House of Commons

Monday 23rd January 2012 Commons Chamber

Monday 23 January 2012

The House met at half-past Two o’clock

Prayers

Monday 23rd January 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 23rd January 2012 Commons Chamber

The Secretary of State was asked—

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

1. For what reasons Work programme contractors are not permitted to publish their performance data.

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

I thought that this afternoon we might have been extensively debating the benefits cap, but no Labour Members have been brave enough to raise the issue; I cannot think why.

The Department is following guidance issued by the national statistician in order to comply with the code of practice for official statistics and to protect the integrity and accuracy of data. However, we propose to allow providers to publish data that do not compromise the official statistics and will issue guidance to providers shortly.

[John Woodcock]

As the Minister knows, under the flexible new deal, providers were allowed to publish their data if they wanted to. If he is confident in his Work programme and knows that he has got the contracting incentives right, about which there is some doubt, why on earth is he refusing to let these providers publish their data if they want to?

[Chris Grayling]

It is precisely because I am keen to get information out there that we are looking at ways to ensure that that can happen, despite the rules about national statistics, which we have to obey very carefully. If the hon. Gentleman wants some statistics about employment programmes, let me share a set with him. The flexible new deal, to which he referred, cost the taxpayer £770 million and delivered 50,000 six-month job outcomes. He can do the maths on that—it amounts to approximately £14,000 per six-month job outcome. That is one failure of the welfare-to-work programmes we inherited, and that is why the welfare-to-work package that we have put together through the Work programme will be better value for the taxpayer and do a better job for the unemployed.

[Mr Julian Brazier (Canterbury) (Con)]

Following that robust answer, does my right hon. Friend agree that when we are able to publish these data, they are likely to show the success of putting work out to contract when we see that organisations such as the Shaw Trust are much better at providing work for disabled people than the work done in-house by the Benefits Agency?

[Chris Grayling]

When I visit Work programme providers —I have now visited most of them—I certainly find a great deal of enthusiasm, a sense of purpose and successful progress. I hope that that will show through in the official statistics when the time arises. I am not in the business of burying good news, and I very much hope that we will be getting the good news about the Work programme out there as soon as we possibly can.

[Stephen Timms (East Ham) (Lab)]

I welcome the U-turn on the publication of data that the Minister has just announced. The White Paper, “Open Public Services”, which was published only last summer, included the following commitment:

“Providers of public services from all sectors will need to publish information on performance”.

So why did he write into the Work programme contract a ban on the publication of performance data by those providers?

[Chris Grayling]

As we can all see, one of the challenges that Labour Members face at the moment is that they are all over the place on policy. On Friday, they were attacking me for allegedly misusing statistics; today they are asking why I am not going round the rules set out for us by the Office for National Statistics. They need to make up their minds about what they really stand for, because at the moment they have no idea.

[Stephen Timms]

The Minister has signally failed to answer the question. We know that he did not ask the UK Statistics Authority, whose rules he regularly quotes, before he imposed this absurd ban. I welcome the fact that he has finally announced a climbdown today, but he cannot blame anyone for asking him what he was trying to hide.

[Chris Grayling]

I have absolutely nothing to hide. I have to say to the right hon. Gentleman, as I have been saying to him for weeks, that I am not in the business of burying bad news. None the less, the statisticians expect us to make sure that we have robust and clear statistics before we publish them. As the Work programme has been going for only six months, and we have barely started to make payments for providers’ success in getting people into work, he is, I am afraid, not portraying the reality of the situation. I am glad that he is pleased that we are going to try to get the good news out there as quickly as possible, but we have to stick by the rules.

[Charlie Elphicke (Dover) (Con)]

Is not the key point that statistics must be first approved by the UK Statistics Authority? Will Ministers ensure that when statistics are available, the success of the benefits cap is also published, with the approval of the UK Statistics Authority?

[Chris Grayling]

I will absolutely do that because, as my hon. Friend knows, we are all about trying to help people out of poverty by getting them back into work. The benefits cap is one part of a portfolio of policies—including universal credit, the Work programme and the migration of people off incapacity benefit—that will deliver the kind of change to our welfare state that we so desperately need and was so desperately lacking in 13 years under Labour.

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

The Minister will be aware that it is expected that the number of claimants on employment and support allowance who are routed to the Work programme will be about 150,000 lower than was expected when the contracts were let. What assessment has he made of the impact on their viability?

[Chris Grayling]

Overall, as the hon. Lady will have seen from the figures that we published before Christmas about expected numbers in the Work programme, we are likely to see more people in the harder-to-help groups go into the programme than was previously expected. However, she will also have seen from the previous sets of statistics on ESA that we have a larger than expected support group, which is partly because of policy changes that we have made in areas such as cancer, addiction and mental health in which we are trying to provide better long-term protection for people who are genuinely vulnerable.

[Nadine Dorries (Mid Bedfordshire) (Con)]

2. What steps he took to consult disabled people and representative organisations on the development of the personal independence payment.

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

We have consulted disabled people and their representative organisations at all stages of the development of the personal independence payment. That included a formal consultation in December 2010 and our response which was published in April 2011; an informal consultation on the draft assessment criteria in May 2011; and a 15-week formal consultation on the revised assessment criteria, which started on 16 January this year.

[Nadine Dorries]

I thank the Minister for that answer. Agate house in my constituency, a Leonard Cheshire home in Ampthill, looks after some of the most severely disabled residents. Some are born disabled and many have degenerative illnesses that mean that they will need greater levels of care in future. They will never need less care than they do today or be less disabled, yet they all have to go through the ignominy and bureaucratic process of an assessment of their allowance once a year. Will the Minister examine that matter? It seems an incredible waste of money, a bureaucracy, a waste of civil servants’ time and an embarrassment to residents. Could we change that?

[Maria Miller]

I thank my hon. Friend for her question and say to her that we absolutely share the objective of ensuring that the people with the severest challenges in living independently in our society do not receive undue assessments. At the moment there is no in-built reassessment under disability living allowance. She put her question in the present tense—I am not sure whether she was referring to other things for which people are assessed. I reassure her that under PIP, we do not intend to have fixed annual reassessments. They will be made based on individuals’ personal circumstances.

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

In their report “Responsible Reform”, disabled people and carers analysed the responses to the Government’s consultation and raised many issues about the replacement of disability living allowance. Carers UK has also expressed deep concern about the impact on carers of cuts to disability benefits, yet today we learn that 5,000 carer households will be hit by the mean reduction of £87 a week as a result of the benefits cap. Will the Minister now publish an assessment of the impact on carers of all the Government’s cuts?

[Maria Miller]

To give the House total clarity I should say that the report that the hon. Lady references was highly selective. It examined only about 10% of the responses that we received on the DLA and PIP consultation.

I will answer the hon. Lady’s question about carers directly as she, like me, wants to ensure that carers get the support that they need. We have already made it clear that carers will be eligible for carer’s allowance as a result of the person for whom they are caring being in receipt of either level of PIP.

[Jenny Willott (Cardiff Central) (LD)]

Many disabled people are deeply unhappy about the performance of Atos Origin in administering the work capability assessment. As a result, they are scared about the introduction of the new PIP assessment. What discussions has the Minister had with disability organisations about who will carry out the new assessments, and what reassurance has she been able to give them that the mistakes made with the work capability assessment will not be repeated with PIP?

[Maria Miller]

My hon. Friend will be aware that the new personal independence payment assessment will be separate from the WCA, and that any contracts that are in place for Atos are not at all connected with the new assessment that we need for PIP. In fact, a formal competition document is going out today to start the commercial process. To reassure her about the involvement of disabled people, I say that we already have an implementation development group, which involves disabled people closely at every step of the way.

[Mrs Anne McGuire (Stirling) (Lab)]

Just for balance, I should like to put on record my thanks to those who gave us the Spartacus report, which was a challenging document and took apart some of the Government’s points.

The Dilnot report recommended that universal disability benefits for people of all ages should continue as now. However, under the new PIP the Government are scrapping low-rate care. Some 500,000 people, and probably more, could face escalating unmet needs that will result in pressure on council care services. What specific discussions has the Minister, as lead for the Office for Disability Issues, had on the changes with her colleagues in the Department of Health and the Department for Communities and Local Government, and with the Scottish and Welsh Governments, and what action has she taken as a result of any conversations?

[Maria Miller]

The right hon. Lady will know that we have been having very close conversations with both the devolved authorities and the Department of Health, and she is right that we have to consider the changes that are happening in the round. She should also be mindful of the fact that the changes that we are making under the PIP will remove something that we inherited from the previous Government—£600 million a year going out in overpayments to people whose conditions have changed and who no longer need the same level of support.

[Jessica Lee (Erewash) (Con)]

3. What steps he has taken to reduce the level of health and safety regulation affecting business.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

7. What steps he has taken to reduce the level of health and safety regulation affecting business.

[David Rutley (Macclesfield) (Con)]

8. What steps he has taken to reduce the level of health and safety regulation affecting business.

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

Britain has the best record in Europe for the prevention of death and serious injury in the workplace. We should be proud of that, and we will seek to retain it under the Government. We also have one of the worst records in Europe for unnecessary health and safety red tape. The Löfstedt report, which we published in November, recommends significant changes to our regulatory regime. We accepted the recommendations and, with other planned changes, we aim to reduce the total number of health and safety regulations by 50% by 2014.

[Jessica Lee]

My right hon. Friend referred to the Löfstedt review. Does he agree that, by returning to a common-sense approach to health and safety legislation, businesses such as mine in Erewash can concentrate on positively contributing to the local economy rather than fearing unnecessary prosecution?

[Chris Grayling]

Absolutely. That is very much our hope. We have already implemented one of the key recommendations of the Löfstedt review. On 1 January, we established the first challenge panel, which will allow businesses that believe that they are on the wrong end of a wrong decision as a result of a health and safety inspection to have a quick, easy and simple way of challenging and, if necessary, overturning it.

[Mr Ellwood]

Is it not the case that a culture of hesitancy, leading to paranoia, developed under the previous Government? That culture saw the term “health and safety” justify bizarre decision making, such as cutting down trees in school playgrounds in case children climbed them, or council office light bulbs being replaced only by those who had completed the “how to use a six-foot ladder” course. I hope that we will see some change from this Government on those issues.

[Chris Grayling]

We hope that a simpler regulatory structure will contribute to that. If we take the example of schools, we have already shortened the forms that need to be filled in for a school trip from more than 120 pages to eight. I encourage every Member of the House, including you, Mr Speaker, to challenge daft health and safety decisions when you come up against them in your constituency. There is almost certainly no basis for them in health and safety law.

[David Rutley]

The average annual cost of compliance with health and safety regulations is more than £4,000 for businesses of fewer than 50 employees. What steps are being taken to reduce further the burden of health and safety regulations on our start-ups?

[Chris Grayling]

That is particularly important. One of the Löfstedt review’s key recommendations was that we should exclude altogether from health and safety rules self-employed people who do not endanger the lives of others in the course of their activities. We have accepted that recommendation and will introduce it shortly.

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

As a member of the Löfstedt review, I can confirm that there is a recommendation that has the potential to reduce significantly the net number of regulations. Will the Minister confirm that the review actually recommends consolidating lots of statutory instruments? It would not remove health and safety regulations and, more importantly, it is not a short, quick fix, but a very long-term systematic study that is needed.

[Chris Grayling]

Let me pay tribute to the hon. Gentleman for his work on that committee—his contribution was much appreciated and greatly valued. He is absolutely right, though I emphasise that there is a mix. Today, we have begun a consultation on scrapping the first seven regulations that we have identified as superfluous or duplicating other provisions. As I said at the start of my remarks, our approach is not about undermining health and safety, which protects people from death and serious injury in the workplace, but about creating a streamlined and simple system that businesses can understand quickly, easily and cost effectively.

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

The Minister will know that the Health and Safety Executive estimates that, each year, £22 billion is lost in the UK economy because of health and safety failures. Surely any reduction in health and safety regulation risks increasing that figure.

[Chris Grayling]

That does not follow because the Löfstedt review—and the hon. Member for Ellesmere Port and Neston (Andrew Miller)—identified many areas in which the rules and codes of conduct are too complicated and difficult for businesses to understand. We need to get back to a simple regime that is easy to understand and does what it is supposed to do: protect people from death and serious injury in the workplace.

[Sheila Gilmore (Edinburgh East) (Lab)]

Given that the Löfstedt report does not say that our health and safety legislation is either excessive or wrong, will the Minister also say that and stop peddling the myths on health and safety legislation—the Löfstedt report says that they are myths—that some of his colleagues keep peddling?

[Chris Grayling]

The hon. Lady misunderstands the challenge we face. It is not Members of the House peddling myths; they are peddled all around the country, by local authority inspectors and middle managers in organisations who blame health and safety for things that have no basis in health and safety law. If we have a simplified regime that everyone can understand, it is much less likely that they can get away with doing that.

[Stuart Andrew (Pudsey) (Con)]

4. What plans he has to support residential training colleges for disabled people.

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

DWP adult residential training provision is delivered in nine colleges. The Sayce review of specialist disability employment provision recommended that funding should focus on the individual rather than the institution. While the Government consider how to proceed following the recent public consultation, and to support the colleges through any period of transition, I have committed to provision continuing through to the end of the academic year ending summer 2013.

[Stuart Andrew]

I am grateful for that answer. Residential training colleges have built up a great deal of expertise in supporting disabled people back into work. How will my hon. Friend ensure that that expertise is preserved?

[Maria Miller]

My hon. Friend is absolutely right. We need to ensure that that expertise is protected and retained. That is why I have given a personal commitment to the colleges for provision to continue through to summer 2013. Indeed, other parts of DWP are supporting colleges to broaden their approach, particularly those such as Enham in Hampshire and near my constituency, which delivers the Work programme in the Thames valley and on the Isle of Wight.

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

5. What assessment he has made of the information technology systems which will support universal credit.

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

Universal credit is on track and on budget. The systems are not new or complex. After all, more than 60% of the total developed system is based on reusing existing IT. New developments will use tried and tested technology. The key difference between how this Government are doing things and how they were done before is that we have adopted commercial “agile” design principles to build the IT service for universal credit in four stages, each four months long.

[Sarah Newton]

I thank my right hon. Friend for his answer. Given the billions of pounds that were wasted by the previous Government on failed IT programmes, this matter is vital to me and my constituents. Will my right hon. Friend therefore explain to colleagues more about the testing regime before the new system is implemented?

[Mr Duncan Smith]

I should tell my hon. Friend that I am not complacent about delivery. Hon. Members on both sides of the House know that IT developments can have difficulties and can go wrong at key points, even when we are not expecting them to do so. I am trying to ensure that Ministers are directly involved at every turn. We get weekly updates and have fortnightly meetings with those in charge. I set up a programme board, which I chair, and a senior sponsorship group, which includes Her Majesty’s Revenue and Customs, the programme board and the Department for Work and Pensions. The major projects review group has regular reviews. “Agile” principles make it easier for us to pinpoint where there might be failures.

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

This morning on the “Today” programme, the Secretary of State declared that he knew where and who the families were who would be most adversely affected by the introduction of universal credit. They will lose their homes, their children will lose their schools and they will have to find new medical treatments. Why does he need that system, and has he begun the process of informing those families about the cataclysm that he will bring down on their heads?

[Mr Duncan Smith]

With respect to the hon. Lady, she is mixing up policies. This question is about universal credit, but she is referring to the cap. I am sorry that no Opposition Member tabled a question on the cap—there might be a reason for that, but I do not quite know what it is.

What I said this morning was quite clear. I said that when it comes to the cap and smaller numbers of people, we have worked very hard over the last nine months or so to ensure that we know who will be eligible to fall within the cap. We know exactly all their details, which will make it easier for us to help them through the process. She should have a word with Opposition Front Benchers, and ask them why they did not ask a question about the cap.

[Mr Peter Bone (Wellingborough) (Con)]

When the Secretary of State introduces the new IT system, will he consider introducing a skills database for all those who want a job, enabling employers to dial into the database and match the skills required with the person seeking a job, as against the other way round as at present?

[Mr Duncan Smith]

That is a very good idea and I am certainly ready to discuss it with my hon. Friend. If we can make something work, it would be brilliant.

[Nick Smith (Blaenau Gwent) (Lab)]

The information technology necessary for university credit will depend on the Revenue’s new PAYE real time system. Is the Minister confident that every employer will be using the system successfully by next October?

[Mr Duncan Smith]

We are working towards that, and so far it has been a success. Small companies of nine employees or fewer will have access to free software upgrades, so those that do not have a software payroll system will not incur any great charge. We are running trials that will start in April and that will join with the DWP in October. We are on target and we will continue to work towards that date. That is our expectation and ambition.

[Priti Patel (Witham) (Con)]

6. What steps he plans to take to reduce the cost of sickness benefit paid to UK citizens living abroad.

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

We are bound by EU rules to pay sickness benefits abroad when people are eligible. I emphasise that they need to be eligible, and the same rules apply to the contributory element on employment and support allowance and incapacity benefit—there are no additional limits. We are determined to clamp down on people claiming when they are not eligible, and we are arguing that through at the moment, even in the Commission.

[Priti Patel]

In the light of the significant sums being paid in sickness benefits to UK citizens abroad will my right hon. Friend update the House on the legal dispute between the Government and the European Commission? Will he assure me that he will fight the Commission all the way on this matter?

[Mr Duncan Smith]

The Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is in the Councils on this one. My hon. Friend refers to the Commission’s idea that the habitual residency test should be abolished. That is quite wrong and we disagree with it fundamentally, but we are not alone: a large number of European nations disagree with the Commission and we join them in saying that this is a step too far—a leap into an area that has always been preserved for national Governments and in which it has no right. We will fight this, and I believe that we will win.

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

This is a very serious issue, but will the Government’s programme of closing the DWP’s overseas network in many countries around the world help or hinder efforts to ensure that benefits are paid only to those entitled to them?

[Mr Duncan Smith]

I believe that the hon. Lady’s question is not directly relevant to whether we are able to spot whether people are eligible, because anybody who claims will have to go through exactly the same checks as they would in the UK. That in itself will be a bit of a deterrent in their trying to claim something from a foreign doctor.

