House of Commons

Wednesday 23rd November 2011 Commons Chamber

Wednesday 23 November 2011

The House met at half-past Eleven o’clock

Prayers

Wednesday 23rd November 2011 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Wednesday 23rd November 2011 Commons Chamber

The Secretary of State was asked—

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

1. What discussions she has had with ministerial colleagues and Ministers in the Welsh Government on the effects of fuel prices on (a) rural and (b) urban areas in Wales; and if she will make a statement.

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

My right hon. Friend the Secretary of State and I have regular discussions with ministerial colleagues and the Welsh Government on a range of issues, including the effects of fuel prices in Wales. The Government are addressing the rising cost of fuel through the abolition of the fuel tax escalator, the introduction of the fair fuel stabiliser and a cut in fuel duty announced at the Budget earlier this year.

[Mr Llwyd]

I thank the Minister for that response. Will he impress upon the Secretary of State the need to push the Government to introduce a true fuel duty stabiliser that would trigger an annual reduction in the pump price, as the so-called fair fuel stabiliser announced in the March Budget does not go anywhere near far enough? The volatility in petrol prices means businesses cannot budget, as was noted yesterday by the Federation of Small Businesses in its submission for the autumn statement.

[Mr Jones]

I hear what the right hon. Gentleman says, but I must point out to him that the tax measures we have taken have resulted in petrol prices being approximately 6p per litre lower than they would have been had that escalator not been scrapped. Even taking VAT into account, fuel prices are approximately 3p per litre lower than they would have been.

[Mr Llwyd]

Further to that response, may I ask the Minister about a slightly different matter? What support are the UK Government providing for the use of electric cars? There are hardly any charging points all in Wales. There is not even one per constituency. What is being done to encourage that?

[Mr Jones]

As the right hon. Gentleman suggests, this is the technology of the future. As he knows, provision is being rolled out in the urban areas, and I hope solutions will be found to ensure that rural users will also be able to have access to suitable charging points.

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

Does the Minister agree that although it would be highly desirable to reduce fuel costs, it is impossible to do so while we are running a deficit of £160 billion a year as a result of the past actions of Opposition Members?

[Mr Jones]

I could not have put it better myself.

[Jessica Morden (Newport East) (Lab)]

For commuters and businesses in my constituency, high fuel prices are painful enough without the exorbitant cost of the Severn bridge tolls. If price increases follow the normal pattern, tolls will hit almost £6 per car this year. What action is the Secretary of State taking to help my constituents?

[Mr Jones]

As the hon. Lady knows, the Severn bridge is privately operated. The franchise comes to an end in 2017, at which time the Government will consider their options.

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

2. What recent assessment she has made of the level of unemployment in Wales.

[Andrew Miller (Ellesmere Port and Neston) (Lab)]

8. What recent assessment she has made of the level of unemployment in Wales.

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

The latest unemployment figures in Wales are disappointing and show that there is still much for both the UK Government and the Welsh Government to do. We have made it clear that while tackling the deficit remains our top priority, we are committed to creating the right conditions for the private sector to expand and grow in Wales, in order to create much-needed jobs.

[Karl Turner]

Will the Secretary of State join me in congratulating the Labour Welsh Government on the launch of Jobs Growth Wales, which I am told will create 4,000 jobs per year, and will she encourage her Cabinet colleagues to establish a similar scheme in this country, because our constituents are desperate for jobs?

[Mrs Gillan]

As the hon. Gentleman knows, I would congratulate any Government who tried to reduce unemployment, which blights so many families, particularly in Wales—and never more so than under the last Labour Government. However, I must say to him that the jury will be out until we see the results from that scheme.

[Andrew Miller]

As the Secretary of State will be aware, in my constituency hundreds of people cross the border both ways for employment. Constituents of mine work in Broughton, and people from Welsh constituencies travel the other way to Vauxhall, Essar and other major employers. Does the Secretary of State agree that there needs to be some joined-up thinking with her colleagues in the Department for Business, Innovation and Skills, in order to address the challenge my hon. Friend the Member for Kingston upon Hull East (Karl Turner) has just raised? There is a good scheme in Wales; why not replicate it in England?

[Mrs Gillan]

The hon. Gentleman is wrong; this is a new scheme in Wales, being introduced by the Welsh Government. I agree that the £400 million investment in the Airbus factory will secure 6,000 Welsh jobs and many jobs in the supply chain to that factory. My right hon. Friend the Prime Minister recently opened the new North factory, which will secure employment and development in that area for a long time to come.

[Guto Bebb (Aberconwy) (Con)]

Does the Secretary of State agree with me that the inaction of the Labour Government on enterprise zones is a real concern to the business community in Wales?

[Mrs Gillan]

I am grateful to my hon. Friend for reminding me of the fact that we started the enterprise zones in England at a much earlier stage than the Welsh Government, but I am pleased to welcome the fact that the Welsh Government have designated some areas in Wales as enterprise zones. I know, however, from my discussions with business and industry that they are keenly awaiting some more details on the enterprise zones, which have been very slow in coming forward.

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

Will the Secretary of State join me in welcoming the announcement by the BSW Timber sawmill in Newbridge-on-Wye in my constituency that it is about to create another 20 jobs, bringing Christmas cheer to those families who will benefit from that employment?

[Mrs Gillan]

The hon. Gentleman is absolutely right and I know how hard he works in his constituency to secure jobs. I offer my congratulations and hope that the business goes from strength to strength. I think we forget in this day and age when unemployment figures are going in the wrong direction that plenty of companies are creating jobs and plenty of enterprising—

[Mr Speaker]

Order. May I ask the Secretary of State to face the House so that we can all hear her dulcet tones, from which we will greatly benefit? I think she has finished and we are grateful to her.

[Mr Peter Hain (Neath) (Lab)]

Does the Secretary of State not realise how out of touch she is? The unemployment figures in Wales are not “disappointing”, they are shocking. We have had a 20% rise in the number of women claiming jobseeker’s allowance since she came to power in May 2010, including an increase of a fifth in the number out of work for more than 12 months. Why, according to her parliamentary answers to me, has her Wales Office business advisory council not yet discussed the plight of jobless women in Wales?

[Mrs Gillan]

The right hon. Gentleman is right to commiserate with those people who are looking for employment, but I am not going to take any lessons from him—he was part of a Labour Government under whom youth unemployment rose by more than 40% and female unemployment rose by more than 30%.

[Mr Hain]

What world is she living in? We created a record number of jobs in Wales. There are 10 men on her business advisory council—why does she not appoint at least one woman to it? With the deficit rising and growth stalling, is it not also time that her Government adopted Labour’s five-point plan for growth and jobs in Wales, including a cut in VAT on home improvements to 5%, a tax break for every small firm that takes on extra workers and a £2 billion tax on bankers’ bonuses to create 100,000 new jobs? Unless she acts now, she will condemn tens of thousands of men and women in Wales to misery.

[Mrs Gillan]

In Wales, there is an acid test of Labour’s policies. The fact is that a Labour Government are in power in Wales and, as the First Minister in Scotland said the other day:

“If Labour has the answer to economic problems and unemployment, why are unemployment and youth unemployment in Wales higher than they are in Scotland? If Labour has the magic solutions, why is it not implementing them in the one place in these islands where it is still in government?”—[Scottish Parliament Official Report, 17 November 2011; c. 3582.]

[Chris Bryant (Rhondda) (Lab)]

3. What recent estimate she has made of the number of 16 to 24-year-olds who are unemployed in Wales.

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

Current levels of youth unemployment in Wales and across the UK are, of course, disappointing. We are determined to tackle that and will announce additional measures as part of phase 2 of the growth review.

[Chris Bryant]

That is two Ministers now who have used the word “disappointing” about unemployment. Frankly, it is a tragedy and one of the worst things about it is that a previous Conservative Government consigned constituencies such as mine and whole communities like the Rhondda to long-term mass unemployment. They are doing exactly the same now to a generation of young people. Will the Minister suggest one single thing that he personally is doing in his Department to tackle youth unemployment in Wales and in the Rhondda?

[Mr Jones]

Of course youth unemployment is too high and of course, sadly, that is not a new phenomenon. In the last Parliament, youth unemployment in Wales increased by 73% and we have not heard a word of apology from the hon. Gentleman for that. We recognise the importance of the problem and that is why we have introduced the Work programme, which provides properly targeted support to young jobseekers.

[Jonathan Evans (Cardiff North) (Con)]

Is not export-led growth one route to addressing youth unemployment? In that regard, will my hon. Friend take this opportunity to congratulate private sector business in Wales, which since the last election has seen a 31% increase in Welsh exports—double the national average and the largest increase of any part of the United Kingdom?

[Mr Jones]

Yes. My hon. Friend is entirely right. The export figures for Wales were extremely encouraging, led particularly as they were by the engineering sector. In that connection, we must commend Airbus for the wonderful work it is doing in the north-east of Wales.

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

4. What recent discussions she has had with the Chancellor of the Exchequer on the effects in Wales of the rate of inflation.

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

I have regular discussions with the Chancellor and other ministerial colleagues on a range of issues affecting Wales. I welcome the latest fall in inflation, which was published by the Office for National Statistics last week.

[Chris Evans]

On this Government’s watch, average food bills have increased by 5%, putting more pressure on hard-working families. I have listened to the Secretary of State’s responses, but can she give a guarantee that she is really fighting Wales’s corner and fighting for hard-working families in Cabinet?

[Mrs Gillan]

I thank the hon. Gentleman for what I think was a question. There can be absolutely no doubt about whether I always fight Wales’s corner in Cabinet. I thought he would at least be encouraged that the Bank of England has forecast that inflation should fall rapidly over 2012. In the mean time, the Government are taking very strong action to help consumers with high costs. We all want to help households and the Government go to the last degree to do so.

[Mr David Hanson (Delyn) (Lab)]

5. When she next expects to meet representatives of the solar industry in Wales to discuss the feed-in tariff consultation.

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

My right hon. Friend the Secretary of State is meeting representatives from the Welsh solar industry next week along with the shadow Minister for Wales to discuss concerns that businesses have about the feed-in tariff review.

[Mr Hanson]

The Minister will know that confidence in the solar industry has been considerably damaged by the decision on feed-in tariffs. Will he and the Secretary of State now stand up for Wales and ask the Department of Energy and Climate Change to defer the decision date for implementation of 12 December so that the consultation, which finishes on 23 December, can at least have the views of the solar industry he is meeting next week?

[Mr Jones]

I understand the right hon. Gentleman’s constituency interest in this regard. As he rightly says, there is a consultation going on, which ends on 23 December. Although the reference date is indeed 12 December, that is subject to consultation.

[Hywel Williams (Arfon) (PC)]

Antur Nantlle community business group in my constituency has well developed plans for a hydroelectric scheme that will benefit the environment as well as provide an income stream for the venture, but it is concerned that any future change in the tariff will undermine the financial basis of the scheme. What can the Wales Office do to ensure that this example of the big society in action is not jeopardised by the Government’s actions?

[Mr Jones]

The hon. Gentleman will know that the consultation proceeding at the moment relates only to photovoltaic installations. There will be a further consultation in due course in which he will no doubt participate.

[Nia Griffith (Llanelli) (Lab)]

The Government’s feed-in tariff fiasco risks shattering all investor confidence in manufacturing in Wales. What will the Minister do to influence ministerial colleagues to prevent imminent job losses in the Welsh solar industry and ensure that any change to the feed-in tariff is given a long lead-in time and is set at a rate that will encourage investment and not increase unemployment?

[Mr Jones]

We fully understand the difficulties that companies involved in this sector of the economy face as a consequence, but if things had been left as they were, the feed-in tariff budget would have been eaten up. There is a consultation and I have no doubt that the hon. Lady will participate in it.

[Caroline Dinenage (Gosport) (Con)]

6. What recent discussions she has had with ministerial colleagues and Ministers in the Welsh Government on the cross-border economic implications of the development of enterprise zones.

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

I have regular discussions with ministerial colleagues and with the First Minister on various issues, including enterprise zones in Wales. It is vital that businesses investing in Wales are given the same or even better competitive advantages as businesses in places just across the border such as Bristol and Merseyside.

[Caroline Dinenage]

Given that enterprise zones not only create jobs but have a wider geographical impact on the supply chain with regard to the economy, does the Minister share my surprise at the procrastination of the Welsh Government in locating enterprise zones in Wales?

[Mrs Gillan]

This is becoming a common theme. Although the enterprise zones have been declared by the Welsh Government, we have only a recent letter from the Minister for Business, Enterprise, Technology and Science of 22 November to Assembly Members, which says that the Department is currently working hard with colleagues in transport, planning and elsewhere to ensure that its enterprise zone policy can be delivered. We can only hope that it gets a wiggle on and gets those details out to businesses as fast as possible.

[Nick Smith (Blaenau Gwent) (Lab)]

Blaenau Gwent, with high unemployment but great potential, includes an enterprise zone. I thank the Secretary of State for meeting developers who propose to build a £200 million race track there. She offered to speak to Ministers from the Treasury and from the Department for Business, Innovation and Skills about that infrastructure plan and capital allowances. Following those representations, will she meet me to feed back on progress?

[Mrs Gillan]

I am always happy to meet the hon. Gentleman, and I was pleased to meet him and the business people who are thinking of investing in Blaenau Gwent. There is a lot of work to be done on the project, which is exceedingly ambitious, but as the area has been designated by the Welsh Government as an enterprise zone for the automotive industry, I hope that good progress will be made. If any help can be given, I am always happy to see what I can do, and I will certainly be pleased to feed back to the hon. Gentleman.

[John Howell (Henley) (Con)]

Does my right hon. Friend share my regret that it is almost impossible—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the hon. Gentleman, but there is a considerable hubbub in the Chamber, which is very unfair for Members asking questions and the Ministers answering them. Let us have a bit of order and some self-respect.

[John Howell]

Does my right hon. Friend share my regret that it is almost impossible to answer the question about cross-border implications, because there are no details other than the location and sectors for the Welsh enterprise zones?

[Mrs Gillan]

It is increasingly difficult when relying on another Government to implement a policy, but I remain optimistic because I want the message to go out that Wales is open for business. Enterprise zones will give an advantage to businesses going into these areas and create jobs, and there are good forecasts for the number of private sector jobs to be created by 2015, so I walk in hope. I encourage the Welsh Government to do everything that they can, and I stand ready to help them.

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

The funding available for the Bristol enterprise zone is nearly as much as the entire amount for enterprise zones for the whole of Wales. How can the Secretary of State justify supporting that alongside the tax on trade and investment in Wales that the Severn bridge toll represents? Will she resist this massive investment at the doorway of Wales that would stop inward investment into Wales?

[Mrs Gillan]

The amount given to the Welsh Government as a consequence of what is being spent on enterprise zones in England is calculated in exactly the same way under our Government as under the previous Government. The Minister in Wales has received £10 million towards enterprise zones, but she also has a budget of nearly £15 billion at her disposal, and she can decide how she spends that. I encourage the hon. Gentleman to encourage her to look at what she can do in those enterprise zones to encourage businesses.

