we have to realise that it is difficult. When the concept of Sure Start was originally introduced, we decided that we would go to the 500-most deprived communities in the land, but there was a big flaw in that approach because most poor children do not live in those 500 poorest communities. That is a dilemma for us all. It is more difficult than asking where the 500 poorest communities in Britain are. That does not work and there have to be more centres than that, which is why we moved to a figure of 3,500.

I think there are some ideological—no, not ideological, but intellectual—differences between us. When we looked into this issue in the final report, a couple of members of the Select Committee would have liked to have gone back to a smaller number of centres. I do not think that that was callous or because they wanted fewer centres; I think it was because they thought that we could probably do better over a period of time with 500 centres and that dissipating talent as a resource was dangerous. I disagreed with that, as did the majority of the Committee, on an all-party basis, because we thought that 3,500 was the number necessary to reach those poor children wherever they were in our country. There is a lot to learn and my worry is that the methods for assessing quality are not refined enough. I do not think that Ofsted has been good enough in the past; it has been improving but still more needs to be done in terms of assessing and spreading good practice.

One of the wonderful things about our Sure Start and children’s centres—I hope that people agree—is that they represent the end of looking at children in bits. Previously, we would look separately at a child’s health, stimulation and so on. In a Sure Start centre, for the first time, the assessment of all sorts of bits of their needs were brought together in one place, so that a child, for whom there might be a lot of pressures and challenges, was looked at holistically. That children’s centre was a one-stop shop where the child was evaluated and got the proper help. That is not always in a building. It is a matter of outreach, finding out which child needs the help, and giving it. I agree with my right hon. Friend the Member for Birkenhead (Mr Field) that that is difficult, but it can be done.

I disagree with the hon. Member for Bedford about resources. No one wants to waste resources, but we all know what will happen if Sure Start is cut by a significant percentage. I do not care so much about buildings, although having a building near a community which people can identify and get to is pretty important. If, as is the case in the constituencies of some of my colleagues, a children’s centre that used to have a substantial budget now has £25,000, not much can be done with that. It is all about resource.

I make a plea to the Secretary of State. He always says that cuts are necessary because of the economy and the dreadful things that the Labour Government did in connection with debt. He would say that, as we would probably do in his place. Those of us who care about children and about education want him to go into Cabinet as a bruiser and a thug, to bash the table and say, “I want a budget for my children and for the future of children in our country,” and to be much more physical about it. Sometimes I think he is a little too polite when he gets round that table.

15:21

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

It is always a pleasure to follow the hon. Member for Huddersfield (Mr Sheerman).

I oppose the motion moved by the shadow Secretary of State for Education, the right hon. Member for Leigh (Andy Burnham), and his assertion that local authorities are disinvesting in Sure Start centres. My local authority, Medway, has 19 Sure Start centres and all 19 are being kept open. Seven of them are in my constituency. There is a seven-year age gap between the centres in the two parts of the constituency. Medway, an excellent Conservative-run local authority, recognised that the centres were a valuable lifeline. It is always right for such decisions to be made by local authorities, because they know what goes on on the ground.

The seven Sure Start centres in my constituency include one at Burnt Oak school in Gillingham, which I attended back in 1984. It is a tough area where there are real social and economic problems. The Sure Start centre deals with those.

The shadow Secretary of State accepted that Sure Start centres were being kept open by local authorities across the country, but he asserted that they were only bricks and mortar, and that there was nothing substantive about them. He is wrong about that. If he comes to Medway, I will take him around our Sure Start centres, show him what they do, and show him that they are not just bricks and mortar. They hold drop-in sessions for parents and children, play activities with music and stories, ante-natal classes and baby clinics. The centres offer encouragement and support for parents thinking about training and finding new jobs. They have links with local schools and voluntary agencies. They provide information and advice on breast feeding, speech and language therapy, and parenting classes. That is what goes on.

The shadow Secretary of State may acknowledge that Conservative authorities show no inclination to close Sure Start centres and that it would be wrong to assert otherwise, but he asserts that they are just bricks and mortar. They are not. The Government and Conservative authorities such as mine in Medway are committed to keeping those Sure Start centres and helping the most vulnerable to get the best start in life.

The role of central Government is crucial, in partnership with local authorities. We are discussing the extra funding and resources that may be made available in future for two-year-olds, but it is not something that will happen only in the future. I have a letter from the Department for Education dated 31 March—[Interruption.] Maybe the shadow Secretary of State is not putting his questions properly or succinctly, and that is why he is not getting answers. The letter is addressed to the authority to which I referred, Medway, and it states:

“I would like to thank you for the bid that you submitted to test out effective approaches to the expansion of free early education for two year olds and to improve provision for three and four year olds. We are pleased to confirm that your bid has been successful.”

So it is not just about the future. It is about this Government. Within the first 12 months they have expanded facilities for two, three and four-year-olds. That is why I say that in partnership with local authorities, which do an excellent job, the Government are committed to supporting early years provision for our young children in the most difficult and deprived areas, which I certainly represent in Gillingham and Rainham.

The hon. Member for Bolton West (Julie Hilling) spoke about deprivation up north. She may have her experiences of deprivation, but in my constituency there is a seven-year difference in life expectancy between one part of the constituency and another. I grew up in that constituency and in that deprived area, and still live there. We in the south have high levels of deprivation. The discussion should not be about north or south. Wherever there is deprivation, help must be provided. I will work with the hon. Lady on that.

Of course Sure Start centres are crucial to help early years development, but the role of the voluntary sector should not be forgotten. For example, Contact a Family helps to support 300,000 families with disabled children. It is right and proper that we recognise the excellent work that it does. The state, local government and the voluntary sector each have a role, and should work together in partnership.

I recognise that brevity is a virtue, not a vice, so I shall be brief. Many of those who work at Sure Start centres or who want to work with the voluntary sector are hindered by bureaucracy. For example, those who work with children in the early years must have qualified teacher and early years professional status. There are not many in the voluntary sector who have such qualifications. I welcome the Government’s commitment to review that requirement. There are many people out there who want to work with our young ones through the big society and the voluntary sector to give them the best start in life.

I welcome the support given by central and local government. I pay tribute to the excellent workers in our Sure Start centres. They are dedicated and committed, and they need that support. They also need freedom from bureaucracy. It is right that the Government should review the requirement for Sure Start centres to be open for 40 hours a week, although there may not be a need for that and those resources could be used elsewhere on the front line. I support the Government’s provisions and proposals, and disagree with the shadow Secretary of State’s motion and assertions.

15:30

[Julie Hilling (Bolton West) (Lab)]

I want to talk briefly about the cumulative effect of cuts to the organisations that make up the sum of Sure Start provision, because Sure Start is not just about child care; the best centres provide so much more.

Meadowbank in my constituency provides support for families in one of the most deprived wards in Wigan. It provides not only the usual support for parenting and child care, but all sorts of educational provision for mums and dads, encouraging them to improve their basic literacy and numeracy and to get back into formal learning. Those courses are at risk, however, because of cuts to further education funding.

The centre works in partnership with the Connexions service to support young people into employment, and Connexions is not—or perhaps I should say, was not—just about careers advice; it was also about providing opportunities for young people to build their confidence and skills and to undertake different work experience. Money was available to provide bespoke opportunities to help the hardest to reach into employment, training or education, but Connexions funding is part of the early intervention grant, so it is disappearing as we speak. Thousands of Connexions workers were made redundant on 31 March, and many thousands more have received letters to say that they are at risk of redundancy.

Meadowbank also provides sexual health services to young people and to their parents, services that are at risk due to the cuts in teenage pregnancy and health service funding. Teenage pregnancy funding was also put into the early intervention grant pot. Meadowbank has worked with the youth service to provide informal education to children and young people, but guess what? Youth service funding is also part of the early intervention grant and faces savage cuts. I truly hope that Meadowbank stays open, but it will not be able to provide the services that it did 12 months ago.

Sure Start centres in other parts of my constituency have run out of libraries—libraries that are at risk of closure because of the disproportionate cuts that the Tory-led Government have made to local authorities in the north-west. That in turn puts Sure Start services at risk.

I was always taught that you cannot get a quart into a pint pot, or indeed a quart out of a pint pot, but the Secretary of State seems to think that you can. He has put a range of funding streams into the early intervention grants, and forgive me but I am going to list them. They are Sure Start children’s centres; early years sustainability; the two-year-old offer; the disabled children short breaks programme; the January guarantee; Connexions; the child trust fund; Think Family; the youth opportunity fund; the youth crime action plan; the challenge and support project; the children’s fund; positive activities for young people; the youth taskforce; the young people’s substance misuse service; the teenage pregnancy service; key stage 4 foundation learning; the targeted mental health in schools programme; ContactPoint; the children’s social care work force; and the intensive intervention fund. I think that I have listed them all, but I may well have missed some.

The Secretary of State says that Sure Start funding has been increased, and I suppose that we could say that—if we agreed to get rid of every other programme funded by the early intervention grant. That is impossible, of course, because of the statutory duty to provide many of those services, but it is also unwise, because of the work that service providers actually do.

It is time for honesty in this debate. Funding to all the areas now covered by the early intervention grant has been cut, so funding for Sure Start has also been reduced.

[Anna Soubry (Broxtowe) (Con)]

Does the hon. Lady agree that this is all about political will? In Nottinghamshire, where we too have had great cuts in Government money, not only have we ensured that we do not need to close a single one of our 58 Sure Start centres, but in Awsworth in my constituency we have actually opened one. It is about political will—balancing the budget, cutting bureaucracy and getting into the reserves. Does she not agree?

[Julie Hilling]

I thank the hon. Lady for that intervention. I do not know how Nottingham manages to get a quart out of a pint pot, but when we look at a £50 per head cut and, in Wigan, a £60 per head cut in funding, we find that it is impossible to keep all the services open. We only have to look at the faces of councillors and council leaders in Bolton and Wigan to see the difficulty that they have in trying to support existing services. Bolton has to find £42 million of cuts this year. How on earth is it supposed to do that? Over two years, one quarter of its budget will be cut.

[Anna Soubry]

Will the hon. Lady give way?

[Julie Hilling]

No, let me finish my point.

Bolton and Wigan will not—I hope—close any of their Sure Start centres. They are at risk because of the cuts to libraries and other services, but my overall point is that the other services which make up the Sure Start project will be cut: youth services will be cut, Connexions will be cut and teenage pregnancy funding will be cut. All those services will be cut because the Tory-led Government have savagely cut their grants to local authorities.

[Anna Soubry]

And those cuts would have been made if the hon. Lady’s party had been elected, because her party would have had to make cuts of at least 20%. So will she answer me this, please? How would her local council have implemented the budget had there been a Labour Government with 20%-plus cuts?

[Julie Hilling]

I am absolutely delighted to answer that question, because Bolton council prepared for £15 million of cuts this year—the amount that the Labour Government told the authority that it was likely to face. It was therefore facing £60 million of cuts over four years. No doubt, that money was difficult to find, but the council now has to find £60 million of cuts over two years, and potentially another £30 million after that. With £15 million of cuts, would life have been hard? Yes, life would have been difficult, but instead of that it has to find £42 million of cuts.

[Andy Burnham]

I am grateful to my hon. Friend for giving way because I can, I hope, give the hon. Member for Broxtowe (Anna Soubry) an answer and support what my hon. Friend is saying. Let us look at the range of the per-child cuts under the early intervention grant this year. In a number of authorities, such as Kingston upon Thames and Hampshire, they start from £30 per head for every person under 20. Let us turn to some of the authorities that my hon. Friend mentioned. The cut for Wigan is £60 per head, while for Liverpool—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The right hon. Gentleman is supposed to be making an intervention, and we are coming towards the end of the debate.

[Julie Hilling]

Thank you, Madam Deputy Speaker. I look forward to my right hon. Friend giving more of that information.

It is utterly unacceptable that the Government should be playing a game that says that local authorities have the funding and are therefore making the choice. The Government have cut funding to local authorities and have cut the pot of money that is funding Sure Start. They are wrong to do so and they should reconsider their decisions to harm families, children and young people struggling for survival in the dark days of high unemployment and ever-rising costs of living.

Finally, it is not enough to say that Sure Start centres will remain open. The question must be about what services remain and whether they are of the quality and quantity that prevailed previously. The answer, too often, is a resounding no. The Government should rethink their decision and truly look at how they can support children and families, without saying that the money exists within local authorities to do that, when patently it does not.

15:36

[Ben Gummer (Ipswich) (Con)]

I have to profess that I am underwhelmed by the motion. It asks, in the end, for the Secretary of State to monitor the evidence. The Opposition do not ask for the closures of half the Sure Start centres in the country to be reversed, but that was the threat put before the electorate at the last election.

As I mentioned earlier, the right hon. and learned Member for Camberwell and Peckham (Ms Harman) was in my constituency during the last election. I confronted her at the entrance to the Tree House Sure Start centre. She shouted at me that centres in Ipswich would be closed within months of the general election. What has happened? Not only has every centre stayed open, but two new ones have opened. The services have been protected because of the decisions of the Conservative county council, which faces £90 million-worth of cuts over the next two years, and because of the strength of will of Councillor Graham Newman, who leads the children’s and young people’s services there.

Suffolk shows how it can be done. The shadow Secretary of State suggests that the centres are hollowed out. Last week I was at the Tree House centre, on the anniversary of that altercation with the right hon. and learned Lady. I went inside with Claire Ball, the manager of the centre. It is true that parts of the organisation of Sure Start centres are having to be remodelled, but Claire Ball is introducing new services and the county council is excited about the possibilities in the Health and Social Care Bill, which will allow it to integrate social services yet further within Sure Start centres.

I assure the shadow Secretary of State that every centre is staying open. Perhaps he will tell that to the right hon. and learned Lady. I have written to her and confirmed that she has not apologised for the smear that she made. Every centre has stayed open and the services are being improved and increased.

That bears testament to the passion that Government Members feel for Sure Start. It is telling that more Conservative and Liberal Democrat Members are attending this Opposition day debate than Labour Members. I exempt the right hon. Member for Birkenhead (Mr Field) from that criticism. I do not want to embarrass him once again by mentioning him, but he has driven many people on both sides of the Chamber into politics. Having been discouraged from this vocation from perhaps too close a connection with it, he was the one person who saved it in my mind.

The genesis of the right hon. Gentleman’s idea is to have a broader universal service, with funding targeted at those who need it most, to repair the damage of decades of failure—not dreamt of or created by anyone deliberately—in communities across the country. The failure has been of a structural welfare state that does not support families and does not, at times, support communities. That failure was not designed, but it has happened. We are in the process of re-stitching together communities, and Sure Start is part of that.

May I ask the Secretary of State and Ministers to address two things that could be improved? We need proper longitudinal studies through Sure Start into primary education so that we can understand the evidence, but there are blocks in data protection which prevent that from happening. Primary school teachers would very much welcome better co-ordination with Sure Start managers and assistants, and they could do that better if data protection rules were relaxed. It would also be useful to be able to encourage a greater diversity of providers so that we can share best practice across the country.

Conservative Members are passionately in favour of Sure Start, and that is why it is such a pleasure to see it flourishing in my constituency under this Government.

15:40

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

This debate, like others before it, has shown the strength of feeling in this House that the children of this country deserve the very best.

Let us be clear about why we are here today. The Government’s mandate was to protect and improve the Sure Start network; instead, they have done the opposite and put centres up and down the country at risk of cutback and closure. There is no way in which Ministers can hide behind the favourite line we hear of late that this is a coalition and manifestos do not count. It is not the case that the Tories wanted to abolish Sure Start and the Lib Dems heroically stood their ground with the Business Secretary wielding his secret weapon menacingly, because the Prime Minister, the Deputy Prime Minister and every single Member sat opposite me today were elected on a promise to protect and build on the Sure Start centre network. The fact that they have done the opposite represents yet another broken promise to the British people.

I was always brought up to think that when someone breaks a promise, the least one can expect is an apology. This debate gave the Secretary of State a chance not only to apologise to the parents, carers and children who will suffer because of his broken promise but to make amends for it. Our motion gives Ministers an opportunity to say to all the parents who are fighting tooth and nail up and down the country to save their children’s centres, “We are sorry; we will keep our promise.” Ministers have said in this Chamber that there is enough money in the early intervention grant to maintain and improve Sure Start. In the comprehensive spending review, the Chancellor told us that there is £1.135 billion every year throughout this Parliament. If that were true, they would have no problem in voting for the motion, but they will not do so. The Minister will no doubt cite the localism agenda. Decisions should be taken locally, he will say—but these should be decisions about how to improve outcomes for children rather than where to cut inputs. In this case, localism is not about who makes the decisions but about who takes the blame.

Reinstating the ring fence is not a panacea, but it would bring back the stability and security that the Sure Start network needs. It would let managers and staff concentrate on how to deliver the improvements that we all want in children’s centres rather than forcing them to focus on financial fire-fighting year in, year out. Parents would have the sense of security, which they do not have at the moment, that their local centre would be there from the moment their child is born right up until they started school. We would have a sign that the Government are listening to all the advice that they have sought—not least from my right hon. Friend the Member for Birkenhead (Mr Field), whose excellent speech we heard earlier, and my hon. Friend the Member for Nottingham North (Mr Allen)—and that they are taking early education and early intervention seriously. It would also mean that we would not be left with situations such as those in Tory-controlled Hampshire, which is facing 35% budget cuts; Liberal Democrat-led Hull, with its smoke and mirrors and 50% cuts; and Tory-led Hammersmith and Fulham, which has a strange hub-and-spoke model where the spokes are buildings with a caretaker and a bottle of bleach. A building running on £25,000 a year or less is not a Sure Start children’s centre—it is just a building.

We are giving Ministers a chance to increase their popularity with parents—and not just the Toby Youngs of this world, either: parents such as those I met on mother’s day outside Downing street, who were handing in petitions from all over the country that, on that day alone, contained 52,000 signatures; parents such as the ones who came to the Sure Start seminar in Parliament, which was hosted by my right hon. Friend the Member for Leigh (Andy Burnham); parents such as those I met recently with my hon. Friend the Member for Derby North (Chris Williamson), who are fighting Tory-controlled Derby city council over its plans to close or cut centres; and parents such as those I have met on doorsteps over the past few weeks in Sheffield, York, Peterborough, Gravesham, Newcastle and Sunderland in my own constituency. No matter where one goes, the view is the same: the Government are letting down families and attacking social mobility at every stage of a child’s life.

We have heard a lot today about Hampshire. The debate has done a real service in exposing the cynicism of some Conservative councils. We heard the surprise news that a last-minute extraordinary meeting was called in Hampshire yesterday, although a final decision is not due until 24 May. That is a blatantly cynical move to get through the local election period. The council is still cutting £6 million from the budget, which will cut right to the heart of the service. One of the petitions handed into Downing street on mother’s day was from Hampshire, and another petition signed by 22,000 parents was handed in on 18 April by 50 mums from Hampshire. That may well have led to yesterday’s U-turn. Twenty-eight centres were earmarked for closure or serious cuts, and there was a legal challenge to the rushed consultation.

[Caroline Dinenage]

Will the hon. Lady give way?

[Mrs Hodgson]

You have already spoken, thank you.

We announced the subject of this Opposition day debate last week, just before the bank holiday weekend. The fact that an extraordinary meeting was called over a bank holiday weekend and hastily arranged for the other side of the weekend is very telling. I am sure that the tens of thousands of parents in Hampshire who signed the two petitions were happy when they heard the news, as we were when we heard it today. However, the news is bitter-sweet. Although we are told that no centres will close, they face a 35% budget cut: going from £17 million to £11 million is a £6 million cut, which is huge. A £6 million cut is much more than just the streamlining of services, and parents know that. They use the services, and will notice if they are taken away or diminished. Indeed, on the Facebook page for the Hampshire children’s centres campaign, this is not seen as a U-turn or a great victory. The group is still campaigning, because it is deeply worried about the £6 million cut and the effect it will have on children’s centres. It says that the campaign goes on.

The Secretary of State loves playing to the gallery, so why will he not give the people what they want and say that he will consider bringing back the ring fence? After all, it would be a nice boost for all those Tory and Lib Dem candidates who are struggling on the doorstep. My right hon. Friend the Member for Birkenhead, who is one of the most knowledgeable people in this area, challenged the non-ring-fencing of this vital area of expenditure and said that the Government should change their attitude to non-ring-fencing. That is strong stuff from a highly respected expert in the area. I hope that the Government pay heed to that.

It is not as if the Secretary of State has not had practice at backing down. In fact, he is probably the most qualified person in the Cabinet when it comes to U-turns, and that Cabinet includes the Deputy Prime Minister. My right hon. Friend the Member for Leigh laid bare at the beginning of the debate the reasons the Secretary of State probably will not back down and support the motion. He repeated the claims of Ministers that Sure Start funding is protected and showed that that simply is not true. There is not enough money to maintain the current network of children’s centres if Ministers expect councils to deliver all the other important programmes that the grant pays for, such as short breaks for disabled children. How can there be enough, when there has been a real-terms cut of 22% in the pot?

If I am wrong, why are centres closing or effectively being mothballed, and why are services being cut? If I am wrong, why would Ministers have a problem with the motion? But I am not wrong: they are, just as they have been wrong on Bookstart, on EMA, on the English baccalaureate and on Building Schools for the Future. They are the most incompetent Department in a shambolic Government, and the worst thing is that children’s lives are at stake.

I know that some Government Members do see the value of Sure Start and recognise the importance of protecting it, and we have heard from some of them today. My plea to those Members is simple: support the motion and show their constituents that they understand the priorities and concerns of ordinary, hard-working families, even if their Front-Bench colleagues do not.

15:50

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

What a debate we eventually had. I have to say that in almost 14 years in the House, I have never known such an anticlimax at the opening of an Opposition day debate as when the shadow Secretary of State spoke today, following his top billing in the press and his frenetic tweeting about this important motion and debate.

We were promised a grand tour d’horizon of local authorities taking the axe to children’s centres. After the shadow Secretary of State stated the blindingly obvious about Sure Start centres featuring in the top five most popular policies—and after reminding us of how former Prime Ministers had constantly scaremongered about Conservative policy on Sure Start—he tantalised us with the prospect of “getting to the bottom of the facts on the ground”. He started tentatively with the mention of Derby, where, allegedly, some six Sure Start centres could be threatened. That went unchallenged.

We then heard about Hammersmith and Fulham, where, in fact, a new Sure Start centre has been opened. We briefly heard mention of Barnet and Bromley, and then we went on to Hampshire, where we were told no fewer than 28 Sure Start children’s centres were going to be closed—until it was pointed out that in fact not a single one is going to be closed or ever was going to be. Yet when challenged by my hon. Friend the Member for Gosport (Caroline Dinenage), the shadow Secretary of State said that he did not read the Hampshire daily press.

The right hon. Gentleman then came up with the absurd claim that Hampshire council had deliberately performed a U-turn because it felt so threatened and intimidated by the prospect of today’s Opposition day debate that it had to climb down. Then we heard that it was all about electioneering in Hampshire, despite the fact that Hampshire county council, which runs the Sure Start centres, does not have any elections this year. If any local authority was so fickle as to base its policy on the prospect of a 46-minute, lacklustre, misinformed, misfired and opportunistic speech by the shadow Secretary of State, I would want my money back if I was a council tax payer in that authority’s area.

Even when the right hon. Gentleman had been well and truly rumbled, was there a word of apology, a hint of retraction, a whimper of humility? Not a murmur. Indeed, he went on to repeat his calumny later in his speech. And that was it—that was the tour d’horizon around the United Kingdom. He then quickly shunted off into the sidings with an attack on the right hon. Member for Eastleigh (Chris Huhne) on EMA, tuition fees and AV, none of which features in the motion. It was 46 minutes of gloomy and mostly unfounded predictions—what a dead loss of an opportunity.

Perhaps we can see the reason for that lost opportunity. Although the shadow Secretary of State is not a reader of local media in Hampshire or elsewhere, as we have found out, he is certainly an enthusiast for Twitter. The basis for today’s debate was his tweet of 25 April, when he proudly announced:

“Labour has called debate on Sure Start & Tory/Lib Dem broken promises this Weds. Tell me which local egs you think we should highlight.”

I looked, and not many people tweeted back. There was a tweet from the hon. Member for Kingston upon Hull North (Diana Johnson) about Sure Start centres, but that was it. From what I can make out, answers came there none, although the right hon. Gentleman does appear to have had at least one fan.

What an anticlimax from the mover of the motion. However, his scaremongering was soon eclipsed by the news from the Government Back Benches about yet more local authorities pledging to keep their children’s centres open, even over and above those on the list recently surveyed by 4Children and the Daycare Trust. Northamptonshire is adding an early attachment expertise centre, West Sussex is not closing any Sure Start centres and Ipswich is adding two, despite the scandalous observations and scaremongering of the right hon. and learned Member for Camberwell and Peckham (Ms Harman) that half of them would disappear if we won the election. We also heard from my hon. Friend the Member for Broxtowe (Anna Soubry) that a centre opened recently in her constituency.

This is an important debate on an important subject. Clearly, there is all-party support for retaining a network of children’s centres, which has never been in doubt, as every Back-Bench contribution made clear. The hon. Member for Hammersmith (Mr Slaughter) went on about the importance of children’s centres, but as usual got his figures wrong—he completely ignored the revenue streams for children’s centres apart from the local authority stream.

My hon. Friend the Member for North Cornwall (Dan Rogerson) rightly said that there were no killer statistics in the motion. What is the Opposition’s alternative? What would they cut?

The right hon. Member for Manchester, Gorton (Sir Gerald Kaufman), who has returned to the Chamber, made a rather arrogant speech. He thinks that Manchester, and he as a Manchester representative, have a monopoly on deprivation. However, I agree wholeheartedly with my hon. Friend the Member for Gillingham and Rainham (Rehman Chishti), who said that multiple deprivation is the same whether it is in the north, the south or any other part of England. If wards with multiple deprivation in my constituency had a fraction of the funding that wards in the constituency of the right hon. Member for Manchester, Gorton, had, they would be much happier than they are now.

My hon. Friend the Member for Gosport, having skilfully rumbled the shadow Secretary of State, showed how Sure Start centres can transform the lives of our constituents. As usual, that skilful, well-informed paragon of reasonableness—the right hon. Member for Birkenhead (Mr Field)—made a very important point about ring-fencing and payment by results. His point on the latter was absolutely right. The question we should ask is this: are more children being made school-ready as a result of spending on children’s centres? He is right that payment should flow on that basis.

I hope that we do not need to ring-fence money. Rather, I hope that local authorities spend money and do the right thing in the interests of their constituents. They are best placed to decide on that, and I do not want to ring-fence money if their decisions produce the right results.

My hon. Friend the Member for Bedford (Richard Fuller) spoke of our shared commitment to children’s centres, but why do only some councils choose to close children’s centres while others manage not to do so? Why are some councils adding to their reserves rather than trimming back on overheads before they look to trim spending on Sure Start?