[Chris Kelly (Dudley South) (Con)]

9. What recent progress he has made on delivering universal credit.

[Caroline Dinenage (Gosport) (Con)]

19. What recent progress he has made on delivering universal credit.

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

Design work is well under way. As I said earlier, we are continually testing with staff and claimants to ensure that it works and that we make progress. On 8 December the major projects review group panel report acknowledged that significant progress had been made over the past few months.

[Chris Kelly]

How many households are expected to receive a higher entitlement as a result of the universal credit, and how will it help hard-working families in constituencies such as mine?

[Mr Duncan Smith]

Universal credit will be a major sea change for my hon. Friend’s constituents, who will appreciate the fact that for the first time ever we will guarantee that work pays. Figures show that 2.8 million households will have higher entitlements under the universal credit.

[Caroline Dinenage]

Is there any flexibility in the way in which the universal credit will be paid? For example, could it be paid weekly rather than monthly, and could its housing component be paid directly to landlords in order to protect vulnerable families?

[Mr Duncan Smith]

I thank my hon. Friend for that question. She has raised an issue that has been raised by a number of people. The reason why we want to try to pay universal credit monthly is simply that when unemployed people go back to work, they sometimes have to adjust to their wages being paid monthly rather than bi-weekly, which often causes them problems. One of the reasons why they often fall out of work is that they cannot settle on that. We want to try and pay the universal credit monthly, so that it assists them. We will give every bit of assistance we can to all those who have difficulty to help them manage their budgets, which will include a new test on the way we pay housing benefit and the way it will be allocated through their bank accounts. I also give my hon. Friend this undertaking: we will have set-back proposals to make it absolutely certain that we can assist those who genuinely cannot do so to pay their relevant bills.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Before Christmas it was announced that, at least initially, local authorities would have no role in the universal credit assessment. Will the Secretary of State tell me what impact that will have on those working in housing benefit departments in local authorities? Will his Department be helping with redundancy costs if large numbers of people working in housing benefit departments lose their jobs?

[Mr Duncan Smith]

The reason is that we will be talking full time, all the time, to local authorities. We receive a huge amount of information from them, so we are not talking about stand-alone assessments being made; rather, the functioning of universal credit requires that, at its best, it should be done in one location. However, we will be in constant contact with local authorities about the needs in their areas, and we will be with them all the way through in the way this is applied.

[Tessa Munt (Wells) (LD)]

May I press the Secretary of State a little further on the matter of paying housing benefit directly to landlords? A number of my constituents have found that when they are overdrawn or beyond their overdraft, the bank snatches the money, leaving them still unable to pay their rent, so that they get into worse and worse difficulties. Will he reconsider?

[Mr Duncan Smith]

I recognise that, and the point is that although the vast majority of those who receive local housing allowance make their payments on time, there is always a group that does not. The way to deal with that is to recognise that we need to help landlords by not allowing those kinds of people to get away with it—for example, by paying a little bit at the two-month point, which sets the clock back to zero. We can make adjustments that way, and we can also deal with those who have difficultly by assisting them and, where necessary, making direct payments. However, those payments should always be the exception, to try to help people manage their budgets.

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

10. What estimate he has made of the average cost to a small business of real-time reporting of PAYE information to enable calculation of universal credit entitlement.

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

Real-time information—there was a question about this earlier—should not be an additional cost to business, and I do not believe it will be. Ultimately, it will help to reduce administration burdens for employers. RTI will also be good for Her Majesty’s Revenue and Customs, because it will help to eradicate some of the errors caused by HMRC waiting a year before adjusting what it has already paid and then trying to chase people for that money. The fraud and error savings that will arise from the RTI programme—which the DWP considers vital for the universal credit—should be around £700 million, which is an important feature.

[Dame Anne Begg]

I do not think that the businesses I speak to have any idea whatever that this is about to hit them ahead of the introduction of auto-enrolment, which they are more conscious of and worried about. However, that may be academic, because from what I am hearing, HMRC’s timetable for real-time information has slipped. It will not be ready to roll out RTI universally across the country on the date that the universal credit is introduced. What happens to universal credit if RTI is not in place on its launch date?

[Mr Duncan Smith]

From the word go, we have not needed the full system of real-time information to be ready for universal credit. We get our information from essentially two feeds, which we have already been working on with HMRC, long before any further timetables. The reality is that RTI will dovetail nicely with universal credit, but we do not need it for that, and we are not expecting it to be ready at the start of universal credit. We were never expecting that, and we have been working on that basis. However, RTI will come in—it is “on timetable”—and those involved will be working hard to produce it.

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

11. What recent progress he has made on the introduction of the workfare scheme.

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

We do not operate a workfare scheme. I think the hon. Gentleman might be referring to mandatory activity; in which case, I can confirm that we have schemes in place as part of people’s job search. They include mandatory work activity and the community action programme, which is being tested as part of supporting the very long-term unemployed.

[Grahame M. Morris]

May I press the Minister to give a fuller answer to the question that my hon. Friend the Member for Barrow and Furness (John Woodcock) asked a little earlier? Profits at Poundland soared by 34% in 2011, with people on workfare forced to work for free in Poundland stores and being told at the beginning of their placement that there is no prospect of permanent employment, while they carry out the same duties as paid employees. Who is the real beneficiary of workfare: the taxpayer or the shareholder?

[Chris Grayling]

The hon. Gentleman is telling a lot of complete nonsense to the House. The reality is that Poundland is one of many major retailers taking part in our work experience scheme, which is providing young people who are out of work with their first opportunity to get into the workplace so that they can show a potential employer what they can do. More than 50% of young people who go through the scheme move quickly into employment afterwards, including, in some places, with Poundland.

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

There is a lot of noisy criticism from those on the left about asking people to work in return for benefits. Does the Minister think that they are right?

[Chris Grayling]

My hon. Friend is right; those people keep harking back to the future jobs fund. Let me give the House a simple comparison. The future jobs fund resulted in about half the participants getting into work, at a cost of between £5,000 and £6,000 per placement. The work experience scheme is resulting in more than half the participants coming off benefit and going into work at a cost of about £300 per placement. Which one do you think is better value for the taxpayer, Mr Speaker?

[Mr David Hamilton (Midlothian) (Lab)]

12. What estimate he has made of the number of children who will be living in poverty in 2015.

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

The Government do not forecast in the way that the hon. Gentleman’s question suggests. Child poverty is dependent on a number of factors, and we know that the most sustainable way of reducing it is through parents going to work. I hope that the hon. Gentleman will take this opportunity, when asking his supplementary question, to show his support for the benefit cap, which will be one of the best ways of ensuring that work pays, for families throughout our country.

[Mr Hamilton]

The Minister will have a long wait. The independent Institute for Fiscal Studies has said that child poverty, as measured by the Child Poverty Act 2010, will rise by 400,000 by 2015, and that 200,000 children will be forced into absolute poverty. That means that the Government have no chance of meeting the targets set out in the Act, which both parties supported. Does the Minister believe that those forecasts are wrong? Also, will she make a commitment not to overturn amendments to the Welfare Reform Bill passed in another place when the Bill comes back here?

[Maria Miller]

As I have already said, the Government are not really into the forecasts that the hon. Gentleman is looking at, but we are firmly committed to eradicating child poverty. The IFS projections do not tell the whole story; they do not take into account fundamental things such as behaviour change, or our significant investment in early intervention, our education reform policies and our policies in other areas.

[Andrea Leadsom (South Northamptonshire) (Con)]

Bearing in mind the great importance given to the issue of child poverty across the House, will my hon. Friend tell us what steps she is taking to assess the amount of child benefit being paid to the non-resident children of EU workers in this country? What can be done to ensure that those benefits are minimised?

[Maria Miller]

We all want to ensure that the money available goes to the children who need it most, and I am sure that we will look carefully at my hon. Friends’s question.

[Ann McKechin (Glasgow North) (Lab)]

Given that 92% of single parent households are run by women, will the Minister tell me what she is doing about the alarming rise in female unemployment, which is rising at a much higher rate than that of male unemployment?

[Maria Miller]

The hon. Lady will know that the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) is doing a great deal to support women and men back into work in these very difficult times. I should like to commend him for the excellent work that he is doing further to expand the Work programme.

[Duncan Hames (Chippenham) (LD)]

Families with children that are currently in receipt of disability living allowance are among those who are worried about what they read in the papers about the Government’s welfare reforms. Will the Minister take this opportunity to reassure them that they will not experience any reduction in the cash value of that benefit under the reforms?

[Maria Miller]

My hon. Friend is referring to the future of the personal independence payment. He will be aware of my firm commitment to ensuring that that payment is focused on helping those who need help the most. He will have seen from our recently published documentation that our initial work in that area shows that more of that money is going to people who really need it in order to live independent lives.

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

13. What steps he is taking to protect the interests of people with small pension pots.

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

The problems associated with small pension pots can include higher charges, losing track of a pension or facing barriers to moving the pension and getting a decent annuity. That is why we published a paper last month that sets out some radical options for some form of automated transfer system to make it easier for people to build up one large pension pot.

[Rehman Chishti]

Does the Minister have evidence on the number of small pension pots that will be created after automatic enrolment?

[Steve Webb]

I am grateful to my hon. Friend for that question. There is a risk that without action, in an auto-enrolment world hundreds of thousands of new small pension pots will be created each year as people change jobs. That is why it is doubly important that we should have some mechanism to combine those pots so that they are a pension worth having.

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

The UK is in the grip of a private pensions crisis, with 60% of private sector employees saving nothing for their retirement. In the light of that fact and in the light of the emergence of new competitors in the auto-enrolment market, will the Minister consider ending the statutory restrictions on the national employment savings trust scheme so as to better serve the auto-enrolment market?

[Steve Webb]

The hon. Gentleman raises an important issue. The Labour Government introduced the constraints on NEST—and for a good reason, as it ensured that NEST focused on its target market. The situation has moved on and competitive developments in the market have emerged that were not necessarily foreseen. We are reflecting on the role of those constraints and I look forward to discussing the issue further with the Select Committee on Wednesday.

[Alex Cunningham (Stockton North) (Lab)]

14. What assessment he has made of the likely effect of the closure of the social fund on (a) homelessness, (b) hardship and (c) use of payday loans.

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

The social fund is not closing as payments for maternity, heating and funeral expenses will continue. Some discretionary payments, particularly community care grants, will be replaced by targeted local provision at the same total level—so it is not a cut in the budget—and universal credit will provide a better service with payments on account supporting many people in need of short and longer-term credit.

[Alex Cunningham]

I am grateful for that update. For some people, the social fund is a crucial safety net, allowing them to avoid catastrophe. One of the major concerns about its abolition is that people will no longer be able to claim crisis loans to pay rent in advance when they move into private rented accommodation. What provision will there be to help formerly homeless people pay rent in advance when moving into independent accommodation?

[Steve Webb]

I know that the hon. Gentleman had written his question before he heard the answer, but the social fund is not being abolished. The new system under universal credit of payments on account will actually be more flexible, allowing people to draw down their universal credit ahead of time. That will be more efficient than the current rigid system of crisis loans.

[Hywel Williams (Arfon) (PC)]

What discussions has the Minister had with the Welsh and Scottish Governments about the transfer of some responsibilities to local authorities and with what result?

[Steve Webb]

We are localising to English local authorities and, as the hon. Gentleman says, to the Scottish Government and the Welsh Assembly. We take the view—we have had a positive response on this from the Welsh Assembly—that the ability to shape a system for Wales is welcomed. Whether the Welsh Assembly chooses to do that through Welsh local authorities or at a national level in Wales will be a matter for it.

[Hugh Bayley (York Central) (Lab)]

15. If he will set a limit on the charges which pension fund managers may levy for the administration of pension funds.

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

Initial evidence ahead of the roll-out of auto-enrolment later this year is that the creation of NEST, with its relatively low charges, and competition in the market are leading pension providers to offer products for auto-enrolment with lower than average charges. However, we believe that charging levels are important and have taken additional reserved powers under the Pensions Act 2011 to cap charges under auto-enrolment if that proves necessary.

[Hugh Bayley]

The report produced for the Government by Dr Christopher Sier shows that pensioners are losing out because of the excessive fees and charges levied by private pension fund managers. What action will the Government take to cap the amount that private fund managers can milk from the funds they manage on behalf of pensioners?

[Steve Webb]

I think the hon. Gentleman was a Minister in our Department under the previous Administration, and as he knows they chose not to cap charges but to give themselves powers to cap them if it proved necessary. At the moment, our judgment is that the early roll-out of auto-enrolment will deal with big firms who will give good deals and low charges and that we have more competition than was perhaps expected, with NEST coming in at around 0.5% and other providers at or below that point. We are encouraged by developments in the market but we are absolutely prepared to use the capping powers if it proves necessary.

[Mr Marcus Jones (Nuneaton) (Con)]

16. What recent progress he has made on the youth contract.

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

Since the launch of the youth contract, we have been engaging with employers, providers and stakeholders to give them an active role in shaping the delivery of the new offer. As a result, employers are now starting to sign up to support the delivery of the youth contract and we remain on track to implement it in April as planned. Let me pay tribute to all the employers that are currently and have committed in the future to offering places in our work experience programme and in sector-based work academies and to offering in other ways to support what we are trying to achieve.

[Mr Jones]

I thank the Minister for his response. I welcome the youth contract and I am sure it will help many of our young people into employment, but having spoken recently to a number of local business people, particularly from small businesses, I have concerns about the general level of awareness of the policy. Will my right hon. Friend assure me that he is doing all he can to raise awareness of this crucial policy with employers?

[Chris Grayling]

I can indeed. I met representatives of the major business representative groups a few weeks ago. Communicating with individual businesses is certainly a challenge but we aim to do everything we can to ensure that employers are taking up the wage subsidies available from April. It is worth noting that later this evening we will debate the Opposition’s plans to create 100,000 supported jobs, but that through the wage subsidies in the youth contract we are offering a similar opportunity to 170,000 young people.

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

17. What progress he has made in assisting members of troubled families into employment through the use of payment-by-results programmes.

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

We launched the programme before Christmas, funded by European social fund money. This is the second major foray that this Government have made into payment by results, and I am confident that the payment-by-results approach, combined with the support that is available to those families if they move into the Work programme, will provide a transformational level of support in the lives of some of our most challenged families.

[Jack Lopresti]

I thank my right hon. Friend for his answer. Given that past Governments have not had great success at helping certain families get back into work, why does he think his approach will be more successful?

[Chris Grayling]

The big difference is that we are adopting the payment-by-results approach. The organisations taking part in the programme can be paid only at certain points—first, when they agree an action plan with one of the individuals in a problem household; secondly when they deliver that action plan, which might mean the person completing a training course or something similar; and thirdly when that person gets into employment. The taxpayer does not pay the bill unless that happens, and that is a much better deal than ever happened under the previous Government.

[Kerry McCarthy (Bristol East) (Lab)]

In Bristol, we had the pilots for family intervention projects that involved working with families who had a multitude of problems to tackle some of these issues. Does the Minister accept that this is not just about working through one Department such as his own? Other Departments such as the Department of Health and the Department for Education, as well as drugs funding, will need to be supported if we are to succeed in tackling these problems.

[Chris Grayling]

I absolutely do that. Two points regarding the contracting of this support are crucial to what the hon. Lady says. The first is that referrals come from local authorities so that they know they are taking people from their problem family register and are not duplicating effort. Secondly, the contracting was based very much around the effectiveness of the firms in the bidding process at showing they could form the kind of partnerships that she rightly says are so important.

[Mr Tobias Ellwood (Bournemouth East) (Con)]

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

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

Today in the other place they will be debating an amendment on the benefit cap. I believe that that system will help to restore fairness by setting a cap for those on benefits of £26,000 a year after tax or £35,000 a year before tax. I cannot understand why those who have said they would support this and were in favour of it have voted against it as often as possible.

[Mr Ellwood]

I congratulate my right hon. Friend and his team on the work they are doing to modernise the benefit system following the mess that was left by the previous Government. On the benefit cap, does he agree that those who oppose it need to explain to those who are in work but who earn less than £35,000 a year why people on benefits should be better off than they are?

[Mr Duncan Smith]

My hon. Friend makes a powerful point. The reality is that almost everybody out there beyond the politicians and the game playing believe it is reasonable to say to people who are on benefits that if they are not working, they should not earn more than those who are working and paying their taxes. I am astonished at the Opposition, who do not seem able to get it. I understand from a recent poll that even their supporters are overwhelmingly in favour of the proposal.

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

I hope that the Secretary of State will not mind if I sustain his attention on the benefit cap for a moment because there will be an important debate in the other place this afternoon on the cap. This is a policy we support because, like him, we believe that people should be better off in work than on benefits. However, I want him to be absolutely straight with the House about what the cap will and will not achieve. Will he tell the House how much the housing benefit bill is going to rise over this Parliament as a result of his failure to get people back to work?

[Mr Duncan Smith]

There are two things to say about that question from the Opposition. If the right hon. Gentleman is, as he says, in favour of the cap, why does his party keep voting against it? Today, in the other place, it has tabled what is officially a wrecking amendment on the cap. Labour Members cannot weasel their way out and say that they are in favour on the one hand and against on the other. On housing benefit, I remind him that under his party, housing benefit pretty nearly doubled in 10 years, and it was set to rise far more than it will under us.

[Mr Byrne]

Perhaps I can help the Secretary of State: the truth is that over the course of this Parliament—over four years—the housing benefit bill is set to rise by an extraordinary £4 billion. We do not want, on top of that, another bill for council tax payers—a bill to clean up the cost of homelessness. The Secretary of State for Communities and Local Government has already warned us that 20,000 people will be made homeless as a result of the way in which the cap will be introduced, and this morning, the Department for Work and Pensions published an impact statement that puts up the number of families who will be affected by the cap by a third. It is almost as if the Secretary of State for Work and Pensions is making the policy up as he goes along. I hope that this afternoon he will accept Labour’s safeguards against a new risk of homelessness. If he dismisses that risk—if he wants to be so glib about it—why does he not accept the amendment this afternoon? If he does not, we will support the lord bishops’ amendment to safeguard against a new bill for council tax payers. That is the way that we will get this vote—

[Mr Speaker]

Order. The right hon. Gentleman has had his say, and we are most grateful to him.