[Mr Robin Walker (Worcester) (Con)]

7. What recent discussions she has had with (a) ministerial colleagues and (b) others on the work of UK Trade and Investment in promoting inward investment in Wales.

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

I have regular discussions with ministerial colleagues, UK Trade and Investment and others on promoting inward investment in Wales. I have met the new chief executive of UKTI in the last month and yesterday I met the senior investment adviser for Wales as part of continuing discussions better to promote Wales to potential investors.

[Mr Walker]

I thank the Secretary of State for that answer. The Select Committee on Welsh Affairs recently heard from the chief executive of UKTI, but he, like our Committee, is still waiting in hope for his first meeting with the Welsh Minister for Business, Enterprise, Technology and Science. Given that surprising fact, and the fact that the Secretary of State herself has met the Committee and UKTI many times, what advice can she give the Welsh Business Minister on pushing the respect agenda and the interests of Welsh business?

[Mrs Gillan]

My hon. Friend knows that I try to give encouragement to the Welsh Labour Minister for Business, rather than giving her advice, but I am pleased that the Welsh Affairs Committee is investigating trade and investment, and I look forward to giving evidence to the Committee next month. I continue to hold a series of meetings to see how we can assist and work with the Welsh Government to improve those figures.

[Paul Flynn (Newport West) (Lab)]

But is not inward investment always a second best? Brace’s bakery, an indigenous Welsh firm with its headquarters in Crumlin, took over an inward investment company in my constituency that was about to close down. On Monday, Brace’s increased its work force by a third, so will the Secretary of State give her congratulations and support to indigenous Welsh companies, and ensure that the rest of the country enjoys the great merits of Brace’s breads and Welsh cakes?

[Mrs Gillan]

Now the hon. Gentleman is tempting me; I always like a good Welsh cake. He should know how much I encourage indigenous Welsh companies, not least by my continuous support of the Fast Growth 50, which celebrates indigenous companies and the way they grow the economy, but he must not do down inward investment. In 2010-2011, 38 inward investment projects led to the creation of 2,444 new jobs and safeguarded another 1,100 jobs in Wales. I think that is pretty important and certainly not second best.

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

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

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

My right hon. Friend and I have regular discussions with ministerial colleagues, the Welsh Government and other organisations to discuss measures that would help to stimulate economic growth in Wales.

[Andrew Selous]

Does my hon. Friend agree that the private sector in Wales represents far too small a share of the total Welsh economy? What steps is he taking to change that?

[Mr Jones]

My hon. Friend is entirely correct. I agree with him, and so do the shadow Secretary of State and the Welsh First Minister. The Government’s plan for growth aims to create the most competitive tax system in the G20 and make the UK the best place in Europe to start, finance and grow a business. That applies to Wales as much as to the rest of the country.

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

Does the Minister agree that one of the best ways to incentivise good growth in difficult times is to invest in green jobs and the green economy? What would he say to my constituent Labour Councillor Phil White, ex-Tower colliery, who has put together proposals for investment in 1,500 homes in five of the most deprived areas of Wales using the feed-in tariff scheme by next March? This Government have cut the legs away from under that scheme, so what would the Minister say to my constituent?

[Mr Jones]

I am sure the hon. Gentleman listened carefully to my previous answers on the issue. I urge him and his constituents to engage with the consultation now proceeding.

[David Rutley (Macclesfield) (Con)]

10. What recent discussions she has had with ministerial colleagues and Ministers in the Welsh Government on support for small and medium-sized enterprises in Wales.

[Stuart Andrew (Pudsey) (Con)]

11. What recent discussions she has had with ministerial colleagues and Ministers in the Welsh Government on support for small and medium-sized enterprises in Wales.

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

My right hon. Friend the Secretary of State and I have regular discussions with ministerial colleagues and Ministers in the Welsh Government to support Welsh businesses.

[David Rutley]

Given the importance of SMEs in the vital task of job creation in Wales and across the United Kingdom, what steps are the Government taking to reduce the burden of regulation on businesses in Wales?

[Mr Jones]

My hon. Friend is correct. SMEs are the backbone of the Welsh economy and have long been so. Through our programme of reduction of regulation, we are easing the burden on SMEs and setting up new businesses. It is hoped that that will cause the sector to flourish in Wales.

[Stuart Andrew]

Does my hon. Friend agree that rises in interest rates would be catastrophic for the prospects of SMEs in Wales, and that maintaining our low interest rates could be at risk if we were to lose our triple A rating, making it more difficult for Wales to maintain its competitive edge when it comes to exports?

[Mr Jones]

Yes, my hon. Friend is entirely correct. This Government have had to take tough decisions on the economy. The fruit of that is that we have maintained our triple A rating and, as a consequence, this country is in a far better position than many of our competitors.

[Albert Owen (Ynys Môn) (Lab)]

Small businesses in my constituency have written to me this month saying that they are going to lay people off or may face closure because of the Government’s policy on the feed-in tariff for solar. Will the Minister give a categoric assurance to the House that he will lobby the Treasury and Ministers at the Department of Energy and Climate Change to ensure that the scheme is maintained to help businesses that are doing the right thing in Wales?

[Mr Jones]

The hon. Gentleman will have heard my previous answers on this question. I urge him also to contribute to that consultation, and no doubt he will participate in the debate this afternoon.

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

It is estimated that the SME sector accounts for 90% of employment in Wales. What discussions has the Minister had with the Welsh Government about promoting this vital sector?

[Mr Jones]

The hon. Gentleman is entirely correct. As I have said, the SME sector is the backbone of the Welsh economy. We have regular discussions with the Welsh Government. In fact, I am meeting the appropriate Welsh Minister next Monday for that purpose.

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

13. What recent discussions she has had with (a) ministerial colleagues and (b) others on broadcasting in Wales.

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

I have had recent discussions with ministerial colleagues in the Department for Culture, Media and Sport on a range of issues, including broadcasting in Wales. My hon. Friend the Under-Secretary of State for Wales and I have also had recent discussions with the BBC Trust, the S4C Authority and independent Welsh television producers on the issue.

[Sarah Newton]

Will my right hon. Friend join me in calling on the head of the BBC to reconsider his savage cuts to BBC local radio so that people in Wales can continue to enjoy Welsh language broadcasting alongside people in Cornwall enjoying Cornish language broadcasting?

[Mr Speaker]

Order. I do not know whether the microphones are playing tricks on us or—more likely—there is just too much noise. I wanted to hear fully what the hon. Lady was saying.

[Mrs Gillan]

I think I got my hon. Friend’s drift. I congratulate her on being a champion of the Cornish language. Like me, she will want to recognise and congratulate the BBC and S4C on reaching an agreement on the funding governance and accountability of S4C until 2017, thereby securing Welsh language broadcasting in Wales?

[Kevin Brennan (Cardiff West) (Lab)]

Anyone watching the BBC’s excellent sporting coverage this weekend might like to know that the odds on the right hon. Lady remaining Secretary of State have dropped from 8:1 to 2:1. Would she recommend that they have a flutter on that?

[Mrs Gillan]

I would tell the hon. Gentleman not to bother wasting his money.

The Prime Minister was asked—

[Andrew Bingham (High Peak) (Con)]

Q1. If he will list his official engagements for Wednesday 23 November.

[The Prime Minister (Mr David Cameron)]

I am sure that the whole House will wish to join me in paying tribute to Private Matthew Thornton from 4th Battalion The Yorkshire Regiment, Lance Corporal Peter Eustace from 2nd Battalion The Rifles, Lieutenant David Boyce and Lance Corporal Richard Scanlon, both from The Queen’s Dragoon Guards, and Private Thomas Lake from 1st Battalion The Princess of Wales’s Royal Regiment. They were all courageous soldiers held in the highest regard by their comrades. We owe them a great debt of gratitude for their service and sacrifice and send our condolences to their families and friends.

I am sure that the whole House will also wish to join me in paying tribute to Alan Keen, who sadly died after a courageous battle with cancer. He was a popular constituency MP who served Feltham and Heston for nearly 20 years. Before entering politics, Alan was a scout for Middlesbrough football club and continued to be a great advocate for sport, not least through his chairmanship of the all-party parliamentary football group, which grew to be one of the largest in the House under his stewardship. We send our deepest sympathies to his wife, Ann, who is a friend to many here, and to his family and all his constituents. He will be missed by Members on both sides of the House.

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

[Andrew Bingham]

I join the Prime Minister in paying tribute to our brave soldiers who this week gave their lives in service to our country. All our thoughts should go out to them and their families at this very difficult time. Similarly, I join the tribute paid to the late hon. Member for Feltham and Heston.

The mass strike proposed by the unions for this time next week will cause great upheaval for many of my constituents in High Peak. Does the Prime Minister agree that it is wholly irresponsible for the unions to bring their members out on strike based on such a small number of votes and when negotiations on pensions are still ongoing?

[The Prime Minister]

My hon. Friend makes a very important point. It really is irresponsible, when negotiations are ongoing, to cause strikes that will lead to the closure of most of the classrooms in our country. It is the height of irresponsibility. What is on offer is an extremely reasonable deal: low and middle-income earners getting a larger pension at retirement than they do now; all existing accrued rights being fully protected; and any worker within 10 years of retirement seeing no change in either the age they can retire or the amount they can receive. It is also a tragedy that it is not just the union leaders who do not understand this; the Labour party refuses to condemn these strikes.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to Private Matthew Thornton from 4th Battalion The Yorkshire Regiment, Lance Corporal Peter Eustace from 2nd Battalion The Rifles, Lieutenant David Boyce and Lance Corporal Richard Scanlon, both of 1st The Queen’s Dragoon Guards, and Private Thomas Lake from 1st Battalion The Princess of Wales’s Royal Regiment. All those men died serving our country with the utmost bravery and courage, and my deepest condolences, and those of the whole House, are with their families and friends.

I also want to pay tribute, as the Prime Minister rightly did, to Alan Keen, the former Member for Feltham and Heston. He was, as the Prime Minister said, somebody who had friends across the House. He was somebody who believed in young people, in opportunities for young people and, most of all, in the power of sport to change people’s lives—and, as I heard at his funeral yesterday, he certainly had an unusual idea for his first date. He took his future wife, Ann, to the Orient, which turned out not to be a Chinese restaurant but to be Leyton Orient, who were playing that day. He was a great and lovely man, and he will be missed by all of us, but most of all by Ann and by his family.

Can the Prime Minister tell us the increase in long-term youth unemployment since he scrapped the future jobs fund in March?

[The Prime Minister]

Youth unemployment is up since the last election, I accept that; and youth unemployment is unacceptably high in this country, as it is unacceptably high right across Europe. The problem is that youth unemployment in this country has been rising since 2004, and under the previous Labour Government it went up by 40%.

What we have to do to help young people back to work is to improve our school system so that they have proper qualifications; improve our welfare system so that it pays to work; and improve our employment system so that there are proper apprenticeships to help young people. We have 360,000 apprenticeships this year, helping young people to get work.

[Edward Miliband]

Under 13 years of a Labour Government, youth unemployment never reached 1 million; it has taken the Prime Minister 18 months to get to that tragic figure. Given that he did not answer the question, let me tell the House the reality: since he scrapped the future jobs fund in March, long-term youth unemployment has risen by 77%. Now, can he tell us what has happened to long-term youth unemployment since he introduced his Work programme in June?

[The Prime Minister]

First, let me just repeat: youth unemployment went up by 40% under a Labour Government. Let me also remind the right hon. Gentleman of something that his brother, the right hon. Member for South Shields (David Miliband), said last week. He said very clearly that this Government did not

“invent the problem of youth unemployment”.

We should have that sort of candour from this brother.

The Leader of the Opposition asked me very specifically about the future jobs fund and the Work programme. Let me give him the answer. The Work programme is helping 50% more people than the future jobs fund: it will help 120,000 young people this year, where the future jobs fund helped only 80,000. The waiting time for the most needy young people will be half the waiting time under the future jobs fund; under the Work programme, those who are not in education, employment or training will get help—[Interruption.] I would have thought that Opposition Members would want to hear about what we are doing to help young people. They will get help within three months, rather than six, but the absolute key is that, because we are paying by results, the Work programme will actually help those who need the most help, whereas the future jobs fund put a lot of graduates into public sector jobs and was five times more expensive than the alternative. That is why we have scrapped it and replaced it with something better.

[Edward Miliband]

Classically, lots of bluster but no answer to the question I asked—[Interruption.] Government Members will be interested in the answer that the Prime Minister did not give, because in June, when the Work programme was introduced, 85,000 young people had been unemployed for more than six months; now, there are 133,000—a massive increase since he introduced the Work programme. If he is serious about tackling youth unemployment, he should get those on the highest incomes to help those with no income at all. Why does he not tax the bankers’ bonuses and use the money to create 100,000 jobs for our young people?

[The Prime Minister]

We have introduced the bank levy, which is going to raise more every year than the right hon. Gentleman’s bonus tax would raise in one year.

We have just heard a new use for the bonus tax—there have been nine already. Let me give the right hon. Gentleman the list. He has used his bonus tax for higher tax credits; giving child benefit to those on the highest rates of tax; cutting the deficit; spending on public services; more money for the regional growth fund—that is when he is defending it rather than attacking it; turning empty shops into cultural community centres; and higher capital spending. This is the bank tax that likes to say yes. No wonder the shadow Chancellor has stopped saluting and started crying. [Laughter.]

[Edward Miliband]

rose—

[Hon. Members]

More!

[Edward Miliband]

Even for this Prime Minister, to be playing politics with youth unemployment is a complete outrage. He is the one—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting the right hon. Gentleman. Let me say it again: the Prime Minister will be heard, and the Leader of the Opposition will be heard. Laughing about the denial of a hearing is not to the credit of any hon. or right hon. Member.

[Edward Miliband]

The truth is, the Prime Minister is the one cutting taxes for the banks year on year in the course of this Parliament. That is the reality. He is creating a lost generation of young people, and he knows it. It is his responsibility; it is happening on his watch.

The Prime Minister said on Monday to the CBI that it was “harder than anyone envisaged” to get the deficit down, but he was warned that his strategy of cutting too far and too fast would not create jobs; he was warned that it would not create growth; and he was warned that he would find it harder to get the deficit down. Is that not exactly what has happened?

[The Prime Minister]

The right hon. Gentleman accuses us of cutting taxes. Let me tell him what we are cutting. We are cutting interest rates, which is giving the economy the best boost. We are cutting corporation tax, and we now have the lowest rates of corporation tax in the G7. We are cutting tax for the low-paid, because we have taken 1 million people out of income tax. We are freezing the council tax, cutting the petrol tax and scrapping Labour’s jobs tax. That is what this Government are doing.