The hon. Member for Huddersfield (Mr Sheerman), who as we all know has form on early intervention, made an important point about the strong correlation with those not in education, employment or training. He said that much of the thinking on early intervention and Sure Start is backed by empirical research, which is what we want. The Government are interested in qualitative research on the outcomes of children’s centres. The entire Opposition argument is based on quantitative analysis and figures. The Government want better Sure Start centres, producing better services for better effects on the children who desperately need them, particularly those from the most deprived communities.

Let me be clear yet again that this coalition Government are 100% committed to Sure Start. We always have been. Early years is a priority, and Sure Start has proven itself as a programme that has the capacity to be life changing. We have no intention of forgetting that; on the contrary, we want to build on the success of Sure Start and to put it at the heart of our approach to early intervention. We want to narrow gaps in achievement and improve social mobility, which the previous Government singularly failed to do as they presided over an unprecedented widening of the poverty gap.

However, this Government believe that the best way to do that is through greater local decision making and accountability, greater involvement of organisations that have proven expertise in service delivery, and the greater use of evidence-based intervention. We want children’s centres to provide the foundation for stronger earlier support, retaining a network of children’s centres that offers universal services that are accessible to all families, but with targeted support for those families who are in greatest need.

This coalition Government are 100% committed to Sure Start children’s centres, but reform is needed to make them more effective in providing a universal service that is focused more effectively on families in greatest need. This Government, however, have an approach to reform that is radically different from that of the previous Government. Children’s centres need to have more flexibility to do more to help the families in the greatest need, to involve a greater diversity of providers and to be more accountable to local communities. There are no easy solutions or quick fixes, but it is time we trusted local authorities to make the right decisions for local people—we do, but Labour does not, and that is why I urge the House to vote against this opportunistic motion.

Question put.

16:00

Division 259

Ayes: 207

---

Labour: 201
Plaid Cymru: 2
Independent: 2
Democratic Unionist Party: 1
Green Party: 1

Noes: 312

---

Conservative: 269
Liberal Democrat: 42

[Madam Deputy Speaker (Dawn Primarolo)]

I now have to announce the results of the deferred Division on the question relating to short selling. The Ayes were 287 and the Noes were 20, so the Ayes have it.

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

Higher Education Policy

Wednesday 27th April 2011 Commons Chamber

[Madam Deputy Speaker (Dawn Primarolo)]

I remind the House that because of the large number of Members wanting to participate in this debate, there is an eight-minute limit on Back-Bench speeches.

16:15

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

I beg to move,

That this House condemns the failure of the Government to deliver the commitment made to Parliament that £9,000 a year student fees would be ‘exceptional’; further notes that the Office of Fair Access (OFFA) has said that it has no powers to set university fees or determine university admissions policies; notes with alarm the warning of the Secretary of State for Business, Innovation and Skills that average fees higher than £7,500 would mean reducing student numbers or further cutting university teaching funding; condemns the failure of Ministers to explain their policies by publishing a Higher Education White Paper; believes that Ministers are putting at risk the success of universities and the future of generations of students; further believes that current policies are unfair, unnecessary and unsustainable; and therefore calls on Ministers, as soon as practicable, to set out to Parliament how they will meet the promise that fees of £9,000 will only be in exceptional circumstances, to guarantee that there will be no fall in the number of university places or further cuts to university teaching budgets, and to outline what powers, if any, they propose for OFFA on determining fee levels and enforcing access arrangements.

I am glad to see the Secretary of State for Business, Innovation and Skills in his place, although I understand that he is not following the usual courtesy of responding to my opening remarks. I am nevertheless grateful to him for attending the debate.

I make no apology for raising for the third time in an Opposition day debate the dismal record of this Secretary of State and the Minister for Universities and Science on university fees. Nothing is more important to this country’s future than the rising generation of young people, including all those who are working hard as we speak on their GCSEs and A-levels. We owe it to them to give them the best opportunities, to make the most of their talents, the most of their abilities, the most of their willingness to work hard and do the best for themselves. All of us depend on them to ensure that, through their innovation and creativity, this country can pay its way in the world and create jobs in the future. Despite fashionable sneers, we need more people, not fewer, educated at a higher level. That is what is happening in every country with which we compete. Young people will benefit from their higher education, but so will the rest of us. That is why our young people deserve a fair deal and good opportunities.

Under the last Labour Government, the number of students in English universities increased by almost 380,000, and 51% of young women now go to university. Now, however, the ladders of opportunity are being kicked away. The education maintenance allowance has been scrapped, and Aimhigher, which persuaded countless young people that they could go to university, has been scrapped. Sir Peter Lampl of the renowned Sutton Trust said:

“I think these fees are going to put a lot of children from lower and middle-income homes off universities.”

A poll today shows that more than half of final-year students at 14 Russell group universities in England would not have enrolled if annual fees had been £9,000.

For those who do aim high, fees are being trebled—to the highest average fees of any public university system in the world, and all because this Secretary of State decided to cut the higher education teaching grant by 80%, to make most students pay the whole cost of their higher education and to embark on a bizarre ideological experiment devised by the Minister for Universities and Science. It was always a bad idea, but these Ministers have implemented it with truly staggering incompetence: they have lost control and are making it up as they go along. Instead of being open and honest about finances and open and honest about their future policies, they are resorting to veiled and not-so-veiled threats, planning the biggest ever interference in the autonomy of universities.

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

If a Labour Government had been re-elected, would tuition fees have risen?

[Mr Denham]

We have made it quite clear in every debate since the Browne report was published that it would be unrealistic to say that higher education budgets would be untouched by the deficit reduction that we would have had to introduce. However, we have also pointed that if, for the sake of argument, the reduction in higher education spending had been in the order of 10% to 20%, as faced by most public services, we would certainly not have been talking about tuition fees above about £3,800—and certainly not the £9,000 that this Government are implementing.

Since Parliament voted to treble tuition fees in December, Ministers have ensured through their actions that record numbers of disappointed students will be turned away from university this year, with perhaps 150,000 applicants missing out on places. More of the students across England who are studying hard for their A-levels today will be rejected than ever before, because tens of thousands are rushing to avoid the trebling of fees, and because Ministers have already cut 20,000 places for 2012 from the number that Labour had planned for 2010—and that is before any more cuts that may be in the pipeline.

On 3 November, the Minister for Universities and Science told the House:

“We… are… proposing a basic threshold of £6,000 a year, and in exceptional circumstances there would be an absolute limit of £9,000.”—[Official Report, 3 November 2010; Vol. 517, c. 924.]

That was the solemn promise on the basis of which the House was asked to treble fees. The Minister did not say, “Most universities will charge £9,000 or as near as makes no difference”; he said that £9,000 would apply “in exceptional circumstances”, and that is not going to happen. Of the universities that have made declarations, 71% have declared fees of £9,000 and 85% have declared fees of £8,000 or more.

The Minister continues to live in a world of his own. In March he was saying of arts and humanities degrees:

“Most institutions should only need to charge £6,000—or perhaps a bit more once inflation has been accounted for.”

So where are those £6,000 arts and humanities degrees in the most sought-after universities? Where, for that matter, are the £6,000 arts and humanities degrees in less sought-after universities? The truth is that the Minister and the Secretary of State have lost control of the system through their own incompetence. They have created a system in which there is every incentive for universities to charge high fees and virtually no incentive for them to charge low fees, and it is young people who will pay the price. Some will be put off university altogether, while those who go to university will face 30 years of debt repayments, with middle-income graduates paying more money and a larger proportion of their incomes than the wealthiest. They will still be paying off their student debt when their own children have started university.

The Minister is now trying to say that what matters is the average once the reduced fees for some students have been taken into account. How disingenuous can you get? When the Minister promised fees of £9,000 “in exceptional circumstances”, I do not believe that a single Member of the House thought, “Oh—that means that most universities will charge most students £9,000, or as near as makes no difference.” That is not what Members thought; they thought that he meant “in exceptional circumstances”. I do not think they thought that middle-class, middle-income students would have no choice but to pay close to £9,000 a year no matter which university they chose to go to. The Minister’s failure to admit that he got it wrong does him no credit.

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

Given that universities that charge £9,000 will have to satisfy fairly stringent access requirements, will they not be helping the very students whom the right hon. Gentleman says we should be helping?

[Mr Denham]

That argument is worthy of further examination, and I assure the hon. Gentleman that I will be dealing with it in due course, at—I hope—not too much length. It gets worse.

[Jeremy Corbyn (Islington North) (Lab)]

rose—

[Mr Denham]

Ministers have consistently claimed that fees above £6,000 will be allowed only if tough access agreements are in place. Before I say more about that, however, I will give way to my hon. Friend the Member for Islington North (Jeremy Corbyn).

[Jeremy Corbyn]

I am sure my right hon. Friend realises that the universities that have not raised their fees to £9,000, such as my own London Metropolitan university, are giving themselves a large financial problem which is resulting—in the case of the London Met—in the loss of possibly as many as 10,000 student places over the next three years, a large number of redundancies, and a loss of access to higher education for students from working-class backgrounds. That is the perverse effect of the Government’s strategy of effectively trying to privatise higher education.

[Mr Denham]

My hon. Friend has underlined a point that I have already made. Individual institutions have had to make their own choices, but this was a system in which almost every incentive for the vast majority of institutions was to raise fees, and there were almost no incentives to lower them. Given the number of professors of game theory in the universities of England, one would have thought that Ministers could have got a few together and asked them, “What will you do, in practice, if we introduce a system like this?” Every single one of them would have replied, “We will make the fees as high as we possibly can.” The Minister and the Secretary of State are just about the only people with any connection to higher education who are surprised by what has happened.

Of course, Ministers have consistently claimed that fees above £6,000 will be allowed only if tough access agreements are in place. When Cambridge university announced it wanted a fee of £9,000 per year, the Deputy Prime Minister—the man who promised no fee increases—exploded, stating:

“They can say what they like. They can’t charge £9,000 unless they’re given permission to do so. And they’re only going to be given permission to do so if they can prove that they can dramatically increase the number of people from poorer and disadvantaged backgrounds who presently aren’t going to Oxford and Cambridge.”

That sounded pretty clear, but what has Cambridge actually proposed? Its current access target under the current fees policy is to reach 60% to 63% of state school students—not, we should note, poorer or disadvantaged state school students, just any state school students including those from selective schools. What has it proposed in the new access agreement? It has proposed that the target should be not 60% to 63% of state school students, but 61% to 63% of state school students. As the Financial Times put it:

“Cambridge basically reckons it can triple student fees and placate the Government by adjusting the bottom of its target range for state school pupils by one percentage point.”

Does anybody in this House believe that Cambridge will not be allowed to charge £9,000?

The Secretary of State’s guidance to the Office for Fair Access did not request that OFFA take into account past performance on benchmarks or widening participation, nor could it legally have done so. It will be many years, at best, before OFFA can possibly judge whether the new access agreements have been complied with and made any difference to access. Will the Minister for Universities and Science tell the House today how long he expects it to be before OFFA could feasibly sanction any university for failure to comply?

It is obvious that these bungling Ministers thought OFFA had powers it simply did not have. When The Times asked Sir Martin Harris, the director of OFFA, whether Ministers had been aware of his limited powers when plans to treble the cap on fees were approved by Parliament, he replied:

“I think that the powers of OFFA became clearer as this debate went on.”

That is a tremendously polite way of saying, “They didn’t understand what they were talking about,” and he went on to say, for the avoidance of doubt:

“It is very important that everybody understands that OFFA is not a fee regulator.”

Tory peers made sure of that in 2004. In another place, they passed amendments that ensured that Labour’s fees legislation could not allow the very interference that the Tory-led Government are now threatening.

Of course, in theory OFFA can reject an access scheme, but only a stupid and incompetent vice-chancellor would run that risk. Universities just need a rational plan for school outreach work, and bursaries or fee waivers for some students; if they get that right, OFFA’s powers to limit fees to £6,000 collapse, and the university is free to charge up to £9,000. That is the second reason why £9,000 is becoming the norm, not the exception.

The cynical talk of tough access agreements is raising false hopes among students, and now the finances are unravelling. The permanent secretary at the Department for Business, Innovation and Skills recently appeared in front of the Public Accounts Committee, and he was asked by my hon. Friend the Member for Walthamstow (Stella Creasy) about the consequences of fees higher than an average of £7,500. She asked:

“You have a gap, haven’t you, that you are going to have to plug”?

The permanent secretary replied: “Yes.”

The Secretary of State has already made it absolutely clear how he will respond. He told the Higher Education Funding Council for England conference:

“Government essentially has two ways of dealing financially with collective over-pricing: either cutting the teaching grant or student numbers.”

So there will be more cuts in teaching grant, or even more cuts in student numbers beyond the cut of 20,000 from the total Labour planned for September 2010 and the number he will allow in 2012-13.

Frankly, the Government are all over the place on this. On the one hand the permanent secretary says there is a problem, and the Secretary of State says he may cut student numbers or the teaching grant. On the other, he says there is not a black hole. The House of Commons Library has published estimates of the financial shortfall at average fee levels above £7,500. Ministers say they do not recognise the Library figures, so will the Minister guarantee to the House today that the average fee will be no more than the £7,500 first promised? If he cannot guarantee that, will he tell the House what the black hole will be, and how he is going to balance the budget?

That is not the only question about finances, because the whole fiasco has been driven by the Secretary of State’s claim that he needed to sacrifice higher education to cut the budget deficit. There are increasing concerns that the policy will not save any public money. The cut in teaching grant has to be set against the massive increase in the level of student debt that has to be written off because of loans that will never be repaid. London Economics, million+ and the Higher Education Policy Institute are among the organisations that have pointed out that quite small changes in assumptions about future graduate earnings or the rate of non-repayment would wipe out any savings. Yesterday, the director of the Office for Budget Responsibility wrote to me confirming that the OBR will re-examine the Government’s assumptions once all the universities have set their fees.

As it has become increasingly clear that fees approaching £9,000 will be the norm, Ministers have constantly threatened to enact new laws to stop them. In their guidance to the Office for Fair Access, these Ministers said that

“if the sector as a whole appeared to be clustering their charges at the upper end of what is legally possible, and thereby increasing the pressure on public funds, we will have to reconsider what powers are available, including changes to legislation, to ensure there is differentiation in charges.”

They have talked of cutting all university places by 5% to 10% and then auctioning them off to the lowest bidder, including foreign-owned private universities. They have also talked of strengthening OFFA’s legal powers, but part of this disgraceful situation is that they make threats but they will not publish any details.

So I ask the Secretary of State and the Minister for Universities and Science whether, having said that they are prepared to legislate to stop universities charging high fees, they will stop hiding behind weasel words and tell us what they actually propose to do. Will there be an auction of student places? Is OFFA going to be given powers to set fees or impose quotas for students from different backgrounds? There are people on both sides of the House who would like to have the answer to that question. Does the Minister have any idea how he would get such a policy through the House of Lords, given that the Lords insisted on explicitly limiting OFFA’s powers in 2004? It really is not good enough for the Secretary of State and his Minister to keep making it up as they go along.

The Minister said that he would double the level of student loans available for study at private universities and he has made it clear that he wants more competition from private universities, but he has not set out how they will be regulated, how quality will be maintained or how the problem of fraud, which is being investigated by congressional committees in the USA, will be avoided—this involves the same companies he wants to expand their activities here. Once again, veiled threats are being made in panic as Ministers lose control of the system, but we are being given no details, no substance and no openness. It is not good enough to keep this House, future students and universities in the dark about what they plan to do.

Let me turn now to another aspect of Government policy that is becoming clear. The Secretary of State and his Minister plan to force tens of thousands of students from squeezed-middle homes to pay a levy to cut the fees of other students, often those from similar backgrounds. In a typical access scheme—hon. Members can go on websites to look at these—a student with two working parents both on £24,000 a year will pay a full £27,000 a year in fees, but that will include a £3,000 levy to cut the fees of the student from next door with one working parent on £24,000 a year. So two graduates with the same degree from the same university starting the same job will start their working life with as much as a £9,000 difference in their level of debt. How many of our constituents will think that having two hard-working parents should be a disadvantage that stays with someone for 30 years?

[Mr Gyimah]

Will the right hon. Gentleman briefly explain to us how his proposal of a graduate tax can address the challenges in higher education that he has so eloquently highlighted?

[Mr Denham]

I am flattered by the hon. Gentleman’s remarks. No system of student payment for the cost of higher education makes easy the problem of an 80% cut in teaching grant. The fundamental problem we face is that the Government have decided to make most students pay the entire cost of their higher education. The great advantage in a system of repayment of moving towards a graduate tax is that it is fairer; it ensures that what people pay is better related to what they are able to earn as a graduate. But nobody should be under any illusions: the fundamental problem we are dealing with is not the choice between a graduate tax and a fees system; it is the choice between slashing higher education teaching grant by 80% and not doing so.

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

Does my right hon. Friend share my concern about a matter that was brought to my attention by a constituent? She is so concerned about the level of fees that her children will have to pay for the rest of their lives if they go to university that she is looking into retiring early to prevent them from being burdened with them. That could be an unintended consequence of this policy across the board—people could be incentivised not to work.

[Mr Denham]

Although this does not apply to the case that my hon. Friend raises, she has touched on an issue that will need to be examined in greater detail on another occasion. It has long been an oddity that the incomes declared to the Student Loans Company by those applying for loans appear to be rather low if they are set against the statistics about the social class from which people come. There is a financial incentive for minimising declared income when applying to the student loan system, and we must acknowledge that that was present to a degree under our system, too. Any sensible person will have real concerns that as fees rise towards £27,000 for a typical degree, with possible significant differences in the maintenance awards available and significant fee advantages for declaring a lower income, the temptation creatively to declare household income, shall we say, may well rise.

I think that it is a tragedy if, in a legitimate way, people take a household decision that takes somebody out of the labour market to enable somebody to take advantage of such opportunities. I am just flagging up this point without developing it further, but there is an issue here that the whole House will have to consider in the years to come.

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

Does the shadow Secretary of State not understand that he is fuelling fears for those who wish to go university by constantly referring to what students have to pay? They do not. In the words of a former Home Secretary, it is graduates who pay and who benefit. That is the difference. I suggest that the right hon. Gentleman thinks carefully about the damage that he is doing to the potential of young individuals.

[Mr Denham]

With due respect to the hon. Gentleman, I shall read back to him directly the words I spoke before I took those interventions: two graduates with the same degree from the same university starting the same job will start their working life with as much as a £9,000 difference in their level of debt. That is an accurate representation of the system that there will be and of the current system, in which, as Government Members do not understand, fee repayments start after graduation. The issue, however, is that students—those planning to go to university—are being told that they will be responsible in most courses for footing the entire cost of their university education. That is undoubtedly true.

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

rose—

[Margot James (Stourbridge) (Con)]

rose—

[Mr Denham]

I am going to make a little more progress, because I am aware of Madam Deputy Speaker’s strictures about time and I need to draw to a close very quickly.

Let me complete the point I was making about the unfairness that is being introduced into the access system. Labour’s progress on social mobility must be maintained—[Laughter.] There is laughter from those on the Government Benches, but let me remind Ministers and the House that under the previous Labour Government the proportion of students from disadvantaged backgrounds going to university increased every single year after the changes we made to higher education. We will wait to see whether this Government can maintain that progress.

These Ministers have put the burden unfairly on the shoulders of hard-working squeezed middle families and the Commons Library suggests a significant risk of no overall increase in money spent on widening access because schemes such as Aimhigher have been scrapped and the widening participation premium is in doubt. That risks the worst of all worlds: middle income students and their families being asked to pick up the tab, with no increase in spending on widening access.

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

First, will the shadow Secretary of State confirm that, under Labour, a widening of participation did not occur in the Russell group universities? Secondly, if he is concerned about those on middle incomes, is not the answer for him to say that universities should offer no fee waivers, because if there were none, the inequity that he suggests will follow would not happen?

[Mr Denham]

This is bizarre. The right hon. Gentleman is the Government’s access tsar, but he is asking, “Why do not we all agree that there should not be any fee waivers?” Because it is a requirement of the national scholarship programme that there should be fee waivers. That is the scheme that he has advocated, designed and developed.

The right hon. Gentleman has been as guilty as anybody of raising false hopes about what the Government’s policies are going to do. It was he who said there was going to be

“a really tough regime that does not allow any college or university to charge more than £6,000 unless it is in exceptional circumstances”.

The truth is that he is one of those who have no understanding of how the system operates. I hope that further progress is made on widening participation, including in the Russell group universities. However, nothing that Ministers have set out, and nothing that the right hon. Gentleman has said, matches the rhetoric that he has been putting all over the newspapers. He has played a role in trying to persuade the media in this country that the Government are serious about social access while doing absolutely nothing to deliver on that. He should be ashamed of the role that he has played. He knows that he should have voted against the measures in the first place but he was bought off with a title and he has done nothing to deliver on the responsibilities he has been given.

The Government have broken their promise on the level of fees. They have made claims about access they cannot deliver and they have based their arguments on savings that may never materialise. They said that they wanted to set universities free but they are planning the biggest attack on university autonomy in history, and the sad truth is that all this was not only predictable, but was predicted. From the outset, the Opposition have said that the Government’s policy was unfair, unnecessary and unsustainable. We called for a delay in the fees vote and said that the House should not vote before the Government were clear about how they would control student numbers and how private providers would be regulated. We wanted them to give details about the cost and fairness of the new loans system and to be clear about having an independent assessment of the effect of their measures on social mobility, but they ignored us and four months later they have still failed to answer those crucial questions. In January, the Minister for Universities and Science told the House:

“We are consulting students, universities and other experts and will publish a White Paper in the early part of this year.”—[Official Report, 13 January 2011; Vol. 521, c. 421.]

It is nearly May and there is no sign of this White Paper.

England’s higher education system is not perfect, but it is widely recognised as one of the best in the world. That is not just because of the quality of its world-class research institutions but because of the diversity and quality across the whole higher education system. No one should be afraid of having an honest debate about how it can be made better, but it is so important to all our futures that it needs competent Ministers who are capable of protecting all that is good about it.

Public concern about the Government’s NHS reforms has at least forced a temporary period of reflection on that policy, but no such luxury exists for students and universities, which are on a tight timetable to introduce the new system for 2012-13. The Secretary of State must act now, so will Ministers tell the House today what action will be taken to deliver the promise that fees of £9,000 will be charged only in exceptional circumstances? Will they legislate and if so how and when? Will they promise that there will be no further cuts to student numbers and no further cuts to spending on the teaching grant, research or public funding for widening participation? What will they do to deliver the wild promises of widened participation and improved access? Will they strengthen the powers of the Office for Fair Access to set fees or to impose quotas? If the measures, which are the biggest interference in university autonomy in history, are rejected, what will they do? If the Minister for Universities and Science cannot answer these questions, the House must conclude that he and the Secretary of State have lost control of the policy for which they are responsible.

16:44

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

I welcome this opportunity for us to set before the House the Government’s approach to higher education and to clear away the farrago of confusion, misplaced speculation and plain old-fashioned errors that we have just heard from the shadow Secretary of State.

I congratulate the right hon. Gentleman on one thing: his sheer audacity in standing in the Chamber and denouncing cuts and financial black holes, when he was in the Cabinet of a previous Government who got our finances into the crisis that the coalition inherited. So yes, we are having to take some tough and difficult measures, but that is because, as always, Labour left behind a mess and then denounced us for clearing it up.

[Sheila Gilmore (Edinburgh East) (Lab)]

Some months ago the Minister indicated in the House, in response to a question from me, that his proposals were not to do with the deficit, but were to do with a new way of providing for the financing of higher education, yet he introduces his speech by referring to the deficit.

[Mr Willetts]

I will turn to that point as I develop my argument. I hope the hon. Lady will accept that the Government whom she supported left behind a fiscal crisis. We were borrowing £120 million a day and were heading for the largest budget deficit in the G20. In fact, the position was so bad that the previous Chancellor had set out proposals for bringing down the deficit by reducing public spending. It is an irony that the Opposition called this debate in the very month when the previous Government’s spending cuts would have started to take effect—£14 billion of cuts planned for this financial year by the previous Chancellor, £16 billion of cuts that we are implementing.

As the shadow Secretary of State knows because he was in the Government at the time, it is clear from the pre-Budget report of December 2009 that there was a commitment to £600 million of cuts from the higher education and science and research budget. It was never explained what those were to be. As we know from the work done by the Institute for Fiscal Studies when it tried to assess Labour’s plans when the previous Government left office, there were to be reductions in public expenditure that the IFS estimated as a 25% reduction in the budget of the Department where the Secretary of State and I serve. So we inherited a mess that we have to sort out.

[Hugh Bayley (York Central) (Lab)]

The question is not whether the deficit needs to be reduced, but whether the decision to impose cuts of 80% on universities is the right way to do it. How will students benefit when they pay three times as much in fees but get less spent on the quality of their education in our universities?

[Mr Willetts]

Let us turn to that. Given that we face a crisis in the public finances, and given that even the previous Government had planned £14 billion of saving, how does one best deliver those in a departmental budget which I do not think any of the three parties represented in the House said could be exempted from reductions? Fortunately, the previous Government set in train an exercise that helped tackle precisely that problem. In November 2009 they commissioned Lord Browne to review the financing of higher education, and they made perfectly clear the wide range of options that they wanted him to look at.

[Mr David Lammy (Tottenham) (Lab)]

rose—

[Mr Willetts]

I will give way in a moment to the right hon. Gentleman, not least because of his role as a Minister in the previous Government, but I hope he will accept that Lord Browne’s report was commissioned precisely so that when public expenditure had to be saved, the finances of higher education would be examined.

[Mr Lammy]

The right hon. Gentleman knows that the higher education review was indicated in the Higher Education Act 2004, some years before the deficit.

[Mr Willetts]

It was made perfectly clear—[Interruption.] Let me quote from the very first sentence of the terms of reference of Lord Browne’s report. It was to

“analyse the challenges and opportunities facing higher education and their implications for student financing and support. It will examine the balance of contributions to higher education funding by taxpayers, students, graduates and employers.”

So, the previous Government left us a deficit, recognised that they needed to make £14 billion of savings and set up an inquiry under Lord Browne to look at how universities should be financed in those circumstances—almost in the same month, incidentally, that we had the plan from the right hon. Member for Edinburgh South West (Mr Darling) for large reductions in public spending.

After considering Lord Browne’s report, which took him a year to produce and in which time he took a large amount of evidence, the coalition has adopted a strategy that, although not in every respect his strategy—[Hon. Members: “Ah!”] I do not know why Opposition Members react with such glee; in many ways, we have improved on the strategy that Lord Browne put forward. The fundamental proposal in the report that the previous Government commissioned is the one that we are now implementing in order to put the finances of higher education on a stable footing.