[Mr Duncan Smith]

First, I do not accept the bishops’ amendment, because of course it would raise the cap on the level of income to roughly £50,000; it would be rather pointless having a cap set so high that nobody could ever hit it. Interestingly, I have just had an e-mail from a vicar, who wondered why the bishops fail to recognise that he is paid only £22,000 a year. He wonders why they are getting excited about £26,000 being a poverty-level figure. As regards housing benefit, let me remind the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) that we are saving £2 billion a year; housing benefit doubled under him.

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

T4. Will my right hon. Friend tell me what the Government are doing about migrants who live in the UK and claim benefits without working or paying tax? Will the Government consider recording the nationality of benefit claimants?

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

I can confirm that we will record the nationality of benefit claimants when universal credit is introduced in 2013. I also confirm to my hon. Friend that where we have identified people who have a question mark over their benefits and immigration status, investigations are already under way. For 27% of the people whom we looked at in our data matching process, we are not yet able to make a match between benefit claimant status and immigration status. We will continue to do detailed work to make sure that there is not a hidden problem, left behind by the previous Government, relating to benefit tourism and inappropriate claims.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I remind right hon. and hon. Members, in the light of the extensive interest in topical questions, that topical questions and answers need to be brief. Let us be collegiate towards each other.

[Hugh Bayley (York Central) (Lab)]

T2. The benefits bill this year will be some £15 billion higher than in the last year of the Labour Government, and that costs about £600 per family per year. What will the Government do to cut unemployment, which is what is pushing up the benefits bill so fast?

[Chris Grayling]

Of course, we will debate this again tonight, but as I keep saying to the House, we will sort out the problems in our public finances to deliver stability in our economy. We will deliver the best possible support to business through the various measures that we have introduced, including enterprise zones and changes to the tax system. Through the Work programme, our work experience scheme, and the youth contract, we will deliver the best possible support to get the unemployed back into the workplace.

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

T9. My constituent, Dr Christine Davies, has contacted me with examples exposing the unfairness of Child Support Agency arrangements, which often fail to take into account the living costs of the non-resident parent. These are parents who are trying to engage with their children and do the right thing, but who are left to live on as little as £30 a week. What are Ministers doing to deal with this unfairness?

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

I thank my hon. Friend for his question, and I assure him that we are working very hard on reform of the maintenance system, which still fails to support around half of all children in separated families. He talked about cases in which both parents want to stay involved in their children’s upbringing; he and I share that objective, and I hope that he will continue to support the reforms that we are taking forward, which will provide far more family support to enable that to happen.

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

T3. What advice can the Minister give the 3,259 people in St Helens who have been told to downsize their home, despite the fact that on existing turnover it will take five and a half years for them to do so while, in the meantime, losing their benefit? What advice would he give those constituents?

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

I think that the hon. Gentleman is referring to social housing over-occupation. If people are in a particularly difficult situation, local authorities have been given an enhanced amount of discretionary housing payment to help them make that transition. It is vital that we tackle 1 million empty bedrooms in social housing.

[Robert Halfon (Harlow) (Con)]

Going back to the issue of testing the disability living allowance, will the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Basingstoke (Maria Miller) reassure the House that testing will be localised, humane and fair?

[Maria Miller]

I thank my hon. Friend for his question, and I pay tribute to him for all the work he does to make sure that things are right as we reform the benefits system. I can absolutely assure him that we will look at ensuring that the new face-to-face assessment is done in a fair manner, and we are going out to commercial contracting on that.

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

T5. During the recent Westminster Hall debate on the future of Remploy, I was pleased to be able to tell the Minister that at the Wythenshawe print factory sales continue to increase while operating costs are falling. What action has she taken since then to procure additional print work for the factory from Government Departments and agencies, and when does she expect to be able to confirm that the factory will remain open?

[Maria Miller]

That was an important and useful debate to ensure that the work that we are doing in government is made clear. I have asked officials to look at the situation that he raised regarding Wythenshawe to make sure that the appropriate sales teams are in place. He asked when we are going to talk about our long-term decisions, and I can assure him that we will respond on that as soon as is practicable. We are in year four of a five-year plan, and it is important that we have those new plans in place.

[Nicky Morgan (Loughborough) (Con)]

I was pleased that the Minister affirmed her commitment to residential training colleges, including the college of the Royal National Institute of Blind People in my constituency. She may be aware of recently published figures from the Select Committee on Work and Pensions showing that 1,000 people who have suffered sight loss are still looking for opportunities to be helped back into work. Does she agree that those colleges provide a valuable opportunity to help those people find employment?

[Maria Miller]

I pay tribute to the work that my hon. Friend does to support her local residential training college. I absolutely agree that colleges such as the one in her constituency have a valuable role to play, particularly to offer specialist advice and support. I hope that the commitment that I have given the colleges to ensure provision through to the summer of 2013 will help them to plan for a future in which we focus more on individuals than on institutions.

[Ian Murray (Edinburgh South) (Lab)]

T6. Recent reports have shown that more than £3 billion of pension charges are hidden from consumers. Will the Minister tell us what the Government plan to do to make it possible for pension fund trustees and consumers to compare charges between pension funds?

[Steve Webb]

The hon. Gentleman is absolutely right that charges are a crucial issue, so we are working with the National Association of Pension Funds and others who have undertaken an industry-led initiative to make charges information-transparent and consistent, and we are pleased to support them in that.

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

May I assure the Secretary of State that a great many of my constituents object strongly to paying through their taxes for people to get more in benefits than they can get on a working wage, or to live in property far beyond anything that they could afford on their wage? It is important that we get the transition right, but the principles are sound.

[Mr Duncan Smith]

I absolutely agree with my right hon. Friend. It is remarkable that there is overwhelming support. Yes, he is right about making sure that we get the transition right, but the principle behind this and its application are vital. I simply cannot understand why the Opposition snigger and wriggle on this issue, failing to do what is right, and failing to do what is proper or to face up to their responsibilities.

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

T7. The disability advocacy group Black Triangle has said that 11 disabled people have committed suicide in circumstances in which the coroner said that it was as a result of assessments as part of the work capability assessment. Is that figure right? Can the Minister advise whether he has looked into what legal liability the Government may have and, in particular, whether there is exposure under the corporate manslaughter legislation?

[Chris Grayling]

It is always a matter of regret when any person on benefits or indeed any person at all commits suicide. We always look carefully at reports that suggest any link between anything we do and people finding themselves in such a position. Let us be clear: the principle of trying to help back into work people who have been on benefits long-term is very important in supporting people who have mental health problems. If we do not reassess people, we will never be able to identify those who can benefit from that help.

[Margot James (Stourbridge) (Con)]

Average earnings in my constituency, Stourbridge, are £23,700 a year, on which there is a tax liability of some £5,000. Does my right hon. Friend agree that to oppose or to equivocate on the policy of a cap on benefits is an outrageous insult to all hard-working people in this country?

[Mr Duncan Smith]

My hon. Friend is absolutely right. The cap is fair and popular, and it helps to put right the welfare system that we inherited, which is in a mess and is trapping people in dependency when we could free them. My hon. Friend is right that the Opposition position is ludicrous. The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) has taken more different positions on the issue than a Jane Fonda work-out.

[Mr Speaker]

I call Mr Jim Cunningham, not necessarily on the subject of work-outs, but on whatever appeals to him.

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

May I ask the Minister whether employers can still take a pensions contributions holiday and, if so, how many?

[Steve Webb]

Where employers run defined benefits pension schemes, if they are in deficit and have a recovery plan agreed with the Pensions Regulator, there is no obligation on them to overfund above 100%, and there are Inland Revenue rules that affect surpluses, which are still in place.

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

Does my right hon. Friend agree that those well-intentioned but misguided individuals who oppose the introduction of a benefits cap are in serious danger of killing with kindness the very people they seek to help, by condemning them to a lifetime of benefits dependency and worklessness, which the benefits cap will seek to reverse?

[Mr Duncan Smith]

I fully understand those who on every principle and in every regard oppose the cap, but I cannot understand those who say they are in favour of it and then vote against it.

[Several hon. Members]

rose—

[Mr Speaker]

Order. I am sorry to disappoint colleagues. There is a great deal of interest, but we must now move on.

Petition

Monday 23rd January 2012 Commons Chamber

Mr David Lammy (Tottenham) (Lab)

- Hansard - - Excerpts

The petition is from the governors, parents, teachers and community of Downhills primary school in Tottenham.

The petition states:

The Petition of residents of Tottenham,

Declares that the Petitioners believe that there has been inadequate consultation about the Secretary of State for Education’s plans to close Downhills Primary School and re-open it as an academy; that the Petitioners value the links with the community that the school has maintained over the last 100 years; that the Petitioners believe that the Secretary of State’s plans are undemocratic and undermine the recent progress that has been made towards improving standards at the school and that the Petitioners oppose any attempts to change the status of the school without the consent of the community.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Education not to exercise his powers to close Downhills Primary School and re-open it as an academy.

And the Petitioners remain, etc.

[P000998]

Executive Pay

Monday 23rd January 2012 Commons Chamber

15:32

[Mr Chuka Umunna (Streatham) (Lab)]

(Urgent Question): Will the Secretary of State for Business, Innovation and Skills make a statement on the Government’s proposals on executive remuneration?

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

I welcome this opportunity to set out Government proposals on executive pay. Last September I published papers that explored the issues around the rapid growth in executive pay in our largest listed companies, and embarked on a call for evidence.

The evidence is clear that business and investors recognise that there is a disconnect between top pay and company performance, and that something must be done. We cannot continue to see chief executives’ pay rising at 13% a year while the performance of companies on the stock exchange languishes well behind, and we cannot accept top pay rising at five times the rate of average workers’ pay, as it did last year. It is not Government’s role to micro-manage company pay, but there are things we can do to address what is a clear market failure.

Today I can announce a package of measures that the Government will take forward to tackle the issue on four fronts: greater transparency, so that what people are paid is clear and easily understood; more shareholder powers, such as the introduction of binding votes, so that shareholders can hold companies to account; more diverse boards and remuneration committees; and best practice led by the business and investor community. No proposal on its own is a magic bullet, but together they can enable a major transformation to get under way.

Let me start with transparency. Shareholders have told us that they need clearer and more relevant information about pay, particularly the link to performance. At present many company pay reports are simply impenetrable. Through secondary legislation later this year the Government will require companies to publish more informative remuneration reports on how executives are rewarded. This will start with reports being split into two sections: one detailing proposed future policy for executive pay, and the other setting out how pay policy has been implemented in the previous year.

On future policy, remuneration committees will be expected to explain why they have used specific benchmarks and how they have taken into account employee earnings, including pay differentials, when setting pay. Companies will also have to explain how they have consulted employees and taken their views into account. UK employees in large companies already have the right to request that their employers consult them on issues relating to the organisation, including pay, through the Information and Consultation of Employees Regulations 2004. This potentially powerful mechanism for employees has been underutilised to date, so I encourage employees to use it and put executive pay on the agenda.

Shareholders say that pay policy too often appears totally disconnected from their company’s overall strategy. I want companies to state clearly and succinctly how their proposed pay policy reflects and supports company strategy, how performance will be assessed and how it will translate into rewards under different scenarios. In the backwards-looking section of the report, companies will have to provide a single figure for total pay for each director and explain how pay awards relate to the company’s performance. To provide context, companies will be mandated to produce a distribution statement outlining how executive pay compares with other disbursals, such as dividends, business investment, taxation and general staffing costs.

Alongside more information, shareholders need new powers to hold the board to account. I will consult shortly on specific proposals to reform the current voting arrangements and give shareholders a binding vote, enabling them to exert more pressure on boards. This will include a binding vote on future pay policy, including details of how performance will be judged and real numbers on the potential payouts directors could receive. Companies will have to include a statement on how they have taken into account shareholder views and the results of previous votes.

There will also be a binding vote on any director’s notice period longer than one year and on exit payments of more than one year’s salary. Shareholders will still get a vote on how the agreed policy has been implemented. I will consider whether we need further sanctions that could be applied when a significant number of shareholders dissented in the advisory vote. In addition, we will review what level of shareholder support is needed to pass pay proposals—for example, whether the threshold for a successful vote should be raised to 75% of share votes cast. By way of context, last year four FTSE 100 companies failed that test.

Let me move on to diversity in remuneration committees. Having diverse remuneration committee membership is crucial to changing the status quo on executive pay. The right way to tackle this is by having more diverse boards. I want to see more people who come from different backgrounds appointed, including people from the professions, public servants, academics, lawyers, and people who have not been directors before. For example, I would like at least two board members to have never previously been members of a board of directors.

In October a new provision in the UK corporate governance code will come into force requiring companies to report on their policy on boardroom diversity, how they propose to deliver it and what progress has been made. That sits alongside a new code of conduct for executive head-hunters and good practice guidance from the Association of British Insurers on the importance of board diversity, board evaluation and succession planning. The Government will also address fundamental conflicts of interest in the pay-setting process and require greater transparency on the role of remuneration consultants, how they are appointed, their fees, and who they advise and report to.

We have also observed that in the FTSE 350 about 6% of remuneration committee members are executives of other companies. There is a perceived conflict, as those individuals have a personal interest in maintaining the status quo in pay-setting culture and in pay levels, and we are looking at mechanisms to limit that.

In the context of such changes, we must deal with the specific issue of payments for failure. Some of our consultees have argued that all quoted companies, not just those in financial services, should have a clawback mechanism in place, and we will ask the Financial Reporting Council to revise the corporate governance code in order to require all large public companies to adopt clawbacks.

In relation to best practice, this package of measures will create a more robust framework within which executive pay is set and agreed. Moreover, lasting reform depends on active shareholders and responsible businesses accepting the need for change and pushing the agenda forward.

Deborah Hargreaves, who chairs the High Pay Commission, will launch a new project next week to monitor the state of pay at the top. The high pay centre will perform an important role in delivering the high-quality research that this area of debate badly needs. Companies have to show leadership on this issue, and in the following weeks and months I will be working with business and investor groups to build on the current momentum for reform, to agree on what best practice looks like, and to promote that more widely.

[Mr Speaker]

Order. I am extraordinarily grateful—[Interruption.] Order. I am extraordinary grateful to the Secretary of State, but I have been immensely—perhaps excessively—generous, because the right hon. Gentleman took precisely three times as long as he is supposed to take in answering an urgent question. I know he will understand—I listened to him with great interest and respect—that I must make allowance for that with regard to the Opposition Front Bencher’s response, but above all I make the point for the future that those on the Front Benches must stick to the limit, because my concern is to protect the rights of Back-Bench Members.

[Mr Umunna]

Thank you, Mr Speaker, for forcing the Secretary of State to come to the House today to set out the Government’s proposals in this area—[Interruption.] The Under-Secretary of State for Business, Innovation and Skills, the hon. Member for Kingston and Surbiton (Mr Davey) chunters from a sedentary position, but it is quite extraordinary for Ministers to demand greater accountability and transparency from people in business, and then to seek to avoid being held to account for their policies in that area in the House of Commons.

The problems of excessive executive pay and rewards for failure have grown over the past few decades; in fact it was probably 30 years ago, when the current Business Secretary was a happy and active member of the Labour party, that things were more in proportion. We agree that it is right that those who work hard, generate wealth and create jobs for our country are rewarded, but excessive pay and rewards for failure are bad for business, the economy and society at large.

I welcome much of what the Business Secretary says, but his proposals simply do not go far enough in promoting the transparency, accountability and fairness that people want to see. We support all the recommendations of the independent High Pay Commission, to which the Business Secretary referred, but why will he not do the same, particularly given that his Treasury spokesperson in the Lords is a member of the commission, and presumably supports its recommendations?

The Business Secretary and other Ministers have underlined the importance of consulting employees, so why will he not back moves for employees to sit on the remuneration committees that set pay? Employees play that type of role in Europe’s strongest economy, Germany, and on the board of one of our most successful businesses, John Lewis. We read that he would like to back the proposal but has been prevented from doing so by the Prime Minister and the Chancellor. Can he confirm that?

The right hon. Gentleman said nothing about the publication of pay ratios within businesses. Why will he not agree to that proposal? If I am wrong, I am happy to be corrected. I agree with him on the need for greater clarity about the role of remuneration consultants. They currently owe their duty to the board, as I understand it. Does he agree that there is a case for changing the situation so that, much like auditors, they owe their duty to shareholders?

Above all, I do agree that increased shareholder activism is key. Two issues have been cited as obstacles: that more of our UK stock is held by foreign investors and that it is held for a shorter period. Does the right hon. Gentleman agree that that need not be an insurmountable barrier to increased shareholder activism?

Finally, on shareholder activism, the Business Secretary, the Deputy Prime Minister and other Ministers who ultimately bear responsibility and control the public stake in the banks—RBS, in particular—have said that they are in a position to stop the chief executive of that bank receiving a large bonus while he is issuing thousands of redundancy notices to RBS employees. How and when will that happen? Does the right hon. Gentleman think that it is acceptable for the chief executive of RBS to take a bonus of the order of £1 million when thousands of company employees are being made redundant?

[Vince Cable]

I start by acknowledging that the issue is, as some of the hon. Gentleman’s questions implied, complex. The best way to proceed with it for the country is to have an all-party consensus. The contributions made in recent weeks by the Prime Minister, the Deputy Prime Minister and the Leader of the Opposition have contributed in a very positive way towards that, and we can make some progress on that. I contrast that slightly with the hon. Gentleman’s somewhat carping response. I believe that today he put out a press release describing as “half-baked” proposals that he had not seen; he did not know what was coming. That was not terribly clever.

The hon. Gentleman’s central criticism was that we had not gone far enough. Let me reflect on what that means. We have emerged from 12 years of Labour government, when many of the issues could have been dealt with. That period of government started with something called the “prawn cocktail offensive”, which led to my immediate Labour predecessor saying that he was “intensely relaxed about people being filthy rich”. Those were the standards that we inherited. I remind the hon. Gentleman about what happened in that period of government. At the beginning, chief executives’ pay was 47 times average pay; at the end, it was 120 times average pay. That is the problem that we are now trying to correct. Before the hon. Gentleman lectures me any further on not going far enough, he should reflect on why so little was done when his party had the power to do it.