Let me answer the right hon. Gentleman directly on the issues of growth and debt, because this is absolutely key. [Interruption.] The shadow Chancellor is at it again, I am afraid. All over Europe there is an interest rate storm, with high interest rates in Spain, Italy and even some of the countries at the heart of the eurozone. We must ensure that we keep this country safe with low interest rates. Let me just remind the Leader of the Opposition of this: if interest rates went up by 1% in this country, that would add £1,000 to the typical family mortgage. That is the risk that we would have with Labour’s plans for more spending, more borrowing and more debt.

[Edward Miliband]

There he goes again; when it goes wrong, it is nothing to do with the Prime Minister. It is his ABC—Anyone But Cameron to blame when things go wrong.

What did the Chancellor say at the time of the Budget last year? He said that his approach would deliver

“a steady and sustained economic recovery, with low inflation and falling unemployment.”—[Official Report, 22 June 2010; Vol. 512, c. 168.]

Three promises made; three promises broken. The Government’s plan is failing, and that is the truth. Does that not show why at the autumn statement, the Prime Minister should change course?

[The Prime Minister]

Let me just give the right hon. Gentleman the latest growth figures in Europe. Britain grew at 0.5% in the last quarter, which is the same as the US and Germany, faster than France, faster than Spain, faster than the EU average and faster than the eurozone average. That is the fact. Of course it is a difficult economic environment that we are in, but is there a single other mainstream party anywhere in Europe that thinks the answer to the debt problem is more spending and more borrowing? If he is worried about the level of debt, why is he proposing to add another £100 billion to it? It is the height of irresponsibility, and the reason why people will never trust Labour with the economy again.

[Edward Miliband]

How out of touch does this Prime Minister sound? Some 1 million young people and their families are worried about finding a job and all he offers is complacency and more of the same. Now we know it: however high youth unemployment goes and however bad it gets, it is a price worth paying to protect his failed plan. I tell him this: unless he changes course next week, 1 million young people will become the symbol of his failed economic plan and an out-of-touch Prime Minister.

[The Prime Minister]

The right hon. Gentleman asks for a change of course. Let me just say to him what the leading economic organisations in our country and, indeed, across the world say about that issue. The IMF says this:

“'Is there a justification for a shift in the policy mix', we think the answer is no.”

Let us listen to the Governor of the Bank of England, Mervyn King:

“There has to be a Plan A”—

[Interruption.] The Leader of the Opposition says that he would not listen to him; it was Labour who appointed him.

“There has to be a Plan A…this country needs a fiscal consolidation starting from its largest peacetime budget…ever”.

Who was it who gave us that peacetime budget? The Labour party. Let us listen to the CBI, the leading business organisation in this country:

“Priorities for the next 12 months: Stick closely to the existing credible plan”.

That is what the experts say; that is what business says; that is what the Bank of England says. Would you listen to them or would you listen to the people who got us into this mess in the first place?

[Richard Ottaway (Croydon South) (Con)]

Q2. Returning to next week’s public sector strikes— [Interruption.] They don’t like it up 'em, do they? Is the Prime Minister aware that, of the three largest unions, the turnouts in the strike ballot were 32%, 31% and 25% respectively? Does my right hon. Friend agree that any striker has the right to strike if he so wishes, but he should not engage in mass action unless he has the support of the majority of those unions’ membership?

[The Prime Minister]

My hon. Friend makes a very important point. As I said, it is wrong that these strikes are going ahead when negotiations are under way. It is wrong to strike and to close so many classrooms and essential services, but it is being done on the basis of those turnouts. Just one quarter of Unison members voted to strike, and just 23% of those balloted at Unite voted in favour. [Interruption.] I am not surprised that Labour Members want to shout me down. We know why they will not condemn the strikes, because we got the figures today on where they get their money from. In the right hon. Gentleman's first year as leader of the party, 86% of Labour’s donations have come from the trade unions—86%! Under the previous Labour leader, it was 56%. That is about the only thing the Leader of the Opposition has improved since the time of Gordon Brown.

[Ann McKechin (Glasgow North) (Lab)]

Q3. I understand that the Prime Minister is having trouble connecting with women and is seeking advice. Given that female unemployment has increased this year by 20%, that women have been the hardest hit by public sector cuts and the VAT rise, and that they have benefited the least from his tax give-aways, does he not agree that it is time for a plan B which reverses the VAT increase and ensures that benefits increase in line with inflation?

[The Prime Minister]

I do not agree with the hon. Lady. Of course, every family in Britain is facing a difficult time, with rising inflation, tight household budgets and a public sector pay freeze. But let us look at what we are doing in terms of trying to help women. Of the 1 million people we have lifted out of tax at the lowest end, many are women. What we are doing in terms of additional child care is helping women. The extra hours we are giving for two, three and four-year-olds—that is helping women. So I do not accept what she says. This is a difficult economic environment, but the changes we are making to public sector pensions, for instance, mean that low-paid people in the public sector will actually get a better pension, including many women. Because she, like everyone else on the other side, is in the pocket of the unions, they cannot see that or say it.

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

Q4. Given the Government’s intention to freeze council tax, is the Prime Minister as astounded as I am that Green-run Brighton and Hove council is planning to decline £3 million of council tax grant and is planning instead to raise council tax by 3.5%, so costing local tax payers £4 million?

[The Prime Minister]

That is a very important point. At a time of difficult household budgets, it is this Government who have cut the petrol tax, and we are freezing the council tax and have made that money available to councils up and down the country. It is a decision for individual councils. If they want the money to go ahead with the council tax freeze, the money is there, but if they reject it, as they plan to in Brighton, that is a huge mistake, because the council will be asking families in Brighton to pay more at a time when it should be on their side.

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

Earlier this year, the Prime Minister confirmed that he would meet members of the cross-party inquiry into stalking, which I chair. It is indeed welcome news that the Home Office will now be consulting with a view to legislating. Will he confirm that the inquiry’s evidence-based deliberations and conclusions will be fully taken into account in considering future legislation?

[The Prime Minister]

I can certainly give the right hon. Gentleman that assurance. It is important that we take forward the work that the Home Office and the Ministry of Justice have done in looking at a proper, separate offence for stalking and recognising that there is a gap in the current law that we should fill, because there are people who are not getting the protection and help from the police that they need.

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

Q5. There is genuine concern in Crewe about over-development in respect of housing. How can my right hon. Friend ensure that my constituents get a greater say in planning decisions for new housing estates required for our housing shortage?

[The Prime Minister]

The great strength of the Localism Act is that we are giving local people a much greater say. In many parts of the country, that will be welcomed, because people can see the advantages of development going ahead, and recognise that if they build extra houses they will keep the council tax and that if they attract extra businesses they will keep the business taxes. That will help to end the problem that we have had for so long of communities not seeing any advantage in development taking place. But it should be a matter for them to decide, as in the case of Crewe.

[Malcolm Wicks (Croydon North) (Lab)]

Does the Prime Minister agree that the history of Northern Rock represents a kind of modern-day morality tale or play, in that here we have a decent, mutual and responsible building society, which is then privatised, then over-extends, then goes bust, is then bailed out by the taxpayer, and now, sadly, instead of returning to mutuality, is sold off dirt cheap to one of the brashest companies in England?

[The Prime Minister]

I was with the right hon. Gentleman for some of the way through his question, but let us look at the decision the Government have taken. First, we are selling a business that was costing the taxpayer money, and getting well over £700 million for that business. The second thing we are doing, which is in the interests of every single person in this House and everyone in this country, is to get another functioning bank and building society on our high street lending money. How many times do all of us go to our constituency surgeries and hear people say, “I can’t get a mortgage”, or small businesses say, “I can’t get a loan”? We need a good, new, healthy lending institution out there, and hon. Members should welcome the fact that it is going to be based in the north-east of England, as Northern Rock was.

[Mark Menzies (Fylde) (Con)]

Q6. At a time when the Government are taking steps to drive growth in the economy, will the Prime Minister update the House on what measures are being taken to attract high-quality inward investment to enterprise zones such as Warton in my constituency?

[The Prime Minister]

I do think the enterprise zones are going to be a success, because we are basing them, as in my hon. Friend’s constituency, in areas where there is already a successful cluster of businesses. Take, for instance, the enterprise zones at Daresbury science park or at Harwell in Oxfordshire, or the one in Wolverhampton, where Jaguar Land Rover has said that it is going to establish a new plant employing 1,000 people. Enterprise zones are being well applied, they are a good success story, and this Government are right behind them.

[Chris Bryant (Rhondda) (Lab)]

Q7. The personal damage caused by long-term unemployment can be phenomenal. On average, somebody who is unemployed for more than six months is six times more likely to contract a serious mental health problem. Does the Prime Minister not worry that we will have a generation of young people who will suffer many of the problems of lack of self-esteem and of never having a first job? Would it not make more sense to guarantee every under 24-year-old a job after six months' unemployment, thus paying them to work, not paying them benefits?

[The Prime Minister]

The hon. Gentleman makes an important point about the scarring effect of long-term youth unemployment. We are doing two important things to try to help with that. First, we are helping those not in employment, education or training within three months through the Work programme, rather than the six months under the future jobs fund. Secondly, one of the most successful schemes that there has been in recent years is giving people work experience placements. We will produce evidence on that soon. In many cases, it is leading to direct employment opportunities for young people. The Deputy Prime Minister will say more about that later this week, but we are doing everything that we can to help young people into work and to prevent the scarring effects that the hon. Gentleman talks about.

[Louise Mensch (Corby) (Con)]

Q8. May I associate myself with the Prime Minister’s tribute to Alan Keen? He was our dear friend and colleague on the Select Committee on Culture, Media and Sport. Everybody who worked with him will miss him greatly. Will the Prime Minister acknowledge that one of most disruptive impacts of next week’s strikes will be on mums and dads with children in school? Will he join me in encouraging employers to allow parents to bring their children to work when it is safe to do so?

[The Prime Minister]

I am sure that everyone in the House will agree with the tribute that my hon. Friend paid to her colleague from the Select Committee and to the very good work that he did on that Committee.

My hon. Friend makes a good point about the strikes next week. Frankly, the strikes are going to go ahead and everybody should be very clear about where the responsibility lies: it lies with the union leaders and with the Labour party, which is taking their side and backing the strike. She makes the important point that when it is safe for people to take their children to work, organisations should allow them to do so.

[Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op)]

Q9. The Prime Minister is probably aware that up to 20,000 individuals across the United Kingdom have lost considerable sums of money, often their pension savings, through the collapse of the Arch Cru investment fund. That fund was advertised and marketed as being cautious, and turned out to be anything but. Will he heed the calls from all parts of the House for the Government to use the powers of section 14 of the Financial Services and Markets Act 2000 to institute an immediate inquiry so that this never happens again?

[The Prime Minister]

Like the hon. Gentleman, I have been contacted by constituents who have lost money because of that fund and who are very concerned about what is happening. There has been a Westminster Hall debate on this issue, where the Financial Secretary to the Treasury set out the position and the responsibility of the Financial Services Authority. I will look carefully at what the hon. Gentleman says and see whether we can do more.

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

Q10. I fully understand that savings have to be made in the defence budget, but I am very concerned by the proposals for significant cuts to the Ministry of Defence police budget and the possible implications for security at the nuclear bases at Faslane and Coulport in my constituency. Will the Prime Minister please look at those proposals carefully?

[The Prime Minister]

My hon. Friend makes an important point. The defence budget overall is £35 billion and it will continue at pretty much that cash figure throughout this Parliament. It will still be the fourth largest defence budget anywhere in the world. I assure him that there are no current plans to reduce the number of Ministry of Defence police at the Faslane or Coulport naval bases. Those are vital sites, as he knows, but obviously we have to look at all the costs at the Ministry of Defence and ensure that we are getting the safety that we need.

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

Q11. Does the Prime Minister favour the establishment of local authorities that meet only to give out contracts to others and that provide no direct services to the local population?

[The Prime Minister]

What I support is local authorities that provide good services and keep their council taxes down. I think that the hon. Gentleman’s part of the world has had the advantage of a bit of change and some common-sense conservatism.

[Mr Stewart Jackson (Peterborough) (Con)]

Some 1,600 people are employed by Thomas Cook at its headquarters in Peterborough. They are rightly concerned about the media coverage over the last two days of the company’s difficulties. Will my right hon. Friend join me in supporting this great British institution, which has been providing travel to British people for 170 years? People can support the company by booking their holidays through Thomas Cook, safe in the knowledge that it is part of the ATOL scheme, and they will have an excellent holiday to boot.

[The Prime Minister]

My hon. Friend speaks up for an iconic and important British business that has given people a lot of pleasure over the years. I have asked the Department for Business, Innovation and Skills to give me a report on what is happening at Thomas Cook, because it is important to ensure that it is in a good, healthy state.

[Helen Jones (Warrington North) (Lab)]

Q12. Recent research has shown that the NHS achieved the biggest drop in cancer deaths and the most efficient use of resources among 10 leading countries. Will the Prime Minister accept that he did not inherit an NHS in crisis, but one that was rapidly improving? Will he stop using dodgy 10-year-old statistics to justify his wasteful and destructive NHS privatisation?

[The Prime Minister]

I am a huge supporter and fan of the NHS. There are many things that are truly wonderful about our NHS. We should celebrate that, but under the last Government, the number of managers in the NHS doubled—the number of NHS managers was increasing six times faster than the number of nurses—and NHS productivity was falling. If a Government inherit a situation like that, it makes sense to make some changes. That is why we see, since we have come in, 14,000 fewer non-clinical staff, but more doctors and midwives, and more operations taking place. If the hon. Lady wants something to celebrate in the NHS—[Interruption.]

[Mr Speaker]

Order.

[The Prime Minister]

Thank you, Mr Speaker. If the hon. Lady wants celebrate something in the NHS, mixed-sex wards are down 90% since this Government came to office.

[Mr John Whittingdale (Maldon) (Con)]

Q13. Is my right hon. Friend aware of research by the TaxPayers Alliance—[Interruption]—that shows that residents of the Maldon district are paying more in motoring taxes and receiving less in direct benefit than anyone else in the entire country? My constituents appreciate that they would be paying even more in motoring taxes under the plans of the previous Labour Government, but does my right hon. Friend accept that, for them and others in rural areas, such taxes are becoming an intolerable burden?

[The Prime Minister]

I do accept what my hon. Friend says. That is why in the Budget we took the decision not only to get rid of the tax increases on petrol that were coming down the track, but to make a cut in petrol duty. Effectively, that was 6p off a litre of diesel or petrol. It seems to me essential that, at a time of economic difficulty, we demonstrate that we are behind those people who want to work hard and do the right thing, by freezing their council tax, scrapping Labour’s jobs tax and helping them with their motoring expenses. This Government are absolutely committed to doing that. It is all very well Opposition Members shouting about the TaxPayers Alliance, but it does a good job of drawing attention to those things. Also, the difference is that the TaxPayers Alliance does not pay us to put down amendments.