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

Will the right hon. Gentleman give way?

[Mr Willetts]

Let me just develop this point, because crucially the best way to save money is not to go for reductions in the teaching grant per student, as that simply means a lower-quality experience for students in our universities; instead, the aim is to provide universities, as the teaching grant is reduced, with an alternative source of income from fees and loans which does not involve students paying any money up front.

[Hugh Bayley]

rose—

[Mr Willetts]

I am just going to carry on explaining the basic finances of the measure, because they are so important and the Opposition clearly do not understand them. The point is about lending students money to pay fees. For example, if we lend them £1,000, we can reasonably expect, on the basis of outside forecasts, about £700 of that to be repaid, so we account for the £300 of the loan that is written off—that will not be repaid—but know that we will get approximately £700 back. That is the financing model in Lord Browne’s report, which the Labour party commissioned, and that is what enables this coalition to save money for the Exchequer, to continue with high levels of finances and to ensure that students do not have to pay any money up front. That is an excellent combination of policies at a time when money is tight.

[Tristram Hunt]

I am grateful to the Minister for giving way as he digs himself ever deeper and reveals the fallacy of the sums involved. The whole point of the Browne review was that it would introduce a market in higher education, but, if we strip away the teaching grant and everyone charges £9,000, we do not have a market. That is why the policy is such a car crash.

[Mr Willetts]

I will move on to that stage of the argument in a moment, but let me just explain to the hon. Gentleman why this measure, which is not mine but that of the report commissioned by the Government whom he supported, is very straightforward, simple and absolutely the right way to tackle the challenge of financing higher education at a time of fiscal crisis. It enables us to save money for the Exchequer, because the money that goes into universities is lent to students and is not a grant, and at the same time we ensure that universities are well financed.

The shadow Secretary of State sounded as if he was willing to contemplate large reductions in the amount of resource going to universities, but that would affect the quality of students’ education. On our estimates, the cash going to universities rises from about £9.2 billion in 2010-11 to £10 billion in 2014-15, so we save money, there is more resource going into universities and, crucially, at the same time the money is accompanied by reform.

[Several hon. Members]

rose—

[Mr Willetts]

I give way to my hon. Friend the Member for Beverley and Holderness (Mr Stuart).

[Mr Graham Stuart]

Will my right hon. Friend nail the misinformation, peddled not least by Opposition Front Benchers, about the increase in fees putting people from lower-income backgrounds off going to university? The truth is that the payments per month will be lower under the new system, that those who earn lower amounts will pay less, that the new system is more progressive and that Opposition Front Benchers, who cry crocodile tears for caring about those from the lowest incomes having access to a university, are scaremongering and providing misinformation. Will he please put them right?

[Mr Willetts]

That was an excellent intervention. After this debate, I hope that Members on both sides will agree to commit ourselves to visit, between now and the summer, the secondary schools and colleges in our constituencies and explain to them that not a single young person is going to have to pay up front for their higher education. They will repay only if they are earning more than £21,000 a year and that means that their monthly repayments under our proposals will be lower than under the system we inherited from the previous Government.

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

rose—

[Mr Willetts]

I will accept the hon. Lady’s intervention, especially if she makes that commitment.

[Dr Whiteford]

Last month, the BBC published figures from the accountants Baker Tilly. They suggested that a student who borrowed £39,000 to complete their higher education would end up paying back something in the region of £83,000. What does the right hon. Gentleman make of those figures?

[Mr Willetts]

I am afraid that I do not recognise those specific figures. We are talking about a system whose powerful logic is simple—no student pays up front, a point that my hon. Friend the Member for Beverley and Holderness correctly made.

[Graham Stringer (Blackley and Broughton) (Lab)]

rose—

[Mr Willetts]

I need to make some progress because this is not simply a matter of finances, important though they are. It is essential that the measures be accompanied by reform. Above all, that means a focus on the quality of the teaching experience for students. Many students, and their parents, come away from university not convinced that they had the teaching that they needed during their time in higher education. The third challenge, therefore—as well as saving money for the public finances and ensuring that proper financing gets into our universities—is to focus on improving the quality of the teaching experience. We do not achieve that by—

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

Will the Minister give way?

[Mr Willetts]

I am responding to the point made by the hon. Member for Stoke-on-Trent Central (Tristram Hunt); it is an important stage in the argument. The money must be accompanied by reform that puts teaching up front and enables students, for the first time, to choose the course and university that they believe will best meet their needs. That is why the Secretary of State and I are absolutely committed to ensuring that it is easier for universities to escape from the shackles of the detailed quotas and restrictions set, university by university, in the system that we inherited from the previous Government. One of our highest priorities is to ensure that our reforms also improve the quality of the student experience. That will be at the heart of our White Paper.

[Graham Stringer]

Will the Minister explain how the quality of education will improve? Due to his miscalculations about the number of universities charging £9,000 and the structure of the students who will be going, there will be a huge deficit. That will lead to cuts in universities or in the number of students going to universities.

[Mr Willetts]

Let me deal briefly with that point. A fortnight ago, the Labour party was claiming that there was a £1 billion shortfall; last week, apparently, the shortfall was £450 million. We simply do not recognise those figures. We will see in autumn next year exactly what students are paying and how much they choose to borrow; they do not necessarily even need to borrow the full amount of fees that they face. That will be a decision for them. At that point, we will assess the financial situation that we face, but we see no reason to amend the broad estimate that we put before the House last autumn.

[Angela Smith]

Given what the Minister has just said, will he guarantee that there will be no cuts in quality or numbers in higher education?

[Mr Willetts]

We have a set of proposals that ensures that increasing resources will go to our universities, so, absolutely, I see no reason why quality should suffer. Indeed, I believe that as we liberalise the system in the way that the Secretary of State and I wish to, we will see improvements in the quality of the student experience. I do not see any need for a reduction in student numbers; on the figures that we have in front of us, I do not believe that that will be necessary.

I want to deal with another point made by Labour Members. There is so much confusion and misapprehension on their part that there is a large amount to sweep away.

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

Will the Minister give way?

[Mr Willetts]

I wanted to move on to the improvements that we have made to the Browne plan, but of course I give way to the shadow Minister.

[Mr Thomas]

Will the right hon. Gentleman distance himself from the Secretary of State’s comments at the Higher Education Funding Council for England conference when he threatened universities with either more cuts to the teaching grant or further cuts to student numbers?

[Mr Willetts]

We will obviously have to keep a very close eye on the situation. When one looks behind the headline figure of the £9,000 fee, there are so many waivers and special arrangements that the average fee will be significantly lower than that. Given the evidence that has so far come through, we do not recognise the so-called figures for fiscal black holes that are being perpetrated by Labour Members. I suggest that they calm down and wait until the autumn of 2012 when we see what students are actually paying in fees when they arrive at their universities.

[Mr Thomas]

The right hon. Gentleman was asked a very straight question—does he, or does he not, agree with his Secretary of State, who clearly threatened universities at the HEFCE conference with either further cuts in teaching grant or further cuts in student numbers? Does he agree with him—yes or no?

[Mr Willetts]

I am always in agreement with the Secretary of State. The position that he was describing related to options that would be necessary if the financial position was very different from the one that we estimated last autumn. On the basis of the evidence that we have, we do not believe that that will be the case.

[Margot James]

Does my right hon. Friend agree that university costs should be looked at very closely, just as with every other kind of public sector institution? Lord Browne found that the average fee was £6,000 if one took into account efficiencies that universities could make in relation to what would be the break-even point compared with what they currently enjoy in terms of funding.

[Mr Willetts]

My hon. Friend is absolutely right. We look forward to the report that Ian Diamond is preparing on precisely how we can improve efficiency in our universities.

[Mr Andrew Smith (Oxford East) (Lab)]

Will the Minister give way?

[Mr Willetts]

No, I am going to make some progress because Members in all parts of the House wish to speak and I have a lot more ground to cover.

We have not only taken on Lord Browne’s proposals in the report commissioned by the previous Government as their way of reforming the finances of our education system, but tried to improve on those proposals. The crucial way in which we have done that is by improving the repayment terms for graduates. A very important feature of the new system is that instead of the repayment threshold of £15,000 that was left to us by the previous Government, we propose a threshold of £21,000. The only way in which people pay for higher education is as graduates repaying their loans, so the level of threshold and the amount of the repayment that they make is crucial. Under our scheme, a care worker graduating in 2016 with a £20,000 starting salary would repay nothing. Under Labour’s £15,000 repayment threshold, that care worker would have been repaying £37.50 a month. Under our scheme, an accountant graduating in 2016 with a £25,000 starting salary would repay £30 a month. If the repayment threshold had remained at £15,000, that accountant would have been repaying £75 a month.

The crucial figure that matters for young people thinking about the cost of their higher education is how much they will have to repay. Under our scheme, their monthly repayments will be significantly lower. That is why the Secretary of State and I are confident that these reforms are the right way forward and are genuinely progressive. We are discharging our obligation to future generations in exactly the way the shadow Secretary of State set out at the beginning of his speech. That is the crucial challenge and we believe that our reforms rise to it.

That is not just my view or that of the Secretary of State, but the view of bodies that have scrutinised our financing proposals. The Institute for Fiscal Studies said that

“the Government’s proposals are more progressive than the current system or that proposed by Lord Browne.”

The OECD endorsed the coalition’s policy:

“The increase in the tuition fee ceiling is reasonable and should pave the way for higher participation in tertiary education”.

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

Can the Minister quote any vice-chancellor of any reputable higher education institution in this country who has said that the Government’s record in their first year of office has been good for higher education in this country?

[Mr Willetts]

I have been at many events with university vice-chancellors at which they have all accepted that, given the circumstances that we inherited and faced with the policy options of reducing teaching grant, reducing student numbers or implementing Lord Browne’s proposed changes in student finance, we took the right decision. I am confident that we have improved on Lord Browne’s proposals by making the repayment threshold more progressive.

Let me quote someone who is not a vice-chancellor, but who is perhaps still treated with a degree of respect by some Opposition Members, namely Lord Mandelson. The new postscript to his excellent memoirs, which I commend to Opposition Members, states:

“When the university fee debate came up before the Lords, for example, there was a large part of me that felt I should weigh in.”

I am sure that there was. It goes on:

“It was I, after all, who had set up the Browne Review”—

the Labour party seems to have forgotten that—

“into what future changes were necessary to ensure proper funding for universities in the best and fairest way, for both them and their students. When I did so in November 2009 I assumed, as the Treasury did, that the outcome would have to include a significant increase in tuition fees. I felt that they would certainly have to double in order to offset the deficit-reduction measures that we too would have implemented had we won the election. The alternative would be a disastrous contraction of higher education.”

Those are the words of the previous Secretary of State, and I take them as an accurate account of what was in the minds of Labour Ministers when they set up the Browne review.

[Andrew Bridgen]

I remind the Minister of the words of Professor Steve Smith, the president of Universities UK, who said that the coalition Government’s higher education policies

“will bring in the resource needed to allow students to go to university regardless of their financial circumstances, provide financial sustainability for universities, and ensure that we can maintain the UK’s international competitiveness in terms of undergraduate education.”

[Mr Willetts]

Absolutely. That is the view of Universities UK, and, as I have explained to the House, it holds that view because in the difficult circumstances that we inherited from the previous Government, we have taken the correct strategic decisions.

I have set out our approach to higher education. What was striking in the speech of the shadow Secretary of State was the complete absence of how he believes higher education should be financed in tough times. What was particularly noticeable was the absence of any reference to what we understand to be the preferred policy of his party leader, namely a graduate tax. We are still waiting to see the move to the graduate tax, which we understand is now the view of the shadow Secretary of State. Of course, the last Labour Government produced a helpful document on the subject entitled, “Why not a Pure Graduate Tax?”, which sets out clearly some of the issues surrounding a graduate tax. We are still waiting to hear whether the shadow Secretary of State advocates it.

Of course, our proposals involve a capped graduate tax, which has a threshold of £21,000 and a rate of 9%, is linked to the university that one went to, and is extinguished when one has discharged the cost of one’s higher education. That is the right way of delivering a graduate tax to pay for higher education. I would be very interested to hear from the shadow Secretary of State whether he believes that that system should be improved in some way. Does he prefer a model of graduate tax with, perhaps, a lower threshold and a lower rate?

[Lilian Greenwood (Nottingham South) (Lab)]

Will the right hon. Gentleman give way?

[Mr Willetts]

No, I am going to make some progress on this important point.

Would the shadow Secretary of State prefer a model with a 3% tax for graduates? That is one possibility, but of course it would bring low earners into the burden of graduate tax, whereas they will be exempt from it under our proposals. It would have another significant defect, because whereas we can collect student fees from people across Europe, there is no way in which a graduate tax could be collected from a graduate who has been educated in Britain and then goes to live abroad.

Once again, the memoirs of Peter Mandelson are very clear on this point, and we now know where the Labour party’s policy comes from. He writes:

“To be fair to Ed”—

he is referring to the current Labour leader”—

“from his days in the Treasury when we were first introducing the top-up-fees scheme in government, he shared Gordon’s preference for an alternative graduate tax”.

So it was Gordon who wanted a graduate tax—that is where this bold, new Labour idea comes from. The memoirs continue that the current Labour leader held that view

“even when our research concluded that it was simply unworkable.”

That is what Peter Mandelson says. Labour’s research showed the defects of a graduate tax, and we are still waiting to hear from the shadow Secretary of State what his policy is on such a tax.

The position is clear: the Government have a plan for financing higher education in tough times. We are financing it in a way that continues healthy support for our universities and enables us to save funding for the Exchequer at the same time. We are doing that without any cuts to student numbers or to the teaching resources going to universities, without any burden on students when they are at university and while improving the regime for graduate repayments after they have left university. That is why our plan is realistic, sober, reformist and progressive. We believe it is the right way forward, and in the absence of any constructive proposals from the Labour party, we remain convinced that ours is the correct strategy.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This is a popular debate, and an eight-minute limit has been put on Back-Bench speeches, with the usual two-minute injury time allowance for interventions.

17:12

[Lilian Greenwood (Nottingham South) (Lab)]

I am grateful for the opportunity to speak in today’s debate, as I am very worried about the Government’s plans for higher education and their impact on many of my constituents and the city I represent.

I was deeply concerned when the Government announced their intention to raise the cap on fees, and like every Opposition Member I voted against that rise. I did so not just because of my pledge during the general election campaign but because I felt that the Government were rushing through their plans without proper thought and consultation. Like many Members, I felt that fees of £6,000, £7,000 or £8,000 would deter many bright and able students from low and middle-income families from applying to university, or from applying to the university or course that would best suit them. As university after university has announced its intention to charge fees of £9,000, my concern has only deepened. Far from being the exception that the Prime Minister promised, £9,000 fees are becoming the norm. Why? It is because universities have to fill the huge hole left by the cut in the teaching grant.

[Mr Graham Stuart]

Will the hon. Lady confirm for the benefit of her constituents that the monthly payment that each of them will have to make will be lower under the new system than it was under the previous system? The monthly payment will be lower at all times. The bad news is that people will have to pay for longer, but the payments will be more affordable and people will have to pay only when they are earning £21,000. Her constituents need to hear that so that they are not put off. I hope that she agrees.

[Lilian Greenwood]

The concern that many of my constituents express is that they will have to pay back at least three times more than they would if they were a student now or had been recently.

[Stella Creasy (Walthamstow) (Lab/Co-op)]

One difficulty is that we do not know the real rate of interest that will be charged. When we debated the Education Bill, Opposition Members proposed measures that would enable us to find out what those interest rates would be, but Government Members, including the hon. Member for Beverley and Holderness (Mr Stuart), voted against such a process, so we simply cannot tell how much the bills will be for our constituents.

[Lilian Greenwood]

My hon. Friend is absolutely right. The fact is that many of my constituents who are considering going to university are terrified at the prospect of paying back debts of £30,000 or £40,000. That is about not just how much they have to pay, but how long they have to pay for. I am sorry that the Minister would not take my intervention, but under a graduate tax system, surely those who earn more would pay more.

[Nick de Bois]

Will the hon. Lady give way?

[Lilian Greenwood]

No, not at the moment. Under the Minister’s scheme, those who earn the most will pay less, because they can pay their loans off quickly, before they have substantial amounts of interest to pay on top.

Sir Martin Harris, the director of the organisation charged with improving access to higher education, says that there is a “real risk” that teenagers from low-income homes will feel unable to attend university, which makes me even more convinced that this Government’s policies are not properly thought through.

[Mr Graham Stuart]

Will the hon. Lady give way?

[Lilian Greenwood]

No—I am not taking another intervention.

Unfortunately, my concerns were further confirmed when I recently met staff from Nottingham and Nottinghamshire Connexions services. Careers advisers were not only demoralised by cuts to their service when young people most need advice and guidance to help them to make difficult choices, but deeply concerned about the impact of Government policies on the teenagers whom they are committed to assist. They told me that fee increases are having a clear impact on many young people, and that many young people in Nottinghamshire feel that they can no longer afford to study for a degree.

The problem is heightened by the increase in youth unemployment. Young people are worried not only that they will rack up debts of £30,000 or £40,000, but that they may not even be able to secure a job at the end of it. It was particularly sad to hear a member of staff of the Aimhigher campaign, which supports young people from disadvantaged backgrounds who have the potential to go on to higher education, tell me that it has become increasingly difficult to convince such young people that university is for them.

Young people and their parents frequently bring this issue up on the doorstep. On Monday afternoon, a constituent asked me how he could afford to send his children to university.

[Andrew Bridgen]

Will the hon. Lady give way?

[Lilian Greenwood]

No. I have already taken several interventions.

My constituent was in work and owned his own home, and his children would not qualify for bursaries. He understood the importance of learning as a worthwhile investment in their future, but like many middle-income parents he felt that higher education was becoming out of reach for his children. The Government talk a great deal about widening access and ensuring that more young people from lower-income families go to our top universities, and about improving the chances of those in state schools, which are admirable aspirations, but they have done nothing to ensure that those things happen.

I fear not only the impact that the fees increase will have on our young people from low and middle-income families, but the impact that those policies will have on Nottingham. As many in the House will know, Nottingham is home to two excellent universities that attract students from all over the country, and indeed the world. The university of Nottingham and Nottingham Trent university make a huge contribution to our city and are vital to our local economy. Our city’s most successful businesses tell me that one of the main reasons for locating in Nottingham is the availability of highly educated young people. Although residents may on occasion wish that there were fewer students in the local neighbourhood, they also know that our universities are vital to the city’s economy and future financial success.

Last week, I spoke to a senior member of staff of Nottingham Trent university. She expressed concern that the increase in fees represents a threat to our ability to attract the brightest and best students to Nottingham, and reported that many young people and their families are considering studying close to home because they feel that they cannot afford the costs of living away on top of fees.

[Anna Soubry (Broxtowe) (Con)]

Has the hon. Lady met the vice-chancellor of Nottingham university? If she has, will she confirm that he supports the Government’s policy?

[Lilian Greenwood]

I have met him, and he is in favour of an increase in fees, but unfortunately the people of Nottingham, and prospective students, do not agree with him, and I am rather more concerned about representing them.

I was speaking about a senior member of staff at Nottingham Trent university who said that many young people and their families are considering studying closer to home. They are limiting their choice of university for financial rather than educational reasons, which has implications not only for individual students who feel unable to choose the university that is right for them but for the universities, particularly those in areas of high supply. The east midlands is a net importer of students, and therefore might expect to suffer disproportionately if more students choose to study close to home. What analysis have the Government made of this problem, what discussions have they had with local enterprise partnerships on its impact, and how do Ministers expect any reduction in the number of students coming to the east midlands to affect local and regional economic growth?

It is increasingly clear that in their rush to secure a deeply unpopular rise in fees as soon as possible after the election and before the next one, Ministers failed to come up with a coherent plan for higher education. Six months after the fee rise, we still have no higher education White Paper. The Department’s spending plans, based on average fees of £7,500, are in disarray, and measures sold to the electorate as necessary to save money are likely to cost the same or more. On top of 80% cuts in teaching grants, universities now face the threat of further cuts in grants or student numbers. The impact on local economic growth is uncertain, and young people and their families are paying the price of this Government’s incompetence. It is no wonder they feel so let down by the Business Secretary and his colleagues. I have no doubt that we will see quite how let down they feel when next week’s election results deliver the verdict on 12 months of the miserable compromise that is the coalition Government.

17:22

[Mr Rob Wilson (Reading East) (Con)]

It is a great pleasure to follow the hon. Member for Nottingham South (Lilian Greenwood), who spoke passionately in defence of students in her constituency. I do not intend to speak for long—I hope to keep to five or six minutes.

I make no apology for continuing to support and vote for the policies of the Government, because I am in no doubt that the medium and long-term strengths of our higher education sector will be substantially improved by the measures we have taken so far—and, I hope, will continue to take. It is true, however, that over time we will need to make further changes in some areas. Nevertheless, the Opposition and the shadow Secretary of State have got this one wrong. As Lord Mandelson has shown, even many members of the Labour party believe that mistakes are being made. In particular, the analysis of the role of the Office for Fair Access is wrong. But I will come to that later.

My first observation concerns student numbers. One of the fundamental strengths of the new system is that it empowers students by making money follow their choices, so that universities are incentivised to raise the quality of their courses and of the student experience in order to attract students and generate income. Professor David Eastwood, vice-chancellor of the university of Birmingham and a member of the Browne review, recently emphasised that the

“key policy imperative is to say that numbers will follow informed student choice”.

He has argued that expanding higher education places to meet demand would force down fees at less popular universities and cost the taxpayer less. I believe that he is probably right.

[Mr Denham]

The hon. Gentleman makes an important point, but does he accept that the Government have not told us how they intend to allocate student numbers—or indeed whether we will have a model in which the money follows the student or whether numbers will be centrally allocated, as they are at the moment? The Opposition called for that information before December, so does he share my regret that Ministers have completely failed to answer that question? Indeed, the lack of an answer means that we do not know whether the hon. Gentleman’s point is valid or not.

[Mr Wilson]

I thank the right hon. Gentleman for making that point, because there are certainly questions still to be answered, which is something I will come to.

I am concerned that the restrictions on student numbers will mean that we fail to realise the full benefits of competition in the higher education sector, which would have encouraged universities to achieve greater efficiency and offer more value for money. As a recent report by Tim Leunig for the think-tank CentreForum put it,

“because government restricts the number of students that each university can take, this is not real competition”—

and indeed, it is not. I am sure that my right hon. Friend the Minister will agree that the Government must devise a system in which universities and courses that are popular and economically important can expand, if necessary at the expense of unpopular courses and institutions. Does he therefore share my concern that capping student numbers will threaten one of the key benefits offered by the Government’s reforms? What further action does he propose to take to ensure that courses that students want to take, at a price that they want to pay, can expand at the expense of courses that they do not want to take, at prices that they do not want to pay? In these difficult times the Treasury is keen not to spend more on subsidies for students than it absolutely has to, which provides the Secretary of State and the Minister with a big challenge if they want real competition in the higher education sector. If the Minister cannot convince the Treasury that removing the cap on student numbers will reduce overall HE costs, there will be no genuine market in HE.

However, I hope that the Government are thinking creatively about seeking micro-solutions to the problem. In particular, I would recommend that they look at three areas that are perhaps worthy of further consideration. The first is how we encourage private sector institutions to enter the HE sector and offer degree courses. There is no reason why they should not be allowed to enter the sector and overcome any real or perceived barriers to entry, which can easily be removed. Secondly, the further education sector needs to be encouraged to offer more degree and higher education courses. The changes that we have made in the HE sector offer huge opportunities for FE colleges to offer high quality, affordable, specialist courses. Once again, we can look across the Atlantic at what is happening in the US community college system as an example of the model that we need to strive to follow in this country.

[Mr Graham Stuart]

My hon. Friend is making a powerful speech, the content of which I agree with. Does he agree that many FE colleges are now delivering the quality that should enable them to confer degrees, rather than being dependent on universities, which in times of financial uncertainty tend to reduce what they allow FE colleges to do? We need to give them freedom if they are to compete properly in the market.

[Mr Wilson]

Indeed I do agree with that. There are some fabulous FE colleges that could easily deliver high quality higher education degrees.

Thirdly, if we are to have a Treasury-imposed affordability limit on student numbers, we need to think more creatively about how we tease the best out of a more limited market system. As I have said, we need to encourage the best high-quality, sought-after courses that students actually want to take. We have to design a system that allows good universities with good courses to expand, and poorly performing universities with poor quality courses to decline, or at least take action to improve their offering.

[Mr Willetts]

My hon. Friend is focusing on the crucial issues of how we get more competition and choice into the system. I assure him that these are absolutely the issues that we will focus on in the White Paper.

[Mr Wilson]

I am grateful to my right hon. Friend for that reassurance.

Let me turn quickly to my other point about the Office for Fair Access. As Professor Eastwood rightly argued, more higher education places should mean more social mobility. Although I welcome any constructive suggestion to increase social mobility and opportunities in this country, I am concerned that a heavy-handed attempt to do so would risk another cornerstone of our university system, which is academic freedom.

In a commendable feature of the Higher Education Act 2004, OFFA was given a legal duty

“to protect academic freedom including, in particular, the freedom of institutions…to determine the criteria for the admission of students and apply those criteria in particular cases.”

The first guidance letter issued by the Labour Secretary of State in October 2004 confirmed that the Government’s priority was financial support for the poorest students, and noted that

“institutions that generally attract a narrower range of students may want to put more money into outreach activity to raise aspirations”.

The guidance also made it clear that institutions’ admissions policies and procedures were outside OFFA’s remit.

This Government’s new guidance to the director of fair access is much more aggressive, and I believe that it has clear and serious implications for universities’ admissions policies. It instructs OFFA that it

“will want to ensure that each institution is making sustained and meaningful progress towards a more balanced and representative student body, reflected year on year in its own benchmarks, measures and targets.”

Under the February 2011 guidance letter, if an institution is deemed to have seriously or wilfully breached its access agreement, OFFA can decide not to approve or renew the agreement. That would remove the institution’s right to charge its students above a basic fee level. I understand that a fine of up to £500,000 is also available.

The message to universities, via OFFA, appears to be that unless they make progress each year towards achieving a “more balanced and representative” student body, they can expect OFFA to set much more onerous obligations and require them to devote more of their resources to outreach and financial support. In addition, they could be fined. So, while the Opposition call for new powers for OFFA, will the Minister confirm that the Government remain committed to protecting the academic freedom of universities, and that they have no plans to interfere with university admissions policies through access agreements?

[Mr Willetts]

I can give that assurance. We have no plans to change the legal framework guaranteeing the freedom of universities to run their own admissions procedures.

[Mr Wilson]

I thank my right hon. Friend for that assurance, but the legal framework is slightly different from the access agreement. I do not have time to go into that now, however.