Let me respond specifically to the point about workers on boards. It would be very desirable if there were more workers on boards. The initiatives being promoted in respect of encouraging John Lewis-type arrangements, which by definition will get workers on boards, will take that further. We welcome worker participation in industry; that is one of the reasons why my ministerial colleague, in conducting the Royal Mail legislation through Parliament, laid such insistence on worker shareholding and giving workers a right to participate. But there is a specific set of problems around mandating companies to have workers on their boards. Consider the position of the large number of FTSE companies whose employees are predominantly overseas. How would the work force be selected? Worker participation is a good idea for many companies, but let it be done without the prescriptive route, which would simply not work.

The same applies to pay ratios. There is a lot to be said for pay ratios; the hon. Gentleman may not have heard me, but I did advocate that kind of metric as a way of assessing what is happening. But if he had reflected for a few minutes, he would have seen that there is a big difference between a company that, for example, has a large number of unskilled workers, and another company that has outsourced a lot of its unskilled labour force, producing totally meaningless figures in respect of ratios. So we welcome pay ratios, but they should not be mandated and prescribed.

The hon. Gentleman asked about the High Pay Commission, which has done excellent work; I referred to it during my contribution. I checked back on its 12 recommendations, and we are implementing 10 of them in practice or in spirit. Of the remaining two, one—about employees on boards—I have already referred to. The other was a very specific recommendation on the structure of pay, which we judged to be impractical.

On RBS, let me just say that that matter is above my pay grade. The Prime Minister has said that he will ensure that it is dealt with properly. I am sure that it will be, and that there will not be excessive bonuses.

To return to my first point, we can make progress in this important area on an all-party basis. I encourage the hon. Gentleman to revert to his usual more constructive and moderate approach, and to work with us to achieve far-reaching and overdue reforms.

[Mr John Redwood (Wokingham) (Con)]

I welcome anything that recognises that it is the role of shareholders and competitive markets to decide pay in companies. With that in mind, let us consider what happens where the Government are the shareholder. Will the Secretary of State remind us what deal the Labour Government signed up to for RBS top executives, explain why it was so far in excess of the dreadful results that have been delivered in public ownership, and say what this Government can do to put that right?

[Vince Cable]

My right hon. Friend is right to stress the central role of shareholders and to remind us about the conditions according to which the head of RBS was appointed and the contract negotiated. Of course, the problem is not just with pay; we are now also having to consider the problem of knighthoods that were awarded for appalling behaviour in British banking.

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

A lot of what the Secretary of State has said will have cross-party support. The Government are backing employee share ownership, the logical outcome of which is employees on the board. In view of that, and his rejection of the automatic right of employees to be on the board, for the sole reason that a lot of companies have foreign employees, is the Secretary of State really trying to address this issue and to find a way through? Although it may be difficult in practice, it is very good in principle.

[Vince Cable]

There is no logic to suggest an automatic carry-over from worker shares to representatives on boards. Those are separate issues. I simply urge the hon. Gentleman to look back on my comment about the use of information and consultation arrangements. There is a regulation that came from the European Union— one of its better ones—back in 2005, which employees in many companies could use to engage directly in conversations with their management about their pay. Far too few people have taken advantage of that. I hope that he and others will encourage them to do so.

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

I congratulate the Secretary of State, who, after 13 years of a Labour Government who did nothing about this issue, has persuaded our Conservative colleagues that this is the right policy for the new century. I urge him to continue to be robust and to suggest that each individual company should have a policy that reflects the differential between the highest and the lowest-paid, according to the make-up of its own work force.

[Vince Cable]

Again, I do not want to be too negative. One of my Labour predecessors, Patricia Hewitt, advanced the issue by introducing advisory votes. That was a step forward but it was not enough, and we have to go further. However, that step was usefully taken. My right hon. Friend asked specifically about pay ratios. I have said that those are useful metrics, and that we should encourage their use. However, companies have very different structures, and pay ratios mean different things. Therefore, mandating them is a different matter.

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

Does the Secretary of State agree that it is generally undesirable for public companies to pay more out in bonuses, particularly to their senior staff, than in dividends, especially as dividends are often paid out to pension funds, which include many members of the public on low incomes?

[Vince Cable]

Yes, my hon. Friend is correct. That is why one element of transparency that we have advocated is a breakdown of the different streams of payment by companies, which include payments to shareholders, payments to employees and other costs.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

Does the Secretary of State agree that context, as well as contracts, matters? Whatever it says in the contracts of the top people in the banks in which the Government have a major stake, the context is pay freezes for millions of workers and the biggest squeeze in living standards since the war. Will he therefore resist the temptation to rely on the defence advocated by the right hon. Member for Wokingham (Mr Redwood) about contracts and agree that there is nothing to stop bankers exercising restraint, given the economic context?

[Vince Cable]

Across the coalition, we have been very clear that we expect restraint. In some cases that has been accepted: the head of Lloyds, for example, has waived his bonus for this year. We should not trivialise the issue of contracts, which is a serious matter involving how business is conducted.

[Mr Dennis Skinner (Bolsover) (Lab)]

Whatever happened to the phrase, “We’re all in it together”? I listened carefully to what the right hon. Gentleman said. He talked about “we”. Does he mean himself and the Liberals, or does he mean the whole Government? The truth is that the workers will carry the can, and the bankers and executives who have got their 50% pay increases will get away with blue murder.

[Vince Cable]

As my right hon. Friend the Member for Wokingham (Mr Redwood) reminded us, we are dealing with a legacy in which precisely the failings that he described were allowed to happen over a long period. We are trying to put that right. Addressing executive pay is only one means by which we deal with the fundamental injustices and inequalities in society. There are many other issues, including tax and regulation. However, this proposal will make a significant difference.

[Mark Pritchard (The Wrekin) (Con)]

The Secretary of State mentioned ending the rewarding of failure. Has he consulted business people? Many of those to whom I speak believe that over the past few years far too many politicians have themselves been rewarded for failure, which has brought our economy down from the seventh to the eighth largest in the world. Does he accept that the vice of greed should not be replaced with the vice of envy?

[Vince Cable]

I do agree with that. Of course, it is essential, in a successful economy, and particularly a successful private enterprise sector, that enterprise, entrepreneurship and good management should be properly rewarded. The issue is not envy but performance.

[Paul Blomfield (Sheffield Central) (Lab)]

The Secretary of State acknowledged that he gave a fairly lame answer to the question asked by my hon. Friend the Member for Streatham (Mr Umunna) about worker representation on boards. Will he now try to give a proper answer on why the Government could not end the cosy closed shop on remuneration committees by legislating for worker representation?

[Vince Cable]

Ending the cosy closed shop on remuneration committees involves wider diversity in general. Workers are part of that, but so are consumers and people who have no other connection with the company. Diversity is a much wider concept. At the moment we are promoting the idea of women on boards. I gave a considered answer to the question about workers on boards. We must remember that other issues are involved. For example, different companies have different types of labour force spread across the world. There is also the question of how to ensure that a worker representative accepts the full legal responsibilities of a director. If the hon. Gentleman looked at what those legal responsibilities are, he would find that it is not practical to employ that approach.

[Margot James (Stourbridge) (Con)]

Incentives and rewards are fundamental to the private sector growth that we are all keen to ensure. Does my right hon. Friend accept that it is sometimes hard to distinguish between performance and failure, and that certain companies facing extremely difficult trading conditions might have to hang on to an executive through the incentive of high pay?

[Vince Cable]

Yes, and that is why operational decisions must remain with the company so that it can make a judgment on the matter. Through these recommendations we are trying to ensure that investors are properly informed, and we are, through transparency, giving them the power to make the judgment that the hon. Lady described, and act accordingly.

[Tony Lloyd (Manchester Central) (Lab)]

Does the Secretary of State accept, as a number of his Back Benchers do not, that this is fundamentally a question about what type of society we want to be, and that when we see executives being paid 75 times more than the lowest-paid people in the company, that is not about economic efficiency or incentives, but immorality?

[Vince Cable]

Yes, this is about different types of society, but of course there are many wider issues than the remuneration policies of public listed companies and many aspects of fairness and inequality. I simply make the point that many other private enterprise economies —Germany, the Scandinavian countries, Japan—have a much more disciplined approach to executive pay than has been the case in the UK, and many of their companies do very well commercially.

[Mr Adrian Sanders (Torbay) (LD)]

The Secretary of State will be aware of the book “The Spirit Level”, which suggests that the most successful economies and societies are those in which the gap between the richest and the poorest is the narrowest. Does he believe that the announcements that he has made today will widen or narrow that gap?

[Vince Cable]

They will certainly narrow it, in contrast with the trend over the past decade that was identified in a recent OECD survey. It showed that almost uniquely in the developed world, the big disparities between the top and bottom are widening in Britain. Today’s announcement is one key element in rectifying that adverse trend, which we have seen particularly in the past decade.

[Helen Goodman (Bishop Auckland) (Lab)]

The Secretary of State said that the decisions about RBS top pay were above his pay grade, but unlike the workers, he is on the board of the Government, namely the Cabinet. Will Ministers set a good example and control Stephen Hester’s bonus?

[Vince Cable]

Ministers have already made it very clear that bonus restraint should be employed in that company.

[Mike Crockart (Edinburgh West) (LD)]

I welcome the Secretary of State’s announcements today, especially those on transparency and increasing shareholder power. Does he agree that the fundamental principle must be that executive pay reflects company performance? That is a principle that the 107 bankers suing Commerzbank for £1.6 million in bonuses next week would do well to remember.

[Vince Cable]

Yes, the theme of what I have been saying today has been the link between pay and performance, and as my hon. Friend knows, there are specific problems in the banking sector, not least because until the Vickers report is implemented we still have a “too big to fail” problem and an implicit Government guarantee. That is why rather stricter provisions have to apply in the sector.

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

Does the Secretary of State really want us to believe that those who get vast salaries, bonuses and share options and probably earn well over £1 million a year are now terrified as a result of what he has said today? The truth is, that it does not really amount to much, does it?

[Vince Cable]

I do not expect them to be terrified, but I do expect them to think a little more carefully about their wider responsibilities.

[Philip Davies (Shipley) (Con)]

I have heard some drivel in my time, but I do not think that in all my years in opposition did hear as much drivel from the Treasury Bench as I heard from the Secretary of State today. Businesses look to his Department for support and help. May I suggest that he gets off their backs and lets them create some wealth, and that he spends his time in his Department trying to sort out the massive problems of their own that the Government face without interfering in every business across the country?

[Vince Cable]

May I just gently suggest that my hon. Friend reads through the responses to the consultation, which are predominantly from businesses and investors advocating measures such the ones we are implementing? He might particularly want to examine the contribution of the CBI.

[Mr Speaker]

It is interesting to note that the shyness and reticence that previously overcame the hon. Member for Shipley (Philip Davies) have now been successfully overcome.

[Jonathan Ashworth (Leicester South) (Lab)]

A few moments ago, the Secretary of State told us that he would consider it desirable to see more employees represented on boards, but then he told us about what he considered to be insurmountable obstacles. If Germany, Austria, Finland, Sweden, Norway and Denmark can do it, why cannot we?

[Vince Cable]

I have dealt with this question several times already. I am aware that those countries—[Interruption.] Yes, of course those countries have a different system that results in workers on boards, but of course that does not happen in isolation. They have completely different systems of corporate governance.

Since the hon. Member for Streatham (Mr Umunna) reminded me of my days in his party, I shall say that one of the last things that I tried to do under the 1979 Government, when I was working with John Smith, was introduce a co-determination system, but alas that Government showed very little interest in implementing it.

[Mr David Nuttall (Bury North) (Con)]

As shareholders already have the power to vote out of office directors who they believe are underperforming, why is there a need for any further measures that will serve only to undermine the competitiveness of British business?

[Vince Cable]

As I have already explained to the hon. Member for Shipley (Philip Davies), the consensus view among business and investors is that the status quo is not supportable and is leading to damaging and perverse rewards, including rewards for failure, and that we need to reform the system comprehensively.

[Mr David Hamilton (Midlothian) (Lab)]

May I remind Government Members that they agreed with Labour for 13 years about releasing details of chief executives’ pay? Will the Secretary of State take retrospective action against any companies that try to get through the barriers before the changes come into operation?

[Vince Cable]

In general, retrospective legislation is not a good thing, but I will look at the implications of the question.

[Duncan Hames (Chippenham) (LD)]

As we have heard, some hon. Members argue that nothing should be done to put at risk a light-touch, risk-based regulatory regime. In my right hon. Friend’s attempts to achieve cross-party consensus on the matter, how does he hope to persuade the shadow Chancellor to abandon that position?

[Vince Cable]

I was not aware of the shadow Chancellor’s wisdom on that particular subject, but his party leader has spoken constructively and I hope that that will lead to agreement between our parties on how we can proceed.

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

Does the Secretary of State still believe that all bankers paid more than the Prime Minister should publish details of their remuneration, as he believed when he was in opposition?

[Vince Cable]

I am surprised that Labour Members keep reminding us about bankers’ pay. Bankers’ bonuses in 2008-09, when the Labour party was still in government, were something of the order of £13 billion. They have now come down to about a quarter of that.

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

How does the Secretary of State think that his plans will help attract inward investment and so aid growth?

[Vince Cable]

I think they will help considerably. Many of the countries from which we attract inward investment have good corporate governance systems, in which there is considerable restraint on excessive pay, and reward for success rather than failure.

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

The Secretary of State will know that youth unemployment now stands at more than 1 million. Why will not the Government repeat the bankers’ bonus tax, which could create up to 100,000 jobs for young people?

[Vince Cable]

This argument has been rehearsed many times. The then Chancellor of the Exchequer, who introduced the bonus tax, made it clear that it was a one-off measure and that, if it were continued, banks would simply avoid it by converting bonuses into consolidated pay. It was a good idea at the time. It worked for a year, and we now have a much more effective and credible way of taxing banks.

[Jason McCartney (Colne Valley) (Con)]

Rewards for failure: the old boss at ITV, where I used to be the trade union representative, slashed jobs, made a succession of poor business decisions and brought the company to its knees while picking up millions in pay, perks, bonuses and share options. Is my right hon. Friend surprised that the Leader of the Opposition has rewarded that failure with a key role in restructuring the Labour party?

[Vince Cable]

I have not followed those developments, but perhaps I should retract some of the complimentary things I said about the Leader of the Opposition.

[Mr Speaker]

I remind the Secretary of State that he has absolutely no responsibility for restructuring the Labour party.

[Alex Cunningham (Stockton North) (Lab)]

Here is another opportunity for the Secretary of State to clarify his views on RBS bonuses. The share price has collapsed by 35% in the past year, so will he use any powers he has to block any bonus for the chief executive, or has he really surrendered those powers to the Prime Minister and the Chancellor, who simply do not agree with him that the bonus must be stopped?

[Vince Cable]

I have heard at least three different sets of recommendations on RBS bonuses, including that they should be reduced and that they should be stopped altogether. If we get a coherent, single source of advice, perhaps I can respond better to it.

[Bob Stewart (Beckenham) (Con)]

Does the Secretary of State think that it is more important to have a board with diversity or a board with competence, which looks after the shareholders, the workers and the company?

[Vince Cable]

I do not accept that there is a dichotomy between diversity and performance. All the evidence suggests that particularly the drive to get more women on boards has nothing to do with political correctness and everything to do with improving performance.

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

A few months ago the Secretary of State said that the Government could intervene to stop bankers’ bonuses if they so wished. Does he stand by that? If he does, why is he not dealing with the RBS situation?

[Vince Cable]

I remind Opposition Members that the semi-publicly owned banks, including RBS, are managed on an arm’s length basis under an arrangement devised by the previous Labour Government. This Government have made it clear that we expect restraint in bonuses in the banking system and in RBS in particular, and we will see what happens.

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

Will the Secretary of State confirm that proposals to tackle excessive pay are just part of the Government’s plans to reconnect the principles of risk-taking, success, hard work and rewards in both the private and the public sector?

[Vince Cable]

The hon. Gentleman is absolutely right, although we have of course already introduced principles governing remuneration in the public sector, including greater transparency, ratios and things of that kind. We are now extending those into the private sector where it is appropriate to do so, while recognising, as he implied, that in the private sector we need also to give incentives to entrepreneurship and good management.

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

The Secretary of State mentioned that he was not accepting the High Pay Commission recommendation to publish the ratio between the highest and the average earners in a company because it was too complex. Will he expand on that please?

[Vince Cable]

That was not the recommendation to which I referred. The commission also made a specific recommendation about a double number between salary and top-up to salary. For a variety of reasons, we do not feel that being quite so prescriptive is appropriate, but that was the recommendation to which I referred and which we were not able to take forward.

[Mr Marcus Jones (Nuneaton) (Con)]

Does the Secretary of State agree that the state should not control private sector pay, but empower shareholders with the information they need so that they can be active and committed company owners?

[Vince Cable]

That is a pithy summary of what I was trying to say, on which, as Mr Speaker ruled, I took rather too long.

[Sheila Gilmore (Edinburgh East) (Lab)]

Apparently, the chief executive of Peacocks took a hefty pay increase just last year when clearly his company must already have been failing. I am sure that all workers facing redundancy from Peacocks would like to know how the Secretary of State’s proposals might assist people in their position in future.

[Vince Cable]

The hon. Lady refers specifically to Peacocks, on which I have been approached by several concerned elected representatives. Having looked at the facts, the Government do not judge that there are any grounds for intervention in the wider public interest, but I have great sympathy for the employees, who are in a very bad position because of bad decisions made in the past by their management.

[David Rutley (Macclesfield) (Con)]

Does my right hon. Friend agree that there is an important role for lawyers to big City firms and large plcs in advising their clients on best practice when drawing up arrangements for contracts and bonuses?

[Vince Cable]

In mentioning diversity, I think I included lawyers, improbable as that may seem. There is probably a dissenting view on the Opposition Front Bench.