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

Q14. The whole House will approve of the belated conversion of the Justice Secretary to the office of the chief coroner, but there are many concerns in the House about war memorials. The other week I brought a petition to the Prime Minister, which 3,000 people in Blackpool had signed. Will he now use his office and his weight to persuade the Justice Secretary and his Ministers to look urgently at new protections for war memorials and new penalties for those who attack them?

[The Prime Minister]

I think that the hon. Gentleman speaks for the whole House and the whole country in saying that what has been happening to our war memorials is completely unacceptable. I do not think there is a single answer. It may lie, as he said, in some new punishments and rules, but it also lies in looking at how the scrap metal market is currently regulated.

I hear very clearly what the hon. Gentleman says about the office of the chief coroner. I am delighted that we have been able to put forward an amendment and to accept some of those points. The one thing that we should try to avoid—this is really important, because all of us want to do the right thing for those soldiers and their families who have given so much to our country—is having an endless right of appeal. I do not think that that would be a good idea. I think it would actually damage the interests of families—

[Mr Speaker]

I am extremely grateful to Prime Minister.

[Stuart Andrew (Pudsey) (Con)]

Over the last 30 years, thousands of vulnerable and disadvantaged children in the UK have been supported through projects funded by Children in Need. Will my right hon. Friend join me in congratulating Children in Need on raising more than £600 million over the years, and will he pay tribute to my constituents, who came together as a town, raised thousands of pounds and welcomed Pudsey bear home for the first time?

[The Prime Minister]

I am very glad my hon. Friend managed to get in, and I apologise, Mr Speaker, for almost squeezing him out. It would be a tragedy if we did not have this opportunity to pay tribute to Pudsey and all that Pudsey has achieved over many years.

[Jim Shannon (Strangford) (DUP)]

Q15. Last week, I visited Afghanistan through the armed forces parliamentary scheme and had the opportunity to meet the commanding officer in Helmand province. He stated that he needs two things before any British withdrawal in 2014: political help and influence with countries neighbouring Afghanistan to enable it to develop, and sufficient training and adequate equipment for the Afghan army. Can the Prime Minister assure the House today that those requests will be delivered prior to any 2014 withdrawal from Afghanistan?

[The Prime Minister]

The hon. Gentleman is right to speak up on this issue and to repeat what he heard in Afghanistan. He is absolutely right that we need to help the neighbouring countries—and, as we speak, my national security adviser and other members of my team are in Pakistan speaking with the Pakistani Government. On the equipment, assistance and training given to the Afghan national army, we now publish a monthly report to the House so that everyone can see the progress that we are making in equipping and training the Afghan national police and army. In spite of all the difficulties in Afghanistan, that is broadly on track.

[Mr Speaker]

We now come to the statement from the Secretary of State for Energy and Climate Change. I appeal to right hon. and hon. Members leaving the Chamber to do so quickly and quietly so that those who remain can hear the statement.

Annual Energy Statement

Wednesday 23rd November 2011 Commons Chamber

12:35

[The Secretary of State for Energy and Climate Change (Chris Huhne)]

It is important that when we discuss feed-in tariffs later today we understand the impact of our policies, and that is why we have brought forward the annual energy statement—so that the House can discuss the matter in its proper context during the debate later.

I am today publishing alongside the annual energy statement a consultation document on secondary legislation to provide for the green deal. It is important that we get this consultation under way as soon as possible because it will allow an expectant industry to begin planning for this vital energy saving policy.

The statement on our energy policy fulfils a commitment in the coalition agreement, and in describing the progress made and the policies under way, the statement also honours one of the coalition’s principles: our commitment to open and transparent government.

The consumer is at the heart of everything we do. Our decisions must ensure that the consumer is protected as far as possible from rising prices, and so we will secure our energy at the lowest cost. We will do so in the short term by promoting competition, in the medium term by insulating our homes and in the long term by steering us away from excessive reliance on fossil fuels and on to clean, green and secure energy.

The ultimate goals of the Department of Energy and Climate Change are to deliver clean energy for the future and to tackle dangerous climate change. Our vision is of a thriving and globally competitive low-carbon economy with cleaner energy, more efficient homes and lower bills. Over the past 12 months, we have taken significant steps to achieve just that. On both supply and demand, we have begun to deliver key coalition commitments, starting with energy efficiency.

Energy saving is now an equal priority with energy production. An economy that wastes energy cannot thrive in a high-demand, low-emissions world. Improving energy efficiency will save money and cut carbon, which is why we are creating a new energy efficiency deployment office within the Department. Our first task is to make our homes and businesses less leaky and wasteful. The Energy Act 2011, which received Royal Assent earlier this year, provides for the green deal—the pioneering programme under which businesses will install energy saving measures in our homes and recoup the costs over decades from the energy savings.

I am today launching the consultation on the secondary legislation that will allow green deals to begin next autumn, including the energy company obligation, which will support those who need the most help. Improving our buildings is vital but we must also change how we warm them in the first place. We are determined to help consumers heat their homes and businesses securely and affordably, and we will publish a heat strategy next year.

We are also making it easier for people to save energy. In March, we set out the strategy and timetable for introducing smart meters, which can help consumers to manage their energy use. Furthermore, we continue to push for ambitious EU vehicle emissions standards, and are providing £300 million in consumer incentives for ultra-low emissions vehicles and further support for research and development.

We are also working to secure Britain’s energy supplies. We need significant new investment in power plants and infrastructure to meet future demand. In July, we published the White Paper on electricity market reform, heralding the biggest change to the market since privatisation. We are also introducing a new system of long-term contracts, to remove uncertainty and attract investment, and a new mechanism for back-up electricity generation, to keep the lights on. We are setting new standards on emissions from power stations, to ensure that they are clean, and the Treasury is supporting low-carbon generation with a floor price for carbon, to help encourage low-carbon investment in the UK. Together, the reforms will deliver secure, affordable electricity from a diverse mix of sources, including renewables, new nuclear and fossil fuels, including carbon capture and storage.

Each of those energy sources will be important. They will work together in concert to deliver a reliable energy system, and over the past year we have introduced a range of policies to support them. We have published the first ever renewables road map, setting out the barriers to deployment and what must be done to deploy renewable energy at scale. We have also published a consultation on the right level of subsidy to support jobs, investment and growth. Professor Weightman’s report into nuclear safety after Fukushima reassures me that nuclear can be an important and safe part of the energy mix without public subsidy. In October, as part of our work to enable new nuclear build, I published the regulatory justifications for two reactor designs. Fossil fuels will remain important. That is why we are firmly committed to carbon capture and storage, with £1 billion still available for projects in the CCS programme, despite the disappointment of the Longannet project. Promising projects have been proposed, and we are developing a streamlined selection process, which we will set out shortly. Gas will continue to feature strongly in our energy mix, and our policies are designed to allow new gas plant to be built. I welcome Ofgem’s proposals to sharpen incentives for reliable gas supply.

We may need further measures to ensure that we are ready for low-probability, high-impact events. I am asking Ofgem to report to us by next spring on any such measures. We are improving the technical foundation of our energy security. Earlier this month, we laid the statutory security of supply report before Parliament, which sets out future supply and demand forecasts, and discusses risks and drivers. We are also making it easier for new nationally significant energy projects to be delivered. In July, this House approved the national policy statements for energy infrastructure, against which major energy projects will be assessed. Developers can now have greater certainty about how applications for consent will be considered and absolute certainty on when decisions will be made, with statutory time scales to ensure investor confidence.

Our actions will maintain the diversity and security of our energy supplies. We are working hard to ensure that they are delivered at the lowest possible cost. In a world of volatile fossil fuel prices—we all know about the events in the middle east and Libya—those objectives complement each other. We believe that the policies we have introduced will deliver the best value for consumers, as we move towards a cleaner energy future. However, as we embark on the transformation of our energy system, we must take people with us. That is why I am today publishing an assessment of prices and bills, and the impact of our policies.

Overall, we anticipate that rising world gas prices will push up bills for both gas and electricity, but our policies will moderate that rise. By 2020, we expect household bills to be 7%—or £94—lower than they would otherwise be without our policies. Moreover, bills will be lower during this Parliament. Britain’s homes will be cheaper to heat and to light than if we did nothing, in this Parliament and in the longer term. Those savings will result above all from our energy-saving policies and from market reform. In addition, we decided to fund the renewable heat incentive and carbon capture and storage commitments from general taxation, rather than from planned levies.

To sum up again, rising global fossil fuel prices and decades of under-investment will mean that prices for energy will rise in the UK, just as they will elsewhere. We cannot control global gas prices, but we can, as a Government, soften the blow. Prices and bills are forecast to rise, but we can ensure that they rise less than they would otherwise have done.

We want to leave a fairer energy legacy than those before us did. Between 2001 and 2009, fuel poverty doubled. The warm home discount and the affordable warmth part of the ECO, on which we are consulting, are targeted at the poorest and most vulnerable households. The warm home discount will support up to 2 million homes each year, helping more than 600,000 poorer pensioners, with £120 off their energy bills this winter. Other vulnerable people will also be eligible for a rebate. That discount scheme is worth two thirds more than the voluntary scheme that operated under the last Government. The Warm Front programme helped 130,000 households last year, providing advice and installing heating and insulation, with a further 90,000 set to benefit over the next two years. As it phases out, the affordable warmth part of the ECO subsidies will phase in to replace it.

We are also helping consumers more generally to take advantage of a competitive energy market. Consumers could save up to £200 by shopping around for the lowest online rate, but last year fewer than one in five households switched suppliers. We are making it easier and faster to switch, and we have launched a campaign to encourage consumers to check, switch and insulate to save.

We are also mindful of the impact on businesses. Earlier this year we published our proposals on the simplification of the CRC—carbon reduction commitment—energy efficiency scheme and for the new climate change agreements. We are committed to simplifying the regulatory burden on industry, while driving behaviour change to improve efficiency and reduce emissions.

Lower levels of energy efficiency savings mean that our policies will typically have a larger impact on energy bills for businesses. By 2020, policies are estimated to add 19% to the average energy bill of businesses that are medium-sized energy consumers. For large energy-intensive users, who are more exposed to fossil fuel price volatility, that figure is between 2% and 20%. It is important that these industries play their part in the transition to a low-carbon economy, but it is also important that they remain competitive. That is why we are working with the Department for Business, Innovation and Skills and the Treasury to announce measures before the end of the year to support those energy-intensive industries whose competitiveness is most at risk.

The energy sector is a vital part of our economy. Energy industries employ 173,000 people, contribute nearly 4% of our gross domestic product and provide more than half of our industrial investment. More than 51,000 companies in Britain provide low-carbon and environmental goods and services. Exports are now £11.3 billion a year—up 3.9%. Last year, nearly 4,500 new jobs were created in the sector, which grew by 4.3%.

We expect that our policies, like the renewable heat incentive, will strengthen supply chains across the country, bringing jobs and growth. The green deal alone will kick-start at least £14 billion of investment in the decade to 2022 and support at least 65,000 insulation and construction jobs by 2015. We want to ensure that young people today can play their part in the industries of tomorrow, so we are supporting green apprenticeships to build the skilled work force we need to deliver the green deal.

In conclusion, between now and 2030, our relationship with energy will change fundamentally. We have to build a new energy portfolio—one that is equal to our changing needs and our ambitious carbon targets. It has to be supported by a new consensus. Helping consumers to understand their energy costs, and how our policies affect them, is key. The decisions we take now will affect the way our energy is delivered for decades to come. I commend the statement to the House.

[Mr Speaker]

We are grateful to the Secretary of State, who has significantly exceeded his time. I gently remind him of the merits of the use of the blue pencil. So far as today is concerned, I must obviously make an allowance in respect of the response from the shadow Secretary of State.

[Caroline Flint (Don Valley) (Lab)]

I thank the Secretary of State for briefing the media about his statement today, before informing either the House or the Opposition. Is it any surprise that he is becoming increasingly rattled by growing opposition from his own Benches to the Government’s cuts in the solar power sector, and has chosen to bring his statement forward in order to squeeze time in our Opposition day debate this afternoon? Perhaps he is also trying to put a gloss on the Government’s energy policy before the energy statistics are published tomorrow—or perhaps advisers or lobbyists with “excellent contacts” with Ministers advised him to bring his statement forward. Whatever the reason, disrespect has been shown to the House today.

The Secretary of State said, “The consumer is at the heart of everything we do.” Will he start by telling us what the Government will actually do to deal with soaring energy prices? Energy bills are up by 20% this year, and standard tariffs rose by £175 between June and November alone, driving up inflation and squeezing household budgets. The Government, however, are so out of touch that their only answer is to tell people to shop around, and their only policy is to cut help to pensioners this winter. Can the Secretary of State explain why, with the end of the Warm Front scheme, for the first time since the 1970s a British Government are not offering grants to help to reduce fuel poverty?

The most effective and sustainable way of cutting bills is to reduce energy use, but the Government’s flagship energy efficiency programme, the green deal, has been delayed and is in chaos. We were expecting the green deal consultation back in September. More than two months later, it has finally appeared, but we are still not clear about what incentives households will be offered to take up the green deal, or what the Government will do to ensure that the 10p rate for a green deal package is low enough to secure the widest possible range of energy efficiency measures and the best deal for bill payers. Can the Secretary of State confirm that the Government’s forecast of the number of jobs to be created by the green deal has been slashed from 100,000 to just 65,000 by 2015?

Earlier this year, my right hon. Friend the Leader of the Opposition set out bold plans to break the dominance of the big six by requiring energy companies to sell power into a pool, thus allowing new suppliers to enter the market, increasing competition, and driving up choice for consumers. Will the Secretary of State explain why he is so afraid of standing up to vested interests in the energy industry, and delivering the reform that our energy market needs?

The green economy currently employs 800,000 people. It is estimated that the global market for low-carbon goods and services will be worth £4 trillion by 2015, with the potential to create 400,000 new jobs, but as a direct result of the uncertainty that the Government have created, the UK is falling behind. Last year, when we left office, it was ranked third in the world for investment in green growth. We are now ranked 13th, behind Brazil and India. That is bad for our economy, bad for our energy security, and bad for the prices that consumers pay, because it makes us ever more reliant on events overseas that are beyond our control.

Just yesterday, the Science and Technology Committee in the House of Lords accused the Government of complacency over the skills required for the nuclear industry. Given that power stations in the UK already import staff from the southern hemisphere to run them, given that many of the firms currently providing solar power are about to go to the wall, and given that British Gas has just announced that 850 jobs are to go, will the Secretary of State tell the House how he plans to halt the worrying decline in investment in the UK?

We look forward to the Government’s forthcoming announcements on how they propose to support energy-intensive industries, and we hope that their proposals will extend to both gas and electricity, but will the Secretary of State tell us exactly how much of the proceeds of CRC are going back into Treasury coffers? Under Labour's scheme, the money was returned to the hands of businesses to be invested in energy efficiency.