I agree with the Russell group when it argues that too few poorer pupils are getting the right grades and that the achievement gap according to socio-economic background is getting even wider. It also argues that the most effective way to get low income students into the best universities is to help them to improve their academic performance at an early stage. It is in the schools that we should be looking to change things, not in the universities. As I have said, I am passionately committed to raising aspirations and spreading opportunities more widely in our society, but it would be far better to tackle the real cause of unfair access to higher education—too few poorer children achieving the right grades at school—than to bring the Government into conflict with the legal duty to protect university independence and academic freedom.

17:33

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

I welcome the fact that the Minister admitted that these proposals have been driven by the need to cut the public sector deficit, rather than by any wider educational considerations. Borrowing to give grants to universities counts as public borrowing, whereas borrowing to make loans to students does not, because that is offset, at least in part, by an income stream. This is an accountancy smoke and mirrors exercise, on which the Minister has based one of the most seismic changes in educational funding imaginable. At the end of the day, if the figures are wrong, it will still be the taxpayer who foots the bill. If the loan obligation is higher than expected, that will present problems. If the income, in return, is lower than expected, that will present additional problems. On the basis of the evidence that we have seen so far, that is the situation that is emerging.

[Mr Andrew Smith]

Was my hon. Friend struck, as I was, by the failure of the Minister, who declined to take my interventions on the point, to address the issue put to him by our right hon. Friend the Member for Southampton, Itchen (Mr Denham)—that at the Public Accounts Committee, his own permanent secretary had said that at the current level of fees, universities faced a cash funding gap, which could be plugged only by cutting the teaching grant further or by cutting numbers? Is not that the mess they have left us in?

[Mr Bailey]

Yes, my right hon. Friend anticipates one of my later points. Both the Higher Education Policy Institute and, by implication, the Office for Budget Responsibility have recognised that issue.

Let me make it quite clear that from my personal perspective I have always believed that graduates should make a contribution to their education. There is a legitimate debate—it should have been had before these proposals were introduced—about the appropriate balance of benefit between an individual and the country’s economy and about what the appropriate obligation for payment should be between the individual and the state. That has to take place, obviously, within the constraints of affordability.

[Andrew Bridgen]

The hon. Gentleman comments on the allocation of payments and the contribution that graduates should make to their education, but was that not the entire function and purpose of the Browne report, which has been taken into account?

[Mr Bailey]

Yes, it certainly was and I was just coming to that. We should have had a White Paper, followed by a full debate, which would have enabled the Government to put forward their proposals and the Opposition and others to probe them. A range of educational institutions —there are an enormous number of them—would have been able to contribute their expertise. What we have had, however, is this seismic shift in Government funding, carried out without adequate research and debate.

I spent 10 years on the Government Benches listening to lectures from Conservative Members about the dangers of hasty legislation and the unintended consequences that almost inevitably arise from it. If ever there was a case in point, I honestly think this is it. Hasty legislation, or hasty regulation in this case, is usually bad legislation, or regulation.

The lack of research and work done highlights a number of issues. The first is the setting of the fee levels. The Minister’s hopelessly optimistic estimates, on which the financial model was predicated, have been demonstrated as completely incorrect. The repayment implications are considerable. A whole range of expert research has been done to demonstrate that the income stream on which the Government predicated their financial model will not be met. There will therefore be a long-term financial liability, possibly an expanding one, that the Government will have to meet.

Another issue that could and should have been explored far more comprehensively if we had had a White Paper is of course the role of the Office for Fair Access. When Ministers were pressed on the setting of the level of tuition fees, they seemed to ascribe to OFFA powers that were completely beyond it, as my right hon. Friend the Member for Southampton, Itchen (Mr Denham) said in his opening remarks. The fact remains that OFFA is an organisation of four people, to whom responsibility was attributed by the Deputy Prime Minister for setting the tuition fee levels of all universities. That is totally beyond their resources, and they could not do it anyway, because they do not have the legislative basis to do so. This could and would have been teased out in a full and open debate of a White Paper, but by virtue of the Government’s actions it has been precluded.

The outcome is that the figures in the financial model do not appear to stack up. I mentioned the potential long-term financial implications earlier. As the Minister has acknowledged, the options are to cut funding for universities further and to reduce student numbers. I believe that if tuition fees averaged £8,000 per annum, it would be necessary to reduce the number of students going to university by 17,000 in order to stay within the model. There is actually a third option: the Government could change graduates’ repayment conditions. I think that that would open another can of worms, and would provide the basis for further research to assess the possible outcome.

[Mr Graham Stuart]

Will the hon. Gentleman give way?

[Mr Bailey]

No, I will not give way again.

A reduction in student numbers is inevitable, either because the Government decide to ration them or because of the deterrent effect of the higher fees on student recruitment. I should like the Government to make it clear whether, if the figures indeed do not stack up and the average fees exceed £7,500, they will limit student numbers. I do not know the answer and I am not sure that the Government do, but I should welcome their opinion none the less.

I should also welcome some sort of statement on when we will see the White Paper so that we can debate the issues further. It was originally to be published in January, we were then assured that it would be published in June, and I understand that in subsequent speeches to the civil service the Minister has referred to the summer. It is a bit like Billy Bunter’s postal order. I pressed the Secretary of State on the matter in the Select Committee this morning, and even then he would not give a commitment that the White Paper would be published in June. What I should like him to do today is tell us when it will be published, and whether it will deal with questions raised not just by me but by a range of Members about the funding implications of the current proposals.

Other countries recognise the value of higher education and the number of graduates who make an economic contribution. Other countries, even those that have suffered from the same sort of financial problems that we have experienced during the recession and are subject to the same sort of financial constraints, are investing more in higher education. The long-term implication of not getting this right and reducing the number of graduates is very serious indeed. On the basis of the picture that is emerging at the moment, I think that we are in danger of having fewer graduates, of damaging our economic growth, and of adopting a financial model that will make our public sector deficit far worse in the long term.

17:43

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

I am grateful for the opportunity to speak in what is a timely debate, four and a half months or so after the House took a decision on the future financing structure for universities. As the House knows, it was not a decision with which I, or the majority of my parliamentary party colleagues, agreed. It was proposed by the Government after negotiation between the two coalition parties, and after they had read the Browne report commissioned by the last Labour Government. But the House made that decision, and I believe that the issues to be addressed now are, as the hon. Member for Nottingham South (Lilian Greenwood) said, the issues that are in the minds of the students whom she represents—indeed, those whom we all represent—in the minds of their families, and in the minds of future students.

I want to make four brief comments. I want to talk about the future as opposed to the past, about the cost to future students, about whether the fees being announced by universities are justified, and about what we and they should do in the months between now and the time when the system begins to operate. First, I ask Labour Members and other colleagues on the Opposition Benches to change their rhetoric from today onwards, after they have had this debate, because it is not the amount of the fee that is going to determine the cost to the student. The key question for young people and their families is: what will it cost me if I go to university? The new proposal has many improvements over the last and the present systems. First, as everybody has agreed, the monthly repayment will be less for everybody. Secondly, the starting point for repayment is higher: it is £21,000, not £15,000. Thirdly, for everybody who pays it will be a progressive system under which people pay more for the privilege of a university education according to their ability to pay more. It is therefore fundamentally different from a system—

[Several hon. Members]

rose—

[Simon Hughes]

Labour Members should calm down for a second. It is fundamentally different from a system under which we pay the same irrespective of our earnings.

[Several hon. Members]

rose—

[Simon Hughes]

I will of course give way in a moment, although I am trying to be brief as many colleagues still want to speak.

Under the new system, the cost for those who earn £22,000 a year—which is just above the threshold—will be £90 per year or £7.50 a month; that will be the cost of their university education.

[Mr Lammy]

rose—

[Simon Hughes]

If the right hon. Gentleman will forgive me, I shall give way in a moment.

Those who earn £25,000, which is just above the average wage, will have to pay back £360 a year, or £30 a month. Those who earn £41,000 a year—which is much more than the average wage, let alone the average graduate wage—will have to pay £150 a month. These sums will be deducted from their salaries, in the same way tax is deducted. Those who earn £71,000, which is more than a Back-Bench MP earns, will pay £375 a month.

The first and most important step is to get the message across that there are no up-front fees—no fees when students are at university, and no fees for part-time students at university. They will pay only when they have the money to pay. In that respect, it is therefore not a debt in the normal sense; rather, it is a repayable sum contingent on income. I shall now give way to the former higher education Minister.

[Mr Lammy]

First, let me say to the right hon. Gentleman that £375 a month is a lot of money to our constituents. Secondly, he knows that not a single Member of this House would accept the new terms if their mortgage company were to ring them up and say, “I’ll treble your mortgage, but you’ll pay a lower monthly sum.” That is why students think it is patronising to suggest that this is a good deal.

[Simon Hughes]

The right hon. Gentleman and I have many concerns for the same sorts of people in our communities, and I respect what he has done in that regard, but most of our constituents do not earn £71,000 a year. They will not be earning that amount, and he and I do not earn that much as Back-Bench MPs.

[Mr Lammy]

They want to earn that much.

[Simon Hughes]

Yes, they may want to, and people in this country understand that if they earn more they will pay more to the state and pay more back into the system. That is fair Britain; it is not fair Britain if they pay the same amount for a service they have received irrespective of their earnings. Of course there are issues about perception—and they are big issues, which is why I did not vote for the policy—but I hope the right hon. Gentleman agrees that we now need to concentrate on the cost to the individual who will graduate in 2015 and later. If we start getting that message across, we will be helping young people to go to university, not hindering them, and our prime obligation now is to encourage, not reduce, access.

[Mr Chuka Umunna (Streatham) (Lab)]

The right hon. Gentleman’s constituency and mine share a local university: London South Bank university. May I ask him two questions? First, does he accept that the concerns expressed on this side of the House about the new regime and its deterrent effect on students are not, as it were, crocodile tears, but, rather, reflect real concerns that are felt not least in both of our constituencies? The worries about what this proposal will mean for students and their families have been raised by my constituents, and I am sure they have been raised by the right hon. Gentleman’s too.

Secondly, does the right hon. Gentleman accept or buy into the principle that higher education should be a partnership between government and the individual? If so, how does he explain the 92% cut in the teaching grant, the 60% cut in the capital grant and the 50% in the innovation grant for London South Bank university from the Government?

[Simon Hughes]

That was a lot of questions and I shall try to answer them briefly. Of course I share a concern about perception, which is why I took on this job. By the time I have carried it out and given my final report to the Prime Minister and Deputy Prime Minister at the end of June, I hope—I have been working with Ministers to make sure this happens—that we will have the right messages coming out about the real cost in the future in a way that encourages people to go to university rather than discourages them.

On the hon. Gentleman’s second issue, the Government have to take responsibility for the tough spending decisions, as they have done. There were other choices they could have made, but if the choice was reducing the money going from the state to universities or reducing the money going to fund apprenticeships for people who do not go to university, I, on behalf of my constituents and his, believe that it may well be better to fund those who go to further education college and have apprenticeships, rather than spend the money on people who will be earning £71,000 a year.

[Mr Thomas]

rose—

[Simon Hughes]

If the shadow Minister will excuse me, I will not give way for a moment.

My second point is what now is the issue for universities that have submitted to OFFA their case for wanting to go above £6,000 with any fee. There is an issue as to whether the Government were justified in saying that £9,000 would be the fee only in exceptional circumstances, as that appears, on the basis of the incomplete evidence, not to have been an accurate prediction. Some questions need to be asked, not least about the advice that Ministers were given about what the prediction should be, but there is also clearly something wrong with the universities’ response. It is not just us saying that, because the principal of Queen Mary college, a part of the university of London in the east end, said:

“I think we could say, based on the brief press releases, the possible implication or inference could be that £9,000 fees have not been based on any calculation of cost but on perception of status.”

Universities should not be charging above what it costs them to deliver a course, but many appear to have forgotten that. They appear to be taking an opportunity which they should not be taking. The money is also there for one more thing, which is to make sure that access is improved as a part of widening participation, and universities will be watched to make sure that they are really delivering.

[Mr Thomas]

On that point—

[Simon Hughes]

I cannot give way at the moment, but let us see whether I can do so a little later.

I hope that next year when future OFFA guidance is given by the Secretary of State that fee waivers will not be allowed and indeed will be excluded. I do not think it is logical to state, “You don’t have to pay fees up front or when you are there” and then to say, “But actually we are going to give you a mechanism for you not paying the fees at all.” If we are really going to support students from poor families, the money should go towards the accommodation and living costs, which is where the real bill will apply and where the credit card debts will accrue. I hope that we will not be trying to pretend that reducing fees is the most useful thing for students who may not have to pay them or much of them at all.

Thirdly, I hope that Sir Martin Harris and OFFA will be extremely rigorous. The hon. Member for Reading East (Mr Wilson) made the point that powers are now in place and OFFA is able to make sure that each institution has to make sustained and meaningful progress, year on year, on its own benchmarks, measures and targets. OFFA is entitled to say to universities that they cannot have fees above £6,000 and I hope that it will be robust. If widening participation processes are not in place, I hope that OFFA will say so, and some universities may have to be told that they cannot go above the limit. I wish to make two final points and if I still have some time remaining, I will give way.

The Russell group, in particular, must do much better. It did not improve on widening participation under Labour and it must change its interview and recruitment process. At the moment, those universities are being far too subjective, particularly Oxbridge. Harvard does not have the people who are going to do the teaching doing the recruiting; it has selection on a needs-blind basis and it is one of the best universities in the world—other places are the same. The Russell group has no excuse now for not changing its process of recruitment, and if it does not do better I sincerely hope that the Government will make conditions that will require it to do so in future.

Finally, we need much better requirements on universities to give satisfaction to students. That should be written into the system in future and should be part of the preconditions for higher fees to be charged.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. In order to get greater participation, the time limit is now being reduced to six minutes.

17:55

[Paul Blomfield (Sheffield Central) (Lab)]

It is illuminating to follow the right hon. Member for Bermondsey and Old Southwark (Simon Hughes). His transformation from critic to passionate advocate is part of the extraordinary nature of the road that the Government have been travelling along with this policy. It is almost surreal.

As a new Member almost a year ago, I expected that the Government would put forward policies with which I disagreed, but I had expected that they would at least be carefully considered, carefully evaluated, thoughtful and mindful of their impact. That was not so. The Minister for Universities and Science said earlier that the Government have a plan, but it seems that that plan is increasingly shaped not by Ministers but by events that they do not control and, at many levels, do not understand. Broken promises, conflicting statements and policy shifts: only when the dust settles will we find out the plan, with the publication of the repeatedly delayed White Paper.

Assurances were given to the House when we debated the Government’s plans back on 9 December, but those assurances have proved worthless. Indeed, had the House known then what we know now, who is to say, given the discomfort of some of those on the Government Benches at that time, what the outcome would have been? I recall the right hon. Member for Bermondsey and Old Southwark, in particular, seeking reassurance that £9,000 fees would be exceptional. Let me remind him what the Business Secretary said. He gave the right hon. Gentleman a clear pledge—huh, a Liberal Democrat pledge—that he would not allow the

“migration of all universities to the top of the range.”—[Official Report, 9 December 2010; Vol. 520, c. 547.]

Consistently, the Prime Minister and other Ministers gave assurances that £9,000 fees would be exceptional. So where are we? We have seen precisely the migration that the Secretary of State said that he would not allow. Far from being the exception, £9,000 fees are the norm.

We were told at one stage that fees would average £7,000, then that they were calculated at £7,500, then that they might average £8,000. Now we find that the average fee is likely to be just £360 short of £9,000, at the very top end of the range. It did not have to be like this, however. The situation became inevitable because the Government decided to cut the undergraduate teaching grant by 80% without considering the impact or listening to those who knew what it was likely to be. From the outset, vice-chancellors were clear, including many of those who had been browbeaten into supporting the Government’s proposals, that fees of about £8,000 would be needed for their institutions simply to stand still.

[Mr Lammy]

Does my hon. Friend agree that the 80% cut and effective withdrawal of the state from higher education and the funding of arts, humanities and social sciences—there is no other country in the developed world that has made that kind of departure in higher education—will have catastrophic effects in the future?

[Paul Blomfield]

I completely agree. Back in December, the Minister for Universities and Science made the point that this was not about deficit reduction, as my hon. Friend the Member for Edinburgh East (Sheila Gilmore) reminded us earlier, but about changing the shape of our system. We stand only with Romania among OECD countries in cutting higher education, and we should be ashamed of that.

As universities have looked more closely at the figures, university councils and governing bodies have exercised the responsibility that they have a duty to exercise by setting the fees that their institutions need. It appears that many in government expected universities to fall into line with their picture of them, with Oxbridge setting fees at £9,000 and other universities ranking themselves where they fitted into the system. But those in government did not understand that university governing bodies would recognise their responsibilities to their students and the communities they serve and would set the fees that they need.

What about widening participation? I stress that this is not simply about Oxbridge. We should credit universities across the sector with the achievements on widening participation that my right hon. Friend the shadow Secretary of State has mentioned. Back in February the Deputy Prime Minister pledged in a BBC interview that Oxford and Cambridge would be given permission to charge £9,000 fees only

“if they can prove that they can dramatically increase the number of people from poorer and disadvantaged backgrounds”

who attend. In the past few days, it has become clear that Cambridge is not in a position, or is not intending, significantly to increase access for poorer students. What are the Government going to do about that? Will they tell Cambridge that it cannot have its £9,000 fees or will they tell the Deputy Prime Minister that he is going to have to confess to another broken promise?

What about the involvement of the private sector? The Minister for Universities and Science confirmed to The Times on Monday that, out of the crisis he is creating for the higher education sector, he expects there to be a bigger role for private sector providers. He has already prepared the ground by awarding university college status to BPP, which is part of the Apollo Group, which is currently being investigated by the United States Higher Learning Commission for deceiving prospective students. Where is the accountability for private sector higher education institutions? They do not face the same requirements on quality, access and numbers, and on the Government’s intentions in relation to the private sector we have had nothing but silence.

In December, the Business Secretary was quoted as saying of the Government:

“There is a kind of Maoist revolution happening in lots of areas like the health service, local government, reform, all this kind of stuff, which is in danger of getting out of control.”

What he failed to say was that the greatest chaos was unfolding in the area for which he is responsible.

18:03

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

The future funding of higher education was one of the immediate issues, like that of the budget deficit, that had to be addressed after the months and years of drift at what I can only describe as the fag end of the previous Labour Administration. If we had not addressed it we would have risked reaching a point of decline in further education from which we would have been unable to climb back. Hon. Members should have no doubt that doing nothing was certainly not an option. The previous Government recognised that, which is why they commissioned the Browne review in November 2009. The review’s remit was to investigate the balance of contributions to universities by taxpayers, students, graduates and employers and to consider how much students should be charged for attending university.

If our universities are to compete in the global economy, they need to be well funded. With a huge budget deficit, one cannot argue that when other Departments are facing cuts, the further education budget could be in any way immune. However, the increase in tuition fees proposed by the coalition Government does not, as the shadow Secretary of State has claimed, signal a wholesale withdrawal of state support for higher education. Under the current system, higher education is funded 40% by the student and 60% by the state, and under the new regime it will be funded 60% by the student and 40% by the state. That is far from the wholesale withdrawal of state funding. The fact that fees are to be capped means that there will be no up-front payments for students. No one will pay anything back until they are earning at least £21,000.

[Tristram Hunt]

Will the hon. Gentleman confirm that that £21,000 figure is at 2016 money, so in current terms the figure is £15,900? Once someone earns more than £15,900, they begin to pay back.

[Andrew Bridgen]

I would need to check the hon. Gentleman’s figures, but the sum is considerably more than the current level. The bottom 20% of earners will pay back considerably less in total, and those earning less than £25,000 will pay back less than £1 per day for their university education. That is a progressive repayment system. The Government are working on ways to help students from the most economically disadvantaged backgrounds by reducing the fees that they will have to pay back.

In opposition to this, we have the puffed-up inaction of the Labour party and the support given by the Leader of the Opposition and the shadow Chancellor to the idea of a graduate tax, which is not a solution to higher education funding. It would provide no guarantee that universities would receive the additional funding raised. There is no mechanism for former students to repay early, and it would not allow any differentiation between a student from a lower income background and one from a higher income background.

[Margot James]

Does my hon. Friend think that is why so many senior members of the last Labour Government disagreed with a graduate tax, including Alan Johnson, Lord Adonis, the former Prime Minister, Mr Blair and Lord Mandelson, as quoted by the Secretary of State?

[Andrew Bridgen]

My hon. Friend makes an excellent point. The Opposition are split on the matter for obvious reasons. A graduate tax is not the solution. A considerable number of graduates would pay substantially more than the cost of their course. In addition, there would be a large funding gap in the short term. The Browne review estimates that if all new students from 2012 paid a 3% graduate tax which would start at £8,000, not £21,0000, the tax would not provide sufficient revenue to fund higher education until 2041-42.

With the reckless spending habits displayed by the previous Government, universities would have much to fear if they had to rely on a graduate tax, which would inevitably fail to raise sufficient money, in contrast to the up-front and stable tuition fee income, which will allow universities to spend money as they see fit, rather than being subjected to constant Government interference.

The policies of the previous Government discouraged part-time students from studying, as they are expected to pay tuition fees up front and had no access to student loans. The fact that part-time students will have equal access to student loans will give more opportunity to those who may wish to study later in life, and will give universities a more balanced age range of students. Hon. Members should be aware that more than 250,000 students are studying at the Open university, and they will all be better off under the present Government’s policies. Given the need to retrain in a rapidly changing world, I welcome this.

The changes being bought in by the coalition Government will result in a higher standard of teaching being maintained, a higher completion rate of degree courses as a result of an informed and considered decision-making process, and students from poorer backgrounds being given a better opportunity to make the right decisions. This can only help universities by having students on the right courses.

We should also consider what the Opposition would call the ideological argument—whether universities should be dependent on the Government for their finance. The Browne review argues that a graduate tax would weaken the independence of universities, which would become entirely dependent on the Government for their funding. It argues that its own proposals would force universities to improve standards to compete for students. Under the coalition policies, the relationship of universities with students would rightly become more important than their relationship with Government.

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

I fought against a market system under our last Government. We agreed a reasonable compromise, but not without a fight. On the Opposition Benches there was no fight. We knew where the Liberals used to stand. Can the hon. Gentleman tell the House where his party’s manifesto mentioned a trebling of tuition fees and an 80% cut to teaching grants to universities?

[Andrew Bridgen]

The policies are fair. There is increased fairness, increased opportunity and stability of income, and it is my firm belief that the coalition’s policies will allow our universities to prosper.

I am a graduate, and I had a full grant in my day, but in those days 4% of the school-leaving population went to university; last year, the figure was 43%. That is a considerably different proposition, and I remind the hon. Gentleman that in my constituency 84% of people are not graduates. An average graduate will over his lifetime earn in excess of £100,000 more than a non-graduate, so, if we are talking about fairness, is it fair that my non-graduate taxpayers should subsidise the earnings of those who have had the benefit of a university education? They will have that benefit not for the 30 years that they might pay back their student fees, but for all their working life, and I hope the hon. Gentleman remembers that.

To those who say that the system will not work, I say “Look at America”, where for decades the fees system has resulted in the country having eight of the world’s top 10 universities. If Oxford and Cambridge universities are to remain in the top 10 and other UK universities are to have any chance of breaking into the top 10, we need that stability of funding.

The increased tuition fees will create an expectation and demand for quality teaching among students, and with the proposed changes to A-level marking, which I support, students will apply with actual rather than predicted grades, helping state students to go to the best universities, reducing the drop-out rate and ensuring better results for students all round.

Fairness, opportunity, quality and stability are the hallmarks of this coalition policy on higher education funding, and these tough long-term decisions will secure the future of our nation’s universities, our graduates and our undergraduates.

16:58

[Roberta Blackman-Woods (City of Durham) (Lab)]

The Government are purposefully and quite unprecedentedly shifting the burden of the costs of university tuition from the public purse on to the shoulders of individual graduates, moving away from the assumption that both society and the student should bear the costs of university education. It is notable that the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), who is not in his place, simply refused to engage with that point when he spoke earlier.

The Business Secretary announced to Members in Parliament that a fee cap of somewhere between £6,000 and £9,000 would be introduced, and that fees would be £9,000 only in exceptional circumstances—that £9,000 would be an exception, not the rule. The announcement was much repeated elsewhere, but we know that, of those universities that had made their plans public by last week, the average fees will be £8,678.36—so just marginally less than that £9,000 figure.

We also have to bury the myth that students will pay less under the Government’s proposals. It is true that monthly outgoings, in some circumstances and for some students, might be less, but graduates will pay back their loans for much longer and at an interest rate that has not been fully determined. This is despite the fact that the independent Office for Budget Responsibility said in November and reiterated more recently that increasing tuition fees and funding student loans in 2015-16 will require the Government to borrow £10.7 billion, compared with the £4.1 billion that they borrowed in 2010-11, a point that was excellently made by my right hon. Friend the Member for Oxford East (Mr Smith).

In the context of such sharply rising fees, it is worth looking at some international comparisons. What is happening elsewhere in higher education? A recent article in The Economist on American fees reported that annual tuition and fees averaged £1,639 at two-year colleges, £4,595 at public four-year colleges for in-state students and £7,246 at public four-year schools for out-of-state students—all substantially less than the fees proposed for students in this country.

The situation gets worse if we look at Canada.

[Dr Whiteford]

I remind the hon. Lady that she does not have to look so far from home to find students who do not have to pay fees, because education is an investment in their future.

[Roberta Blackman-Woods]

Indeed. The hon. Lady makes an excellent point; we should always refer to what is happening in the devolved Administrations as well.

In 2007-08, the fees in the Canadian system were £2,866 and in Australia they were £2,600. What has been proposed for this country is absolutely out of line with our competitor countries across the board. According to quite a conservative estimate, the debt that a student will accrue, if they have to pay the £9,000 maximum and then accommodation and living expenses, could amount to about £48,000. If they then went on to do a master’s and a PhD, the student could come out with a debt of £70,000-plus. That is extraordinary.

[Mr Lammy]

On that excellent point, is my hon. Friend as concerned as I am that the plans will lead to catastrophically low levels of UK students deciding to go on to postgraduate study? Is she concerned that our university sector is actively recruiting abroad—notwithstanding the visa requirements imposed on it—and that we will therefore educate international students but deny that to students from this country?

[Roberta Blackman-Woods]

Indeed. My right hon. Friend has made a number of excellent points. It is interesting that we have heard nothing from the Government parties and nothing from the Minister about the impact of the proposals on postgraduate education in this country. The House will have to return to that issue in due course.

Graduates could be incurring extraordinarily high debts. The Government simply have no electoral mandate to do what they have done; it was not in any of the manifestos or in the coalition agreement. The costs are being pushed on to students because of the massive 80% cut being made to the university teaching grant. That does not fall uniformly across all universities; it hits hardest the universities with high numbers of students studying arts-based subjects. We simply do not know what the impact will be on the longer-term career aspirations of our students, but we need to continue to develop jobs in the creative industries. That is important for my region of the north-east, but it is also important across the board.