[Mr William Bain (Glasgow North East) (Lab)]

Does the Secretary of State accept the finding of the High Pay Commission that in the year to last autumn—on his watch—the pay of FTSE 100 directors increased by 49%, whereas average incomes rose by only 2.7%? Does that not make the case for a permanent body on high pay to ensure that companies reflect the social obligations that they owe to all of us?

[Vince Cable]

As I understand it, the commission is in the process of encouraging the establishment of a monitoring body of that kind. That is not governmental or Government financed, but it would be a very useful institution in helping us to understand the trends.

[Robert Halfon (Harlow) (Con)]

Does my right hon. Friend agree that crony corporatism, high taxes and high regulation are as unjust, if not more so, than some of the problems he has set out today? Will he pay as much attention to dealing with those things as he is to dealing with the issues he set out?

[Vince Cable]

I am not terribly comfortable with the phrase “crony corporatism”, but my hon. Friend refers specifically to directors serving on each other’s boards. We have looked at the facts on that. There are few examples of reciprocal agreements, but there are cases— 50 out of 1,000 or something of that order—in which directors serve on the board of another company. We are looking at how we can limit that, because it creates a somewhat more incestuous environment and lacks the diversity we are seeking.

[Kerry McCarthy (Bristol East) (Lab)]

It is often not the management or those in executive roles who get the highest pay packages, particularly in the financial sector. For example, I have heard a rumour that at least one of the traders at RBS is going to get a higher bonus than Stephen Hester. Will the Minister tell us whether his proposals, particularly on transparency, will cover traders too?

[Vince Cable]

The hon. Lady is quite right: there is a different pay structure in investment banks, because of the problems that she describes. The Chancellor has already initiated action, in the form of a proposed regulation through the Financial Services Authority which will require financial institutions to declare the highest pay of employees who are not on the boards of those companies.

[Mr Peter Bone (Wellingborough) (Con)]

The Secretary of State must be extremely happy. The liberal, left-wing clap-trap that he has announced today—which even Labour did not do, in 13 years—has somehow got through the coalition in the hope of a good headline. It has done nothing to increase growth or employment in this country. Is he a happy man?

[Vince Cable]

I am actually. I realise that when I first raised the issue of responsible capitalism 18 months ago, I was denounced in parts of the press as a Marxist. I thought I had left that behind, but apparently not.

[Tessa Munt (Wells) (LD)]

I am sure that my constituents will be absolutely delighted with the arrangements for more transparency and, in particular, increased shareholder power. I wonder whether the Secretary of State will consider the fact that Somerset county council has imposed a pay freeze and is making people redundant—indeed, it sends me a Christmas card, at the same time as it is shutting libraries and slashing youth services—and is now considering abandoning youth carers, to save a paltry £70,000. Will he consider applying exactly the same principles of transparency and shareholder power—or in this case taxpayer power—to councils and their pay and bonuses arrangements for senior management?

[Vince Cable]

Mercifully, I am not responsible for local government, but there are certainly moves afoot, which my hon. Friend is aware of, to ensure much greater transparency in pay. Will Hutton prepared a report for Government with some good recommendations, which include those she mentioned.

Points of Order

Monday 23rd January 2012 Commons Chamber

16:17

[John Cryer (Leyton and Wanstead) (Lab)]

On a point of order, Mr Speaker. As you know, on Friday a consultation paper was introduced that is intended to lead to legislation creating a statutory register of lobbyists. That was trailed in the press like confetti, across the media. It was accompanied on Friday by a brief written statement and nothing else. This is such an important issue that the Prime Minister himself has said that it is the next big scandal in British politics. Should not Friday’s statement be accompanied by an oral statement, and has the Deputy Prime Minister contacted you to indicate that he wishes to come here to make a statement?

[Mr Speaker]

I have not been contacted in the way that the hon. Gentleman expected or would have advised. What I would say to him is twofold. First, the form of Government statements is overwhelmingly a matter for Government to determine. The hon. Gentleman rightly references the fact that although the Parliamentary Secretary, Cabinet Office, the hon. Member for Forest of Dean (Mr Harper) tabled a written ministerial statement on this subject on Friday, there has been no subsequent oral statement. What I would say to the hon. Gentleman, secondly, is that my understanding of the matter is that the Government have launched a consultation process. It is an extremely important consultation process, on what, as he rightly says, is an extremely important matter, but that is the stage that we have reached. If, following the consultation process, the Government have specific policy changes to recommend, I feel certain that they will do so via an oral statement to the House; and, knowing the hon. Gentleman as I do—we entered the House together in 1997—I know that he will be eagerly expecting such an oral statement and will probably be the first in the queue to complain if it is not forthcoming.

[Robert Halfon (Harlow) (Con)]

On a point of order, Mr Speaker. Following the weekend reports that the Houses of Parliament may be slipping into the River Thames, will you give a statement to the House, just so that we know whether or not to buy ourselves lifejackets?

[Mr Speaker]

I am grateful to the hon. Gentleman, in particular for his concern for all those who work, or even live, within the precincts of the Palace of Westminster. I have known him for over 20 years, and I have never regarded him as an inveterate worrier. As he can see, I am not worried. He should not believe everything that he reads in the newspapers, or in those even more downmarket rags that in so describing themselves are almost certainly breaching the Trade Descriptions Act. Getting overexcited is their stock-in-trade; keeping calm and doing the right thing is ours.

Opposition Day

Monday 23rd January 2012 Commons Chamber

[Un-allotted Day]

Food Prices and Food Poverty

Monday 23rd January 2012 Commons Chamber

[Mr Speaker]

In the light of the increased interest that has been expressed in participating in this debate, I have decided to impose an eight-minute limit on each Back-Bench speech. For the benefit of the shadow Secretary of State—the hon. Member for Wakefield (Mary Creagh) —and the Secretary of State, I remind them that there is no time limit on Front-Bench speeches, but I hope that they will apply a certain self-denying ordinance in order to enable more of their colleagues to contribute than would otherwise be possible.

16:20

[Mary Creagh (Wakefield) (Lab)]

I beg to move,

That this House notes that food prices rose by more than 4 per cent. over the last year and that an increasing number of families are relying on foodbanks; is dismayed at Government delays to the Groceries Code Adjudicator and that it has rejected recommendations by the Business, Innovation and Skills Committee and Environment, Food and Rural Affairs Committee to give it teeth; believes that the Adjudicator should have the power to fine retailers and that third party organisations should be able to report retailers for unfair practices; calls on the Government to bring forward proposals for the Groceries Code Adjudicator early in the next Parliament to ensure fairness across the food supply chain; and further calls on the Government to work with the retail sector to provide more responsible, transparent price promotions and clearer unit pricing to offer genuine value-for-money for consumers.

I am sure that hon. Members on both sides of the House will do their best to abide by your strictures, Mr Speaker.

On Friday, I visited a food bank in Bradford and met people who use its services. One woman had fled her violent husband when she was eight months pregnant. Another had left her husband but discovered that he had set up loans in their joint names for which she was still liable. There were women there who had held down high-powered jobs—one had been the personal assistant to the chief executive of a large bank in Canary Wharf—but, through a combination of bad decisions, bad luck and bad men, they had fallen on hard times.

One of the women apologised for not following politics, but said that she could not afford a television licence. Another described how she had found herself shouting at her children when they asked for a bit of jam on their bread, and how she visited relatives at teatime to ensure that her children were fed, while she herself went to bed hungry. Another described cooking tea for her children and eating their leftover food. One woman told me how, the first time she brought home a food parcel, she cried all night because she could not do something as basic as feed her own children.

[Robert Halfon (Harlow) (Con)]

The hon. Lady has mentioned food banks, and we have a very good one in Harlow. Can she explain why the previous Government stopped jobcentres handing out vouchers for local food banks? This Government have reversed that terrible decision.

[Mary Creagh]

I do not know the answer to that question. I am not sure whether it is the role of jobcentres to pass people on. There is a question mark over whether it is appropriate for a Government agency dealing with people’s welfare and benefits to outsource the food element of that to charities, so I throw that question back to the Government.

I went with the centre manager, Gareth Jones, to make up a food parcel. It contained cereal, tins of beans, four tins of meat and four tins of fish—all nutritionally balanced by a health visitor who advises the centre. The hardest part for me was choosing the four treats. Would the children prefer a pot of honey or a treacle sponge pudding, meringue nests or another pot of jam? Those are treats that we all put into our shopping trolleys without a second thought.

Gareth told me that it was important to put in a mix of branded and non-branded goods, so that when people opened the bags at home, they would feel valued. He told me how he holds pampering sessions at which mums can enjoy a hot chocolate while someone minds their children for half an hour. He described how the type of person coming to the food bank had changed from the homeless and destitute to the working poor. He said that families were referred to it by charities, social services or even—as the hon. Member for Harlow (Robert Halfon) said—the jobcentre. When the state does not provide, the big society is left to pick up the pieces.

[Alex Cunningham (Stockton North) (Lab)]

Much has been made of the importance of food banks, but does my hon. Friend share my concern that the New Life church in Billingham in my constituency has felt the need to set up a food bank for the first time, to help local people who are struggling? I support the church in doing so, but I am sure that she would agree that these facilities should not be necessary. Is not this another illustration of this Government’s failure to address the needs of the most vulnerable people in our society, who need food to eat?

[Mary Creagh]

I completely agree with my hon. Friend and pay tribute to the church in his constituency. We are seeing a proliferation in the number of food banks around the country and one of our challenges to the Government is to ask them to map where those food banks are and what social and economic policies are needed to tackle the proliferation of them and hunger in our society.

The Trussell Trust states that it now has 163 food banks around the country, with one opening every week. Last year, its food banks fed 61,000 people, 20,000 of whom were children, and this year it expects that figure to double.

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

Is my hon. Friend aware that in Oldham a food bank has been established for the first time? That was in the paper today. The vicar who set it up said that the banks are not just for homeless people but for hard-working families who are at crisis point. Reports by the Joseph Rowntree Foundation and other organisations show that such problems exist up and down the country. Does my hon. Friend agree that the cuts and austerity are not working?

[Mary Creagh]

I agree and it all comes back to the social and economic failure of this Government. We are seeing these problems in places that were never hotspots for homelessness, such as Oldham. We associate them with our big cities and do not expect them in our smaller towns. There is a food bank in Wakefield now, whereas previously there was not one.

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

My hon. Friend might be aware of the campaign conducted by Sainsbury’s shortly before Christmas, where the company invited customers to buy an extra item with their shopping and pop it in a shopping basket so that it could be distributed to needy households. I was shocked when I attended my local Sainsbury’s to meet many people who said that they would like to help but could not afford to buy that extra item. Is not the idea that we can rely on charity to meet the need bound to be too limited?

[Mary Creagh]

I agree with my hon. Friend. If Sainsbury’s is inviting consumers to put their hands in their pockets, it should match that investment item for item, rather than simply adding it to its bottom line.

[Kate Green]

In fairness, I should say that Sainsbury’s matched every donation.

[Mary Creagh]

That is very good to hear.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Bridgend food bank covers four of the 10 most deprived wards in Wales, so the service it provides is critical. In its recent report, it said that the people who applied for food there did so because of

“low income or ill health…repossession of their home…job loss or desertion by the…breadwinner, or”

burglary,

“house fire or unexpected benefit cuts.”

People who go to food banks go for a variety of reasons, but is it not appalling that in 2012, when we are celebrating the Olympics and spending millions of pounds, people are still starving?

[Mary Creagh]

I agree. Charities such as the Salvation Army and HelpAge are seeing an explosion in demand as incomes fall, working hours are cut and prices rise.

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

I know that my hon. Friend, like me, comes from Coventry. Would she be surprised to learn that 35,000 children from Coventry and Warwickshire will now be on the poverty line, and does she think that that is an indictment of this Government’s failed policies? More importantly, many families are now struggling with electricity prices, heating bills and so on, which is feeding through—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Interventions must be brief, as we are in a short debate with time limits on speeches.

[Mary Creagh]

I am very sorry to hear that my home city of Coventry has 35,000 children living in poverty. I am sure the number was similar when I was growing up there in the 1970s and 1980s and I am only sorry that much of the good work we did in government is falling away and poverty is increasing.

FareShare, which operates nationwide and works to redistribute aid from the food industry to charities, says demand is growing faster than supply. I pay tribute to both Sainsbury’s and Brakes, which recycle their in-date surplus to FareShare. It is important that the food is in-date so that there is no risk associated with that food, which includes fresh vegetables and, in particular, meat. Supermarkets could be doing much more to recycle food waste to hungry people. FareShare estimates it gets 1% of supermarket food waste, which prompts the question of where the other 99% is going. More of it should be recycled to hungry children in this country, which is one of the richest on earth. We can learn from food businesses such as Pret A Manger, which delivers surplus sandwiches around its London stores in the evening. We recall with horror the Tory proposals from Westminster council last year, when it wanted to make food distribution illegal. I pay tribute to all those who fought that proposal and protected people’s basic human right to a square meal even in the city of Westminster.

Gareth said that food is at the heart of everything his organisation does, but as my hon. Friend the Member for Bridgend (Mrs Moon) said, charities are tackling a complex web of abuse, abandonment by the breadwinner, debt, unemployment, non-payment of benefits and other equally serious issues such as house fires, which she mentioned.

[Mark Pritchard (The Wrekin) (Con)]

The hon. Lady is talking about the situation in the UK, but does she accept that rising food and commodity prices are an international phenomenon and that biofuels are taking out of production a lot of agricultural land, which means that food prices are rising not only in this country but around the world?

[Mary Creagh]

Commodity prices of certain things, such as wheat, have remained stable over the past 20 years, whereas others have risen. [Interruption.] Well, at the Oxford farming conference I saw the US Department of Agriculture’s figures on that. However, the hon. Gentleman is right that there is an issue with commodity pricing, particularly with the financialisation of that sector, which is leading to increased volatility, making it harder for food producers to hedge and putting on pressure. We can see from Department for Environment, Food and Rural Affairs figures that where we are self-sufficient we are more protected from those food price spikes than where we rely on imports, which have to have the costs of transporting those materials added on. Also, when our pound falls significantly against other world currencies that puts those prices up.

The people who food charities are seeing are no longer just the homeless and the drug and alcohol users but the respectable mums and dads who have fallen on hard times and the pensioners whose energy bills are so high that they cannot afford to eat. It is an utter disgrace that, although we are the seventh-richest country in the world, we are seeing thousands of people going to bed hungry at night—many of them children. We need to look this issue squarely in the face. A wave of invisible hunger is taking root in our cities, towns and villages. Those charities are the canaries down the mine telling us that respectable working-class and middle-class poverty is on the rise—and this is happening before the housing benefit changes and universal credit come in.

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

Will my hon. Friend pay tribute to the work that Hull city council is doing to reduce the cost of a school meal to £1 in recognition of the increasing cost that families are having to meet, including those families just above the benefit level for free school meals?

[Mary Creagh]

I pay tribute to Hull’s Labour council for that, as well as for the work it did when we were in government on its free school meals pilot to make sure that children in Hull had access to a free school meal. I know that that experiment has been carried out by Islington council as well, and that it helps to ensure there is a wide take-up of free school meals and that no stigma is attached to them.

[Lyn Brown (West Ham) (Lab)]

I am grateful to my hon. Friend for mentioning the free school meals pilot, which Newham is continuing for primary school children. It wanted to extend it to secondary school children but simply could not afford to do so. One thing that I heard from parents in that pilot was that school holidays were a particularly difficult time because their children were burning up a lot of energy but there simply was not the food or the money to feed those children properly during holiday time. Again, that is a hidden form of food poverty.

[Mary Creagh]

I pay tribute to Newham’s Labour council and I find it amazing that, at a time when councils are experiencing a 28% cut to their revenue, they are still managing to subsidise school meals or, as in Newham, to fund completely free meals. What a tragedy it is that that scheme cannot be extended to secondary schools there. I will return to the issue that my hon. Friend raises about school holidays.

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

Does my hon. Friend share my great concern that the removal of extended schools money means that many schools cannot afford to put on breakfast clubs? Many children who would previously have gone hungry if they had not got breakfast through a breakfast club are returning to a situation in which they do not have food in their stomachs, and so cannot learn and are not getting a healthy start to the day.

[Mary Creagh]

It is a tragedy that both breakfast clubs and after-school clubs are under threat. The chef Richard Corrigan did a film for Sky called “Richard Corrigan on Hunger” in which a lady who runs clubs that are provided for by a charitable provider, Magic Breakfasts, talks about children being admitted to hospital in the school holidays for malnutrition—that comes back to the point made by my hon. Friend the Member for West Ham (Lyn Brown) about the challenge that school holidays pose for families’ food bills—and scurvy appearing in children of primary school age, which I find deeply shocking.

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

I am listening with great interest to my hon. Friend’s speech. Does she accept that some of the problem is hidden, because really good, well-meaning staff at schools are finding ways of feeding children during the day? That is hiding some of the scale of the problem.

[Mary Creagh]

That is true, and I am glad that there are so many passionate teachers—and passionate friends and neighbours, who may suspect that all is not well. I remember people telling me, when I brought forward my Children’s Food Bill, that they would invite their neighbours and friends in for tea on a Saturday and make sure that the children had as much meat and fruit juice as they could get into them, because it became apparent from the way that they were eating that they had not been fed since Friday lunchtime. That point, from my constituency of Wakefield, has certainly stayed with me.

In addition, the Agricultural Wages Board is to be abolished. That is a particularly nasty Government decision that has nothing to do with the deficit, but will take £93 million from the sick pay and holiday pay of low-paid agricultural, horticultural and food processing workers over the next 10 years. That money will leach out of the rural economy, where those workers live—out of local pubs, post offices and shops—depressing the rural economy when spending is already squeezed. It costs more to live in the countryside, and the abolition of the AWB could mean that we have in this country food workers who are unable to buy the food that they produce. We know that those agricultural workers are the most socially excluded people in our country. They are often migrants who speak limited English. Their work is seasonal, short-term and low-skilled. They are not in a trade union, and they move from county to county, picking daffodils in Cornwall in February, and following the crop and fruit cycle across the country.