We shall have time to deal with the Government’s cuts in feed-in tariffs later this afternoon, but what sort of message does this whole debacle send out? How can the Government encourage investors to support the renewable heat incentive, the green deal or any other green policies in the future, when a growing sector, built on a flagship policy that had cross-party support, has been cut off at the knees with just six weeks’ notice? How can anyone have enough confidence to make the investment that we need when the Government are so short-sighted and so short-term, and chop and change their policies at every turn?

Today’s statement is just more evidence that the Government are out of touch, are cutting too far and too fast, and have no plans for jobs and growth.

[Chris Huhne]

The right hon. Lady asked what we were doing to help those who face substantial increases in energy bills. Over the last year there has been a 38% increase in world gas prices for delivery this winter, and that will inevitably be reflected in both gas and electricity bills. We have tried to protect consumers by taking the renewable heat incentive off the levy system and into general public expenditure, and by taking similar action in relation to carbon capture and storage. We have capped the feed-in tariff, and we are helping the consumer as much as we possibly can.

Far from our being afraid to take on the big six, Ofgem has clamped down on mis-selling, and we have ensured that the big six must inform people before raising tariffs. We have reduced the period within which consumers can switch suppliers to three weeks, and we are considering giving Ofgem powers to require companies to provide redress. All those steps constitute clear evidence of the determination of the Government and Ofgem to make this a highly competitive retail and wholesale market, which is the best guarantee for consumers that they will be given the best possible deal now and in the future.

The right hon. Lady mentioned the Warm Front scheme. She gave us no credit for the fact that the consultation documents on the green deal that were published today clearly show that we are replacing that scheme with the affordable warmth obligation referred to in the ECO consultation, or for the fact that the warm homes discount scheme is now statutory—it is not a voluntary scheme like that operated by the Labour Government—and will make the discounts available to those experiencing fuel poverty two thirds higher than those provided by the old voluntary scheme.

The right hon. Lady asked about incentives. The Chancellor of the Exchequer could not have made it clearer in his Budget speech that he would consider them. I believe that if the right hon. Lady waits for a matter of weeks, all will be made clear in regard to the Chancellor’s commitment to ensuring that the green deal is a great success. She should also bear in mind that we have already provided incentives, in addition to those that the Chancellor is considering. For example, all F and G-rated homes in the private rented sector will have to be upgraded by 2018 so that tenants can enjoy the benefits of energy saving.

Finally, the right hon. Lady asked what we were doing to encourage investment. The whole purpose of the electricity market reform which will be the centrepiece of the energy Bill that we will present in the second Session in May, and which we have already announced in the White Paper, is to provide the certainty that will lead to investment which, for years, the last Labour Government failed to deliver. A quarter of our power stations are going offline in the next 10 years: a quarter of our capacity. What did the last Labour Government do? Nothing—absolutely nothing. Yet the right hon. Lady, seemingly arriving from Mars, has had the temerity to come here today and pretend that we are not taking action, as if the last Labour Government had. I have to hand it to her: for sheer brass neck, she gets the prize.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There is notable interest in the statement, but I remind the House that today is an Opposition day, and that there are two well-subscribed debates to follow. I want the first of them to begin before too long. Brevity is essential from Members—led, I feel sure, by Mr Peter Lilley.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

My right hon. Friend made the breathtaking claim that he intended to keep energy prices as low as possible. How does he square that with the Stern review, on which his policy to combat climate change is based, and which makes it clear that that policy can work only if energy prices are raised to include the external cost of global heating, and if the cost of hydrocarbon-based energy is also raised to make it more expensive than other forms of sustainable energy? In short, if his policy is not hurting, it is not working.

[Chris Huhne]

I am grateful to the right hon. Gentleman for his question. If he is in any way unsatisfied with the explanations that we have given in the documents—explanations which are considerably more detailed than those provided by any previous Government—he should ask for a briefing, and we will ensure that he receives any additional answers that he may require.

The key point, however, is that a substantial part of what we need to do to tackle climate change involves measures included in our green deal legislation which pay for themselves and do not involve a cost, while those that do involve a cost—namely the raising of prices to enable us to move to a low-carbon economy when it comes to electricity generation—are offset by the reduction in energy volumes precisely because of our energy-saving measures.

I commend the document to the right hon. Gentleman. I am sure he will find is persuasive.

[Malcolm Wicks (Croydon North) (Lab)]

If the last Labour Government did nothing about energy policy, I cannot think why I was so busy all the time.

To raise the tone of this discussion, I welcome what the Secretary of State said about long-term contracts, and I would like to hear more. On carbon capture and storage, the Secretary of State knows that despite all the excitement about feed-in tariffs, renewables and nuclear, the world, including the United Kingdom, will mainly be using fossil fuels for the next few decades. What is happening in respect of CCS? There have been some disappointments in recent months. When does the Secretary of State think the first CCS plant in the UK will be operating and helping to clean up our planet?

[Chris Huhne]

I certainly did not want to imply that the right hon. Gentleman, who has considerable expertise in this area, was in any way slacking when he was an Energy Minister—although I think he might have had better support from his colleagues on certain occasions.

CCS is a key technology. The right hon. Gentleman is absolutely right to say that we are going to continue to be reliant on gas and other fossil fuels. If we move to unabated gas rather than coal, that in itself will save about half the carbon emissions. For the longer term however, CCS is essential if we are going to be able to use gas, especially if we find, as I hope we will, that we have considerable exploitable reserves of shale gas under Lancashire and elsewhere.

As I have said, Longannet was a disappointment—I made a statement to the House on that—but other projects are coming forward. Peterhead is nearer the reservoirs than Longannet, so the pipeline costs are likely to be lower, and less investment will be needed to upgrade the plant in line with the large combustion plant directive. All the parties who were involved in the Longannet negotiation are confident that we can deliver a commercial-scale CCS plant for within that £1 billion budget, and we intend to do so.

[Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)]

The Secretary of State highlighted the future role of gas in the economy, and producing our own gas is obviously the best option. To that end, will he stress to the European Union that its attempt to regulate the offshore oil and gas industry is in danger of creating regulatory confusion and more uncertainty, and that it would be far better to go down the directive route?

[Chris Huhne]

I am grateful to my hon. Friend for making that point. He is absolutely right. If we are going to introduce minimum standards for offshore oil and gas—the Commission has been kind enough to say they should be modelled on those for the UK continental shelf—that should be on the basis of a directive, so that we can use our own legal means to enforce the standards, rather than a regulation. A regulation that would apply directly in all the member states would be inappropriate because countries’ circumstances are inevitably different.

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

In spite of the warm words about the importance of tackling fuel poverty, next year will be the first year in three decades when there has not been a Treasury-funded scheme to do precisely that. Instead, we have a regressive scheme that will fund the energy company obligation through a levy on fuel bills. As the ECO will be split into two pots—the hard to treat and the fuel poor—will the Secretary of State ensure that the latter group does not end up in effect subsidising the former, by making sure he focuses on the fuel poor, the 1.9 million households in fuel poverty who happen to live in hard-to-treat homes?

[Chris Huhne]

The hon. Lady will know that I am passionately committed to helping the fuel poor. That is why we have increased the amount of warm home discount compared with the voluntary schemes. I disagree with her that the ECO subsidy is an ineffective way of reaching such people or that it is more regressive than other schemes. The fact that the previous scheme was Exchequer-funded was by the bye. What is important is achieving the key outcome of tackling the root causes of fuel poverty, and that we will do.

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

I understand that France has persuaded the European Commission to accept nuclear power as a renewable. Will the Secretary of State negotiate a similar deal for this country, and will he also make sure that the information on our energy bills is transparently clear, so we know how much of what we pay is subsidy for renewable energy?

[Chris Huhne]

I can do better than that, because the document published today contains precisely that information on the impacts on prices and bills. We want to be as transparent as possible, because it is important that people understand that although there will be price increases, we can, particularly as a result of our energy saving measures, also get volumes down, which is crucial to getting bills down. There is no point in our having unsubsidised energy and merely heating the atmosphere; we want to heat our homes, not merely push the heat out of leaky and draughty homes into the atmosphere.

[Mr Frank Doran (Aberdeen North) (Lab)]

I heard the Secretary of State’s comments about the potential of the Peterhead CCS project, and I would welcome investment there. However, is it not true that the Longannet project was much more important to the country because it is a coal-powered station, as opposed to the gas-powered station at Peterhead, and coal is the main export market for CCS? Is it not also the case that Shell and Scottish Power have got their sums right, and that their assessment of the investment required for the CCS power we need is much more realistic than the Government’s? We have thrown away the great potential of a large export market.

[Chris Huhne]

CCS is a catch-all for a substantial number of different types of technology designed to do the same thing: take the carbon out of the process of the combustion of fossil fuels. I disagree about gas versus coal, as I think gas, along with coal, will play a very important part in world supply for a long time, and there will be substantial CCS markets in both of them. It is important that the UK is in the lead in that.

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

The Government support the three recommendations of the billing stakeholder group, which I chaired at the Government’s behest, but there is strong evidence that one of those key recommendations is being ignored by the energy suppliers: the requirement that they contact each of their customers informing them on whether they are on the company’s cheapest standard direct-debit tariff. What are the Government going to do to put this right?

[Chris Huhne]

First, I want to pay tribute to the hon. Gentleman for his efforts in this area. We raised this point with the big six at the consumer energy summit, and my understanding is that they are in the process of notifying their customers. Perhaps not all those letters have gone out yet, but one of the commitments was that customers were going to be notified when there was a cheaper tariff they could move to online.

[Mr Mike Weir (Angus) (SNP)]

In what was a lengthy statement, the Secretary of State made no mention of either the long-standing problem of transmission charging, which affects green energy, or Ofgem’s Project TransmiT. What progress is being made, and will he finally take action to tackle this problem?

[Chris Huhne]

I have had continued discussions with Ofgem and, indeed, with the First Minister of Scotland. He and I think absolutely alike on the importance of moving to a regime that does not penalise energy sources for being further away from the market, precisely because renewable sources will inevitably be located where the renewables are. Also, nuclear is generally not welcome in the middle of our cities. For those reasons transmission charging should be amended. Ofgem is looking at that at present, but it is up to it to do so as an independent regulator.

[Justin Tomlinson (North Swindon) (Con)]

The majority of consumers seek to shop around when their tariff rises, only then to run the danger that their new tariff will rise even further only days later. What measures are being considered to protect consumers on new tariffs for either six or 12 months?

[Chris Huhne]

The hon. Gentleman is right. Consumers have the option to choose a fixed rate of course, which will be for a specified period. At the time of the recent consumer energy summit, we made the key point that the big six, which supply 99% of our households, had announced their tariff changes and that some of them had committed to keeping them all the way through the winter. Right now is therefore a rather good time to compare prices and switch to the cheapest tariff.

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

I understand that it is important to get money into the Treasury, but is that more important than people’s lives? The Hills report found that thousands of people will die as a result of this Government’s policies. What is more important: money to the Exchequer or people’s lives?

[Chris Huhne]

I am afraid that the hon. Gentleman is not giving credit where it is due, although I cannot say that it is terribly surprising. I commissioned John Hills to produce that report precisely because I wanted a really good and authoritative review of how we can best tackle fuel poverty. I am determined that we shall do that. One conclusion of the interim report from Professor Hills was that there are 25,000 excess winter deaths and that perhaps 10% of them—a similar figure to those killed on the roads—are due to fuel poverty. We are determined to tackle that issue—[Interruption.] That is after 13 years of Labour government; let us please have a little cross-party consensus on trying to tackle the problem while recognising that it needs to be dealt with in the long run and that we have the means to tackle it at source as well as in the short-term through the warm home discount.

[David Mowat (Warrington South) (Con)]

The Secretary of State will be aware that in the last year of the previous Government, less than 3% of our energy came from renewables and we were 25th out of 27 in the EU. By what extent does he expect to improve on that by the end of this Parliament?

[Chris Huhne]

I thank the hon. Gentleman for his question. We are determined to be the fastest-improving pupil in the class. At the moment, as the hon. Gentleman has pointed out, the inheritance from the previous Government puts us firmly in the dunces corner on renewables, but we are working our way out.

[Ian Lavery (Wansbeck) (Lab)]

The right hon. Gentleman will be very much aware of the situation at Rio Tinto Alcan in my constituency, where 650 jobs are likely to be lost as a result of green taxes and high energy costs. What assurances can he give the work force at Rio Tinto Alcan that the package of measures that have been promised and promised again for energy intensive industries will be sufficient to keep the plant in operation and maintain the jobs, plus 3,000 jobs in the supply chain?

[Chris Huhne]

I understand the hon. Gentleman’s concern, which I have shared. I met the executives from Rio Tinto Alcan who deal with that plant and I put to them a simple question: if we were able to provide support for electricity generation through, for example, conversion to biomass, would they guarantee that they would keep the plant open? They did not give me an answer and one executive is quoted as saying that the 40-year-old plant was beyond Government subsidy. I do not think that, and I very much hope that we can work on finding a solution, but I can assure the hon. Gentleman that the energy intensive package is under serious and urgent consideration. It is on course to be announced by the end of the year, which is what we were committed to doing, and it is also a matter of regret to me that the announcement was made about the Rio Tinto Alcan plant before the managers had the opportunity to read what we were able to say, which suggests to me that they had previously made up their mind.

[Andrew George (St Ives) (LD)]

Of course, energy bill payers contribute a few quid towards the support of renewables, but the big six help themselves to £150 per annum per household. Does my right hon. Friend believe that that is a reasonable balance, and how can we achieve a reasonable balance?

[Chris Huhne]

The key in any market is to ensure that it is properly competitive. I am absolutely in favour of shareholders, particularly since they are usually our pension funds and our insurance companies, making the best possible return in a competitive market. That is why we are stressing the key competitiveness requirements of the wholesale market and the retail market. When we get that right, we will have the assurance that the rates of return in the marketplace for the big six and, I hope, for the new entrants to the market will be fair, precisely because they have been earned fair and square in a competitive market.

[Gordon Banks (Ochil and South Perthshire) (Lab)]

The Secretary of State referred to the green deal in his statement. What is he doing to ensure that VAT on products used in the green deal is set at the same level as for the energy it is designed to save—that is, at 5% and not 20%?

[Chris Huhne]

The hon. Gentleman raises an important point. There are substantial anomalies—and not just that one—in the VAT regime. It is not always possible, because of the commitments in the EU legislation, for member states to make unilateral changes to that regime but he certainly makes a sensible point and I am sure that the powers that be at the Treasury will listen carefully to it.

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

Does the Secretary of State understand the concerns of those who have “prepared their homes”, to use his words, and fitted solar panels about the pace of the reduction in feed-in tariffs, especially when they see the onshore wind industry being rewarded for inefficiency and destroying the UK countryside?