I am also really concerned that the Government do not seem to be paying any attention whatever to the possible deterrent effect of the proposals. There is an increasing constellation of evidence showing that an increase in tuition fees—particularly to the levels proposed —puts off people from applying to university. An Ipsos MORI survey last year of 2,700 11 to 16-year-olds showed that even marginal increases in tuition fees had a significant deterrent effect on participation among young people. Some 17% of the young people who responded said that they were unlikely to go to university if tuition fees increased to £5,000, with 46% saying that that they would not go if fees were increased to £10,000 a year. If the Government dispute those findings, they need to come up with alternative findings of their own. They have simply not commissioned research into the issue.

The Government say that they are remedying the situation with the national scholarship programme and tuition fee waivers, but we know from work that million+ has carried out on the national scholarship programme so far that it is over complex and that students simply do not know what will be available to them. The information about the programme is not available in an easily accessible format. That could lead to a postcode lottery.

We know, of course, that all these changes are part of a wider trend, with the scrapping of the education maintenance allowance and the future jobs fund, which helped to get young people into jobs. The Government are deliberately engineering a situation where the life opportunities of young people will be increasingly worse than those of their parents, and that is simply a disgrace.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. The wind-ups are going to commence at 6.40 pm so we have only 20 minutes left. I still have 11 people on my list, so can we please show great time restraint in speeches and interventions?

18:20

[Lorely Burt (Solihull) (LD)]

I have been listening carefully to the debate so far, and the remarks made by Opposition colleagues make me feel as though I have been transported into some sort of alternative reality. This is a reality where the Labour Government did not introduce up-front tuition fees in the first place, one year after Tony Blair had promised not to in 1997; where they did not introduce top-up fees two years after they had promised not to in the 2001 Labour manifesto; where they did not go into the last election having commissioned the Browne review; and where Lord Mandelson did not say, this very March, that had Labour still been in government it would have needed to double tuition fees, at least. So we will not be taking any lessons from Labour Members this afternoon.

Now I have got that off my chest, it is fair to say that the motion poses some important questions, and it is fair that they should be properly addressed. Let me start with the £9,000-a-year exceptional student tuition fees. At the moment, universities are publishing their maximum fee, not their average fee. Institutions with a “sticker” price of £9,000 will have a significantly lower average fee because of fee waivers. At Oxford, for example, some first-year students will pay only £3,500—about the same as now. At Cambridge, all students from households earning under £25,000 will pay £6,000. At Warwick, students whose family income falls below £25,000 will receive a package of up to £4,500, and their two-plus-two degrees and part-time degrees will have a fee of £6,000, which may be further reduced by an additional fee waiver.

[Paul Farrelly]

I do not want to make party political points about broken promises, and I shall not, even when those promises were being written while people were planning to break them, because that amounts to hypocrisy and the Deputy Speaker would rule me out of order. However, I have one question. If the Government’s policy is to allow universities to charge the top amount of fees only in exceptional circumstances, is it not incumbent on the Government, the Business Secretary, the leader of the Liberal Democrats and the deputy leader of the Liberal Democrats to define, in percentage terms, what counts as exceptional and therefore what percentage of applications charged the £9,000 fee will be refused?

[Lorely Burt]

I was trying to be helpful to the hon. Gentleman by explaining some of the examples of how average fees will be lower than that figure.

The motion tries to commit the Government to guaranteeing that there will be no fall in the number of university places. This is another bit of collective amnesia. Labour Members cut places; they promised additional places and then cut the numbers. In 2009, the shadow Secretary of State, who was then Secretary of State for Innovation, Universities and Skills, put a 10,000 cap on the expansion of places, leaving 140,000 A-level students chasing just 10,000 unfilled places at the UK’s universities. That is 14 anxious students for every unfilled place available through clearing and 130,000 willing and able students without a place. They encouraged thousands of hopeful students to apply for university and then slammed the door in their face when they got there. In 2010, they did it again, leaving 150,000 people without a university place, some of whom had six A-levels at grade A. In 2009, they cut the budget of the Department for Business, Innovation and Skills by £1.9 billion, and in 2010, they cut the universities budget by £500 million.

If I may, I will read a quotation from a debate in the other place:

“The Government have made it clear that higher education needs to shoulder its fair share of the burden of reductions in public spending”.—[Official Report, House of Lords, 21 January 2010; Vol. 716, c. 1101.]

Those were the words of Lord Mandelson in January 2010, when he was Secretary of State for Business, Innovation and Skills. In the same debate, he said that student numbers should be dictated by what is affordable with the resources available. The numbers should not be dictated by a central Government diktat, which says that 50% of young people should go to university. Labour set that target, but quickly realised that it did not know how to pay for it. It was left with a financial black hole and was forced to slash student places to fill it, leaving thousands of students in the lurch. Surely the right number is the number at which every student who has the desire and capability to benefit from university can go. Despite the previous Government’s undoubtedly strenuous efforts, the number of students from poorer backgrounds did not increase proportionately. That is Labour’s legacy on universities.

It is no secret that had the Liberal Democrats won the general election, we would have done things differently. However, I am proud of the coalition agreement, which incorporated two thirds of our manifesto pledges. Sadly, our tuition fees policy fell into the group of manifesto pledges that remain unfulfilled. Working in coalition has its challenges, believe me, but it also has its rewards. One of the rewards was negotiating with Conservative colleagues to make the system that we have ended up with more progressive than the Labour system we inherited. That is not only my view, but that of the Institute for Fiscal Studies. There are no up-front fees for students, graduates will start to pay only when they can afford to, and there will be lower lifetime contributions for the poorest quarter of students compared with the system that Labour left behind. There will also be more support for the Cinderellas of the HE and FE systems, part-time students, who had previously been shunned by a system geared towards full-time students.

In conclusion, it is hard to predict what will happen, given that universities are yet to announce many of the measures such as bursaries and waivers. I have concerns about the number of places and their uptake. As the Minister said earlier, that will be reviewed in autumn 2011 and I greatly hope that the steps we have taken will be vindicated.

18:27

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

First, I declare my interest as a part-time lecturer at Queen Mary, university of London. I therefore take a keen interest in universities and know slightly more about their workings than some Government Members who have contributed.

I am privileged to represent Stoke-on-Trent Central, in which Staffordshire university sits and many students from Keele university reside. In the university libraries of those great universities sits a book by Tony Travers and Andrew Adonis called “Failure in British Government: The Politics of the Poll Tax”. That wonderful text tells one how not to make Government policy from beginning to end. I am going to write to Andrew Adonis and Tony Travers to suggest a second volume on the introduction of the tuition fee fiasco that we see before us.

[Mr Gyimah]

When the hon. Gentleman speaks to Andrew Adonis, he should also discuss the graduate tax with him, which he looked at in detail and dismissed when Labour was in government, and which is now Labour policy.

[Tristram Hunt]

I thank the hon. Gentleman for that intervention. I am happy to look at that. Personally, I am no fan of the graduate tax.

I, too, am new here, but as I understand it, what happens in this place and in government is that people come up with ideas and then there is a Green Paper, a White Paper, some debate, a decision, and then a policy enactment. What we have here is the imposition of an arbitrary fee level, followed by the scurrying around for a justification, which we have seen over recent months, to make the figures add up.

The Government’s policy is driven by ideology. It is the ghost of Keith Joseph coming back to life. It is neo-liberalism rather than Liberal Democrat politics. However, let us be generous for a minute and argue, as the confused Minister for Universities and Science tried to, that some of it is driven by a desire for deficit reduction. We will leave aside for a second the fact that for every £1 million invested in universities £2.5 million comes back, and we will leave aside the fact, mentioned by my hon. Friend the Member for Sheffield Central (Paul Blomfield), that the only other country deciding to slash spending on universities and science during the recession is Romania. Clearly Ministers are using the Romanian model, when we thought they were interested in a knowledge-driven economy.

If deficit reduction is the strategy, why do the sums not add up? Why will the Government’s plans cost more, not less, over the coming years? Because the Government have got their sums wrong and do not understand how universities work. They thought fees would be £6,000 or £6,500, but why would universities charge that amount when it costs them £10,000, £11,000 or £12,000 to educate someone? At the university of Cambridge, it costs £14,000 to educate an undergraduate. Why on earth would it not charge £9,000 to recoup some of that cost? The incompetence of Ministers has been absolutely breathtaking, and the suggestion of the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) that the problem was advice from civil servants was, I thought, rather grotesque.

And what fees they are! Nine thousand pounds. Every decent university will go for the top rate, so we will go from having some of the lowest fees to having some of the very highest. That represents an ideological decision to withdraw the state from higher education. Only that can explain the decision to cut 80% of the higher education teaching grant. The headline fees will put students off, and for all the guff that we heard about special provisions, when people see the figure of £9,000, it will be very hard to convince them.

[Jeremy Corbyn]

My hon. Friend must be aware, as I and many others are, that the cuts are wholly disproportionate. We are destroying humanities, arts and language courses all over the country, and we are denying the opportunity of education to many working-class youngsters, because the cuts are in favour of vocational courses rather than pure academic ones. Does he believe that that is selling the whole country short?

[Tristram Hunt]

I absolutely agree with my hon. Friend. The Government’s attack on humanities has been grotesque from the beginning. Their intervention to try to make the Arts and Humanities Research Council fund big society research could not have been more laughable. There will be an effect on history, French and humanities courses.

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

Design, as well.

[Tristram Hunt]

And on design courses.

I will wrap up so that some of my colleagues can deliver the coup de grâce to these terrible proposals. I end with a point that Government Members clearly have not got their heads around. The figure that people will only pay when they earn more than £21,000 is based on 2016 values. At today’s values, the figure is £15,900. In future, let us have a debate about people beginning to pay back their fees when they are earning that much.

Universities always suffer under Tory Governments. They did in the 1980s and they are again now. The Minister for Universities and Science is like a recherché Keith Joseph, and we need to finish off these terrible proposals.

18:33

[Mr Marcus Jones (Nuneaton) (Con)]

It is always an honour to follow the hon. Member for Stoke-on-Trent Central (Tristram Hunt), even though his arithmetic and his assessment of inflation seem like those of the Labour party of the late 1970s.

Quite often during Opposition day debates, purely partisan posturing overtakes thoughtful and reasoned debate. People put partisan politics before making decisions for the right reasons, even if such decisions have to be taken with a heavy heart. I would not say that I am disappointed by the level of party politics that we have heard, particularly from the Opposition Benches, but I am more than disappointed by the way in which the Opposition have put their points.

Once again, the Opposition have given us no ideas and shown no vision on higher education. They have not acknowledged that Labour introduced tuition fees and increased them on more than one occasion when it was in government. They have also not acknowledged that they instigated the Browne review. Lord Mandelson, the former Business Secretary, now says that when the previous Government instigated the review in 2009, he assumed, as the Treasury did, that the outcome would have to include a significant further increase in tuition fees. Whether that was Labour party policy at the time, you have to acknowledge that the Labour party gave the Browne review its terms of reference—[Hon. Members: “You?”] Sorry, Mr Speaker.

The Labour party no longer acknowledges that it flirted with the graduate tax—Labour Members seem to be in denial. Only one thing is clear: they have no plan for higher education.

[Paul Farrelly]

Will the hon. Gentleman give way?

[Mr Jones]

I will not because I want to give other hon. Members an opportunity.

The motion makes important points about fees and how they will be implemented, and I hope the Minister comments on the timetable and on how quickly students and their parents can find out what the true level of fees will be. That is important because a small number of parents and students go to their constituency MPs to ask for that information so that they can plan for the future. I understand why the Government want to get things right, but the uncertainty does not help.

However, Labour’s constant politics of fear helps no one. Rather than supporting our young people by engaging in the debate and trying to get things right, Labour Members maintain the party line—a misleading line that fills our young people with fear and dread, putting them on the back foot before they even learn the facts, crushing and stifling aspiration, and certainly not encouraging it.

Aspiration is important, but it needs to be realistic. The most capable, regardless of their background, should have the opportunity to attend university. Under the new system, the Government will help to achieve that for young people. There will be lower repayments for student debts than under the current system, and most of those from underprivileged backgrounds will have the opportunity to get into higher education.

Warwick university—one of my local universities—says that all students whose parents have an income of £25,000 or less will receive a package of up to £4,500 a year to assist with their studies. We must also acknowledge that the Government’s policy involves no up-front fees, and that students will not start paying until they are graduates earning £21,000 a year, rather than the £15,000 a year under the current system. As Labour Members know, monthly payments will also be lower.

That is not to say that the current system or the system that the Government propose are ideal. Young people will leave university with debt, and nobody in the House would wish that on a young person. However, we must be realistic. For many young people, taking on that debt is the path to a career—a good and proper career in which they make a substantial living. We know that young people who go to university earn on average £100,000 more over their career than young people who do not.

That is not to say that university is a success for all. It is not, and many come out of our universities unable to gain employment for many years. Many certainly do not enjoy the glittering careers that they thought they would have when they initially went to university. I know that because I used to work for a firm of lawyers that received hundreds of thousands of applications for training contracts every year—applications for jobs that just did not exist. That is not acknowledged by the Labour party.

To sum up, the proposed new system is not perfect or ideal, but it is a move in the right direction. Social mobility stalled under Labour, but it will begin to improve once again with the measures put in place by this coalition Government.

18:39

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

As ever, we have had an interesting and fascinating debate, with many excellent contributions, although I fear that I will not be able to do justice to them all.

As my right hon. Friend the Member for Southampton, Itchen (Mr Denham) said at the outset, the Prime Minister promised us that tuition fees of £9,000 would be the exception, not the rule. Not only Oxford and Cambridge, but Oxford Brookes, Lincoln, Leicester, the university of East London, Aston, Hull, Essex, Newcastle, Bradford and many, many more are set to charge the full £9,000 in tuition fees. Then there are all those that will charge close to—albeit not quite—the maximum. Kingston university, which the Secretary of State will know well, is charging £8,500. Northumbria, Teesside and Portsmouth are all set to charge £8,500 as well. As my hon. Friends the Members for Nottingham South (Lilian Greenwood), for Sheffield Central (Paul Blomfield) and for City of Durham (Roberta Blackman-Woods) underlined in their excellent contributions, the Prime Minister got it wrong. Fees of £9,000 are not the exception; they are the reality that a huge number of the brightest and best of the next generation will face.

Even before the tuition fees vote, however, independent experts such as the Higher Education Policy Institute were arguing that fees of £9,000 would soon become the norm, not the exception. So the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) is wrong to say that Ministers were not warned what would happen. Surprisingly we had no explanation from the Government Front-Bench team of why £9,000 fees will not after all be the exception. Is not the truth that Ministers have lost control of higher education policy, and that instead of a clarity of vision and purpose for the future of our universities, there is confusion?

The Secretary of State has put off and put off and put off again the White Paper on the future of higher education, as my hon. Friend the Member for Stoke-on-Trent Central (Tristram Hunt) made clear. That lack of clarity has left the Department responsible for business and universities being pushed around in Whitehall. We have had the overseas students debacle, as Ministers publicly argued across Whitehall, in the media and in the House about the level of new restrictions on overseas students. University vice-chancellor after vice-chancellor has pointed out the damage done already to Britain’s reputation as a result; and many are still worried about how having 80,000 fewer overseas students—a cut of 20%—will hit their institutions in the long run, given all the benefits that the extra income brings.

Then we have the Department for Education launching a major review of the future of teacher training—never mind the high Ofsted ratings for the quality of that teacher training! Is it not the truth that Ministers have been warned that up to 25% of income for some of Britain’s universities is now at risk as a result of this review? Is there any sign of Ministers from the Departments for Business, Innovation and Skills and for Education getting together to resolve the uncertainties that universities face in this area? No, none at all!

The Department of Health is all set to axe strategic health authorities. They are the very bodies that negotiate with universities over the number of nurses, midwives and radiographers—and all the other vital health professionals who need university training—who are to be trained. Some universities receive approximately 25% of their total income from NHS-funded health professional courses, and others are already expecting cuts in the number of funded student places in this area of about 10% to 15%. Is it any wonder, then, that there is considerable financial uncertainty facing universities in the short and long term in this area as well?

[Stella Creasy]

Does my hon. Friend also think that there is considerable uncertainty for students such as Nancy Quilliam, from Walthamstow, who has deferred entry? She is being asked to pick a university by next Thursday, but she cannot find out how much she will be charged—she has no certainty about the rate of fees—so risks incurring a further £9,000 of debt. Is that not another level of uncertainty that the system has created for students across the country?

[Mr Thomas]

My hon. Friend is absolutely right that our students or would-be students face huge uncertainty about the fees that they will incur. Perhaps if the Government had published the White Paper that they promised to publish even early this year, her constituents might have had just a little bit of certainty. Is not the truth that Ministers in the Department for Business, Innovation and Skills have failed to stop other parts of Government creating huge uncertainty for Britain’s universities, thereby creating incentives for fees to be higher rather than lower?

[Paul Farrelly]

When the Government say that universities will be allowed to charge fees of £9,000 only in exceptional circumstances, is it not incumbent on them not only to say what control they will exert to turn down the 40% to 50% that will want to charge £9,000 anyway, but to tell the House how they will square the circle and make up the funding that universities will otherwise lose?

[Mr Thomas]

You would think that it was indeed incumbent on Ministers to do that, Mr Speaker, but so far they have not done so. Ministers need to publish the White Paper to give us some certainty. Thus far, it does not look as though they intend to do that any time soon.

There is also continuing uncertainty about how the remaining teaching grant will be allocated, if indeed some universities get any at all. As Opposition Members have made clear, it is the huge cut to university teaching funds and to capital that continues to drive fees higher. Surrey university’s vice-chancellor, Professor Christopher Snowden, has said that his university’s plans to charge £9,000 reflected the financial uncertainties for English universities and the substantial cuts that the Government have made to grants for teaching and building refurbishment. The university of Sheffield Hallam, which the Deputy Prime Minister may know something about, has said:

“The new fee will compensate for the government’s 80% cut in our teaching grant and the significant cuts in capital funding.”

The Government based their financial plans on average fees of £7,500. In the face of such uncertainty, it should come as no surprise that many expect average fees to be somewhat higher. Indeed, as I made clear in my interventions, the Secretary of State has confirmed that the Government are considering either a cut in student numbers or an even greater cut in the teaching grant as tools to plug the funding gap. Either he was scaremongering or the threat was real. Because the Government have lost control of higher education policy, if we take the Secretary of State at his word, then on top of an almost 80% cut in university teaching funds and a 20,000 cut in student places already, we face the prospect of our universities being starved of even more income, or more of the brightest and best of the next generation being denied the chance to better themselves through a place at university.

Frankly, watching Ministers on tuition fees has become increasingly like watching a bad episode of “Only Fools and Horses”, with Front Benchers desperately trying to sell any old line on tuition fees to people whom they clearly think are gullible punters. The right hon. Member for Havant (Mr Willetts)? The Department’s very own Rodney Trotter. Grumpy old Uncle Albert, with his best years behind him? Who else but the Secretary of State? And Derek “Del Boy” Trotter? It has to be the Deputy Prime Minister: never selling the real McCoy, never telling the whole truth—inadvertently, of course—a dodgy promise here, there and everywhere, and all his best deals done down the Nag’s Head with Boycie the spiv. Talking of whom, where is the Prime Minister for this debate?

“I’m sorry, we rushed into this and we got it wrong”—I paraphrase the Secretary of State for forests. “We’re going to have a pause, listen to people’s concerns and make changes”—the Secretary of State for Health, never mind the fact that his mea culpa is just an advertising gimmick. Either his lines or those of the right hon. Member for Meriden (Mrs Spelman) would have been a more appropriate starting point for the Minister this afternoon. He should have said, “I’m sorry, better access to university looks unlikely, despite our great promises.” He should have said, “I’m sorry, we thought OFFA could control fee levels. We were wrong.” And he certainly should have said, “I’m sorry that we were so spectacularly wrong when we claimed that only a few universities would charge the full £9,000.”

This is a policy in need of a radical overhaul. Trebling tuition fees was never fair. It was not necessary and neither is it sustainable. I commend our motion to the House.

18:49

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

The Labour Government’s unhappy, unwelcome bequest was an immense financial black hole. Then, as now, Labour was characterised by chaos. Better-informed Members will know that, according to some advocates of chaos theory, black holes are a portal to a parallel universe—an alternative reality, as my hon. Friend the Member for Solihull (Lorely Burt) described it. Perhaps there is a parallel universe in which Labour won the election. Does anyone here truly believe that if it had done so, it would be prosecuting the case it has been making today? After all, Labour was the party that introduced variable tuition fees, established the Browne review and laid down the criteria by which Browne considered these matters.

This is not science fiction; it is hard fact. When Labour was in office, it defended the very principles it has attacked today. As the Minister for Universities and Science, my right hon. Friend the Member for Havant (Mr Willetts) pointed out, Lord Mandelson hinted at a tuition fee rise five months before the Browne review was launched, telling vice-chancellors that excellence in higher education was “not cheap” and that the country had to

“face up to the challenge of paying for excellence”.

[Andrew Bridgen]

What are the Minister’s views on the viability or otherwise of a graduate tax as a solution to higher education funding, as proposed by the Opposition?

[Mr Hayes]

My hon. Friend the Member for Havant referred to an interesting document that Labour has produced, “Why not a Pure Graduate Tax?”, which concludes:

“We have been unable to identify any other country with a graduate tax system along the lines described that could serve as an exemplar for how a pure graduate tax might work.”

I have good news! Experts in Labour central office have now found one. Ethiopia has a graduate tax, but it is thinking of ditching it, just as Labour has decided to take the idea on board.

As for the charge that variable fees will deter working-class students, we heard the hon. Member for Stoke-on-Trent Central (Tristram Hunt) speak with authority on the subject. I know that he is a close student of working-class culture—[Laughter.] I said merely that he was a student; he does study it. He and the hon. Member for Nottingham South (Lilian Greenwood) told us that fees would deter working-class students. When the right hon. Member for Kingston upon Hull West and Hessle (Alan Johnson) was a Minister, he introduced variable fees, saying:

“I reject the notion that working-class kids are more debt averse than youngsters from other backgrounds. I just reject it completely, absolutely completely.”

That was his view of the effect that variable fees would have on the participation of working-class students.

[Luciana Berger]

Has the Minister seen the research published today by High Fliers, which shows that 51% of existing final-year undergraduates said that they would not have gone to university if their tuition fees had been three times as high as they are now?

[Mr Hayes]

I would be the first to acknowledge that I have not seen that research, but I would be more than happy to look at it. I am a straightforward politician, as the hon. Lady knows, and I have to say to her that when fees were first introduced, I was one of the doubters. I wondered whether they would have the effect that has been articulated again today. However, the evidence is that they have not done so. They have not affected applications in the way that was predicted by some people, and she is on dangerous ground if she thinks that they will have that effect this time round.

It does not seem credible for the Opposition to prosecute the argument that students will be deterred from applying to university and that there will therefore not be enough of them, and simultaneously to argue that there will be too many applications and that the universities will be unable to fund sufficient places to meet the demand. The Opposition seem to be running two horses, neither of which is likely to reach the winning post.

[Nic Dakin (Scunthorpe) (Lab)]

rose—

[Mr Hayes]

I shall give way to the hon. Gentleman, who is a great expert on these matters.

[Nic Dakin]

The Minister says he was a doubter in the past. Is he surprised that so many universities are now setting fees of £8,500 and £9,000? If such fees create a gap, how will the problem be solved? Will it be solved by cutting student numbers or by cutting university income?

[Mr Hayes]

I am sure that the hon. Gentleman understands that the headline fees that are being published are not the same as the amount that students will pay in all cases; neither are they the same as the amount that the Government will fund. We know that fee waivers and bursaries, for example, have a real impact on the figures. The figures that are being published are maximum figures, not average figures. That point has been made by Members on this side of the House, although it does not seem to have been grasped, for the most part, by Opposition Members.

[Sheila Gilmore]

rose—

[Paul Farrelly]

rose—

[Mr Hayes]

I will not give way again, as time is short.

The previous Government defended both the extra independence variable fees gives institutions and the principle that universities should justify the fees they charge. That is why this debate on the future of higher education is, above all, about three things. First, it is about securing a settlement to fund higher education that is sustainable. The right hon. Member for Tottenham (Mr Lammy) is right: the deficit was not the context when Browne began, but it certainly was the context when Browne reported. The previous Government recognised that we had strategically to rethink university funding to give them sufficient funds to compete with the best. That was acknowledged by the right hon. Gentleman when was the Minister and it is acknowledged by Conservative Members.

I think it would serve the Labour party if that was acknowledged once again. It was hesitatingly and falteringly acknowledged by the shadow Secretary of State, but he has to answer this question: if the reduction in BIS spending on higher education had been of the order he suggested—around 8% to 10%—where would the cuts have fallen? Would basic skills have taken the hit; would it have been adult and community learning; would it have been apprenticeships; or would it have been further education? Let us face it, we cannot have it all ways—yet too often the shadow Secretary of State tries to do just that.

[Mr Denham]

The answer is, of course, that the BIS team, including the hon. Gentleman, conceded this huge cut in higher education and offered it up to the Treasury. It is not a matter of choosing one cut or another. A BIS team of any credibility or influence would simply have said that an 80% cut in higher education teaching is unsustainable, unnecessary and unfair. It is the failure of the ministerial team to deliver that is at the centre of this debate.

[Mr Hayes]

The hon. Gentleman’s predecessor, the noble Lord Mandelson, was first to the table when it came to volunteering to cut in his Departments. He took more hits when he was in BIS than any other Secretary of State. It is not credible for the right hon. Gentleman to claim that, had Labour been elected, it would not have faced exactly the same challenges or, indeed, not have employed exactly the same approach to deal with them.

The second big issue is whether this system is progressive. The right hon. Member for Bermondsey and Old Southwark (Simon Hughes) made the point very clearly: there are no up-front fees; no repayments until someone is earning £21,000; and debts are written off after 30 years. This is a more progressive, fairer system than the one we inherited. Frankly, no one can honestly deny that. Indeed, it has not been denied, even by Labour Members. A graduate on a starting salary of £25,000 will repay around £30 a month under the new system and we know that graduates typically earn about £100,000 more than non-graduates over an earning lifetime.

The third key point is access. No one is a greater champion of widening access to higher education than I am—with the possible exceptions of my right hon. Friends the Minister for Universities and Science and the Secretary of State for Business, Innovation and Skills. Widening access, however, is not just about fees. It is about the patterns and rhythms of higher education study matching the patterns and rhythms of more kinds of lives. That is why the changes to part-time provision are so important and why the White Paper—for the record, it was published in June—explains how we will look to provide more higher education in further education colleges, look at more modular courses, more distance learning and more part-time provision. That is exactly the way to get more under-represented groups into higher education.