After the Morecambe bay tragedy in 2004, Labour created the Gangmasters Licensing Authority to regulate labour providers in the food processing and packing, and agricultural, horticultural, forestry and shellfish-gathering sectors. Our aim was to ensure that workers received a minimum wage, decent accommodation, safe transport, contracts and decent working conditions, yet the GLA’s latest annual report reveals that, in the year to March 2011, it uncovered more than 800 workers being exploited in the UK. It prosecuted 12 companies and revoked the licences of 33 gangmasters. In 2010, there were horrific reports of children as young as nine picking onions in a field near Worcester. While the Government, continuing with their red tape challenge, are deciding on the future powers of the GLA, we say: “We will work with you to stamp out modern-day slavery, people trafficking, and serious organised crime, wherever they occur in these sectors.”

In government, my right hon. Friend the Member for Leeds Central (Hilary Benn) brought stakeholders together to look at the risks to our food security, and the challenges of feeding a growing global population sustainably. The result was Food 2030, the first Government food strategy since world war two. Peter Kendall, president of the National Farmers Union, has described how that strategy has been left on the shelf, and has been relegated to

“a one-line objective in the business plan”

by the current Government. Labour gathered stakeholders together in September last year to look at that food strategy. We believe that we must not lose sight of the direction that it sets out, and we are pleased that the Government have set up their green food project, imitation being the sincerest form of flattery. We look forward to it reporting this summer.

In government, along with many hon. Friends who are seated behind me today, I campaigned for improvements to children’s diets through the Children’s Food Bill. That led to nutritionally balanced school dinners, an end to junk-food vending machines in schools, and lessons on cooking and growing food as part of key stage 3.

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

Does my hon. Friend accept that the Government’s cuts to Sure Start have made that problem worse, because much of that educational knowledge about what is good food to give to children has been lost?

[Mary Creagh]

I agree. Sure Start has been an amazing tool in the fight for good food in families, and for cooking lessons. The 20% cut imposed by the Government centrally can only make that more challenging for those dedicated workers.

[Kerry McCarthy (Bristol East) (Lab)]

Does my hon. Friend share my concern that the Secretary of State for Education has decreed that free schools and academies do not have to meet the same nutritional standards in school meals as state schools?

[Mary Creagh]

Yes, it is slightly bizarre that that should be the case. I do not understand why, having battled so hard to secure minimum standards across the sector, the Secretary of State should think it acceptable to water them down, unless it is about saving money in pursuit of an ideological objective, but that could surely never be the Government’s intention.

I have mentioned “Richard Corrigan on Hunger” and the hospitalisation of children. People also talk in that programme about lunch boxes containing last night’s cold chips and ketchup. In government, we set up the School Food Trust, whose latest research shows that the average local authority-catered school dinner has gone up by 5p in the past year to £1.88 in primary schools, and by 4p to £1.98 in secondary schools. Councils are forced to charge more as their Government funding has been cut. We have heard today about councils that are doing their best to prioritise children’s nutrition. Those price rises could force parents to take their children out of school-meal provision and make do with a lunch box. If someone has three children who do not qualify for free school meals, £6 a day or £30 a week is an awful lot of money to find.

Food will be a defining issue for this century. The price spike in food commodities in 2008 showed that the era of cheap food may not be with us much longer. Increases in commodity prices—oil, fertiliser and pesticides—all contributed to year-on-year food price inflation of 6% last September: the second-highest increase in the EU, apart from Hungary. That 6% added £233 to the food bill of a family of two adults and two children. Food inflation, currently at 4%, remains higher than most pay rises that people will receive this year. As prices rise, people are eating less beef, lamb and fish, and more bacon. People are shopping around and trading down, and there is less supermarket loyalty. Figures from DEFRA reveal a 30% fall in the consumption of fresh fruit and veg by the poorest fifth of families since 2006. Those families are eating just 2.7 of their five-a-day fruit and veg.

We need a better understanding of what is driving up food prices, and how costs and risk are transferred across the supply chain. However, shopping is confusing and labels do not always show the true costs. Supermarkets are not required legally to show the unit cost on special offers, so they give the price pre-discount, which makes it impossible to compare prices on the shelf; or they give the price per unit of fruit, rather than by 100 grams, making comparisons impossible. We want supermarkets to be more transparent in their labelling to ensure that shoppers get the best deal. We want them to help people to eat healthily. Our traffic light system was rejected by significant players in the food industry, who have turned their back on what consumers want and need to make healthy choices.

We want a fair and competitive supply chain for growers, processors and retailers. The Competition Commission in 2008 found that there was an adverse effect on competition from unfair supply chain practices. It recommended that supermarkets with a turnover of more than £1 billion a year should be prevented from imposing retrospective discounts and from changing terms and conditions for suppliers. That leads to an unfair spread of risk and cost down the grocery supply chain, and to short-termism in relationships. [Interruption.] I thought I heard a phantom sedentary intervention, but that is not the case. We wanted a voluntary approach, but the supermarkets were unable to agree a way forward. That is why Labour in government secured cross-party agreement for a groceries code ombudsman to ensure a fair deal for farmers and producers. This Government’s delays and procrastination mean that the adjudicator will probably not be up and running until 2014-15.

[Andrew George (St Ives) (LD)]

I note that the motion expresses dismay at the Government’s delay, yet it asks for the groceries code adjudicator to be introduced in the next Parliament, rather than in the next parliamentary year, which I assume is a drafting error. Leaving that aside, given the fact that the first Competition Commission report was in 2000, and the Competition Commission report to which the hon. Lady refers was completed in 2008, what word other than “dismay” would she use to describe the Labour Government’s response to that report?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May I remind everyone in the Chamber that the debate ends at 7 pm? There is already a time limit of eight minutes on Back-Bench speeches. Interventions should therefore be short, and I hope opening speeches will not be overly long.

[Mary Creagh]

I quote back to the hon. Member for St Ives (Andrew George):

“Every week the government fails to act, farmers are finding themselves in more difficulty.”

That is what he said. The supermarkets were insistent. We wanted an ombudsman. The supermarkets asked for a voluntary approach. It is right to try a voluntary approach first, which we did, but it did not work. This is the anti-regulation Government, but that approach failed. What we need now is action from his Government.

The commission recommended the powers to levy significant financial penalties, but the Government are recommending that only in reserve powers in the Bill, not on the face of the Bill, meaning that fines for anti-competitive practices are even further away than 2015. The Financial Times quoted an executive of a large supermarket chain saying that

“it is an adjudicator rather than an ombudsman, which suggests that it is a watered-down role.”

Suppliers can complain anonymously, but they are liable for full cost recovery if the adjudicator finds that the complaint was vexatious or wholly without merit. The Business, Innovation and Skills Committee recommended that whistleblowing from within retailers should also be grounds for launching an investigation, which BIS Ministers are currently considering.

Consider this anonymous salad grower who works with the Food and Drink Federation:

“X”—

the name of a supermarket—

“have expected us to support their current pricing campaign in store by contributing with reduced price returns, to maintain their margin demands. It has been made very clear that lack of support could be seen as showing no commitment to”—

the supermarket—

“and the potential loss of business, forcing us to drop our prices and support the activity. Interestingly none of this has been put in writing.”

This suggests anti-competitive practices across the sector. If there is bad treatment at the top of the pyramid, that sets the tone for treatment all the way down the food chain, right down to the workers in the field. What we want is culture change across the food industry.

[Mark Tami]

My hon. Friend raises an important point. In the case of many buy one, get one free offers, the cost is not borne by the supermarket. It puts pressure on the supplier, because the supermarket is saying, in effect, “Unless you fund this, we will move the contract somewhere else.” In the end, it is often the workers in that company who suffer.

[Mary Creagh]

My hon. Friend makes a good point. Such offers increase the volume of sales, but often reduce the margin. That places enormous capital and liquidity costs on small companies in order to fund that as they wait for the money to come in from the supermarket.

[Philip Davies (Shipley) (Con)]

I cannot allow that to stand. As somebody who worked for a supermarket chain for 13 years, may I tell the hon. Lady that suppliers used to fall over themselves to come to retailers and ask to do buy one, get one free offers or three for the price of two offers, because it was a good marketing tool for them? When I worked for Asda, we used to ask them whether we could have every-day low prices instead of all those offers, but it was the suppliers who were pushing buy one, get one free offers. The idea that supermarkets are forcing them on them is just guff.

[Mary Creagh]

That is interesting. I am sure the hon. Gentleman will have a range of suppliers who will appear in the press tomorrow to say that the groceries code adjudicator is not required. No doubt they will make their thoughts very clear through the Food and Drink Federation, which represents the sector. However, I will not hold my breath for that. I like shopping in Asda, but I am not sure that it represents the sunlit uplands that the hon. Gentleman remembers from his happy times working there.

We want the Government to act swiftly on the grocery ombudsman. That will lead to less pressure on suppliers and an end to unfair competition, and greater price transparency in the supermarket sector. We want supermarkets to commit to clearer price labelling, particularly on those buy one, get one free promotions. If they do not do so voluntarily, Government should act. We call on supermarkets to commit to sending their in-date food waste to charities such as FareShare, which will ensure that it goes to a good home. We want supermarkets to publish the amount of food they waste, and if they do not do so, the Government should take action in the next waste review. We want supermarkets to commit to recycling more of that food to hungry children and less to landfill.

We call on DEFRA Ministers to work with stakeholders to define food poverty, identify the extent and scale of the problem and commit to tackling it. We have heard about the extent of the problem today and the obscenity of food being wasted while people are going hungry in our towns and cities, but anecdotes are not evidence. We ignore the perfect storm of rising food prices, falling incomes and food poverty at our peril.

16:50

[The Secretary of State for Environment, Food and Rural Affairs (Mrs Caroline Spelman)]

Let me start by welcoming the opportunity to debate this important matter. World food prices are volatile and the Government should do all they can to help families, but if we are to have a grown-up debate we need to start by acknowledging what the Government can and cannot do. Contrary to the rather Dickensian impression the hon. Lady seeks to convey, food price increases are not a direct result of the Government’s political composition, and a Government cannot be held responsible for what the hon. Member for Bridgend (Mrs Moon) cited: the abandonment of families by the main breadwinner, the misfortune of a house fire or domestic violence perpetrated in the home. Food prices are the product of many complicated and interrelated factors, many of which are globally driven.

In order to have a fully informed debate, I will turn first to the specific issue of the groceries code adjudicator, which this Government, unlike the previous one, are introducing, and put the current situation in context. No one underestimates the difficulties families face in balancing household budgets when bills are high. As a veteran of the weekly shop, I see at first hand the impact of food price rises, as I am sure many of us do. Let us set the record straight. Last summer food price inflation overtook general inflation, but by November the reverse was true. In the coalition Government’s first year in office, food prices increased by less than the average annual increase in Labour’s last five years. Between 2007 and 2008 food prices rose twice as fast as they did between 2010 and 2011. Although the hon. Member for Wakefield (Mary Creagh) has a new-found interest in food prices, which is to be welcomed, it comes a little late.

[Julie Hilling (Bolton West) (Lab)]

The right hon. Lady says that food prices are not rising as fast as they had been, but does she acknowledge that wages have not gone up over that period, which means that people are suffering huge food poverty?

[Mrs Spelman]

I am challenging the hon. Member for Wakefield to consider the fact that during her party’s 13 years in power, which saw steep rises in food prices, it introduced neither a groceries code adjudicator nor the other measures called for in the motion. Despite claiming today that the adjudicator would be some sort of panacea, the hon. Lady seems to feel that doing nothing about this for 13 years is a credible basis on which to criticise us for not having completed the process in just over 18 months.

[Philip Davies]

I must say that this is bizarre. My right hon. Friend says she is concerned about rising food prices, but she is agitating to bring in a groceries code adjudicator that, if it will have any influence at all, will only be able to put prices up further. The two things are completely contradictory.

[Mrs Spelman]

If we thought that the groceries code adjudicator would put prices up, there would not be the current cross-party support across the House for creating one.

The important point is that we need a degree of humility and candour about the Labour party’s record. As has been noted, Labour has shown extraordinary candour in the wording of its motion. We must be clear that the hon. Member for Wakefield is calling on the coalition Government to introduce the adjudicator early in the next Parliament. I am not sure whether she knows the outcome of the next election, but the motion clearly indicates that she has written off Labour’s prospects of forming the next Government—she is certainly not alone in that. It is always good to start a debate with an issue on which we can make common cause, but the good news for her is that we will not wait until the next Parliament to introduce the adjudicator.

[Gavin Shuker (Luton South) (Lab/Co-op)]

The Secretary of State is keen to tie down the timing of the introduction of the grocery code adjudicator, so when will she commit to do so?

[Mrs Spelman]

As I am sure Opposition Front Benchers are aware, the lead Department on the grocery code adjudicator, both for the Government and for the Opposition, is of course the Department for Business, Innovation and Skills, but we have been very clear as a Government that we are fully committed to introducing the adjudicator as soon as possible.

Free and fair competition is the key to a healthy market, and it is right that the adjudicator should make sure the market is working in the best long-term interests of consumers. In this Session, we published a draft Bill to allow pre-legislative scrutiny. It was a popular measure, welcomed on both sides of the House, and as the Leader of the House said on 15 December 2011:

“There will be a second Session of this Parliament, and the Groceries Code Adjudicator Bill is a strong candidate for consideration as part of it.”—[Official Report, 15 December 2011; Vol. 537, c. 937.]

So there is no delay, but it has to be done right.

It is important to bear it in mind that, overall, the Competition Commission found that retailers are providing a good deal for their customers, and they should not be prevented from securing the best deals and passing the benefits on to their customers, but, similarly, we are clear that they should be required to treat their suppliers lawfully and fairly.

During pre-legislative scrutiny, the Business, Innovation and Skills Committee suggested that third parties should be allowed to lodge complaints. Our position remains that it is more appropriate for complaints to be lodged directly or indirectly by suppliers, but we are open to considering further arguments on extending the range of those who can trigger an investigation. That is the benefit of pre-legislative scrutiny. We recognise that third parties, including trade associations, have a valuable role to play, so the adjudicator will be fully free to gather evidence from trade associations once an investigation has begun.

The draft Bill provides the adjudicator with the power to name and shame retailers that are in breach of the code, and we believe that, in a highly competitive market, retailers will not risk reputational damage from unacceptable behaviour towards suppliers. If negative publicity proves insufficient, however, the draft Bill contains a reserve power for the adjudicator to impose financial penalties, subject to an order made by the Business Secretary but without the need for primary legislation.

I hope the House agrees, therefore, that these measures represent significantly more progress than was made under the previous Government and should be generally welcomed.

[Andrew George]

It has been suggested, in particular during the intervention by the hon. Member for Shipley (Philip Davies), that the adjudicator would introduce inflation to the food market, but the Competition Commission itself, which is after all independent on the issue, made the situation quite clear, stating that

“if unchecked, these practices”—

the practices that the Secretary of State and others have described—

“would ultimately have a detrimental effect on consumers.”

It is quite clear that they would have a detrimental effect on prices for consumers.

[Mrs Spelman]

I thank my hon. Friend for his intervention. The Competition Commission clearly keeps the practices of retailers under scrutiny and sees a benefit in independent adjudication of fairness in the supply chain.

I shall turn to other points in the motion. The hon. Member for Wakefield espouses the virtues of the Healthy Start programme, which this Government have continued, and no one will argue with the role of food banks, which are an excellent example of the big society. They are not new, as Churches have been redistributing food in that way down the decades, and we are four-square behind organisations such as FareShare, which do excellent work in the field.

In making it easier for shoppers, this Government have wasted absolutely no time in working with the food industry to simplify food date labelling. Last autumn I made it clear that one date should appear on the label, so that there is no confusion between “use by”, “use before”, “display until” or “store until”. There should be one date: if the product is perishable, the label should state “use by”, for food safety; if it is not, the label should state “best before”. In that way, we can certainly help people to reduce the amount of food that goes to waste.

[Kate Green]

I am shocked to hear the Secretary of State say that we should welcome food banks. It is a social policy failure that families are reliant on food handouts because they do not have enough money to afford a healthy diet for their children.

[Mrs Spelman]

I gather that the hon. Lady would like them banned.

[Kate Green]

indicated dissent.

[Mrs Spelman]

Well, she cannot have it both ways.

[Kate Green]

Will the Minister give way?

[Mrs Spelman]

No.

Let us get back to some facts. Retail food price inflation reached 6.9% in June last year and currently stands at 3.8%. In real terms, food prices have stayed at about the same level since the start of 2009, notwithstanding the fact that food price inflation has fallen below the general rate of inflation. I accept that we need to help those on the lowest incomes, who are spending more of their budgets on food.

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

Does the Secretary of State agree that the major contributory factor to food price inflation is energy and fuel price inflation? They are indelibly linked.

[Mrs Spelman]

Shortly, my hon. Friend will hear me expand correctly on the analysis of what is driving food price inflation.

It is important to remember that in 2010 the average family spent 11.5% of its household budget on food. The figure is greater for low income families, at 15.8%, but it is coming down; the 2010 figures are 1% lower than two years previously. That is a very important fact—the trend is that household expenditure on food in the lowest income families is coming down.

[Luciana Berger]

I do not know whether the Secretary of State has seen the figures released by the OECD last week. They showed that in the UK food prices rose by 4% in the last year, which is 0.7% above the EU average.

[Mrs Spelman]

The hon. Lady needs to understand the contributory factors. The depreciation of sterling makes imports of food in other currencies stronger than ours more expensive. It is important to read the figures in the context of exchange rates and the other factors that drive up inflation.

The Government are, of course, actively finding ways to help mitigate the rises. But the Government cannot do it all, and they should not pretend that they can. Since the removal of production linked support in 2005, crops and livestock are traded on a global market. It is those markets that dictate food prices. As has been pointed out, the key drivers of domestic retail food price inflation include world agricultural commodity prices.

I hate to have to tell the hon. Member for Wakefield, but if she is to have this brief she needs to learn that the wheat price has not been stable; it has fluctuated in recent years from £60 a tonne to more than £200 a tonne. There are also oil prices and exchange rates. In 2008, although the price of wheat fell in dollar terms, it increased in sterling terms because of the relative weakness of sterling to the dollar. To understand the causes of food price inflation, one has to analyse correctly the underlying drivers.