[Chris Huhne]

My hon. Friend raises an interesting point. We have cut the subsidies for the offshore and onshore wind industry, too, and we have done so because this Government are firmly committed to making sure that we deliver what we intend to deliver—that is, the shift to a low-carbon economy—at the lowest possible cost to British consumers. I am sure that we will have a greater opportunity to debate this subject later today, but I merely point out that the subsidies for solar feed-in tariffs now reflect a substantial fall in the costs of the underlying technology. That fall in costs, caused by the global changes in circumstances over the past year, means that those subsidies are providing a very similar real rate of return to that which was planned when the scheme was launched in April 2010.

[Several hon. Members]

rose—

[Mr Speaker]

Order. If it is possible to find a one sentence question and a relatively pithy reply—I do not wish to be too ambitious—that would be a considerable achievement. I look to one of the wise heads of the House and call Dr William McCrea.

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

During the winter months, the poorest members of our society will face soaring electricity bills and many in Northern Ireland have no alternative to heating oil. What action will the Secretary of State take to make home heating oil affordable to the most vulnerable in our society?

[Chris Huhne]

I am grateful to the hon. Gentleman for raising the issue of home heating oil because, as he knows, last winter that issue caused us a lot of concern. We referred the matter to the Office of Fair Trading and I was surprised with its conclusion but we must accept that it followed a full investigation. The longer-run solution will be to ensure that people are less reliant on the heat from heating oil through energy insulation and the green deal. We are determined that those who are off the gas grid will be able to take every opportunity to enjoy the benefits of the green deal, too.

[Mrs Anne Main (St Albans) (Con)]

Small solar panel companies about which I have written to the Secretary of State’s Department are having a particularly hard experience following the change in the tariff. They will lose jobs over it and they are asking whether the domestic 4 kW rate can be considered as a taper for a longer period so that they can recover from the shock of the quick cut in the tariff rate when they cannot deliver as quickly as the big boys.

[Chris Huhne]

I am grateful to my hon. Friend for that question. This is a consultation and a genuine one. We have made serious proposals and we are waiting for the responses. We will take those responses into account when we come to make decisions.

[Nia Griffith (Llanelli) (Lab)]

Energy companies often cite investment in generating power as the reason for the price rises. What assessment has the Secretary of State made of the amount of money made on the price rises compared with the companies’ investment in generating power?

[Chris Huhne]

The hon. Lady raises an interesting point. The need for new investment is clearly factored into the price projections in the documentation. It is not just about the rise in the overall world price in gas that is driving what is happening to our bills but the need to build a quarter of the capacity that is coming offline. That is factored into the calculations.

[Jeremy Lefroy (Stafford) (Con)]

Has my right hon. Friend had the opportunity to look at how other countries, particularly Germany, support their high intensity manufacturing users of energy to keep bills down and jobs in the country?

[Chris Huhne]

My hon. Friend will know that my esteemed colleague, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), was there in September. We have done considerable work to look at the experience of other countries, which is a theme that we might come back to in the debate on the solar feed-in tariff. This Government do not believe that it is sensible to sit in a room and try to develop things from scratch and a priori if other countries have already done so and we can learn the lessons from them.

[Bill Esterson (Sefton Central) (Lab)]

How can the policy change on the tariff possibly be a consultation when it is already set to change on 6 December? My constituent, Keith Bonner, wanted to install solar panels and he tells me that the £12,000 investment is no longer viable because of the change in policy. How does the change in policy fit with the requirements set out in the Secretary of State’s statement of increasing renewable energy, tackling climate change and reducing emissions?

[Chris Huhne]

The hon. Gentleman should know that there will not be a change in tariff before April. The key point is that the old tariff is applicable to any scheme that is installed either before or after 12 December, but any scheme that is installed after 12 December will have a lower tariff from April. We will have plenty of opportunity to debate this later today and I am sure he will want to contribute to that debate.

[Christopher Pincher (Tamworth) (Con)]

Will my right hon. Friend encourage Ofgem to deal with the tariff anomaly whereby household energy bills fall when households use more energy? Surely, that places a burden on single and less well-off households and flies in the face of our desire to encourage greater energy efficiency in households.

[Chris Huhne]

There are many anomalies that Ofgem is looking at in this area. A key part of that will involve looking at any unfairness in the system and making sure particularly that we simplify tariffs. There are far too many tariffs and that is confusing for consumers. If we can get a dramatic simplification, that will make the market work much more effectively. Currently, only 15% of consumers switch, whereas with car insurance about half do so through online sites. We need to get up to that figure and we will then find that the market works much more effectively.

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

Constituents have informed me not only that they are angry about the drop in the tariff and the potential loss of jobs in my area—these are people who have invested in the solar energy industry—but that the arbitrary deadline of 12 December means that there has been a rush for installation of solar energy in people’s homes, which is producing a sharp increase in the price of the components in panels. Does this not show that the Secretary of State has thought very little about the impact of this policy on the energy industry?

[Chris Huhne]

I disagree with the hon. Lady. When a policy is clearly going off the rails, it is important to grip it as quickly as possible. The problem with the industry was that it was massively exceeding its budget. If we had not acted, we would have been adding anything between £26 and £55 to the average household bill by the end of this Parliament, which would simply have been too much. We have had to take account of the cost to the consumer and I very much regret that the Opposition do not seem to remember that.

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

Twelve months ago today, after last year’s statement, I put forward a proposal about topping up card meters online, as I have them at home. I have gas and electricity from British Gas, and I am pleased to report to the House that that has happened with British Gas. Hon. Members can take it from me that electricity is far cheaper than gas, and I urge the Secretary of State to take that into consideration. Is not now the time to put more money into nuclear power and push that industry forward for jobs and in my constituency?

[Chris Huhne]

Nuclear is one of the three key pillars on the supply side, with the fourth pillar being energy saving. Those are the key parts of our policy. We have been meeting all our deadlines except those that arose immediately after the Fukushima disaster when I thought it was important to ask Dr Weightman to come up with a report that answered people’s concerns about making sure that the same thing could not happen here. With that one exception, we have been meeting our deadlines and we are on course for new nuclear without public subsidy.

[Mark Durkan (Foyle) (SDLP)]

The Secretary of State has referred to the carbon floor price and the carbon reduction commitment simplification proposals, both of which give rise to concerns in Northern Ireland that they will have a perverse impact given our market and geographical realities. Those impacts would be counter to the very policy goals that he has enunciated. Is he receptive to those concerns and will he and his colleagues be responsive?

[Chris Huhne]

The hon. Gentleman raises some interesting issues. We are in constant touch with the Northern Ireland Executive and others on these matters and of course we are receptive to concerns and to amending anything that would have a perverse effect of the type he describes.

[Mr Peter Bone (Wellingborough) (Con)]

The right hon. Member for Don Valley (Caroline Flint), who speaks for the Opposition, made the serious charge that the Minister had briefed journalists before coming to the House. In answering her question, it slipped his mind to answer that point. Can he tell us that that did not take place and confirm it by publishing and putting in the Library a copy of the media grid showing which journalists were spoken to before the statement?

[Chris Huhne]

I assure my hon. Friend that I did not speak to any journalist before making this statement. As far as I am concerned, it is an important principle that the House should be told first.

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

The Secretary of State has set out the future energy supply and demand forecasts within the security of supply report. Is he confident that if those forecasts prove to be inaccurate, we will be able to keep the lights on in this country?

[Chris Huhne]

Because of the disappointing economic situation, the margin of capacity has been rising. I am confident that we can do that, but we should not be complacent. We need to keep the matter under review and we are certainly doing that, but I am confident that we can keep the lights on.

Points of Order

Wednesday 23rd November 2011 Commons Chamber

13:25

[Ms Angela Eagle (Wallasey) (Lab)]

On a point of order, Mr Speaker. I would like to make a point about the scheduling of this annual energy statement on an Opposition day when we have two extremely important debates with very short time limits for speakers. The statement was not a time-sensitive one and I hope that you will agree with me and deplore the fact that it was scheduled in Opposition time. Secondly, the timing of the statement was tweeted to the world by The Guardian environment correspondent at 9.37 this morning, 32 minutes before Opposition Front Benchers were informed that there would be a statement. Thirdly, the contents of the statement were extensively leaked to the same tweeting Guardian correspondent and appeared on its website at 10.35 this morning. Mr Speaker, I seek your rulings on these issues, which show grave discourtesy to the House.

[Mr Speaker]

I am grateful to the hon. Lady for her point of order, and I shall seek to the best of my ability to respond to each of her three points in turn. First, the timing of Government statements is a matter for the Government and I do not want to get into the merits or demerits of choosing a particular day, but the point will have been heard by the Deputy Leader of the House and, at a distance from the Chamber, by the Leader of the House. Secondly, let me emphasise that notification of an intended statement should first and foremost be to other hon. and right hon. Members and the shadow team. It should not be to members of the press. That is disorderly and discourteous. Thirdly, I listened intently to the Secretary of State, as I always do, when he responded to the hon. Member for Wellingborough (Mr Bone). He assured the House that he had not spoken to journalists about the contents of the statement, and of course I accept without hesitation what he says on that point. However, I would just gently—or perhaps not so gently—remind the Secretary of State that it is not just a question of Ministers not talking to the media. Ministers must not encourage, facilitate or permit any of their team, officials or advisers to do so either. This is the second time this week that there has been an instance of substantial information in a statement being conveyed first to the media. It will be a pity if further measures have to be contemplated and adopted for dealing with situations of this kind. I hope that the Secretary of State will take what I have said as a deterrent against any future such occurrence.

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

On a point of order, Mr Speaker. On 2 November the Chief Secretary to the Treasury made a statement to the House regarding the Government’s latest offer to unions on the public sector pensions issue. In the statement and in the document he published, he included examples of the pensions that public sector workers would obtain under his proposal. Later that day, the Prime Minister told the House—he has repeated this today—that on that basis, low and middle earners would get more from their pensions. The Cabinet Office subsequently published on its website a pension calculator on which people could check what pension they would receive under the Chief Secretary’s latest announced offer. As was revealed on “Channel 4 News” last night, the calculator demonstrated that the Chief Secretary’s original examples were simply wrong, and that his statement and the Prime Minister’s comments were simply incorrect. The calculator showed that low and middle earners would get less at comparable retirement rates. The calculator has since been taken down from the website.

Three million public sector workers may go on strike on 30 November unless the dispute is resolved, so it is vital that accurate information be provided to the House and to the general public. The Chief Secretary has unwittingly conveyed inaccurate information to the House and, through you, Mr Speaker, I would ask that he be requested to return to the House to correct the error and provide an accurate assessment of the Government’s pension proposals.

[Mr Speaker]

I am grateful to the hon. Gentleman, both for his point of order and for providing advance notice of it. All hon. and right hon. Members, including Ministers, are responsible for the content and accuracy of the statements that they make. If a mistake has been made, a Minister should correct it. I hope that the hon. Gentleman, who is an exceptionally clever chap, will understand if I am reluctant to trespass beyond that, because the detail and minutiae of these matters are probably well beyond my limited competence.

[John McDonnell]

May I make a further point of order, Mr Speaker?

[Mr Speaker]

I am in a generous mood, so I shall allow the hon. Gentleman to do so.

[John McDonnell]

Further to that point of order, Mr Speaker, I simply want to disagree with you regarding the phrase “an exceptionally clever chap”.

[Mr Speaker]

Well, he is certainly a modest fellow, although not with much to be modest about. We will not discuss that any further, but what I would say is that disputes about the impact of the Government’s most recent offer on pension levels are an appropriate matter for debate, and arguments over calculations and hypothetical examples are not tantamount to any deliberate misleading of the House. The hon. Gentleman is an experienced—not an old—hand who has put his concerns forcefully on the record.

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

On a point of order, Mr Speaker. Have you received an approach from the Health Secretary to say that he may have misled the House yesterday in Health questions when answering a question from me about the risk register for his NHS reorganisation? He told the House:

“I have been very clear and published all…risk information relating to the modernisation of the NHS”.—[Official Report, 22 November 2011; Vol. 536, c. 149.]

He has made the same argument to the Information Commissioner who, in a legal decision, said that

“he does not accept the argument and considers that disclosure would go somewhat further in helping the public to better understand the risks associated with the modernisation of the NHS than any information that has previously been published.”

Will you advise the House, Mr Speaker, on how we can correct the record and get to the truth about the risks that the Government’s policies on NHS reorganisation pose to our NHS?

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order, but there is not much that I can offer by way of encouragement or comfort. He is an experienced Member of Parliament, and he has put his interpretation of those matters on the record. I said a moment ago that the contents of answers are a matter for Ministers, but answers to parliamentary questions are not themselves covered by the statutory provisions of the Freedom of Information Act. If he thinks either that the Minister has erred or that I have erred in my exegesis of his point of order—or, indeed, both—no doubt he will return to these matters and will require no encouragement from me to do so.

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

On a point of order, Mr Speaker. I would be grateful if you could advise me how I can put on the record the fact that following the Deputy Prime Minister’s reply to me on 15 November, recorded at column 679 of Hansard, in questions on changes to the law on the succession to the throne, the right hon. Gentleman helpfully wrote to me to clarify that he was in fact referring to his conversation with the Scottish First Minister, not the Northern Ireland First Minister. He further advised me—again, very helpfully—that he has placed a copy of his letter in the Library. I am grateful to his office and to other Ministries for the way in which the matter has been handled.

[Mr Speaker]

The hon. Gentleman wanted to put that matter on the record, and he has done so with his customary courtesy. If there are no further points of order, we come to the ten-minute rule Bill, which the hon. Member for Kingswood (Chris Skidmore) has been waiting patiently to introduce.

Members of Parliament (Change of Political Party Affiliation)

Wednesday 23rd November 2011 Commons Chamber

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

13:34

[Chris Skidmore (Kingswood) (Con)]

I beg to move,

That leave be given to bring in a Bill to provide that any Member of Parliament who changes voluntarily his or her political party affiliation described on the ballot paper at the time he or she was elected is deemed to have vacated his or her seat; and for connected purposes.

This Bill seeks to ensure that any Member who decides to change parties—in other words, crosses the Floor or “defects”, should trigger an automatic by-election so that their constituents can have the final say on their decision. I realise that some Members may have hesitations about such a Bill. It would, after all, seek to overturn centuries of tradition that have allowed Members to change parties with little regard for their constituents’ opinion on the matter.

At the same time, the question of Members changing parties is not a new one. Former and current Members from all political parties have taken the decision to do so, including a former Prime Minister. Equally, former Members from every political party have previously called for a defecting MP to give their constituents the right to validate their decision. Let me be clear: I do not take issue with the right of Members to defect from parties. In an established democracy, we must value the freedom of individual Members to cross the Floor if they so wish. I can fully accept and understand that Members may, at times, no longer find themselves at one with the party they joined. I ask only that they give their constituents the same choice that they themselves have been able to make.

Nor do I wish to criticise any Member or former Member for the action they have taken, or the judgments they have made according to their own conscience. They will have to live with them. However, it is neither right nor fair that a constituent should live with that decision, often for many years, until a general election is called. According to the House of Commons Library there has never been a debate in the House on this issue. At a time when the public’s faith in our political system is at a low ebb, and when trust in politics remains broken, I believe that this is precisely the kind of topic that we should be debating.