Today, we have heard from the Opposition a critique of a policy that is very close to what they might well have had to adopt in similar circumstances had they been in government. What we have not heard, however, is their alternative. I believe it ill befits an Opposition to table a motion when they have no real alternatives—

[Mr Alan Campbell]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question accordingly put.

18:59

Division 260

Ayes: 197

---

Labour: 192
Plaid Cymru: 2
Independent: 1
Scottish National Party: 1

Noes: 304

---

Conservative: 264
Liberal Democrat: 39

Section 5 of the European Communities (Amendment) Act 1993

Wednesday 27th April 2011 Commons Chamber

19:10

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I beg to move,

That this House takes note with approval of the Government’s assessment as set out in the Budget Report, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook, which forms the basis of the UK’s Convergence Programme, for the purposes of section 5 of the European Communities (Amendment) Act 1993.

As we look at the economic history of the past decade, we see clearly that economic imbalances create the conditions for recession, and even growth fuelled by imbalances can prove illusory. This Government’s economic programme tackles the imbalances built up under the previous Government, which triggered the deepest recession since the 1930s. As the Chancellor set out in his Budget and as is set out in the convergence programme document before us, growth in the United Kingdom under the previous Government was fuelled by debt. Imbalances arose from the UK’s overreliance on the south-east and the financial services sector, from high levels of Government debt and an over-inflated housing market. The OECD said of the UK that these imbalances

“exacerbated the downturn during the global recession and contributed to a more pronounced fall in GDP, a larger fiscal deficit and higher inflation than in most of the OECD”.

That is the legacy we inherited from the Labour party, which we need to tackle.

As we look across Europe and beyond, we see that we have had to learn the hard way that in an open, global marketplace, no economy exists in isolation: imbalances in individual countries can cause instability on a regional and global basis; the failures of economic policy in one country can be quickly exported to other nations; and unsustainable levels of debt, asset bubbles and uncontrolled deficits can destabilise whole regions through contagion, as we have seen in recent years. In the light of the global and economic crisis, there is increased emphasis on economic surveillance to identify imbalances and take action to deal with them.

Existing surveillance by the International Monetary Fund and the OECD has taken on renewed importance. The IMF has recognised the need to focus on multilateral surveillance and monitoring spill-over effects and systemic risks, and the OECD has recognised the importance of labour markets, housing markets and current account imbalances for strong and sustainable growth. Furthermore, the G20 is looking at countries with large and persistent imbalances to ensure that growth is strong, sustainable and balanced across the world.

In Europe, work to address this has been done through the stability and growth pact. The pact has been around for many years, but in more than a decade of monetary union the sanctions it contains have never been used. The recent proposals to strengthen the stability and growth pact aim to make it more effective. The changes recognise that maintaining economic stability is not just about deficits. Just as the OECD and the IMF are refreshing their approach to macro-economic surveillance, so too is the European Union as it considers a scoreboard of indicators such as labour market flexibility, current account balances and unemployment to ensure that we are alert to risks across Europe.

[Kelvin Hopkins (Luton North) (Lab)]

The Minister talks about imbalances. We always talk about financial imbalances, but the real imbalances in the European Union are the massive imbalances in trade. Germany has looked after its manufacturing and we have neglected ours under several Governments over the past 30 years. We at least are able to depreciate our currency and to address that to an extent, but there has still been a complete failure by successive Governments to do anything to counter the collapse of manufacturing that began in 1979 when we lost a fifth of it following the election of a Conservative Government.

[Mr Hoban]

The hon. Gentleman makes an important point. Under the previous Government, we saw a further deterioration in manufacturing and an overreliance on the financial services sector, creating some of the imbalances that led to the deepest recession since the 1930s. Part of the challenge faced by the Government is how to tackle those imbalances and move to a more broadly based economy, and I shall touch on that later in my speech.

We must remember that sustainable economic growth across Europe is vital to the success of the British economy. Having the right warning mechanisms in place, underpinned by sound data, will help to identify future economic crises that could harm the UK economy. Even though we are not part of the single currency and will not be joining it in the lifetime of this Parliament, we cannot consign ourselves to be bystanders in the debate.

[Mr William Cash (Stone) (Con)]

I noticed the Minister use the expression “we will not be joining the single currency in the lifetime of this Parliament”. I thought there was a clear commitment that we were never going to join the single currency.

[Mr Hoban]

As I am sure my hon. Friend is aware, I am following what is set out in the coalition agreement. Like him, I do not anticipate that we would seek to join the euro.

Tonight’s debate is a consequence of the stability and growth pact. Since 1999, as a result of the pact, the Government have reported to the Commission on the UK’s economic and budgetary position and our main economic policy measures. I want to reassure the House, however, that the UK is not subject to sanctions under the stability and growth pact—the Treaty is clear that they apply only to euro area countries. The EU can make recommendations as regards our budget, as can other international organisations such as the OECD and the IMF, but, crucially, we are under no obligation to take action and we are not subject to any sanctions by virtue of our opt-out. Any recommendations made will remain just that—recommendations.

[Mr James Clappison (Hertsmere) (Con)]

My hon. Friend is making a very persuasive case, but on the question of sanctions, may I take it from what he has just said that he is ruling out Britain’s being subject to the economic imbalances procedure set out in the Van Rompuy report?

[Mr Hoban]

We are not subject to sanctions as a consequence of our opt-out from the single currency. I made that point when we had a debate last year on economic governance, and it continues to be the case now.

The information we are supplying to the Commission in the convergence programme document that we are debating tonight is the first to be provided under the new European semester arrangements. People were concerned that the Commission would receive information before Parliament, but the information provided to the Commission in the document is already public and much of it was provided when the Chancellor made his Budget statement in March.

[Mr David Nuttall (Bury North) (Con)]

Will the Minister confirm that all the information in the convergence programme document is in the public domain and available to anyone outside the House who wants to gain access to it without the document’s publication?

[Mr Hoban]

Indeed. If my hon. Friend has studied this carefully, as I am sure he has, he will recognise that large chunks of it are familiar from the Red Book. Of course, chapters 6 onwards are taken from the Office for Budget Responsibility’s economic and fiscal outlook. This information is in the public domain and Parliament has had sight of it before its presentation to the European Commission.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Will the Minister remind me exactly why we have to produce all this information for the European Union? I have not read it in enormous detail but it seems that Parliament is telling teacher or the boss why we have done what has been done. That places the House of Commons very much in the position of being subordinate to the European Union.

[Mr Hoban]

I do not agree that Parliament has been placed in a subordinate position. We are passing this information to the European Union having already made it available to the House, particularly during my right hon. Friend the Chancellor’s Budget speech, and there is no requirement on us to accept any recommendations that the Commission might make as a consequence of having read the information. We are in a very different situation to those member states that will provide their convergence programmes at the same time as the UK, but before their Budgets rather than after them.

[Martin Horwood (Cheltenham) (LD)]

Does the Minister agree that all European economies have a shared interest in there being proper economic governance in all other European economies? Britain therefore clearly has an interest in proper economic management within the eurozone. Indeed, will he go further and welcome the recommendations of the European Parliament’s Economic and Monetary Affairs Committee, which pressed for even stronger sanctions against those countries that do not manage their public finances as well as this Government are doing?

[Mr Hoban]

Of course, sanctions are a matter for the eurozone countries. They do not apply to us, as we are outside the eurozone thanks to the opt-out secured under the Maastricht treaty and reiterated in the Lisbon treaty, so that point is not relevant to tonight’s debate. We have ensured, through our opt-outs and our commitment not to join the euro—this addresses the point raised by the hon. Member for Glasgow South West (Mr Davidson)—that Parliament remains sovereign.

The Commission has endorsed the UK’s domestic consolidation plan, which is laid out in the convergence programme. As a result of the measures the Government have taken, the path set for fiscal policy means that the UK is on course to meet the Commission’s recommendations and deadline for dealing with our excessive deficit. We are not doing this to get a gold star—to use the language of the hon. Member for Glasgow South West’s analogy—from Brussels; we are doing it for the UK’s economic health. The plan will tackle our record deficit, with expenditure falling as a share of income in every year of this Parliament and national debt falling as a proportion of gross domestic product by 2014-15.

For those in opposition who question this approach and who would condemn Britain to years of unaffordable and wasteful expenditure, let us look at the facts. In Britain we have a higher budget deficit than both Portugal and Greece. Last year, we also had a similar level of national debt to Ireland, but our market interest rates are a fraction of those countries’ rates. Greece’s currently stand at more than 14% and Portugal’s at more than 9%, while Ireland’s is approaching 10%. Britain’s market interest rates have fallen to 3.6%, our triple A credit rating has been secured and we have avoided the sovereign debt storm that has engulfed our continent. That is a direct result of the decisive action that we have taken.

[Claire Perry (Devizes) (Con)]

Does the Minister agree that it is not only the absolute value of interest rates that is important but the spread over countries such as Germany? Indeed, the spread over German bunds for UK sovereigns has dropped by almost two thirds since the election, confirming the validation of this fiscal convergence programme.

[Mr Hoban]

My hon. Friend makes an important point. Interest rates are low and the spread is narrowing. That is a huge benefit to the British economy. It ensures that mortgage rates for families are kept low and it helps to encourage the economy by reducing the costs faced by businesses that borrow. There is a significant benefit to this country as a consequence of the firm action that we have taken. These actions have shown the world that Britain’s future is now in safe hands, and that this is a Government who know how to manage their finances and who have a credible plan that is delivering stability, certainty and growth.

The independent Office for Budgetary Responsibility has forecast growth in each and every year of this Parliament, with growth of 1.7% forecast for 2011. This is in spite of the rise in world commodity prices and higher than expected inflation. The OBR points out that this effect

“creates scope for slightly stronger growth in later years”

than previously forecast. So although it expects real GDP growth of 2.5% next year, it forecasts that it will then rise to 2.9% in 2013, 2.9% again in 2014 and 2.8% in 2015.

The European Commission last month published its own economic forecasts. These show that the UK will grow more strongly in the coming year than Spain, Italy, France, the average for the eurozone, and the average for the EU.

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

Can the Minister remind the House what the OBR predicted the growth rate would be for the first quarter of 2011? I think it is on page 54 of the convergence programme.

[Mr Hoban]

I am rather surprised that the hon. Gentleman has not congratulated the Government on taking the tough action that put the recovery on track and made sure that we have lower interest rates than Greece, Ireland and Portugal. That is a consequence of the actions that we have taken—actions that the Opposition would not take. We are tackling the legacy that they left. The problem is that the scale of the legacy is huge. That makes the recovery challenging. Today’s figures demonstrate that we are making good progress on that.

To support the economy and to continue the growth in the private sector, my right hon. Friend the Chancellor set out a new economic strategy as part of this year’s Budget. The strategy has four ambitions at its heart—that Britain will have the most competitive tax system in the G20; that it will be the best place in Europe to start, finance and grow a business; that it will be a more balanced economy, by encouraging exports and investment; and that it will have a more educated work force that is the most flexible in Europe. In pursuit of these objectives, we have announced further cuts to corporation tax, taking it down to 26% this year and 23% by the end of this Parliament.

This is alongside our decision to introduce a highly competitive tax rate on profits derived from patents and our fundamental reform of the complex rules for controlled foreign companies, making them much more territorial and making the UK a much more attractive place for businesses to locate, ensuring that we have a far more attractive tax system than either Germany or France.

This year’s Budget also deals directly with the challenge of education and youth unemployment, which has been rising steadily for the past seven years. Instead of 20,000 young people benefiting from our new work experience scheme, as we originally planned, we will increase that number fivefold to 100,000 places over the next two years. Although in Austria and Germany one in four employers offers apprenticeships, in England fewer than one in 10 does so. That must change.

That is why last year my hon. Friend the Minister for Further Education, Skills and Lifelong Learning published a skills strategy and confirmed the largest ever expansion in adult apprenticeships. At the Budget we committed to funding another 40,000 apprenticeships for young unemployed people. That brings a total of 250,000 more apprenticeships over the next four years, as a result of this Government’s policies. This will help to ensure that all parts of the country have access to a better educated work force.

This year’s Budget will help to create a more balanced economy, tackling the imbalances of the past that undermined the economy and led to the longest and deepest recession since the war. This year’s Budget gives support to the private sector and hope to those looking for work, and will stimulate job creation across Britain.

[Mr Cash]

One word that the Minister has not mentioned is “deregulation”. In view of the fact that 4% of GDP is lost as a result of European regulation, does he agree that we need to override European regulation, such as the working time directive, when it has the effect of increasing unemployment and preventing businesses from growing?

[Mr Hoban]

My hon. Friend makes an important point about the burden of regulation on business, and that is why in the Budget my right hon. Friend the Chancellor set out our plans for a moratorium on new regulations for micro-businesses and for start-ups, why the Prime Minister, along with several other European leaders, called for plans to cut the burden of European red tape, and why the Prime Minister has also required José Barroso, the President of the European Commission, to deliver on his commitment to reduce the cost of red tape for business by 25%.

We need to work on those issues to tackle regulation that hampers growth not just here in the UK but throughout Europe, because regulation is a Europe-wide issue. We need to tackle and reduce that burden if the eurozone is to grow at the levels that we expect to see in Asia and in the far east.

As I said to my hon. Friend, this Budget tackles regulation and introduces a moratorium, and that is why it stands firm on our plan for recovery. It is good for business, it is good for growth, and with the approval of the House it will form the basis of the information that we provide to the European Commission. I commend this motion to the House.

19:30

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

Many hon. Members might wonder why we are having this debate tonight. It is an incredibly important debate, but they might be forgiven for not having spotted the small print on, I think, page minus 2 under the ISBN number of the Red Book in probably seven or eight-point font, where it points out that the UK is required to submit to Brussels an annual convergence programme so that it can monitor our economic policy.

I am, however, grateful to the Financial Secretary for having written to me to draw attention to the debate this evening, the papers for which were published only at lunchtime yesterday. In fact, the motion appeared on the Order Paper only yesterday, too, and I am surprised about that, because in the parallel debate a year ago following the 2010 pre-Budget report, the hon. Member for South West Hertfordshire (Mr Gauke), now the Exchequer Secretary, then speaking from the Opposition Benches said:

“It was also very difficult to locate the report. I obtained a copy last week, but it was not available in the Vote Office yesterday. This is a point that has been made many times before”. —[Official Report, 10 February 2010; Vol. 505, c. 947.]

I am surprised that the Government have not really listened to their own Members when it comes to flagging up the importance of this particular debate, but, given that we have a motion asking the House to note “with approval” the Government’s assessment of the economy, and to conform with the requirements laid down in the various European Union treaties, I am sure that it is pure coincidence that Ministers did not flag it up or put bells and whistles around it to draw its attention to many hon. Members.

[Mr Cash]

rose—

[Chris Leslie]

But I am quite pleased that the hon. Gentleman keeps his eye on these developments.

[Mr Cash]

We certainly do our best on the European Scrutiny Committee, which included our making sure, by the way, that this debate took place on the Floor of the House by objecting to the motion to refer it to a Committee. I thought that we might just as well get it on the Order Paper.

[Chris Leslie]

I am very grateful for the hon. Gentleman’s work on the European Scrutiny Committee. This is, as I say, an incredibly important debate, and more hon. Members ought to be aware of it.

[Martin Horwood]

I am not sure what greater publicity the hon. Gentleman wants other than a debate on the Floor of the House in the middle of a parliamentary week, but, if the implication behind his references to the obligation to report to the European Union is that we should not do so, is he suggesting that that shared obligation among all European economies should not apply to places such as Greece, Italy, Spain or Ireland? Would he be happy for those countries not to report the state of their economies?

[Chris Leslie]

I simply note at the outset that we are now engaging in a particular debate. Yes, I am glad that it is taking place on the Floor of the House, but we did not really know that it was going to be on the Floor of the House, in this particular form, with this set of papers and this particular motion, until 24 hours ago. It is curious that the Government, in their relationship with many hon. Members throughout the Chamber, have not made it clear that this is quite an important component of our obligations under European Union treaties. I know that Ministers are keen to abide by their obligations under such treaties, but I just point out that some Members might be less keen.

[Mr Davidson]

Given that this debate is so important, will my hon. Friend clarify whether the programme has already been sent to the European Union or if we will have to wait for the result of this debate before it is posted off second class?

[Chris Leslie]

I presume that the House has to agree the contents of the convergence programme before it can be posted to the European Commission. The hon. Member for Bury North (Mr Nuttall) implied that the Commission could probably glean all the information online, and there is a perfectly reasonable argument that the Commission should follow events in member state countries rather than expect these matters to be handed to it on a platter. I do not think that presenting the information is necessarily genuflecting in front of Brussels, but the obligation to do so is certainly a core component of the treaties. I simply point out that fact.

The point of the motion about which we need to be most wary is the noting “with approval” the Government’s assessment of the economy, particularly given the Chancellor’s and Treasury Ministers’ lamentable failure to understand the need for economic growth. Page 13 of the convergence programme, which was published just 24 hours ago, says that the recovery is in line with previous recoveries. That, of course, is not the case.

In the recessions of the early ’80s and ’90s the economy had clawed back economic strength by this stage in the economic cycle. However, since this Government took office, the trajectory of recovery has stalled. We are already seeing that the information in the document, published just 24 hours ago, is becoming out of date.

[Kelvin Hopkins]

Is it not rather regrettable that we should have chosen to acquiesce in the Government’s decision rather than call for a Division? I would be happy to vote against the document if we had the chance.

[Chris Leslie]

We have the opportunity to divide the House on this matter, although I think that it would be a deferred Division; obviously, that is a matter for Mr Speaker.

As we go through the details of the document, we see that there are problems in it. Page 17 says that the economy is forecast to grow by 1.7% in 2011—lower than the forecast in the June Budget. Is that forecast sustainable? The Government and the Office for Budget Responsibility revised down their forecasts for growth in June and revised down expectations in November. The OBR then revised down expectations for a third time after the March Budget.

The answer to the question that I asked the Minister earlier—what was the OBR’s prediction for the first quarter of this calendar year—is 0.8%. Yet today the Office for National Statistics gave a rather comatose and limp growth rate of 0.5%. That comes on the heels of a growth rate in the fourth quarter of 2010 of minus 0.5%. Essentially, there has been a zero rate of growth—flat-lining—over the past six months.

As Stephanie Flanders, the BBC’s economics editor, said, it is

“depressing to think that the economy is treading water…in a normal recovery we would expect to see a lot of momentum at this point”.

Chris Giles, economics editor at the Financial Times, said that for there to have been any credible claim to a return of underlying growth, this quarter’s figure should have been 0.7%. He went on:

“Add in one quarter of the growth expected in 2011—about another 0.5 per cent—and the figure necessary to show the economy growing at an average pace in the first quarter is at least 1.2 per cent.

Arguably, it should be even higher, at somewhere about 1.7 per cent, if the underlying stagnation in the fourth quarter of 2010 has been recovered in the first quarter of this year.”

We are a long way from that, and that is a serious problem. Yet the Chancellor seems to think that we are on the right track; as somebody said today, if he thinks that, he needs to chuck away his satnav and get a new one.

The GDP growth figure of 0.5% for the first three months of this year merely replaces the loss of output in the snowbound fourth quarter of 2010 and suggests that the economy has no underlying momentum at all. The chief statistician at the ONS said today that we had been “on a plateau” for the past six months. Tony Dolphin, the chief economist at the Institute for Public Policy Research, says that a 0.5% fall followed by a 0.5% bounce-back is equivalent to two successive quarters of zero growth—

“as close as it is possible to come to a recession without actually being in one”.

Yet the Prime Minister says that this is “good news”—those were his words as he trumpeted this resounding success at Prime Minister’s Questions today. Even the Minister said, a matter of minutes ago, that it is good progress. I am afraid to say, however, that the document we are being asked to approve is already out of date, even though it was published only 24 hours ago. It is a bit of dead parrot. It is no more, it has ceased to be, it has expired; it is an ex-convergence programme.

It is not good enough if the Minister cannot even produce a document when he gets advance notice of ONS growth statistics that matches the realities of the economy rather than the forecasting ideas that are dreamed up in the Treasury. That is a sign that the Government do not understand the importance of growth in our economy, especially when today’s statistics showed that construction has fallen back by 7% over the past six months, with total production already falling back even from the last quarter before Christmas. Government cuts have not yet started in earnest, and the VAT increase is already biting hard.

What are the prospects for business growth? On page 14 of the document, the Treasury says:

“Credit conditions have shown signs of stabilisation”.

That is certainly not the experience of small and medium-sized enterprises: lending to businesses is in an atrocious state. It goes on to say in paragraph 2.43:

“however, credit conditions for smaller firms remain tight”.

That is an exceptional understatement. The Bank of England’s lending report shows that lending to SMEs fell by a further 3% in February. That is echoed by the British Bankers Association’s growth rate statistics on lending to small businesses, which cited a figure of minus 6% in December. So much for the much-vaunted Project Merlin. Yet the mark-ups that small businesses have to pay for loans are widening, and the banks are charging small businesses even more even though less and less lending is available. We have a serious systemic problem with our economy. Underpinning the difficulties with growth are the factors that businesses need in order to fire up the economy, and they are going wrong.

We also have to look at the Government’s failure on employment. Page 84 of the convergence programme document says:

“In line with a weaker outlook for output growth, we expect employment to be lower than forecast in November.”

The OBR predicts that unemployment will go up by 200,000 as a result of the Government’s policies. If each unemployed person costs the Exchequer about £7,800 in welfare costs and lost taxes, that could represent a loss to the Exchequer of more than £1 billion—money that the Exchequer should have coming in that is going the wrong way. In addition, inflation is undermining Government spending plans, as the document admits in terms of VAT fuelling inflation, and it is forecast that borrowing and debt will be higher than predicted in June. As a consequence, the interest that we will need to pay on our borrowing will be higher because of the inflationary costs of social security expenditure.

[Mr Cash]

I have no doubt that the hon. Gentleman has looked at the comparison of unit labour costs throughout the whole of Europe. It shows that in the past 10 years Germany’s costs have increased by only 2% whereas almost every other country’s have increased by massive multiples of up to 35%. Does he accept that one of the real reasons Germany is predominating in the European economy includes, in particular, the fact that its labour costs are so low, which means that it can compete in the BRIC countries, including India, China and the rest?

[Chris Leslie]

There are several factors underpinning the German economy. The Germans do not pursue the same degree of hard and fast austerity that we are pursuing, they have a different approach to productivity, and they are achieving higher levels of growth. Our economy needs a pro-growth strategy. I do not say that as a whim—it is a hard-headed credible necessity for reducing the deficit and getting the economy moving again. Without growth, the Treasury will be losing revenue.

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

When the hon. Gentleman talks about a pro-growth strategy, does he mean spending? If so, where on earth is the money coming from?

[Chris Leslie]

As the hon. Gentleman knows, the paradox of austerity and of an anti-growth strategy is that it costs more in the long run. I quite understand that many Government Members do not understand the causes of the deficit. It is therefore improbable that they are the right people to solve the deficit. If they understood its causes, perhaps I would accept their rationale on how to solve it, but they do not.

[Kelvin Hopkins]

I hope to help my hon. Friend a little. If one makes unemployment go up, fewer people pay taxes, more people depend on benefits and the deficit gets worse, not better. That is precisely what will happen.

[Chris Leslie]

That is precisely the point that we need to make this evening: an austerity approach that cuts too far and too fast will cost more in the long run. That is not just in terms of the lost generation of young people who are now on the dole—one in five young people are now unemployed—and not just in terms of the higher welfare costs, which will mean higher borrowing. The House of Commons Library told me today that if the past six months of the economy had emulated the first six months since the general election, the Exchequer would have received an additional £6 billion in revenues. However, because growth is flat-lining, the Treasury is recouping less revenue. The Chancellor will therefore have to add £6 billion to borrowing and the deficit will be higher as a consequence of low growth in the years ahead.

[Martin Horwood]

The hon. Gentleman has expanded at length on the fragility of the economy and the recovery, which I do not think is in dispute, but we are still a little thin on the alternative from Labour. In recent months, it has talked rather admiringly of the American economy and its expansionist approach. However, that has earned America a credit warning from the rating agencies. If that had happened to us, it would undoubtedly have led to higher interest rates, which would have hit everyone with a mortgage, everyone with an overdraft, and all the people who are vulnerable to debt—people about whom the hon. Gentleman is supposed to be concerned. That, in turn, would have hit economic growth. What is Labour’s alternative?

[Chris Leslie]

I would regard the hon. Gentleman’s approach as credible, if it was not for the fact that in precisely the same debate a year ago, he would have argued precisely the opposite points. The Liberal Democrat party has made a volte-face away from supporting the economy and pursuing a pro-growth strategy, and has absolutely no credibility when talking about strategies for growth. They used to be a pro-growth party; they are now an anti-growth party that has joined and been assimilated into the Conservative party.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I wonder whether I can help the hon. Gentleman. Will he outline for the House whether his speech is based on Keynesian or Brownite economics?

[Chris Leslie]

It is actually based on common-sense economics. I regret that the Government cannot see that. Unfortunately, I think that they will rue the day that they neglected growth in the economy. As we know, there is anxiety in the Treasury at the flat-lining, almost comatose nature of the economy. We hope sincerely that it picks up through the next quarter, but many people predict choppy times in the second quarter of this calendar year. I refer the hon. Gentleman to the paradox that I spoke about: pursuing the austerity approach too hard and too fast undermines growth and pulls from under the economy some of the key drivers for future prosperity that support it. Cutting too far and too fast is bad not just for the economy, but for deficit reduction strategies.

The Government’s spending plans are already coming unstuck. I will wind up with this point because I know that a lot of hon. Members want to speak. On tuition fees, which we debated earlier, we know that the cuts to higher education budgets will mean that universities will charge the highest fees, which will result in the ballooning of student loan pressures and the creation of a funding shortfall. Where will that money come from? We know that the Government have U-turned on school sports and that, when it came to the crunch, even the Financial Secretary had to U-turn on the financial inclusion fund. We are glad that he did so, but it changed the spending trajectory. On forests and on any number of other spending plans, when the rubber has hit the road, the Government have been unable to fulfil many of the so-called spending cuts that they promised in their much-vaunted June Budget.

[Mr Cash]

Does the hon. Gentleman concede that, leaving aside the question of cuts for a moment, the motor for an economic revival comes from growth, which in turn can come only from private business and private enterprise generating the taxation to pay for public expenditure? Without that, there is no public sector.

[Chris Leslie]

I agree with the first part of the hon. Gentleman’s point. Of course we need a pro-growth policy, and of course the private sector has to be the engine of that. However, he suggests that the Government somehow have no role to play in encouraging and fostering growth, and that is where we differ. The Opposition believe in supporting firms in moving forward into prosperity. The laissez-faire attitude of the Conservative-Liberal alliance has moved us into wholly different terrain and proves that it does not have a credible fiscal stance.