World commodity prices are the key driver and we are working hard internationally to ensure the better functioning of commodity prices at the global level. That, in turn, will affect food prices at home. The depreciation of sterling has made dollar-denominated commodities more expensive. Furthermore, global weather extremes have caused shortages that drive prices up.

[Nia Griffith (Llanelli) (Lab)]

I assure the Secretary of State that the Opposition fully understand which things Governments can intervene on and which they cannot. What is she doing to help the poorest families in the country to make sure that they get enough food and do not have to rely on food banks? How many food banks would she regard as a measure of success, and what is she aiming to do by the end of her stay in office?

[Mrs Spelman]

The hon. Lady clearly was not listening to what I said about the continuation of the Healthy Start campaign, for example. Of course, in any big society, there is no finite amount of contribution that each of us might make to the more vulnerable; there is no need to put a limit on it.

[Kwasi Kwarteng (Spelthorne) (Con)]

Will my right hon. Friend comment on the moves that the Government are making, such as freezing council tax and cutting fuel duty? That has made general inflation a much more manageable phenomenon for ordinary families.

[Madam Deputy Speaker (Dawn Primarolo)]

Not at this precise point; the right hon. Lady is speaking to the motion.

[Mrs Spelman]

That is a shame, Madam Deputy Speaker, because there is a long list of things relevant to household budgets; there was a wider definition of that earlier. Freezing council tax is but one example of what frees up the budget to buy more food.

Last year, the Government’s Foresight report on the future of food and farming concluded that Governments across the world must take action now to ensure that a rising global population can be fed. It is a chilling fact that in only 13 years there will be 1 billion more mouths to feed on this planet. Increasing demand for water, land and energy means that food security is one of the world’s greatest challenges. The report identified five challenges for all nations to act on: balancing future demand and supply; ensuring that there is adequate food price stability and protecting the most vulnerable from volatility; achieving global access to food and ending hunger; managing the contribution of the food system to mitigating climate change; and maintaining biodiversity in our ecosystems. To take on those challenges, we need international reform. To address global food security, we need an increase in agricultural productivity, which means a move away from subsidy. To address the risk of climate instability disrupting production patterns, we must have open world trading systems.

In June last year, G20 Agriculture Ministers met and agreed to the creation of an agricultural market information system, which aims to stabilise food price volatility through better transparency in the marketplace. In November, I attended the climate change conference and helped the South African Agriculture Minister to get agriculture included in the work stream for the next climate change convention. We are now preparing for Rio plus 20, where we will push for international policies to help the most vulnerable in our society. We will lobby for the sustainable intensification of agriculture, climate-smart agriculture and the reduction of post-harvest losses. The Afghan Minister whom I met in Berlin this weekend at green week said that the reduction of harvest losses would make one of the greatest contributions to combating famine.

The challenges present an opportunity for the UK, and we need to be the first out of the blocks and embrace it. British food producers must make the most of international markets. That is why I have announced that I will publish an action plan at the end of the month to help export the best of British food and drink across the world. It is through global trade that the UK can secure its future food supply and help keep food prices down. We already contribute to global food supply. We provide 2% of global wheat exports, 4% of global barley exports and 1% of global cereal exports. That demonstrates that the UK has a major role in food production. By expanding production and exports, we can contribute to the overall economic recovery.

The food and farming industry is a high performer with great potential. The food chain contributes £88 billion per annum to the economy, which is 7% of GDP. It is responsible for 3.7 million jobs. The Government are acting across the food chain to stimulate growth, facilitate international trade and drive fair competition, because a thriving and competitive economy, where our products are freely traded on an international market, will deliver resilient, stable and affordable food supplies to our consumers.

The Government are working with industry and environmental partners to see how we can reconcile our goals of improving environmental protection and increasing food production. I am grateful to the hon. Member for Wakefield for welcoming the green food project. The Government are spending £400 million on food and farming research, which addresses productivity, environmental performance and resilience along the food chain.

Nobody is under any illusion about the pressures that high food prices put on all our constituents. However, it would be wrong to pretend that there is a “silver bullet” solution when there is not.

[Julie Hilling]

I have not heard in the Secretary of State’s contribution any mention of what she will do for the most vulnerable in this country, who are dependent on a hugely increased number of food banks. What will she do to feed those families who cannot feed themselves?

[Mrs Spelman]

I am sure that the hon. Lady would accept that the responsibility for helping the most vulnerable people in our society to have more disposable income to provide food for their families goes beyond my Department. She must take account of other things such as our freezing council tax, cutting fuel duty, cutting income tax, taking 1.1 million low-paid people out of tax, increasing child tax credit, taking action on energy prices and helping with the cost of rail travel.

The groceries code adjudicator will not be a panacea in the face of rising food prices. The adjudicator has a role to play in delivering a robust check on fairness between supplier and retailer; that is why we are introducing it. However, limiting food price inflation rests on multiple factors, from energy to exchange rates, and not least the core issue of supply and demand. The Government are not only alert to those factors but actively finding opportunities to influence them. We are working internationally to ensure that a growing population can be fed, we are using the challenges of food production to kick-start growth and competitiveness here in the UK, and through the green food project we are addressing the tensions inherent in growing more food at less cost to the environment.

The steps we are taking will produce the market conditions required to deliver good quality, affordable food for households throughout the UK. This debate is important because it is about the household budget and the cost of living. The Government have not sat idly by. We are directly helping in all kinds of ways—the freezing of council tax, the cutting of fuel duty, and so on. Those are all measures that Labour refused to take when it was in power, despite running up the biggest peacetime deficit in our country’s history. This is a Government who are on the side of hard-pressed families, this is a Department that is on the side of British farmers and food producers, and this is an issue on which Labour has no credibility and no alternative. I urge the House to reject the motion.

17:10

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

Listening to the Secretary of State’s final comments, I thought for a moment that I had stumbled into some sort of parallel universe, because I did not recognise any of her claims about what the Government are doing. She talked about the freeze in council tax. First, some of the families we are talking about are so poor that they do not pay council tax. Secondly, in Stoke-on-Trent, as in other areas, the council has been so hammered by the cuts in support from national Government to local government that it cannot accept the bribe of a 2% freeze and will have to make increases to try to get back some of the money that has been ripped away from it.

I welcome this debate because it provides the other side of the “heat or eat” coin. We recently discussed in this House the situation whereby people have to make the choice between heating their home and having food to eat. Sadly, many people do not have that choice because they cannot afford to heat their homes or to eat properly. Many families cannot afford to put proper food in their stomachs, let alone heat their homes.

The problem is going to get worse. To be fair to the Secretary of State, she touched on this area, to a small extent. Back in the 1960s, ’70s and ’80s, we had cheap oil and we encouraged farmers, not only in this country but globally, to turn that oil into food by using machinery—whether milking pumps, tractors or heated greenhouses—to produce more food. The UK imports a huge amount of food—even things that we grow well in this country, such as tomatoes. We seem to have a fascination with buying imported tomatoes even during our tomato season. On imported foodstuffs, we bring into this country a large amount of soy to feed our cattle because of the ever-increasing demand for more milk production. As a result, oil prices are rising and will continue to rise further. As the years go by, the built-in link between the price of oil and the price of food means that the food prices that we have been used to will continue to increase as the price of oil goes up.

We need to wean our farmers off oil. Back in the ’70s, companies decided to produce ever-better strains of seeds. That was linked to the oil industry, because in order to grow those better strains, the farmers needed fertilisers linked to oil. As the weeks, months and years stretch out ahead of us, if we cannot reduce the constant link with oil, we will face an inexorable increase in the cost of food. We need to act now, and the Government need to act now, to start to break that cycle.

Food banks such as that at St Clare’s, Meir Park, in my constituency are doing fantastic work and helping the vulnerable in our society, and they have started only in the past year. In the 13 years of the Labour Government, for which the Secretary of State tried to berate us, they were not needed. I would like to see a country in which there were no food banks, of course—everybody would—but while we have the need for them, we must have them.

[Julie Hilling]

Is my hon. Friend aware that the Trussell Trust estimates that 60,000 people got food from food banks last year, and that 100,000 will this year? It estimates that by 2015, half a million people will depend on them.

[Robert Flello]

Absolutely, my hon. Friend is correct: that is the scale of the problem we face. By 2014-15 half a million people will be looking to food banks, so how many people will by 2020, and how many by 2025, if action is not taken soon?

People do not want to go to food banks. They do not think on a Saturday afternoon, “Oh, I know, let’s pop to the food bank.” They do it because they have no other choice. They are people with pride and self-esteem, but they think, “Well, hang on, it’s that or starve.” What a contradiction it is that at the same time we are throwing away 7.2 million tonnes of food every year. It is unbelievable that we are wasting food on such a level. It is appalling, and a national disgrace.

Why is that happening? The hon. Member for Shipley (Philip Davies) rallied to the defence of the supermarket industry. I will make further points about that industry in a moment, but when it has food promotions such as two for one or three for one, it causes problems for families at the poorest end of the scale, who do not have a freezer and cannot store so much food. However, most of the problem comes from people such as—dare I say it?—us in the House. Mea culpa: at the end of Christmas and its excesses, we look at our own fridge or freezer and see that it is still full of food that was not needed. That food ends up going in the bin, at the same time as people—[Interruption.] Well, actually, I do not throw food away, but there are people who do.

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

You don’t look as though you throw it away.

[Robert Flello]

My hon. Friend is quite right. However, let us not lose track of the serious point.

[Philip Davies]

Will the hon. Gentleman make it clear to hard-pressed families in his constituency whether he is in favour of supermarkets and retailers offering buy one get one free offers, or against? I am sure they would be very interested to know.

[Robert Flello]

I am delighted that the hon. Gentleman asks that question. I would like the goods on the shelves to be at a fair price so that families can afford to buy one of something and do not have to go for a two-for-one offer to get the best value. I know that he is perhaps still an unpaid spokesperson for a supermarket.

There is a problem with the desire for perfect food, too. Our farmers are having to waste a lot of food because it does not meet some of the supermarkets’ requirements for perfect food.

[Laura Sandys (South Thanet) (Con)]

Will the hon. Gentleman give way?

[Robert Flello]

I will not, because I have less than two minutes to go. If there is time at the end of my speech I will allow the hon. Lady to intervene.

My final point is about the groceries code adjudicator. We need somebody who holds the supermarkets to account, because whether we are talking about the past two years, the previous 13 years—as the Secretary of State tries to shift the blame on to our side—or the past 20, 25 or 30 years, the supermarkets have been making money left, right and centre, hand over fist, but at the same time our farmers have told us that they are struggling. The number of farmers now is a fraction of what it was 20 or 30 years ago, and customers and consumers—our constituents—are suffering. We need the adjudicator. If the Secretary of State has a problem with the need for an adjudicator, the answer is quite simple: if the adjudicator is appointed and does not have any work to do, perhaps the post will have been a success because the supermarkets have realised that the game is up.

This debate is not about those of us who are in the comfortable position of being able to go out and buy what we want in the supermarket. It is about the poorest in our society, who may not have freezers and fridges, and cannot buy in bulk, or buy food when it is on offer. They are the ones who work and live from week to week—sometimes from day to day. The House and the Secretary of State need to provide a positive steer, to ensure that the most vulnerable families are looked after, helped and supported by all the machinery of government.

17:19

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

I congratulate the hon. Member for Wakefield (Mary Creagh) on calling the debate. In welcoming it, I draw attention to my declaration in the Register of Members’ Financial Interests. However, there are many other issues that the hon. Lady could have mentioned, which exercise those who live in rural communities. I recognise that Wakefield may not be quite as rural as Thirsk, Malton and Filey, but if we consider poverty among the farming community over the past 10 years, particularly in small upland farms, it is fair to say that farmers are not in a position to employ many outside their own family. Normally the farmer, his wife and his family work on the farm, and that has led to diversification when possible. In some of the most successful examples, such as Shepherds Purse cheeses and Get Ahead Hats, the wife has diversified or gone out to work separately.

The hon. Member for Wakefield also failed to tackle the increasingly important issue of farm-gate prices, as opposed to rising supermarket prices. I would like to draw attention to that. In my constituency, I can point to pockets of rural poverty in the Hambleton district. In the Ryedale district there is a poverty gap, for those on low incomes, between their low wages and the particularly high cost of housing.

DEFRA’s farm business income report showed that the cost of fertiliser and animal feed rose by nearly 30% each in 2010-11, the last year for which figures are available. That means that the livestock and horticulture sectors have suffered falls year on year. I draw the attention of the hon. Member for Wakefield to the fact that livestock farm income fell by 29% in lowland areas and by 19% in upland areas, with horticulture income down 27%.

The hon. Lady did not consider exchange rates, which my right hon. Friend the Secretary of State mentioned. What if the unthinkable were to happen and the euro failed—or what if even one member country fell out of the euro? The question being asked coming up to spring in auction marts, particularly in the north of England, where most of the lambs are exported, especially to France, is: how and in what currency will farmers be paid? They are starting to wonder whether they will be paid at all. We had the opportunity to cover some of those issues in today’s debate, and I am disappointed that we did not.

I welcome the debate, but, as my right hon. Friend the Secretary of State explained, we are looking at the high cost of fuel as well as the increased costs of feedstuffs and fertiliser. As the Chancellor of the Exchequer has said on so many occasions, oil prices are set globally. The price of cereals and many farm commodities are set internationally.

I want to focus on the role of supermarkets, and particularly the part of the motion that deals with the groceries code adjudicator. I draw the House’s attention to a successful one-off evidence session that the Environment, Food and Rural Affairs Committee held. The hon. Member for Wakefield has included kind words about the Committee in her motion. At the evidence session I was very moved by a category of people to whom, again, the hon. Lady did not refer—individual fruit and vegetable growers and horticultural growers, who have the loosest possible arrangement with supermarkets and virtually no protection. We were shocked to realise that their contracts could be terminated at a moment’s notice. They need protection and the ability to make a complaint anonymously. As we said in the letter that we submitted to the Chairman of the Business, Innovation and Skills Committee:

“For many years there has been a ‘climate of fear’ in the groceries supply chain. We therefore endorse the provision in the draft Bill that will allow the Adjudicator to receive anonymous complaints from direct or indirect suppliers about retailers breaking the Groceries supply Code.”

I hope some good can come out of today’s debate and urge my right hon. Friend the Secretary of State to use her good offices to put pressure on the Secretary of State for Business, Innovation and Skills; that is the responsible Department.

I commend all the Committee’s conclusions without hesitation, but I shall draw attention specifically to two of them.

[Philip Davies]

My hon. Friend will know that the vast majority of suppliers to supermarkets are, by definition, huge organisations—multinational companies such as Mars, Coca-Cola, and Proctor and Gamble. Does she think that they need the protection of a grocery ombudsman, or does she agree that they are more than big enough to look after themselves?

[Miss McIntosh]

I am so fond of my hon. Friend that I have great difficulty in saying that I must draw his attention to the remarks I have just made. His big organisation—Asda—is revered in north Yorkshire because it stemmed from Associated Dairies, which not only set the price but provided a market for local milk suppliers. Individual growers need protection, because they are unable to speak for themselves. We all have big constituencies and may not always be aware of such individuals. I hesitate to say whether big companies are “good guys” or “bad guys”, but Asda and Morrisons source a lot of their food locally—almost 80% or 90%. We need to protect the small individual growers.

The Environment, Food and Rural Affairs Committee believes that two of its conclusions could have an impact if the Secretary of State for Environment, Food and Rural Affairs can persuade the Secretary of State for Business, Innovation and Skills to amend the draft Groceries Code Adjudicator Bill. First, the ability of suppliers to make anonymous complaints is fundamental to the success of the groceries code adjudicator. Secondly, the adjudicator should have the power to launch investigations. We are all agreed that he should have the power to fine, but he should also have the power to launch investigations.

[Laura Sandys]

I have just established a not-for-profit company called Ugly Food. The strapline is “Tasty but imperfect, just like you”. There is a phenomenal number of small suppliers who have food rejected because their produce is not perfect. We should look to create a market for that food, so that we do not waste it.

[Miss McIntosh]

The House will draw its own conclusions about my hon. Friend’s self-advertising.

I understand that the powers of the Competition Commission are based on the powers of the Commission in Brussels. The EU directorate general for competition has the power to swoop when it believes an investigation should take place. I urge my right hon. Friend the Secretary of State to make the same plea to the Business, Innovation and Skills Secretary to adopt those two recommendations—and, indeed, all the Committee’s recommendations.

The Secretary of State for Environment, Food and Rural Affairs will be aware of the Committee’s work on food security. I hope she will remove any inconsistencies between trying to supply a secure strand of food and sustainable food production. There is an inconsistency at the heart of the Government on that. She will be involved in discussions on common agricultural reform in Brussels. Greening the common agricultural policy could take productive land out of production. It could also be hugely expensive and involve the introduction of more complex regulations, which we should be aiming to simplify.

[Mrs Spelman]

My hon. Friend will know that I acknowledged that problem when I gave evidence to her Committee last week, and that we will try to ameliorate the Commission’s proposals in that regard.

[Miss McIntosh]

I am most grateful for my right hon. Friend’s clarification.

In conclusion, we should say, “Keep it simple.” With all the regulations coming forward, whether to do with the adjudicator or not, the powers should be clear and allow individual growers, under a cloak of anonymity, to raise such issues, either directly or through a third party. I welcome this debate, although I regret that many of the issues that I have raised are not covered by the motion. However, we can have a positive debate today and see an early completion of the adjudicator code, with an early introduction of the adjudicator in the next Session.

17:30

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

It is a pleasure to follow the hon. Member for Thirsk and Malton (Miss McIntosh), who, like me, represents a large rural constituency where farming is an important industry. I visit farms and talk to farmers regularly, and the one question they ask me to raise in Parliament is, “When are we going to get the supermarkets ombudsman?” I was not here in the previous Parliament. I cannot answer questions about why successive Governments did not introduce a supermarkets ombudsman. However, Members who were here tell me that the issue of a groceries code adjudicator has a long and not very productive history.