If we asked any man or woman on the street the solution would be obvious: if an MP is elected for a certain party, only to decide to defect to another, it is only right that they should allow their constituents a say on their decision. That is the honest thing to do, and it is the right thing to do. It is easy to state the historical arguments against this Bill, mostly stemming from Edmund Burke’s speech to the electors of Bristol in 1774. Burke argued that we are sent here as representatives, not delegates, and as such sit in the House as individuals, not bound by party constraint, but each free to choose how we best represent our constituents, even if that seems to be against their best interests.

The notion that constituents vote for their Members of Parliament as individuals to exercise their judgment on behalf of their constituents, and not to stand for the party ticket on which they were elected, may have been relevant in the 18th century, but that is no longer the case in the 21st century. We can no longer continue the charade that we are each elected solely as individuals. To do so is simply not to be speaking the same language as our constituents. It is an undeniable truth that the vast majority of constituents will vote for the party, with the Member the embodiment of the party locally.

Parties clearly do matter, otherwise there would be no need for a Member to change from one party to another. Such a Member may as well sit as an independent. Indeed, let those who wish to maintain the illusion, and believe that we are elected as sole individuals, stand as individuals, devoid of a party banner.

There are precedents in this House for a political defection to trigger a by-election. Bruce Douglas-Mann voluntarily triggered one in 1982, in the Mitcham and Morden constituency, when he left Labour for the Social Democratic party. He followed in footsteps of Dick Taverne, who in 1973 resigned from the Labour party, only to call a by-election and be re-elected under the banner of Democratic Labour. By-elections like these should be the rule, not the exception.

Nor would the Bill be the first to legislate on a Member of Parliament’s defection. Defection laws have been passed in India, providing that someone can be disqualified for voluntarily giving up

“membership of his original political party”.

Of 193 countries worldwide, 41 have laws about crossing the Floor. Indeed, in Canada, a Bill almost identical to my own was debated only this month.

I do not deny that this change in the law would raise other issues that would need to be investigated fully, but I would welcome the scrutiny that the House could provide by debating the merits and demerits of the Bill. For instance, the reason why I suggest that the Bill should apply only to Members who have voluntarily changed parties is to ensure that the withdrawal of the Whip would not affect a Member’s ability to remain as a representative. It is not the Bill’s intention to strengthen the party system, or to strengthen the control of any parliamentary party. It is intended only to strengthen the hand of our constituents. Loyalty to our constituents lies at the forefront of what we all, whichever political party we stand for, wish to achieve as Members of Parliament.

Edmund Burke once stated that he was a Member of Parliament, not the Member for Bristol. As a proud Bristolian, I am the Member for Kingswood first and a Member of Parliament second. We have a choice: we can stand by the arguments first formulated more than 200 years ago, noble though they are, or we can choose to face forwards, into the 21st century, and accept that we cannot go on as we have done. We must accept that the status quo cannot remain, and that we must seek to form a new relationship with our voters, our constituents—the men and women who put us here in the first place.

The central issue must be one of trust. At a time when the public want politicians to be more accountable, if a Member of this House decides to defect, it should lie with the voters and the constituents whether that Member should remain a Member of Parliament or not. We need to look beyond the confines of this Chamber, and ask ourselves what is so wrong with a Member who defects from one party to another asking their constituents’ opinion. What should any defecting MP be so afraid of? Who are we to turn our backs on our constituents—the voters who placed us here—without their assent? Without them we are nothing.

I end by paraphrasing the words of that other Bristol MP, Edmund Burke: “Your representative owes you, not his industry only, but his honesty, and he betrays, instead of serving you, if he sacrifices that to his ambition.”

13:44

[Sir Peter Bottomley (Worthing West) (Con)]

Edwina Currie had the bright idea of having equal numbers of men and women in the House by pairing constituencies and saying that the man who got the most votes and the woman who got the most votes each became a Member of Parliament. I asked her what would happen if someone went in for gender reassignment between one election and another, and she thought I was not being sufficiently serious.

When I first started taking an interest in politics, I do not think we had party labels on the ballot paper. I think it would not be a bad thing if we removed them and showed only candidates’ names and addresses. Incidentally, I do not know whether my hon. Friend the Member for Kingswood (Chris Skidmore) would suggest that if I changed my address between one election and another I should have a by-election, because that was on the ballot paper as well.

I do not think many of us would get elected without parties, but the key point is that we have a duty to our constituents and to our party, and we have international obligations as well. In my view the trust comes from what we do, not from whether we decide to change our party. We are at present in coalition with the Liberal Democrats. The Liberal Democrats include people who were Social Democrats. The Social Democrats, in the main, unless they were political virgins, came from the Labour party, so there has been significant moving around.

We could approach this matter from the point of view of narrow self-interest. Do we as the Conservatives, or we as the coalition with the Liberal Democrats, expect to get more people from the Labour party to come and join us, or do we expect to lose more people? If we expect to gain more people, which is what I hope we are going to do, we should not support the Bill. We should say, “Come across and perhaps we’ll see if we can look after you at the next election as well. It may mean changing your seat, as one or two Conservatives who switched to Labour did, but we can have a go.”

Then we come to Burke. Edmund Burke is quoted far too often. He bears the penalty of fighting his great campaign against Warren Hastings for five years, tying up Westminster Hall and stopping the visitors having a good look round. But we forget that having made his declaration of the duties of a Member of Parliament, at the next election he lost his seat. Losing the seat at the election is what such a Member should take the chance of doing.

We have had voluntary by-elections. Our right hon. Friend the Member for Haltemprice and Howden (Mr Davis) caused a by-election to say that he still agreed with what he had said at the previous election so could he be re-elected, and he was. We had the time when the Ulster Unionists, who do not seem to be present at the moment, had by-elections en masse for some reason that we have now forgotten. We ought to recognise that although my hon. Friend the Member for Kingswood is absolutely right—there is no better historian in the House now than he—in saying that the matter ought to be debated, the idea that it should be the subject of a Bill that should be enacted is controvertible, and I would say that it is wrong.

The House should not be delayed by too many of the greater arguments, except of course if we wanted to return to the glory days. Was there not a time when if someone elected as a Back-Bench Member of Parliament was invited to become a Minister, a by-election had to be held? It would be a real test of popularity, especially if a reshuffle came, to make it a requirement that any Back Bencher who became a Minister had to fight a by-election, and anyone who stood at a general election as a Minister and succeeded, but then lost their ministerial position, should also be required to fight a by-election. If by-elections are a good idea, let us have more of them.

Question put and agreed to.

Ordered,

That Chris Skidmore, Dr Sarah Wollaston, Mr Robert Buckland, Zac Goldsmith, Mr Aidan Burley, Conor Burns, Gavin Williamson, Bob Stewart, John Healey, Mr Philip Hollobone, Mr Tom Clarke and Steve Brine present the Bill.

Chris Skidmore accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 16 March 2012 and to be printed (Bill 252).

Opposition Day

Wednesday 23rd November 2011 Commons Chamber

[Un-allotted Day]

Economic Growth and Employment

Wednesday 23rd November 2011 Commons Chamber

13:46

[Mr Chuka Umunna (Streatham) (Lab)]

I beg to move,

That this House notes with concern that UK economic growth is flatlining and was choked off well before the recent Eurozone crisis, that youth unemployment is now more than one million and that Government borrowing is therefore expected to be £46 billion higher than forecast over the Parliament; further notes with regret that the Government has failed to deliver a credible growth plan, is undermining critical industries in which the UK must compete, is failing to use strategically procurement and other tools to drive growth and innovation, and is holding back regional growth with its flagship projects mired in inertia and with most business still waiting for Regional Growth Fund money seven months after the recipients were announced; therefore calls on the Government to deliver a growth plan that provides an immediate boost to the economy to increase demand and growth, including a £2 billion tax on bank bonuses to fund 100,000 jobs for young people and build 25,000 more affordable homes; and further calls on the Government to bring forward long-term investment projects to get people back to work, to reverse the damaging VAT rise of January 2011 for a temporary period giving families a £450 boost and providing immediate help for the UK’s high streets, to provide a one-year cut in VAT to five per cent. on home improvements, repairs and maintenance to help home owners and small businesses, and to provide a one-year national insurance tax break for small firms to help them grow and create jobs.

In his Conservative party conference speech last October, the Chancellor said he would stick to his plan to cut faster than any other Chancellor in our history, regardless of the consequences, because, he said, it was necessary to put our economy on a sound footing. With reference to the Business Secretary he said:

“Together, Vince and I have started to open Britain for business.”

A year later, what do we find? The economy has grown by just 0.5% in the past 12 months. This compares with growth of 1.5% in the US over the same period and is significantly down from the 2.6% growth in the previous 12 months, thanks to the measures taken by the Labour Government. Have the Chancellor and the Business Secretary opened Britain for business? The figures tell a different story. The number of UK enterprises fell by 20,000 in the year to March 2011, with decreases in business numbers in every region except London and Scotland, and business confidence nose-dived following the announcement of the Chancellor’s spending review.

What effect is this having on the people of this country? More than 2.6 million people are out of work, the highest rate in 17 years. More than 1 million young people are now out of work, the highest since comparable records began in 1992. Let me be clear: these are not our statistics. They are those of the Office for National Statistics. They are the facts.

How have the Government responded to the facts? Last week, when we learned of the youth unemployment figures, the Prime Minister and the Chancellor were nowhere to be seen. Instead, the Minister with responsibility for employment took to the airwaves. He told us that the 1 million figure for youth unemployment was “a distraction.” The 1 million figure for youth unemployment is not a distraction. It is a disgrace. What a tragic waste of talent. He not only described the figure of 1 million as a distraction, but attempted to blame it on the eurozone crisis. Does he really think that the British people will fall for that?

In fairness to the Business Secretary, when the figures came out his unofficial spokesperson, the noble Lord Oakeshott, told The Guardian:

“It’s ridiculous to blame this rise in unemployment on the crisis in the eurozone. All economists know it’s a lagging indicator, so this is the result of what has been happening in our economy over the past year”.

I could not put it better myself. Despite that view, the Business Secretary remains resolutely wedded to the Government’s economic strategy, however disastrous it is turning out to be. He does so in the name of deficit reduction, yet the independent forecasts published last week show that the Government are projected to borrow, on average, more in each remaining year of this Parliament than we would have done under our more balanced deficit reduction plan. Those are neither the Opposition’s figures, nor those published by the Office for National Statistics; the summary of independent forecasts was published last week by the Government themselves. Of course, the Office for Budget Responsibility has already forecast borrowing to be £46 billion higher than previously thought. The evidence is clear: the Government’s strategy is not working because reducing borrowing requires growth, which they choked off by cutting spending and raising taxes too far and too fast, and long before the eurozone crisis.

[Richard Fuller (Bedford) (Con)]

I welcome the hon. Gentleman to his place on the Front Bench, which gives the Opposition the opportunity for a fresh start in putting forward their policies. He noted that according to later assessments the deficit will be higher than originally estimated, but does he accept that the key thing the Government got right was to set the tone for interest rates so that this country’s businesses can benefit from much lower interest rates than those in other countries, and would not the policies that his party proposes put that at risk?

[Mr Umunna]

With the greatest respect to the hon. Gentleman, the reason the Monetary Policy Committee has set our interest rates so low is that we are struggling to find growth in this country. Without growth, we will be unable to reduce our borrowing. Our not being in the eurozone is another reason we are able to adopt lower interest rates.

[Charlie Elphicke (Dover) (Con)]

I, too, congratulate the hon. Gentleman on his much-deserved elevation and on his speech, which has been very interesting so far. I put it to him that the Opposition’s plan would have been to borrow about £100 billion more than the Government plan to borrow in the current Parliament, which would lead to higher interest rates and push us closer to the situation Italy and Greece find themselves in and to what is happening in the eurozone, which would be irresponsible and reckless.

[Mr Umunna]

I thank the hon. Gentleman for welcoming me to my post. First, if he looks at page 22 of the Government’s summary of independent forecasts, he will see that they are projected to borrow, on average, over £100 billion more than the Government thought they would. Secondly, when he returns to his constituency he might wish to explain to his constituents, particularly the young people—youth unemployment there is up by 155% since January this year—why he cannot get his Government to change course.

[Mr Julian Brazier (Canterbury) (Con)]

I am most grateful to the hon. Gentleman, who has shown considerable courtesy already in giving way. Does he accept that the markets set long-term interest rates, whatever the MPC does, and that the problems in countries that have let their fiscal position get out of hand with interest rates have been driven not by a choice given by the European Central Bank, but by the markets setting the prices for their medium and long-term bonds?

[Mr Umunna]

The market is not irrational, as the Government seem to suggest. The suggestion is that if they move their direction and course by even one millimetre, even if economic circumstances justify such a change, they will be hammered by the market, but that is clearly not the case. I invite the hon. Gentleman to read the numerous articles and speeches by the former adviser to the Chancellor and the Prime Minister and former chief economist of the Cabinet Office, Mr Jonathan Portes, now director of the National Institute of Economic and Social Research, who makes that very point.

[Stephen Timms (East Ham) (Lab)]

Does my hon. Friend recall, as I do, the Prime Minister telling the House in June of last year that employment would rise in every year of this Parliament, and did he notice in last week’s unemployment figures that employment fell by more than 100,000 in the year after that pledge was made? Is it not absolutely clear that the policy is not working and must now change?

[Mr Umunna]

I completely agree with my right hon. Friend. Of course, another question for the Government is why they will not listen to business organisations that have been calling for action. The CBI is calling for infrastructure spending to be brought forward, the Federation of Small Businesses is calling for a one-year national insurance break for every small firm taking on extra workers, and the Federation of Master Builders would like a targeted cut in VAT to 5% for home improvements, maintenance and repairs. Business organisations, from those representing the food and beverage sectors to those representing businesses on our high streets, which are suffering, are calling for a reversal of this year’s hike in VAT. What do all those measures have in common? They are all part of Labour’s plan for growth and jobs. As our motion stated, the Government must take action now to increase demand and growth and give immediate help to the high street—[Interruption.] The Minister of State, the hon. Member for Hertford and Stortford (Mr Prisk), chunters from a sedentary position. If he wishes to ignore all the various business organisations, people might put a big question mark over his judgment. It is clear that the Government need to back our plan and that they must do so now.

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

Does the hon. Gentleman not agree that the Government have been listening to businesses organisations with regard to employment law and deregulation? I am surprised that he, as a former employment lawyer, has not included in the motion a single proposal to make it easier for small businesses in Britain to take on staff.

[Mr Umunna]

I will move on later in my speech to the Government’s employment proposals, which I might add were announced this morning to a conference rather than to this House.