Unfortunately, the convergence programme is a hollow document that is already out of date. Its predictions are not probable or plausible, and for those reasons I urge Members to reject the motion.

19:51

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I start by drawing on the last intervention by my hon. Friend the Member for Stone (Mr Cash). He made an important point, and it was the one that I made last night. Government money is not our money, it is the public’s money generated by the private sector. We cannot simply say that we should carry on pouring in money, because it is not our money. We must think about where it comes from.

The hon. Member for Nottingham East (Chris Leslie) said that if certain actions had not been taken, an extra £6 billion would have come in to the Exchequer, but in our emergency Budget we cut the deficit by £6 billion. If we had not done that, there would not have been any extra money, would there? We would have borrowed an extra £6 billion instead. We would have been borrowing money, churning it out, collecting it back in and saying, “What great money generation”. We would just have been turning money around. We can get money coming in to the Exchequer only through growth, and that can occur only if the private sector is in a credible position so that it can move forward.

The Opposition’s comments are interesting, because there is a paradox in that they paint a gloomy picture but meet it with glee and struggle to keep a straight face. Of course, we know that if we had followed the previous Chancellor’s spending plans, we would have been cutting £7 for every £8 that is being cut now. The margins are small. Let us not get into a discussion about the idea that if the Government’s actions had not been taken, a further £6 billion would have come in. We cut the deficit by that amount in the emergency Budget, so there would not have been any extra money. The money that we borrowed would just have been churned out and collected back in, which would have done nothing to stimulate the growth of the economy. I agree with the hon. Member for Nottingham East that the growth figures are small, but they are growth figures. He says that they may be flat, but we know that things can be choppy. The point is that we are growing and moving forward.

Let us come back to tonight’s debate and the history of the Council of the European Union. Back in July 2008, the Council of Ministers decided that the UK had an excessive deficit and asked it to correct that by the financial year 2009-10 at the latest. In April 2009, the Council concluded that the UK had failed to correct its excessive deficit within the time set. In December that year, it adopted a recommendation that the UK end its continuing excessive deficit by the financial year 2014-15, by bringing it below 3% of gross domestic product. In 2009-10 it was at 11.4% of GDP, but the convergence document now predicts it to be at 2.6% of GDP.

That is in stark contrast to the Opposition argument that it is unnecessary to make cuts and that we should continue as before. I shall tell the House later how I actually feel about the EU’s interference in such matters, but people outside this country were saying, “You are spending too much; you need to make those changes,” and we are now doing so. Whether we should have to do that for the EU is a slightly different debate, and my hon. Friend the Member for Bury North (Mr Nuttall) was right to say that we are using parliamentary time and publishing documents containing information that the EU could quite easily find out for itself. That adds to the already bloated EU system, and perhaps indicates why it asks us for a 5% increase in its budget, which is an absolute disgrace at times of austerity.

The hon. Member for Glasgow South West (Mr Davidson) spoke of the imbalance of trade with the German economy. The German manufacturing economy is a powerhouse of Europe, and as my hon. Friend the Member for Stone outlined, we have a very low manufacturing base. The picture that that paints is that economic integration in the EU is not possible with sovereign countries generating high GDP growth and trade imbalances. For integration, countries must move to one common taxation policy. That, if anything, is proof that the euro is leading to a common taxation policy and a loss of fiscal sovereignty.

[Mr Cash]

As my hon. Friend may have noted, I raised that question with the Prime Minister earlier today in relation to voting against the provisions for a corporate tax base for the whole of Europe. That decision will in fact be made unanimously, and we can get rid of it with our veto. I did not get an answer from the Prime Minister, and I hope my hon. Friend continues to urge against having a tax system imposed upon us by the rest of Europe.

[Alec Shelbrooke]

My right hon. Friend the Prime Minister has a very pragmatic view on such things, and I am sure he took great note of my hon. Friend’s question. I am also sure that the Prime Minister will listen to the mood of the country and ensure that the EU does not move towards such a common economic base.

This is crux of the matter: we are publishing documents tonight to pass back to the EU that show that the UK is in compliance with the rules. Those rules mean that we could qualify for the euro. People have often asked, “With the pound so close to parity with the euro, why don’t we join?” but we will not join because we will not fudge the figures just to get into the euro—not that we want to join—[Interruption.] Please! I would not want anyone to leave the Chamber thinking that I am pro-euro, because I certainly am not—perish the thought.

To qualify for the euro, countries must have a budget deficit of 40% of GDP and they must borrow no more than 3% of GDP annually. We know that the Italians fudged that. That is one reason why the euro is in the mess that it is in, and why it is nowhere near competing with the US dollar, or indeed the Chinese currency, in the way that people thought it would. The fact is that if the EU wants to have a strong economic case, it must go for full monetary union, which is totally unacceptable for sovereign countries.

As we know from the treaty of Rome, the original European partnership of six nations was set up to try to prevent further wars in Europe, to bring peace to the European nations, and to get everybody trading together as one bloc. That was the vision. However, I do not think that the rise of far-right parties across Europe and the increasing moves down the federalist route are coincidental. People feel that they have lost their sovereignty and identity. If the EU moves forward to a full, integrated economic policy, that will be the end of the EU, because people around Europe will vote in extremist parties to try to reclaim their national identity. I say that as a warning, with no joy. I am probably one of the more dove-ish Government Members when it comes to violence or military matters, but I fear where those moves could lead.

The Opposition’s main argument this evening has been: “You’ve got your economic policy completely wrong. You could have had more money coming to the Exchequer.” However, they have forgotten that the money coming to the Exchequer was the money they printed, pumped out and brought back in before saying, “Oh, look at all the money we’ve generated!” I do not think so. This is about creating growth, and in the document before us, an independent body has said that the Government’s policy is correct and in line with what we want to achieve, which is what the previous Government singly failed to achieve despite the warnings in December 2009.

20:00

[Kelvin Hopkins (Luton North) (Lab)]

I want to speak briefly on this document and to support my hon. Friend the Member for Nottingham East (Chris Leslie), who sits on the Opposition Front Bench. The Government’s economic policy will drive us into recession. The cuts have not really started yet, and when they do, unemployment will rise, and when unemployment rises, people will lose confidence and stop spending, and we will see a downward spiral into recession. I am convinced of that. I am not the only person saying it. As I have pointed out in the Chamber more than once, Paul Krugman, the Nobel prize-winning economist, has said that the Government are going in precisely the wrong direction. They should be trying to stimulate the economy through additional spending in labour-intensive areas, such as construction and the public sector—but that is the absolute opposite of what they are doing.

If we bring down unemployment, revenues will rise, benefit payments will reduce and the economy will grow, and that will reduce the deficit. I have used this example many times: after the second world war, under Conservative and Labour Governments, we had a gross debt two and a half times GDP—about four times what it is now—but we just maintained a policy of full employment, led by the magnificent Atlee Governments in 1945 and 1951. We had full employment, we created the national health service, living standards rose and we even ran a labour shortage such that people came from abroad to work here because the economy was growing so fast. We ran a growth economy led by public spending. That is what we should be doing now, but we are doing the absolute opposite. If other countries do the same, we will see the 1930s relived, but people have so much more to lose now it will be politically quite dangerous.

There is already a reaction in Europe to what is happening. In Finland, a Government have been elected who are baulking at the idea of bailing out some of the weaker members of the eurozone. I have no idea why we should be bailing out members of the eurozone. Ireland is a special case, because it is our nearest neighbour and effectively part of the sterling-zone economy, not the eurozone economy. We are its major trading partner and we have an exchange of population, so Ireland is a different case from the rest of the EU. For us to be bailing out other countries in the eurozone is complete and total nonsense. The sooner they leave the eurozone, recreate their own currencies and depreciate them, the sooner they will recover.

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

The hon. Gentleman puts a happy and cuddly aura around the old hard-left of the Labour party. Bearing in mind that for years we and other European countries have been reporting to the European Commission on these matters, does he think that the Commission has learned any lessons from the information it has been sent? If it has, why did it not try to help the economies of Greece, Ireland, Portugal, Italy and so on?

[Kelvin Hopkins]

I think that the hon. Gentleman and I agree on this point. It has learned absolutely nothing. To try to squeeze the life out of an economy that is already almost wrecked is nonsense. The Commission should allow those economies to grow, and they can grow only if they can recreate and depreciate their own currencies, and start to compete again. Ireland is in a terrible state because it chose—foolishly, I think—to join the euro. I have said to Irish politicians—in as friendly and comradely a way as possible—that they should recreate and depreciate the punt to something like the level of sterling, and rejoin the sterling zone, which is where Ireland belongs. Its economy would then start to recover. Without that, it will not recover.

[Martin Horwood]

I am just curious: who does the hon. Gentleman think would lend those Governments the money to finance that public spending, given their credit ratings at present?

[Kelvin Hopkins]

In the end Governments can print money if they wish to, but the idea that we can squeeze those economies into growth is complete nonsense. We could debate these matters at great length—I would be happy to do so on another occasion—but that is not what this debate is about. I want to focus on the Government’s economic policy, which I think is profoundly mistaken.

Another point in the document is the emphasis on fiscal neutrality. The Government do not seem to appreciate that fiscal neutrality can be achieved in various ways. If we cut public spending and taxation at the same time, that is, in a sense, fiscally neutral. If we raise public spending and taxation, that is also fiscally neutral. We can also achieve fiscal neutrality by raising taxes on the rich and reducing them on the poor. Fiscal neutrality can have all sorts of different effects. If we cut taxes on the rich and raise them on the less well-off, we will drive the economy into recession, because poor people will spend less money. The marginal propensity of the poor to consume is higher, so if we tax the rich and give more to the poor, they will spend. If we give pensioners a rise in their pensions, for example, they will spend more, but if we give a wealthy person a tax cut, they will not spend.

Those are marginal changes, but my general point is that fiscal neutrality can be achieved in various ways. In fact, it is nonsense to have fiscal neutrality when growth is flatlining. We ought to have an expansionary fiscal strategy, not a neutral fiscal strategy. I might add that this is my view, not necessarily the view of my hon. Friends on the Opposition Front Bench. They are perhaps more cautious than me, but in the end I would like to think that I and others will be proved right. We have to generate growth, but it will not happen if the Government continue to operate in the way that they are at the moment.

[Steve Baker (Wycombe) (Con)]

As the hon. Gentleman knows, I have great admiration for him on many subjects, but does he realise that when Keynes was suggesting those fiscal stimulus packages, the state accounted for only about a quarter of GDP, whereas now the figure is up to 45% and getting on for 50%? The capacity is just not there. I would suggest to the hon. Gentleman that even Keynes would be horrified at the notion of Governments spending more from present levels?

[Kelvin Hopkins]

The role of the state is much larger than it was even in Keynes’s day; therefore, the state has to generate more demand. The state has a bigger role in the economy—I think that is a good thing—but we cannot withdraw from the idea of managing economies in the way that we did after the second world war. Between 1945 and the 1970s, we had a world that actually worked. We had rising living standards and the highest rate of growth in our history. We had full employment, we developed a welfare state and the national health service, and we had free tuition at universities. Since then, the neo-liberals and the monetarists have got hold of economic policy again and we have gone back to something like the early 1930s, albeit with higher living standards, at the moment, but that could so easily be destroyed if the current mistakes continue to be made.

[Alec Shelbrooke]

I really do not understand the hon. Gentleman’s rose-tinted view of the 1960s and 1970s. In the 1960s we had to devalue, and by the 1970s inflation and wage inflation were huge, to the point where teachers were given a 25% pay rise in the mid-1970s that was worthless the following year. As for the Keynesian arguments, the new deal in 1930s America failed until the second world war came along and the country could manufacture and lend money to support the war effort. That is what created the recovery. Surely the hon. Gentleman is not suggesting that we need another war to sort out the economy.

[Kelvin Hopkins]

I would advise the hon. Gentleman to read an excellent book by J. K. Galbraith called “The World Economy Since the Wars”. He said that wartime investment in American manufacturing transformed the economy, which emerged as the strongest economy in the world.

We could go into those matters at great length; the point is that it is nonsense to try to deflate our way to growth, as has been said by a number of leading economists. Okay, so they happen to be Keynesians rather than monetarists, but do we want to go back to a world of high unemployment and greater inequality, or do we want to go forward to a world of full employment and greater equality? That is the choice. The Government’s proposed strategy, as set out in the document under discussion, will have a devastating effect on our economy and—they may not be prepared for this—will make them detested and massively unpopular. I remind them that, after the second world war, Labour took office with a massive majority as a result of the working people of Britain rejecting what had happened in the 1930s: the recession and the war. We are in danger of going in that direction again, and the end result would be the election of a Labour Government who would have to pick up the pieces of an economy that had been destroyed.

Even PricewaterhouseCoopers—not a noted left-wing organisation—has suggested that, for every job lost in the public sector, one would also be lost in the private sector, as opposed to the private sector picking up where the public sector left off. Much of the demand in the private sector comes from public sector spending and public investment. We have already seen construction levels falling, with the cancellation of many school building programmes. That will create unemployment in the private sector as well as the public sector, and it is conceivable that unemployment could rise by 1 million. If we had 1 million unemployed, in addition to the 2.5 million that we already have, we would be in very serious economic waters. It would be a terrible time, not just for young people but for the whole economy. We would see falling living standards, mass unemployment and a mass political reaction to what was happening.

I had a different view on this matter from those on my own Front Bench, particularly before the election, when I and a number of Labour comrades rejected the idea of cuts altogether. We believe that dealing with the deficit has to be done by generating growth. After the banking crisis, the Labour Government did exactly the right thing. They pushed demand into the economy by printing money, reducing interest rates almost to zero and recapitalising the banks, all of which had to be done. In fact, the Conservative Government, in their first six months, were living on the growth generated by Labour’s policies—[Interruption.] That is the reality. Now, Conservative policies are kicking in and we are starting to see the economy go down.

I could go on about this at greater length, but others want to speak and this is a short debate. I am happy to come back and talk about these issues time and again if hon. Members wish me to. Indeed, I am happy to discuss them in private as well as in public. I am convinced that the Government have got this wrong, and that Keynesian economists such as Krugman and Stiglitz have got it right. We need to generate growth through public spending and public investment; we do not need to cut.

20:12

[Mr William Cash (Stone) (Con)]

It will be useful to remind the House of what section 5 of the European Communities (Amendment) Act 1993 actually says. Some of us were here in 1993 during the Maastricht debates, and it was rather an interesting moment when the only piece of reality in the whole of that Session occurred. That was when an attempt was made to restrain the movement towards a European Government. Section 5 states:

“Her Majesty’s Government shall report to Parliament for its approval an assessment of the medium term economic and budgetary position in relation to public investment expenditure and to the social, economic and environmental goals set out in Article 2”—

they are pretty extensive—

“which report shall form the basis of any submission to the Council and Commission in pursuit of their responsibilities under Articles 103 and 104c.”

What this really boils down to is that, in order for us to be able to continue—leaving aside the opt-out from the euro—we effectively have to comply with the convergence criteria and other criteria that are laid down by the European Union. Effectively, leaving aside the question of the European stability mechanism—my hon. Friend the Member for Elmet and Rothwell (Alec Shelbrooke) knows that I totally agree with the extremely important point that he made earlier—the bottom line is that we have been moving inexorably, regrettably and avoidably towards deeper and deeper European integration, with more and more requirements and obligations being imposed on us.

As Chairman of the European Scrutiny Committee, I and other colleagues here tonight—my hon. Friends the Members for Daventry (Chris Heaton-Harris) and for North East Somerset (Jacob Rees-Mogg), and the hon. Member for Luton North (Kelvin Hopkins), a distinguished member of the Committee from the other side of the House—know the sheer, massive extent of the invasion and the vast range of impediments that are put in our way as a result of decisions taken not by this Parliament but by other countries, by the European Commission and by the European institutions. So this is an important debate, and the Minister will understand why I objected to the idea that it should be shunted off to some innocuous Committee, well controlled by the Whips, without having any real opportunity for the whole House to participate.

I can make my points briefly. Some have already been made and others I have made myself in the past, so I do not need to elaborate on them. First, I very much agree with the suggestion that this undemocratic process affects the daily lives of the people of this country and inhibits our ability to grow our economy, particularly when at least 4% of our gross domestic product is lost through excessive European regulation of small and medium-sized businesses. I find it utterly absurd—it is incomprehensible to me—that the Government cannot simply say, “Look, we’ve tried. We’ve gone ahead. We’ve tried to negotiate, but they are not listening. We are going to have to override the European legislation.” I think it negligent not to do so.

I received a letter from the Prime Minister only a few days ago, reminding us that the European Council

“agreed on the need for robust actions to support growth”.

He went on to refer to reducing

“the overall burden of regulation including exemptions for micro-enterprises from future regulations”.

In my right hon. Friend’s absence, I have to say—he will know that I would say it anyway—that “future” regulations are not the issue. The real question is about existing regulations. I do not need to go through them all again—I have written pamphlets about them, as have many others—and we know that there is a vast array of completely negative regulations that cause a vast amount of difficulty for small and medium-sized businesses. We are not going to achieve the private enterprise that will be needed to pay for the public sector that is needed unless we get out of that vicious circle. That is point No. 1.

Point No. 2 is that the consequences of not having sufficient growth and of having the deeply regrettable legacy of the deficit will mean that riots and protests—not only in other countries, but in our own—will grow as the pain bites into the economy and into people’s daily lives. This will lead to an increase in the potential for parties of the far right to gain traction. I do not think that the policy pursued on the stability and growth pact can be described as anything other than a disaster area because there has been no stability, no growth and no pact. I wrote an article about that in The Times five or more years ago, but it is exactly the same now. Nothing changes. That is terribly depressing, which is why we must have the political will to do something about it.

The Europe 2020 strategy is another re-run of the vast amount of verbiage that accompanied the Lisbon agenda, which those involved had to admit was a complete disaster. It is words, words and words; it is nothing to do with the practical question of generating growth. I mentioned Brazil, India and China earlier. The plain fact is that we have to compete with these other countries and it is impossible to do so when looking at the question of unit labour costs in those countries and then looking at the European Union and noticing that Germany had an increase of only 2% in the last 10 years, compared with 30% in most other EU countries. We are in a completely impossible situation. I say this with the greatest respect to my hon. Friend the Financial Secretary, but I did not hear anything in his speech to respond to this situation except for the fact that he said we were getting close to achieving the parameters laid down by the EU for the excessive deficit procedure.

Let me ask a question that I asked before the general election and again during it. It is simply this: what is the true level of our debt? Suppose that the Chancellor of the Exchequer had risen to make his Budget speech in the House the other day and said, “The first thing I must tell the House is that we will have to knock £6 billion off the figures that I am about to announce because we will be bailing out Portugal—and, by the way, our budget contribution to the European Union will rise to £10 billion, so we had better start factoring that in as well.”

Some Members may not know—I do not think many people do—that a spat is going on between the Office for National Statistics and Eurostat about the formulation of our figures in relation to the deficit. I am looking into it, but it is the sort of thing that really troubles me. If we do not get the figures right, and if the Eurostat figures are imposed in a way that makes it difficult for us to accord with the parameters of the rules, that will be another matter that should concern us.

There are many other issues that I could raise, but let me end by dealing with the question of looking to the future. The plain fact is that Germany has now taken pole position in the European Union. The European Central Bank—which has not been mentioned tonight, and to an extent I understand why—has been more or less working in a German environment, if I may put it in those general terms, and has become the owner of vast quantities of bad assets. Another problem is being stoked up there. As was pointed out in a very interesting article in The Economist a few weeks ago, all that is part and parcel of Germany’s pole position at the heart of Europe and also the heart of the problem itself. We cannot afford to work on the basis of a system—to which the Government have foolishly agreed—in which we would not be isolated, but would be engaged in the process of a two-tier Europe because we had agreed to a treaty that will have a serious adverse effect on us. We must renegotiate these treaties and return to a European Free Trade Association-type arrangement, so that we have independence and, with it, the ability to deliver an economy that the British people deserve.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Three Members are standing; I remind them that the debate must end at 8.43 pm. I call Mr Nuttall.

20:22

[Mr David Nuttall (Bury North) (Con)]

I will bear that in mind, Mr Deputy Speaker.

It is always a great pleasure to follow my hon. Friend the Member for Stone (Mr Cash), who speaks with such knowledge and who gives the House the benefit of his long experience of these matters. Let me say at the outset that I am 100% supportive of the economic policies that the Treasury and its Ministers have pursued since the general election. It cannot be the case that the way out of the financial mess created by the last Government, who were borrowing, borrowing, borrowing, is to borrow even more, and to continue to borrow at those levels.

[Alec Shelbrooke]

Will my hon. Friend give way?

[Mr Nuttall]

Briefly.

[Alec Shelbrooke]

I am grateful to my hon. Friend, and I will be brief. Is his view not confirmed by what the hon. Member for Nottingham East (Chris Leslie) said about inflation creeping into the system, and by the suggestion of the hon. Member for Luton North (Kelvin Hopkins) that the way out of the problem was to print more money?

[Mr Nuttall]

My hon. Friend is absolutely right. As everyone knows, printing money invariably leads to inflation. I am sure that that would be the case if we continued to print money today.

I want to address the issue of our dealings with Europe, but first let us consider our net borrowing figures. According to forecasts from the House of Commons Library produced just a few days ago—on 21 April—even if we take into account all the measures that the Treasury are taking, we will borrow £122 billion in the current financial year and £101 billion next year. We are not paying back our debts; we are simply reducing the scale of the debt.

[Kelvin Hopkins]

I could raise a number of issues, but one in particular is that the Treasury is now predicting that the deficit at the end of this Parliament will be £11 billion higher than it thought a few months ago, simply because it expects the economy to grow less.

[Mr Nuttall]

I think there is always scope for margins of difference in predictions for five years ahead. I agree that on page 54 of the document in question a figure of 0.8% is referred to in respect of the quarterly growth figures, but what was not mentioned is that the previous line refers to erratic factors, and the very use of the word “erratic” implies there is some deal of scope for the figure not to be precisely bang on the nail. As we all know, the figures that have been released today are provisional, and it would be very surprising indeed if they are not revised one way or the other. [Interruption.] They may well go up, but it would be very surprising indeed if they were not to be revised.

Let me move on to my concern about this motion. I have said that I am entirely supportive of the Government’s economic policy, but I am not at all supportive of the idea of our supplying 201 pages of information, which I am grateful the Minister confirmed is all in the public domain, to Europe. Why cannot we send the Europeans one simple e-mail with a link to the Treasury website, where we say the following: “Here you are chaps; if you’re interested in what we’re doing, look at our website as it’s all on there, and you’ll be able to read what you want. We are a sovereign nation, and we are not going to produce 201 pages of bumf for you to no doubt translate into dozens of other languages. If you want to see what we’re doing, look at our website or read Hansard, as it’s all in there. We’ve got nothing to hide”? Frankly, I have to ask what on earth they do with these documents when they get them, as they obviously have not been keeping an eye on Greece, Ireland or Portugal, because look at the mess they are in! They obviously get these documents, file them under “Too difficult”, and let those countries get on their merry way.

That is not good enough, and that is why I do not support this motion. I do not think we should be sending any documents to the Europeans. We should be saying, “If you want to see what we’re doing, look at our documents, which are all in the public domain, and where it is all confirmed.” I am fully supportive of our economic policies. Let us stick at it, and let us say no to Europe.

20:27

[Steve Baker (Wycombe) (Con)]

I shall try to confine my remarks to three points on the report. First, the report rightly talks about imbalances in the economy. The hon. Member for Nottingham East (Chris Leslie) talked about serious systemic problems in the economy, and I agree that there are such serious systemic problems, albeit not, perhaps, those that the hon. Gentleman thinks there are.

On the first page of section 2, the report talks about debt and unsustainable levels of private sector debt. It is estimated that the UK has become the most indebted country in the world, and one sentence stands out:

“the spending plans set out in the 2007 Comprehensive Spending Review were based on unsustainable revenue streams from the property boom and the financial sector.”

The report also talks about geographical and sectoral imbalances. Given the limited time available, I will be very brief, but let me say that I feel that far too little effort has been made to explain some of these imbalances through monetary factors. Printing money has been mentioned. The problem with printing money is that it creates patterns of economic activity that can last only as long as that supply of new money. When the new money comes to an end—[Interruption.] From a sedentary position, the hon. Member for Luton North (Kelvin Hopkins) talks about the multiplier effect, and, again, he has appealed to Keynes. I have to say to him that one thing I have learned over the past few years in setting up a think-tank and talking to economists is that it is really no good at all appealing to the authority of economists. There are always several schools of thought, and one of the things they are no good at is making accurate predictions—or, indeed, agreeing with one another. I am therefore afraid that that leads us to thinking for ourselves.

One of the most important factors to do with money is something long known, called the Cantillon effect: the fact that when money is created, it always arrives in one place in the economy first. So when banks are lending money into existence and into the housing sector, of course house prices rise, the financial sector is better off and the economy reorients itself to the south-east, where the banking sector is based. Although the report diagnoses the problem very satisfactorily, I am disappointed that the monetary policy framework consists of one short paragraph. We have learned tonight that there is an appetite in this House for a serious debate about monetary policy, and the monetary framework and how it has an impact on the real economy.

Secondly, and further to my point about new money creating unsustainable patterns of economic activity, sustainable investment requires prior production and real saving. That involves individuals, families and businesses consuming less than they produce to make real savings and invest them. Easy money will not create sustainable development and sustainable growth.

I wish to allow other hon. Members to speak, so I shall make one final point. I must ask to what end we are making this report. The lexicon has suddenly developed the term “convergence programme” and I am not sure where it came from. We have talked about Maastricht, but the term has certainly only just emerged into the public debate today. Why are we converging? With whom? To what end? I would be grateful for an answer.

20:31

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

I do not know how long I have before we move on to the wind-ups, if indeed we are having them.

[Mr Hoban]

indicated dissent.

[Jacob Rees-Mogg]

We are not having them, so I have 11 minutes—this is very exciting. Thank you, Mr Deputy Speaker for calling me last—it does sometimes happen that the first will come last and the last first.

[Chris Heaton-Harris]

Like under AV.

[Jacob Rees-Mogg]

That is a good point.

I had not intended to speak until we heard so eloquently from the shadow Minister about the virtues of reckless spending—it is tremendously important to stop that view of the world. We have to get back to some of the debate we had yesterday, which is why it is worth supporting the Government’s financial outlook position and policy. The reason for that is that the situation will be increasingly difficult. The economy was left to us in a terrible mess, in terms of not only the public finances, but private sector debt. The idea that this will easily be recovered by getting people to borrow again or banks to lend again is simply wrong.

The hon. Member for Luton North (Kelvin Hopkins), who is an hon. Friend on European matters but an hon. Gentleman on other matters, talked about getting more people to spend and taking money off the rich so that it can be spent by poorer people, who have a greater propensity to spend. That might be fine when the banks have money to lend, but we need to get the loans-to-deposit ratio for the banks as a whole in the United Kingdom below 100%, so that the banks have the liquidity to lend. Until we are able to do that, the idea that we can have debt-fuelled re-growth is simply mistaken.

On Government debt, I wish to return to a point made yesterday by the shadow Chief Secretary on Ricardian equivalence. She does not believe in Ricardian equivalence and I do not think that many people do in exactly the terms that Ricardo spelt it out. None the less, his underlying point was completely sound: the debt of Governments will ultimately have to be paid back through tax income raised. Intelligent electors realise that and know that if the economy is growing on the basis of Government debt, that will eventually be a charge to them. It might not affect their behaviour over one or two months, but over one, two or five years it certainly does. Economies that run indefinitely on debt find that their growth levels are neutered, and anybody who doubts that should look at the Japanese economy.

If we look at what has been going on in Japan since 1990, we see that the Japanese have increased their public sector debt from next to nothing to 200% of their GDP and that in that period they have had absolutely no growth—their economy has been stagnant. Their tax revenues were lower in 2010 than in 1985, because the level of growth in the Japanese economy has been so low.

[Alec Shelbrooke]

Would my hon. Friend like to bring things up to date and comment on the US economy and the fact that the Americans decided to pour a lot of money in, found that that did not work and are now considering very strong austerity measures?

[Jacob Rees-Mogg]

It is relevant to look at the United States economy and at the gold price, which is up at $1,500 and not because more people are getting married and want wedding rings—although I congratulate my hon. Friend on his forthcoming nuptials and I am sure he is buying a large piece of gold for his future wife. The gold price has been so strong because the financial markets have lost confidence in the US dollar and because the American political forces—the President and Congress—have not been willing to tackle the deficit in the way that Her Majesty’s Government have done. The gold price in sterling terms has not risen by anything like so much, because people have confidence in what the Government are doing.

Normally, I take the view that there are two people in this world who should be obeyed. One is the Holy Father and the other is my hon. Friend the Member for Stone (Mr Cash). When my hon. Friend speaks on European matters, he does so with a degree of infallibility that belongs to only one other living person, although I hasten to add that the remit of the Holy Father does not cover European matters. My views diverge slightly from those of my hon. Friend on one point: I think we should be proud of the document that Her Majesty’s Government are sending because of what the Government have got right. The situation they faced a year ago was desperately serious, needed urgent attention and had to be brought under control by their taking measures that are not necessarily popular.

It is important to emphasise that point because all Governments, when they take tough decisions, face gentlemen such as the shadow Minister, the hon. Member for Nottingham East (Chris Leslie). Over the next year or two, as people see the cuts coming through, it will be very tempting to listen to such voices and to think that perhaps there is an easier way and a land flowing with milk and honey that we have not yet found where we can borrow more money, where the financial markets will turn a blind eye, where we can spend money we do not have and not worry about our children and our grandchildren and where the banks will suddenly miraculously lend to bankrupt people to keep inefficient systems going. That is when those on the Treasury Bench must stiffen their sinews and summon the blood and not give way to those voices. At the moment, that is still relatively easy, because there has not been much coming through in the way of cuts. We have not seen the pain that will come from those difficult decisions. Now, however, we are sending our plan abroad. We are telling people not just in this country but in foreign countries of what we are doing and we should be proud of it because it is right. If we do what is right, the economy will begin to recover.

We on the Back Benches, in particular, must support those on the Front Benches when they do such things and when the critics from the other side appear to be doing well in the opinion polls. That is the point of maximum difficulty. Let us think of the great lady in 1981, when 360-odd economists wrote to The Times—a great newspaper with very fine editors—to suggest that the economic policy was wrong. That was two years in and it was the hardest point and that Government stuck to their guns, which led to the recovery we then had.

[Mr Davidson]

The hon. Gentleman has spoken movingly about the need for cuts and indeed for pain—pain that I suspect will not be felt by him. Pain will be felt by poor people whereas bankers, who are rich people, will feel no pain whatsoever. It is the unfairness of what the Government are doing that is causing so much opposition and bad feeling in the country and that is why the Liberals will suffer so badly in the AV referendum and the election.

[Jacob Rees-Mogg]

The fundamental flaw in the hon. Gentleman’s argument is to think that there is a painless way out of a major crisis. It is simply a question of whether we deal with it now and ensure that the problem is resolved and that the economy can grow again or whether we delay it and have a much worse crisis later. The pain I was talking about was political pain for the Government as people notice the cuts. Our approach will reduce the pain for individuals because it will ensure that the economy is rebalanced sooner rather than later. That is the way to minimise pain—not thinking that there is a never-never land with no pain after we have lived on debt and incompetent Government policies for the past 13 years.

[Alec Shelbrooke]

We hear about fairness from the Opposition, but which does my hon. Friend feel is more unfair: bringing in higher taxes to get us out of this problem or letting the economy run away and allowing interest rates to rocket, thereby leaving thousands of people’s homes to be repossessed?

[Jacob Rees-Mogg]

My hon. Friend is absolutely spot on. This is one of the great virtues of the Government’s policy, which is being welcomed by the gilt market.

It is also worth noting what the late John Maynard Keynes said on such matters. Everyone in opposition quotes him and says that we should follow his policies but one of his policies, to quote the Chancellor, was that Governments should mend the roof while the sun shines and should build up reserves in the good times. My godfather interviewed John Maynard Keynes late in life and asked him, “What happens if Governments do not do this? What happens if they spend money in the good times?” to which Keynes replied, “If they do that I shall make a speech in the House of Lords and that will put them off.” Sadly, he was not here between 1997 and 2010 to make a speech in the other House to tell the other side of the policy failures when the economy was booming, so there was no money when the economy went wrong.

Time is short and I have a point to make about the presentation of the document to Europe. I hope that we have a Division because it will be delayed until after the deadline for sending in the papers. I hope that Her Majesty’s Government will show their independent-mindedness and ensure that the House’s approval comes before the requirements of a foreign international body. It would be a great discourtesy to the House if the document were presented to the European Commission before the deferred Division that we are likely to have on Wednesday.

Question put.

The Deputy Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 5 May (Standing Order No. 41A).

Business without Debate

Wednesday 27th April 2011 Commons Chamber

Delegated Legislation

Wednesday 27th April 2011 Commons Chamber

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Civil Contingencies

That the draft Civil Contingencies Act 2004 (Amendment of List of Responders) Order 2011, which was laid before this House on 28 February, be approved.—(Mr Vara.)

Question agreed to.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Sexual Exploitation of Children

That this House takes note of the proposed draft Directive on combating the sexual abuse and sexual exploitation of children and child pornography, repealing Framework Decision 2004/68/JHA; supports the Government in welcoming the objectives of the draft Directive in raising the standards of protection from sexual exploitation for children across Europe; and supports the Government’s view that national law or practice in England and Wales fulfils the obligations in the draft Directive.—(Mr Vara.)

Question agreed to.

Delegated Legislation (Committees)

Wednesday 27th April 2011 Commons Chamber

Ordered,

That the draft Employment and Support Allowance (Limited Capability for Work and Limited Capability for Work-Related Activity) (Amendment) Regulations 2011 (S.I., 2011, No. 228) be referred to a Delegated Legislation Committee.—(Mr Vara.)

petition

Wednesday 27th April 2011 Commons Chamber

20:43

[Valerie Vaz (Walsall South) (Lab)]

The petition is from the users of Pleck library, Walsall. The petitioners wish to prevent the closure of Pleck library and therefore request that the House of Commons urges the Government to take all possible steps to protect Pleck library for the future. There are 1,108 signatories to the petition in similar terms.

The petition states:

The Petition of users of Pleck Library, Walsall,

Declares that the Petitioners wish to prevent the closure of Pleck Library. The Petitioners therefore request that the House of Commons urges the Government to take all possible steps to protect Pleck Library for the future.

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

[P000916]

Press Self-regulation

Wednesday 27th April 2011 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Mr Vara.)

20:43

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

I thank those hon. Members who have remained behind for this Adjournment debate, which is rather later than expected. There has been some speculation on the internet today that the debate would be about super-injunctions, so I must apologise to hon. Members who have turned up to be titillated by stories of the exotic adventures of premier league football players as they will be sorely disappointed. It is not about that; it is about the self-regulation of the press—hon. Members are leaving immediately!—and particularly about the Press Complaints Commission and the editors code of practice.

Mahatma Ghandi said:

“I believe in equality for everyone, except reporters and photographers.”

On that point, I disagree with the great man. If anyone is attending this Adjournment debate expecting an all-out assault on the printed media in the Chamber tonight, they should leave now. That is not my intention.

The printed news media, which from now on I shall refer to simply as the press, have the right to publish anything they want, so long as they do so fairly and accurately. The press is free to be partisan, although it must distinguish clearly between comment, conjecture and fact. I will fight to ensure that it continues to enjoy those freedoms. I value the freedom of the press, the right of journalists to criticise or praise and the right of photographers to do their job, because the freedom of the press is a cornerstone of our democracy.

There has always been tension between those who argue for press freedom and those concerned with a range of other issues, including the invasion of privacy, the restriction that complaints can be made only ex post facto, and the practice of newspapers paying for stories. The case for the defence of the press is more often than not that a story is in the public interest, but who decides what is in the public interest and how do they arrive at that decision?

The stand-off between self-regulation and statutory controls has been around for decades. A 1947 royal commission recommended in 1949 that a General Council of the Press should be created as a governing body to regulate behaviour, but it was not until the threat of statutory regulation was mooted again in 1953 that the General Council was set up. The friction continued and by the time of a second royal commission in 1962 the General Council had been the subject of considerable criticism. The General Council became the Press Council. This organisation stumbled on ineffectively until the Calcutt report in 1990, which recommended the formation of the Press Complaints Commission.

The PCC was originally given 18 months to prove that self-regulation could work, with the threat that if it failed to do so, a statutory system would be introduced. It passed that first test and has continued to evolve. The code has changed 30 times since its formation, the last revision taking place in January 2011 on the question of the prominence of corrections, an issue that I will touch on shortly. It is right for the press to work within a voluntary code, but evidence is emerging of problems that need to be addressed.

The most disconcerting issue is that these challenges are not new. They have been around for some years but no solutions have been found, despite genuine attempts to look for them. These problems have been parked, but I believe the industry must get into gear, move on and find solutions, for it would be a major advantage to the industry if, as well as being seen as a champion of self-regulation, it were seen in the vanguard of promoting and introducing change. That, more than anything, would consign to the dustbin of history the period I spoke of earlier, when the stick had to be used more often than the carrot. If we can achieve that, those who feel compelled to complain to the PCC will have more confidence in the system.

Right now there is a serious lack of confidence in the system. My views are based on my  personal experience of dealing with the PCC editors code of practice which, sadly, I have had to do in my short spell as a Member of Parliament. It will come as no surprise to Members in the Chamber this evening that  my first dalliances with the PCC were in relation to the first batch of expenses published by the Independent Parliamentary Standards Authority.

The code states:

“The Press, whilst free to be partisan, must distinguish clearly between comment, conjecture and fact.”

Paragraph 1(i) states that the press must also

“take care not to publish inaccurate, misleading or distorted information”.

One of my local newspapers printed a story stating that I had claimed expenses for hotels in London, while at the same time claiming rent for a London property. The story was trailed on page 1 and appeared prominently on page 9. If it had been true, it would have been a sensational story and helpful to the paper’s dwindling circulation, but it was a complete and utter falsehood that had been fabricated in an attempt to mislead readers and to destroy my reputation.

The newspaper then refused to publish the truth or to apologise, and I was forced to complain to the Press Complaints Commission. The PCC carried out a full, thorough and professional investigation and found that the code had been breached, but the adjudication that was eventually printed was placed at the bottom of page 9, much less prominently than the original article, and there was no trail on the front page. It was said to have been given due prominence by the PCC; I contend that it was given less prominence.

The PCC further took the view that, as the misleading words had appeared on page 9 and not on the front page, the page 9 adjudication, less prominently placed, was sufficient.

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

My hon. Friend makes a powerful argument in favour of press freedoms as the cornerstone of our democracy, but I am sure he will agree that with press freedom there should equally be press responsibility. I cite the example of the worst sporting disaster in British history, when 96 football supporters were killed at Hillsborough on 15 April 1989. In the immediate aftermath of that human tragedy, press reporting hit an all-time low. Despite the huge loss of life, that most despicable of men, Kelvin MacKenzie, used the front page of The Sun newspaper to peddle lies about Liverpool supporters under the banner headline “The Truth”. When the scurrilous claims that it made were proven to be—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. This is an intervention, not a speech. Please, could the hon. Gentleman make it briefly?

[Steve Rotheram]

When the scurrilous claims that the newspaper made were proven to be entirely fallacious and without foundation, Kelvin MacKenzie refused to print a banner headline of a similar size and font, with the same page prominence that my hon. Friend talks about, stating quite simply that they had lied, something for which he and his former newspaper will never be forgiven in Liverpool. Does my hon. Friend therefore agree that if editors were forced to give equal prominence to retractions, they would be think carefully before fabricating stories and besmirching the reputations of individuals or of great cities such as Liverpool?

[Mr McCann]

I agree. My trials and tribulations with the press pale into insignificance when compared with the grievous claims that that publication made against the people of Liverpool. I agree wholeheartedly, and I am going to deal in some detail with the issue of prominence, because it has to be covered.

The issue of prominence has to be addressed by the PCC. It is currently parked, but it needs to be moved on, otherwise—and I do not say this lightly—it might have to be clamped by some sort of statutory mechanism. If newspapers get it wrong, ex post facto a complaint is made and that complaint is upheld, the correction must be given equal prominence to the original story. The very least that an individual or organisation can expect, if their integrity or actions have been inaccurately called into question, is that the apology should be of the same size, weight and prominence as the article that besmirched them. That is exactly the point that my hon. Friend makes. For those who argue that the same end result can be achieved by negotiation, let negotiation be the driving force of the settlement but let the persuader of “equal prominence” be available.

[Mr John Whittingdale (Maldon) (Con)]

When the Select Committee on Culture, Media and Sport, which I have the honour to chair, examined press standards, we certainly looked at the issue of due prominence. I share the hon. Gentleman’s view that, when an adverse ruling is reached by the PCC, it is vital that it appear with the same due prominence as the original article. The PCC in response suggested to us that the failure to do so would in itself constitute a potential breach of the code. If the hon. Gentleman felt that the adjudication did not receive the proper prominence that it should have, I should be interested to know whether he went back to the PCC and made a further complaint against the newspaper.

[Mr McCann]

The hon. Gentleman will not believe this, but the newspaper tried to editorialise the adjudication. It was forced to reprint it the following week because I immediately complained to the PCC that the words of its adjudication had been changed.

On the hon. Gentleman’s other points, I should say that, yes, I did contact the PCC and spoke to Stephen Abell, the chief executive. I made the very point to him. He said that because the misleading words were not on page 1, the adjudication could not be on page 1. I said, “Hold on a second. The page 1 trail took people to the misleading article. Why could there not have been a page 1 trail taking people to the PCC adjudication?” Surely that would be a fair and reasonable way to deal with my complaint and the subsequent adjudication.

Another feature that needs to be addressed is the letters pages of newspapers. I discovered that letters pages are also covered by the editors code of practice, so the same rules that cover articles in newspapers also cover letters; those letters, like everything else in the paper, are the editor’s responsibility. He or she is the sole arbiter.

In the normal chronology of events, newspapers print stories and, post-publication, they receive comments from readers. When I was the subject of the misleading article that I referred to earlier, the same edition of the newspaper contained a letter attacking me in the same way as the so-called news story. In my opinion, that was an unlikely coincidence.

To add insult to insult, the author was protected under the guise of anonymity; all I know about my so-called critic is “name and address withheld”. Mr Deputy Speaker, I am a trusting fellow as you very well know. I have tried hard over the years to find the best in people wherever I go, but my sixth sense told me that that was a stitch-up. I made a complaint to the PCC about the veracity of the letter, only to be told that because the writer wanted to remain anonymous no investigation could take place.

If the PCC thinks that its position on this matter is justified in any way, it is seriously out of touch with reality. If I do not know who wrote the letter, how do I know that it was not a political opponent seeking to make mischief? How do I know that it was not a journalist pretending to be a member of the public? How do I know that the letter was genuine?

[Ian Murray (Edinburgh South) (Lab)]

My hon. Friend has raised an incredibly interesting point about the letters pages of newspapers. However, there are also anonymous contributions to newspapers’ online presence; people can anonymise the comments that they make online. Very rarely do the newspapers have the resources or time to look at those in detail and deal with issues against an individual or organisation. Does my hon. Friend think that that aspect should come under a statutory code as well?

[Mr McCann]

Some might think that I am foolish to hold this debate, because they might think that taking on the press on any subject whatever is not a good idea. I think that it is better to take small steps rather than large ones. If we can deal with the first two issues of prominence and the letters pages, we can then move on to deal with some of the content on the internet.

For a code to work, it must operate in the unoccupied territory between the press and the consumer. The code must be able to interrogate complaints openly and fairly, yet this element of the system does not allow that to happen. The PCC administers the code; the editors code of practice committee is its keeper. That committee meets periodically to take account of public and—crucially—parliamentary comment, as well as reports from the PCC itself. The purpose of the committee is to allow the code to develop and respond quickly to changing practices and technology in the industry and to the concerns of readers.

The two issues that I have raised are not new; they have been around for some time, yet no solutions have been brought forward.

[Nadine Dorries (Mid Bedfordshire) (Con)]

I congratulate the hon. Gentleman on this Adjournment debate. The greater public perhaps regard MPs talking about their experiences with the media as self-indulgent. I am one of the Members who can speak with authority as one who has been maligned time after time by page after page of pure lies, but I have never gone to the PCC, which I regard as a toothless tiger.

I congratulate the hon. Gentleman on this debate. The issue is not about MPs because we rarely feature in the local press, which is full from front to back cover with stories about individuals in our constituencies. They do not know how to go to the PCC or how to complain. They try to complain but do not have their complaints answered in any way. Does the hon. Gentleman agree that what he is proposing tonight would benefit those people far more than it would us? We are, after all, here to represent our constituents, who suffer far more than we Members do. We can decide not to bother because we know that the PCC is a toothless tiger. Our constituents, however, may have expectations that will be thwarted.

[Mr McCann]

Let me say to the hon. Lady, in the words of Bill Clinton, that I feel her pain, because she and I have been in the same place. The code is meant to protect everyone—not only people like us in public positions, but our families. My daughter had problems at school because people were suggesting that her dad had acted inappropriately. That is wrong. My family is not in public life; I am, and I have broad shoulders and thick skin. We have to put in place a code that ensures that everyone is protected. What is wrong with people standing up when they make a mistake and saying, “I’ve got it wrong”, and the mistake being remedied in the same way that the original story and besmirchment took place?

These problems need to be resolved, and I hope that this short debate can at least put the issues into the public domain. The press have enormous power: they have the power to make the innocent guilty and the guilty innocent. With that great power, they have massive responsibility, as my hon. Friend the Member for Liverpool, Walton (Steve Rotheram) said. For the PCC editors code of practice to be effective, it must be able properly to scrutinise the press. Fairness must run through the code like the lettering through a stick of rock. I found this quote from Franklin D. Roosevelt that I thought very appropriate:

“If in other lands the press and books and literature of all kinds are censored, we must redouble our efforts here to keep them free.”

If this debate makes a pinprick of a contribution to that cause, it has served its purpose. I hope that the Minister will take on board the points that I have made and join me in pressing the Press Complaints Commission to deal with these two big issues.

21:00

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

I am grateful for the opportunity to respond to the hon. Member for East Kilbride, Strathaven and Lesmahagow (Mr McCann), whom I congratulate on securing this Adjournment debate. I am also grateful to have heard the contributions made by other hon. Members in expressing their concerns about press reporting.

As the hon. Gentleman said from the outset, this debate is not an opportunity to attack the press or to lose sight of the importance of a free press. It is worth recalling that more than a third of the world’s people live in countries where there is no press freedom. It is therefore important to emphasise that however the press may transgress, a free press is fundamental to our democracy. The independence of the press from state intervention is also fundamental to our democracy, and that is why this Government and previous Governments have always fought shy of statutory regulation of the press. However, the press are not immune from criticism, as we have heard from several hon. Members, and this makes the work of the Press Complaints Commission as important today as it has ever been. It is worth remembering that, as the hon. Gentleman said, the PCC covers not only Fleet street but the 1,300 regional and local newspapers. As he informed the House, the PCC was set up in 1991 to replace the failing Press Council, so this debate gives us an opportunity to celebrate its 20th anniversary.

The PCC was designed to deal with complaints from members of the public based on the terms of an agreed code of practice. Since it was established, it has handled tens of thousands of complaints and, as the hon. Gentleman said, the code has been amended more than 30 times. The PCC has also sought to expand its remit to more than just the handling of complaints: for example, it now runs a training programme for journalists and journalism students. It advocates on behalf of individuals to prevent intrusive stories appearing in the press—it is worth recalling that it can help individuals before a story is actually printed—and deals with the problem of media scrums by communicating with the whole press and broadcast industry as a story is breaking. It is right that it has evolved as an organisation and that the process of evolution continues.

Public confidence in the PCC’s work is vital. To maintain that confidence, not only must it be effective and robust; it must be seen to be effective and robust.

[Nadine Dorries]

Will the Minister say how many times the PCC has been involved in a story before it has been printed and how many media scrums it has assisted in dealing with?

[Mr Vaizey]

I am afraid that I do not have those figures to hand, but I will ensure that my hon. Friend is informed of them tomorrow by e-mail or letter.

It is my experience that the PCC has a strong appreciation of the need to be seen to be effective and robust. It spreads the word on what it does and what it can do. It seeks to be transparent in how it works and is extremely helpful in providing advice. It is always willing to discuss decisions and the reasons behind them. Of course, that does not mean that it will always reach what the complainant sees as the right decision. We have to be realistic and understand that that would be the case with any system, whether statutory or self-regulatory.

The PCC can and should constantly scrutinise how it works. It should listen to what others have to say, respond to them and act on the feedback. It will certainly have received significant feedback from tonight’s debate. I know that it receives useful and constructive criticism from other sources.

[Mr McCann]

I am grateful for the Minister’s explanation, a lot of which I was aware of. Will he answer one point? I have had direct discussions with Stephen Abell and Scott Langham, and when I put these points to them, they do not say that they will look at the problem and try to resolve it, but argue for the status quo. It is surely wrong that they absorb the information that they get, but do not do anything about it. We have to get to a position where they do. As I mentioned in my speech, these problems have been around for a long time. When are we going to deal with them?

[Mr Vaizey]

The hon. Gentleman makes an extremely important point. I will come on to how the PCC deals with criticism and recommendations of how it should change its ways.

As the hon. Gentleman said in his speech, the code has been changed more than 30 times. I will give one example, which may draw another intervention. One way in which the PCC is scrutinised in this House is by the excellent work of the Culture, Media and Sport Committee. It is good that the Chair of that Committee is in the Chamber tonight. I gather that the PCC places great weight on its recommendations and has adopted many of the recommendations from its last report, the thrust of which was about making the organisation a more public-facing body.

Before I come on to the hon. Gentleman’s specific point, it is important to say that although the press pays for the PCC, it should not be seen as a creature of the press. The Select Committee commented on that problem with self-regulation in 2003. As a result, the PCC changed the balance of the commission so that there is a two-thirds majority of lay people. The PCC has announced three appointments recently, who will take up their posts soon: Lord Grade, the former chairman of the BBC, Michael Smyth, the chairman of Public Concern at Work who retired recently from the law firm Clifford Chance, and Jeremy Roberts, who is soon to retire as a permanent judge at the central criminal court and the Court of Appeal.

There is no room for complacency, and that starts with the code itself. One benefit of a non-statutory approach is the flexibility that such a code offers. The PCC would tell me its code committee is able to move quickly to incorporate issues of public concern, and that anyone is free to contact the committee to ask that it includes coverage of any issue.

The PCC holds an annual consultation so that the public can suggest changes, and Members of Parliament, including the hon. Gentleman, are free to raise concerns about the coverage of the code. I am told by the PCC committee that all proposals are fully considered and answered, but he has said that he has advocated a change and been met in response with an argument against that change and for the status quo. I was obviously not privy to that conversation, but I suggest to him that he make a formal proposal to the PCC for a change to the code as part of the annual consultation, to get on the record from the PCC why it feels that a change from due prominence to equal prominence would not be the right way forward and that the code deals adequately with the provenance of readers’ letters.

[Mr McCann]

May I ask a direct question, then? Will the Government support the plea for those changes?

[Mr Vaizey]

I think it is very important that the Government do not take a view. That sounds mealy-mouthed, but I have been keen to stress that the system is self-regulatory, and no Government—not this Government, and not the previous Government—want statutory regulation of the press. It would be the thin end of the wedge if Ministers recommended specific changes to the code.

[Mr McCann]

rose—

[Mr Vaizey]

May I finish this point before the hon. Gentleman intervenes again?

It is open to hon. Members to raise the issue in the House, and of course it is open to the Culture, Media and Sport Committee to examine the PCC and make recommendations. In a self-regulatory system, individuals should be able to put their case, whether they are Members of Parliament or, as my hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) pointed out, members of the public.

[Mr Whittingdale]

Does my hon. Friend recognise that the revelations that have streamed out over the past six months have probably led to a greater loss of confidence in the self-regulation of the press than there has been at any previous time? I strongly support self-regulation, but if the public are to regain confidence in that self-regulation, the PCC will have to be seen to have stronger powers. My Committee strongly recommended that it was not sufficient for the PCC simply to require a newspaper to publish an adjudication. In cases of serious breaches of the code, there should be some sanction available to the PCC to demonstrate that the breach was unacceptable and to ensure that newspapers take seriously the requirement to abide by the code.

[Mr Vaizey]

I have run out of time, but I would say in conclusion that the PCC and the press will have heard hon. Members’ remarks in the debate. The Chairman of the Culture, Media and Sport Committee will be aware that the PCC is conducting its own review following the phone hacking allegations. As well as being a criminal offence, phone hacking is of course a breach of the code. The PCC is reviewing the matter to see whether it can make its recommendations stronger, but it will have heard the important—

21:13

House adjourned without Question put (Standing Order No. 9(7)).

Division 258

Ayes: 287

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Conservative: 238
Liberal Democrat: 43
Labour: 3
Independent: 2

Noes: 20

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Conservative: 5
Democratic Unionist Party: 5
Labour: 4
Plaid Cymru: 2
Scottish National Party: 2
Green Party: 1