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

When businesses get in touch to tell me about the problems they are suffering from, none of them tells me about problems with employment law. They tell me about the lack of public procurement and problems with VAT and financing from the banks. Those are the concerns that need to be tackled, rather than the side issues that Government Members are pursuing.

[Mr Umunna]

I agree with my hon. Friend. We all know what is holding back business in taking on workers: the forecast economic projections for this country. That is the real problem. What has been the centrepiece of the Business Secretary’s alternative offer? How will he turn things around? The answer is the regional growth fund. The aim of the fund is to unlock private sector investment, support areas that are dependent on the public sector and help them become more balanced economies. Good. We take no issue with those objectives. We want that money to get to business and to create the jobs that will support growth, yet the scheme has been managed shambolically. It has been an utter fiasco. The fund is a third of the size of the moneys distributed through the regional development agencies, which have been scrapped without effective replacement, so it has been hugely over-subscribed, which demonstrates businesses’ craving for capital. Of the 956 bids received, only 50 were successful in the first round and 119 in the second round. There have been many more losers than winners. It is difficult for the losers, but what of the winners?

Of course, due diligence is needed to ensure the proper use of public funds. The permanent secretary at the Department for Business, Innovation and Skills told the Business, Innovation and Skills Committee that due diligence on successful bids tends to take between two and six weeks, and that until it is complete the successful bidder is not given its money. Yet, clearly, very few successful bidders have received what was promised, because it has taken so long for due diligence to be completed.

I have written to the Secretary of State and tabled parliamentary questions, and in fact the Minister of State, the hon. Member for Hertford and Stortford, who has continually chuntered from a sedentary position today, provided the answers. I tabled those questions to get the answers, to get the facts and to get to the bottom of the delays and mess.

On Monday I received answers to those parliamentary questions, indicating that 30 weeks—30 weeks—after the original announcement just nine of the 50 first-round winners have completed due diligence. When I asked why due diligence has taken so long, I was told:

“It is for successful bidders to initiate due diligence upon receipt of a conditional offer letter from the Department.”—[Official Report, 21 November 2011; Vol. 536, c. 154W.]

Usually, the Government blame us for all the mistakes; now, it seems that they are seeking to pass on blame to the very businesses that they claim to want to help—and the bidder has to pay for the due diligence cost, too.

As it happens, I met—[Interruption.] Ministers shake their heads—

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

Will the hon. Gentleman give way?

[Mr Umunna]

I will in a moment.

Last week I met one of the first-round bidders, who told me that on learning of their successful bid in April they immediately sought to progress due diligence but, despite chasing the Secretary of State’s Department, received no further documentation for four months. When they got it, they immediately responded but, again, heard nothing for another three months—until around the time that my right hon. Friend the Leader of the Opposition raised the issue of the regional growth fund at Prime Minister’s questions. I am sure that the timing was totally coincidental.

Even now, formal due diligence is not complete, and the matter is due to go to the permanent secretary’s committee for approval on 2 December.

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

On that important point, the Institute of Chartered Accountants believes that one reason for the length of time taken on due diligence is the disappearance of the RDAs’ expertise in following up the process, and the efficiency savings within the Department, meaning that the skills base there has evaporated, too. Is that not the case?

[Mr Umunna]

It is clearly the case, as we saw from the evidence of the Department’s permanent secretary to the Business, Innovation and Skills Committee a couple of weeks ago.

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

I reiterate the point about the expertise that has been lost due to the abolition of the RDAs. The European regional development fund is another vital source of money for businesses. Millions of pounds, particularly in the north-east, remain unspent, and only one fund, from the regional growth fund in Manchester, has been used as match funding for ERD funding. That is a huge waste of important business support that could be going to people throughout the country.

[Mr Umunna]

Perhaps the Secretary of State will address that comment in his response.

Almost one year after the regional growth fund was announced, and six months after due diligence should have been completed, the winning bidder to which I have referred has still not received any money from the regional growth fund. It is clear to me, in that case, where the blame lies for the delay: it is not with the successful bidder. That organisation provides onward distribution of fund awards to businesses that desperately need it. As a result of the chaos, confusion and delay, the bidder in that case tells me that between 3,000 and 4,000 businesses are being deprived of the moneys they need, putting an estimated 11,800 jobs at risk.

What about the other bidders that provide the onward distribution of funds, and the businesses that could support jobs and growth? As I have said, the situation is a fiasco. It is no way to run a Department, and it is no way to treat our businesses or grow our economy. The Secretary of State and his Department are not doing enough to get our economy growing; what little they are doing, they are doing badly.

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

The hon. Gentleman makes a reasonable point about ERDF delays, one of which I have drawn to the attention of Ministers myself, but, having spent 10 years a councillor in the city of Hull dealing with organisations such as Yorkshire Forward, I must say that the nirvana picture of the RDAs that he tries to paint is certainly not my experience. The points he makes now are exactly the same points that we could have made about Yorkshire Forward and its processes for the past 10 years. The problem is the systems, not, as he outlines, how we structure them.

[Mr Umunna]

With the greatest respect to the hon. Gentleman, the question is whether the Department is doing what it promised to do for those businesses, which is to give them money and to carry out due diligence in a quick and timely way. It has failed to do so. I do not claim that there was a nirvana in relation to RDAs, but we are talking about the regional growth fund, and we actually want it to succeed.

The Government’s latest attempt to grow the economy consists of making it easier to fire, not hire, people. Today, to great fanfare, the Secretary of State said that the service required to claim for unfair dismissal should be increased from one to two years. He said this morning that

“this will mean that business can once again have the confidence to hire the staff they need to grow and thrive.”

That is a retrograde step for a Government who think that watering down employees’ rights is a substitute for a proper growth plan.

[Mr Denis MacShane (Rotherham) (Lab)]

Even at the height of the Thatcher years, there was no attempt to target individual workers—their unions, yes, because industrial tribunals were a Conservative Government invention, but the measure under discussion is utterly shameless. The efficient European economies are partnership economies, but targeting weaker workers and, particularly, women workers is to the utter and contemptible shame, above all, of a Liberal Democrat Business Secretary.

[Mr Umunna]

I am glad that my right hon. Friend brings up the Thatcher era, because a well known noble Lord was asked on Sunday whether such initiatives, which seek to make it easier to fire as opposed to hire people, act as a stimulus to job creation. He told the BBC what he thought of that, saying:

“I’ve been responsible for one of those deregulation initiatives for many years and I would be quite frank in telling you that I don’t think we achieved much.”

He went on to say that

“you want to be very careful in political terms that you don’t get the reputation that all you’re trying to do is make life rougher and tougher for large numbers of people.”

Those are the words of the noble Lord Heseltine, and, if a Conservative-led Government are unable to persuade him to buy into the concept, why should the rest of us do so?

[Bill Esterson (Sefton Central) (Lab)]

My hon. Friend makes an excellent point about what Lord Heseltine said, and the evidence is that, when we create uncertainty for workers by attacking their rights, we find that their behaviour changes in relation to the economy. They stop spending money in the economy, and that undermines the opportunity for growth and the support for businesses, so any Government Member who thinks that cutting workers’ rights is a way to grow the economy is sadly mistaken.

[Mr Umunna]

My hon. Friend is right, and when the Chartered Institute of Personnel and Development looked at the economic effects of the proposal to increase the service requirement from one to two years, the chief economist, Dr John Philpott, said that

“any positive effect on hiring is likely to be offset by a corresponding increase in the rate of dismissals. Increasing the qualifying period for obtaining unfair dismissal rights thus runs the risk of reinforcing a hire and fire culture in UK workplaces. Although the policy change will undoubtedly be welcomed by the de-regulation lobby, it isn’t the way to boost growth and jobs.”

[Nadhim Zahawi]

The hon. Gentleman is now quoting selectively. Will he tell us what the Federation of Small Businesses, which he quoted earlier, or the chambers of commerce think of that policy?

[Mr Umunna]

First, I am not quoting selectively. If the hon. Gentleman would like to go and inspect the CIPD press release, he will see that what I have said is the case.

[Nadhim Zahawi]

What did the FSB say?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The hon. Gentleman has had his intervention, and he should please wait for the answer. We do not need comments from the side.

[Mr Umunna]

There we have a Government Member hungry to fire, as opposed to hire, workers.

[Nadhim Zahawi]

Withdraw.

[Mr Umunna]

I withdraw that comment.

The hon. Gentleman asked whether business organisations were in favour of increasing the unfair dismissal service requirement from one to two years. That policy may sound good on the face of it, but what will happen—I say this as a former employment lawyer—is that we will simply end up with more employees making spurious discrimination claims, because there is no service requirement for them. When we put that to businesses, they take quite a different point of view of the policy.

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

rose—

[Julian Smith]

rose—

[Mr Umunna]

I have given way several times, and I want to make a bit of progress.

Instead of reverting to the tired old mantras and doing over the people who work in this country, perhaps the Secretary of State could tell us what he will do to get banks lending to small and medium-sized businesses that are, by his and the Chancellor’s own admission, currently being starved of credit. We know that the Project Merlin accord between the banks and the Government failed. The Secretary of State more or less admitted as much when he said:

“Merlin was necessary but it was never going to be sufficient. I don’t think any of us pretended it was enough.”

We know that the figures published under Merlin are entirely misleading, because under the agreement between the banks and the Government a gross lending measure was adopted, not the more meaningful net figure used by the Bank of England. The truth is that Project Merlin was really no more than a public relations gimmick designed to get the Government out of a hole when banks’ declarations of bonuses were in full flow earlier this year.

For real businesses, the failure is real. The Bank of England’s “Trends in Lending” publication for last month showed the stock of lending to UK businesses contracting overall in the three months to August. The Bank’s latest agents’ summary, for this month, stated that small businesses were still reporting that credit conditions

“remained tight, and in some cases had become tighter.”

That is supported by the figures released this morning by the British Bankers Association, showing lending by the high street banking groups to non-financial businesses contracting this month.

To resolve that problem, the Government first need to change their overall economic strategy, to give businesses the confidence to borrow and grow. The small and medium-sized enterprise finance monitor published last week showed that the main barrier to future borrowing by SMEs was the economic climate, but that the other major barrier was the lending practices of the banks. The Government need to use their influence with the banks, particularly through United Kingdom Financial Investments in the case of the banks in which the state has a stake, to insist that they get money out of the door to responsible businesses that have sound business models but are struggling to access finance. In addition, they must urge those banks to adopt a better lending culture—for example, by ensuring that they have local relationship managers on the ground who get to know the business concerned.

[Charlie Elphicke]

I am sure the whole House has considerable sympathy with the hon. Gentleman’s position. Unfortunately, the Government’s hands are somewhat tied, because UKFI was set up on the basis that it was at arm’s length. When the original deal was done with the banks, the then Government did not force any lending targets on them. This Government have been trying their best to undo that damage through Merlin and other measures, but the previous Government should have got it right in the first place and have made it harder now.

[Mr Umunna]

When will Government Members take responsibility? I wish that we were still in government, but we have not been for 18 months now. It is about time that they got used to the fact that they are in government and took responsibility.

Business is crying out not for a Government who step aside and fail or refuse to act but for one who adopt an active approach, using all the tools at their disposal to create the conditions for private sector growth. For all their claims about our record, such as the ones that we have just heard, the Government have kept in place some of the support measures for business that we left them on leaving office. I should point out that under Labour, 1.1 million businesses were created. When we left office, the UK was rated fourth by the World Bank for the ease of doing business, and first in Europe. Under this Government, the UK has dropped to seventh in the global rankings. We will take no lectures from the Government on support for business.

In government, we set up the Better Regulation Executive and the Regulatory Policy Committee to improve the quality, and where appropriate reduce the quantity, of regulation on business. I note that the Government have continued with them.

[Julian Smith]

Will the hon. Gentleman clarify the top five deregulatory measures that his party took in the 13 years it was in government?

[Mr Umunna]

I cannot name the top five, but the whole reason the Better Regulation Executive and the Regulatory Policy Committee were set up was to reduce regulations by a huge number and improve their quality.

In government, we also conceived the technology and innovation centres, to promote innovation. The Government are now rolling them out across the country, and they have sought to build on the measures that we put in place to reduce the bureaucracy of Government procurement and increase SMEs’ access to it.

In many other areas, however, there has been a disorderly retreat from an active approach. The Government have undermined certainty for investment, cut the science and research funding budget by 15% in real terms and abandoned the 10-year funding plan, and they have abandoned sector strategies such as the defence industrial strategy. The Automotive Council continues, but the RDAs, which could have helped make a reality of the ambition to strengthen companies’ supply chains, no longer exist.

The Government have undermined new industries, such as green industries, as my right hon. Friend the Member for Don Valley (Caroline Flint) will outline in the debate that will follow this one. They have delayed the roll-out of universal broadband and undermined the collaborative institutions that we set up to work with businesses, such as the Office for Life Sciences and the Technology Strategy Board, which are widely respected. The higher education sector, the seventh-largest export industry, has been put in disarray by the Government’s visa changes. Support for the digital, creative and educational sectors has been scaled back. Then there is the decision to award the £1.5 billion contract for new Thameslink trains to a manufacturer that will make them in Germany, which means that Bombardier is reviewing its activities in Britain.

The Government have retreated from action, undermined confidence, failed to unlock investment, failed to deliver a credible plan for growth and failed to use action to back business. They need to back our five-point plan for growth now and put in place a credible plan to build for our long-term success. These are difficult and challenging times for businesses and people in this country. They deserve better from a Government who say, “We are all in it together”, but who, time and again, show that they have absolutely no understanding of the concept.

14:18

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

I should like to respond to the motion, which actually bears only a passing resemblance to the speech made by the hon. Member for Streatham (Mr Umunna). I will start with issues of fact that I hope we can agree on.

The motion makes perfectly legitimate points about the state of the economy. It is certainly true that there is slow growth across Europe and in the UK. We fully understand that. We have not had the double-dip recession that has been predicted since the very first day of this Government, but yes, we do have slow growth. We accept that we have a worrying level of youth unemployment, although the largest component of that, the NEETs—those who are not in education, employment or training—were actually at their peak level before the financial crisis occurred. It is correct to say, as the motion does, that we have a high, and we would argue excessive, level of borrowing. That makes it all the more perverse that the single policy that the hon. Gentleman is offering to us is to increase that level of borrowing, which he considers so toxic.

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

The Prime Minister’s constituency has 1.8% unemployment and mine has 7.9%, yet the Secretary of State’s Government have chosen to leave a full employment service in Witney and to close down the jobcentre in Deptford. Does he agree, and will he support me, in asking his colleague to return an employment service to Deptford to help the 1,000 young people who are out of work now?

[Vince Cable]

Obviously, I do not know the particular position in Deptford, but I am very happy to take up the specifics if that helps.

The particular question that the hon. Gentleman started with was fair: why did the economic slow-down occur? He quoted my colleague in the upper House and others of varying views about why we have lower growth than was predicted by independent forecasters 18 months ago.

[Bill Esterson]

Will the Secretary of State give way?