Members have championed the cause in opposition, but have proven remarkably slow to put anything into action when in government. In opposition, the Tories announced that they would create the new body through a levy on retailers. Two years ago this month, in January 2010, the then shadow Environment Secretary, the right hon. Member for Arundel and South Downs (Nick Herbert), said that

“further consultation is not the decisive action that consumers or the industry need…Conservatives are clear: we would establish a supermarket ombudsman to enforce the grocery supply code as a dedicated unit in the Office of Fair Trading to ensure a fair deal for producers and safeguard the consumer interest.”

However, we are two years into this Government, and it appears that they are not quite so decisive now. The hon. Member for Westmorland and Lonsdale (Tim Farron), who was then the Liberal Democrat environment, food and rural affairs spokesman, also told us in January 2010:

“For years, Labour and the Tories have twiddled their thumbs while huge supermarkets have pushed thousands of farmers to the brink. Their response has been totally inadequate”.

However, the Lib Dems are part of this Government, yet we are seeing no sign of decisive action.

Where we have seen consistent, strong and decisive action is from the big four supermarkets. They have always offered strong and sustained resistance to the establishment of a supermarket ombudsman. Tesco, Asda, Sainsbury’s and Morrisons have fought a long, consistent and, it now appears, successful campaign of opposition and delay. However, in the meantime, the farming industry and the consumer continue to wait. Tom MacMillan of the Food Ethics Council tells us:

“The government must now ensure that it listens to small producers as well as big business. A strong supermarket ombudsman, invested with real power, would have the authority to ensure fair prices from the farm gate to the checkout”—

the very point that the hon. Member for Thirsk and Malton made. He continues:

“It would protect the livelihoods of farmers across the UK and give consumers better access to fresh, healthy food.”

The National Farmers Union tells us that dairy producers have been particularly squeezed, with dairy farmers going out of business every day. That is exactly what I am seeing in my constituency, where the number of dairy farmers has been reduced significantly, as they either move into other forms of farming or, more often, leave the industry altogether. War on Want believes that a supermarket ombudsman would support farmers here at home and help poorly paid workers in the developing world. Only the British Retail Consortium, speaking for the supermarkets, believes that a supermarkets ombudsman is a costly and unnecessary new bureaucracy that would not benefit suppliers or consumers. [Hon. Members: “Hear, hear.”] Oh sorry, only the British Retail Consortium plus one or two Government Members.

The farmers in my constituency, and in many others across the country, are looking for decisive action from the Government on this matter. How many more of them need to go out of business before the Government get around to taking action? Farmers and consumers need a groceries code adjudicator with real powers who can impose real fines of a magnitude that will change the behaviour of food retailers, and that are not just seen as an occupational hazard and a risk worth taking. Thatis the way to bring in fairness across the food chain. It really does not matter whether we call the body a groceries code adjudicator, a supermarkets ombudsman or Oftrolley; what matters is that we get such a body now.

17:34

[Laura Sandys (South Thanet) (Con)]

I must now declare an interest in the organisation called Ugly Food that I have established. I believe that it is open to all small producers to market their foods with new branding and a new logo.

Perhaps I am looking at these matters non-politically, and perhaps I am looking too far into the future, but I think that we have a real problem. We talk about cheap food, but we are not always going to be able to deliver cheap food. We will have been deluding our constituents by suggesting that it will be available in the longer term, unless someone comes up with the answers to climate change, increased calorific intake and population growth. If we are to be responsible and live in the real world, we must try to deliver a system in which the cost of feeding one’s family healthily and effectively does not go up in price, but that is fundamentally different from talking about cheap food.

The food system in this country has been distorted by the very cheapness of the products. Food here is cheaper than in any other country in Europe and, as a result, we have seen a much steeper price hike in recent years than the rest of Europe. That price hike has been compounded by two fundamental aspects of our food chain. We import much more than any other OECD country, and we eat much more processed food, which is highly energy intensive and labour intensive. A further anomaly is that, although this country’s supply chain is supremely efficient, it is not very resilient. As a result, we face greater price fluctuations and volatility when shocks to the system occur.

[Julian Sturdy (York Outer) (Con)]

I draw Members’ attention to my declaration of interest. My hon. Friend is right to say that food prices will continue to rise, and that that will be a problem. Is it not the case, however, that one way of tackling that would be to tackle food waste? Should we not also examine the new technology that could really move agriculture forward, not only in the UK but around the world?

[Laura Sandys]

I totally agree with my hon. Friend. It is pretty frightening that wheat yields in this country have not increased at all over the past 20 years. Also, because food has been so cheap in this country, we have not valued it. As a result, there is a huge amount of waste in the system.

It is interesting that the Opposition have chosen this subject for debate, because you left this country very vulnerable—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. That is the second time the hon. Lady has done this. She is not to refer to the Chair in that way. I have not done anything. She should refer to “the hon. Lady”. I certainly have nothing to do with fruit of any kind.

[Laura Sandys]

I do apologise, Madam Deputy Speaker.

To address the bigger problem of food insecurity, we should look to the energy model. This Government’s strategy on energy insecurity aims to manage a valuable resource, to address the waste in the system and to build greater UK resilience to international price fluctuations. With some tweaks, several of those policy mechanisms could and should be adopted for food. Security of supply is an example. The previous Government cannot claim much credit in that area. Imports of food increased by 52% under the previous Government and agricultural land was diverted away from production. Thank goodness, today we have Ministers who understand the issues of production.

To build greater security of supply, domestic production must, in my view, increase. We must build a hedging mechanism against global volatility and realise not only that food imports will become more expensive but that the level of imports, with a weak pound, is having a negative impact on our balance of payments and placing inflationary pressure on benefits and entitlements.

We must address food waste with a similar tenacity to that with which we are addressing energy waste through the green deal. We need to reverse the indulgent years that deskilled the consumer in food preparation and supported profligacy in the supply chain. Customers—we, the consumers—are often accused of being responsible for such waste, but I disagree. The system is designed to create waste and the consumer is merely responding to how the supermarkets and other retailers sell their products. The waste in procurement is terrifying and I hope that the grocery code of practice will ensure that we reduce some of it. As I have mentioned before, my campaign through Ugly Food is one way of addressing some of the waste embedded in our system.

Waste is also embedded in the design of consumer-facing products. The hon. Member for Stoke-on-Trent South (Robert Flello) talked about the packaging and presentation of food. People blame the customer, but is it their fault? Servings of food are often too big and processed foods are heavily advertised. Although the Government have made a great deal of progress on display dates, safety dates mislead the consumer about the longevity of products. Point-of-sale displays draw consumers to larger packages rather than smaller units of food and BOGOFs—buy one, get one free offers—neither help single item shoppers nor reduce the bills for family shoppers.

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

Will my hon. Friend add an additional item to that long and rather depressing list, which is country of origin?

[Laura Sandys]

I believe that EU regulations are changing and that country of origin labelling will have to be much clearer, but we certainly have an issue with knowing and understanding exactly where food comes from and, when it comes to meat, where the animal was born rather than where it was reared.

Our system is designed around cheap disposable food and the UK, more than any other country other than the US, must embark on a culture change. We should re-engineer our food system to place value on food and to stop regarding it as disposable. That is why I am calling for a food security obligation—similar to the energy company obligation—for supermarkets and large food producers so that they record and reduce waste through their procurement process and commit to designing their products with the aim of delivering real value for money for the consumer, which is quite different from cheap food.

Both 2008 and 2011 were shocks to the system, but the price rises we have experienced will be the norm in the future. We had better get used to it. Food will not be cheap, but with the right policies in place, feeding our families need not be more expensive.

17:43

[Nia Griffith (Llanelli) (Lab)]

I pay tribute to the excellent work done by my hon. Friend the Member for Ynys Môn (Albert Owen) through his private Member’s Bill, the Grocery Market Ombudsman Bill, which, as many Members will know, had a long history spanning several years. He said—this is the most important thing to remember about the Bill—that it was about fairness to all those involved, whether they were farmers, small producers, local suppliers, suppliers from developing countries, small shops, convenience stores, supermarkets or, most importantly, consumers.

The Bill led to the proposal for a supermarket ombudsman or groceries adjudicator being in all three parties’ manifestos for the 2010 election, but what has happened since then? The hon. Member for South Staffordshire (Gavin Williamson) secured an Adjournment debate on the groceries code adjudicator last April, and in May we had the Department for Business, Innovation and Skills document, “The Government’s policy for a Groceries Code Adjudicator”, but it is now January 2012 and we do not seem to be any further on.

I should like to ask the Secretary of State why we are waiting so long for the Bill and when we are going to see it. Is it going to contain the proper sanctions that we all want to see—sanctions that will actually make a difference and make people change their behaviour? Will the adjudicator be able to carry out proactive investigations? One thing is certain: if, as the hon. Member for South Thanet (Laura Sandys) has explained, we need to increase food production, farmers are not going to be able to do that if they are being squeezed on prices. Many Members have cited the dairy industry as an obvious example. If the price of milk is squeezed, people inevitably go out of business and we produce less, which means we end up importing even such things as milk, which one would think we could produce very easily in our climate.

[Philip Davies]

Here we are being offered again this painless panacea in which everyone benefits from an ombudsman. Will the hon. Lady explain how getting the supermarket to pay more to the supplier and the farmer, fining it more and getting it to pay for the ombudsman will result in reduced costs for the customer? I am absolutely fascinated to hear how that will work.

[Nia Griffith]

This is about fairness. It is about paying a fair price to farmers for what they produce, having a fair price for consumers, and stopping sharp practices. It is about protecting the good businesses—the good guys if you like—and creating a level playing field, which is extremely important.

Let me address what happens to people when they go into supermarkets, particularly when they buy fruit and vegetables. We should not forget that there has been a dramatic drop of 30% in fruit and vegetable purchasing by the poorest families, so that the poorest children now get only 2.7 of the five portions of fruit and veg they should have each day. Is it small wonder that when people go into supermarkets they are quite worried about what will end up on their bill at the till, given that they are absolutely dazed by the displays of fruit and veg and the ways of pricing them? Sometimes they are priced by the item, sometimes by the packet—in fours, eights or tens—and sometimes by weight. For example, there are many varieties of tomato, from cherry tomatoes to beef tomatoes, and there is a range of different pricing mechanisms, which is extremely confusing. There should be a very simple formula that allows us all to compare prices easily, because it is very difficult with loose items such as fruit and veg, which can be packed in so many different ways, to work out exactly what one is being charged. Last September there was a bumper crop because of that fabulous spring we had last April, but did we see prices drop? No. Could we have told if they had dropped? No, because unlike at the petrol pump where we can all see the sign displayed very clearly and can tell when prices go up, one cannot see when prices for fruit and veg go up—it is easy to disguise and to pull a fast one on the consumer. Those issues need to be addressed.

As my hon. Friend the Member for Bolton West (Julie Hilling) has explained, the number of people needing help from food banks is increasing and it is set to increase further. Why? Because some of this Government’s taxation policies are hitting the poorest hardest and squeezing their income. For example, some of the changes being introduced mean that those on low wages who are trying to do the right thing and go out to work are going to find that their tax credits will be cut. They would like to top up with more work hours, but those hours simply are not available. Sometimes that is because supermarkets prefer to have people on low hours; it gives them more flexibility for the Saturday and Sunday shifts that they want worked.

What about the cuts to housing benefit? They are going to leave many families who currently receive the amount they need to pay their rent having to use what should be food money to pay the rent. That is why we will see dramatic drops in the amount that people have to pay for their food. There will also be more and more families relying on food banks. What about the cuts in winter fuel allowance? They will leave some of our pensioners with less money to spend on food.

[Simon Hart]

Does the hon. Lady accept that obesity is increasing, particularly among young people and people from poor backgrounds? Despite the efforts of the previous Government and this Government, that does not show much sign of changing. Does she accept that, in reality, the issue is about a lot more than just the current Government’s tax system? It is much wider and much more complex than she portrays it.

[Nia Griffith]

Obesity may very well be on the increase because unhealthier foods are the only type that some families can afford; they cannot afford the healthier alternatives. That is a real issue. People look at the different pricing mechanisms and go for what can fill them up. That is the type of food that they rely on now. They do not have the luxury of choice.

Let me move on from pricing in supermarkets and our adjudicators Bill to my worry about families who cannot afford something very basic: enough food to eat. That is very serious. It is nothing to be proud of that we need food banks; that is something that we do not want to see. We do not want anybody to have to rely on charity for something that every family should be able to afford. We want proper policies that will put money in the pockets of the people who need to spend it on food. No one in this country—one of the richest countries in the world—should have to look to charity for food. We need to make absolutely certain that the policies put in place deliver fair prices for consumers and farmers, and that the distribution of income levels is fair, so that those who have the least can make the purchases that they need to make to feed their family. It is an absolute disgrace to rely on food banks to do something that everyone should be able to afford to do: feed their family.

00:00

[Fiona Bruce (Congleton) (Con)]

Thank you for this opportunity to speak on food poverty, Madam Deputy Speaker. Members have mentioned with concern a lack of knowledge among many people today about what constitutes a healthy diet, and a lack of the skills to create healthy meals. I share those concerns, but in the time that I have, I would like to concentrate on another skill that is less prevalent today than it was just one or two generations ago: the skill to grow and produce at least some of our own food. That is something that my grandparents did, and not just as a hobby; it gave them a vital supplement to their daily diet. I remember enjoying that whole-family activity on many summer evenings.

I want to concentrate on some of the excellent initiatives in my constituency devoted to sharing know-how in this sphere. Interestingly, while some groups are decades old, including the Middlewich and District Show Society, the Congleton and District Horticultural Society, and the Alsager Gardens Association, others have been set up in the past two to three years, with immense support. They include the Sandbach Allotment Society, Home Grown in Holmes Chapel, and the Congleton Sustainability Group.

People on low incomes have the lowest intakes of fruit and veg, and are therefore far more likely to suffer from diet-related diseases such as cancer, diabetes, obesity and coronary heart disease, which is why the initiatives that I am talking about could be disproportionately valuable to them. The ability to develop and share skills, and more opportunities for people to grow their own—whether in their garden, a neighbour’s garden, or on community land—are greatly needed. That need will increase, given that, as the chief scientific adviser to the Government has said, by 2030 we will need to produce 50% more food, and given that the European Commission’s current proposals could mean taking 7% of land out of production, much to the consternation of farmers in my constituency.

Turning back to the local, let me describe some of the benefits that the Middlewich annual show promotes. There were 400 entries last year across the many categories, including cookery, flowers and vegetables. John Carver, the chairman, grows leeks, onions, carrots, potatoes, peas and broad beans in his garden. I can testify, having visited it, that it is as attractive as any garden with flowers in it. He says he gardens as people did 30 years ago, and has to buy hardly any veg for his family. He has carrots in storage, and freezes beans and peas. He advises people to grow their own

“as they are far better since they have not lost any of their ‘goodness’”.

At the last Middlewich show, it was a real pleasure to see the civic hall crowded out. Some of the entrants were very young, and some of the veg were of phenomenal size; several leeks, when stood on end for a photograph with me, were bigger than me.

[Chris Ruane]

Never!

[Fiona Bruce]

That will not come as a surprise to some Members. We should promote the idea of making greater use of gardens. Indeed, many elderly people might appreciate having veg tended in their gardens in exchange for some of the produce.

The Sandbach Allotment Society has been going for just two years. Forty people came to the first meeting, and 120 to the second. It aims to encourage growing your own, and has found temporary accommodation on a 1.2 acre site belonging to a local farmer. That will provide 34 half-plots, each of which will provide a significant amount of vegetables for a family, at a fraction of the cost of buying them. It says that growing your own is not an old man’s domain; it is for families. It brings families and communities together. I know how popular it is: there is a 100-person waiting list for further allotments that it hopes to obtain.

Home Grown in Holmes Chapel is an innovative community action group that encourages residents of Holmes Chapel and neighbouring communities to buy locally produced food, shop in local shops, and work together to grow their own fruit and veg. It has been lent two previously untended plots of land in the village centre, one by the carpet shop and one by the health centre. The organisers say that, despite rain showers, on a blustery May day, nearly 40 volunteers turned up to the group’s first dig-in. Volunteers planted a variety of fruit and veg—strawberries, lettuces, cabbages, sugar-snap peas, and radishes donated by the volunteers, whose ages ranged from just 18 months to 75 years. Lissy Berry, aged eight, said to her mum:

“This is hard work, but I’m really enjoying it—it is so worthwhile”,

and other volunteers agreed. Another said:

“I have really enjoyed myself—it is a wonderful feeling to have achieved so much”.

I went to the group’s first harvest in October, and I can testify to the tastiness of the lettuce.

The group says:

“We want people to think about the way we live our lives…We are not trying to feed Holmes Chapel—just show what is possible with a little space, sunshine, water and love! It is great to eat vegetables that have been grown for taste, not for shelf-life, and it is great to be able to do so without driving the car anywhere or eating produce that has been flown half way around the world…We are growing community fruit and vegetables for the community to use!”

The group has great plans: it is starting to talk to the parish council and Cheshire East council about planting fruit trees around the village; holding a “shop local” week; and encouraging residents who have a bit of spare community land near their house to set up a community veg plot. It is working with Holmes Chapel primary school; I was pleased to see recently planted herbs and veg there, and there are plans for more vegetable beds. It wants to work with retirement and nursing homes in the village, and to see if it can get community groups working together to grow fruit and veg in those places. It says:

“that is enough to keep us busy for some time to come!”

Other initiatives in the constituency seek to reduce waste. Ray Brown, a farmer, proposes to convert an old Ministry of Defence fuel base into an anaerobic digester, with the support of Cheshire East council. It is anticipated that it will be able to take all the food waste from the entire population of Cheshire East, which covers not just my constituency but several others. That will raise Cheshire East’s recycling rates to a remarkable potential 90%. The scheme will also generate electricity and feed it into the grid. As I hope the Government will recognise, that should negate the need for an incinerator just 15 minutes away in Middlewich.

On waste, I cannot omit to mention the tremendous work done by the Congleton Sustainability Group, which produced the now-famous Congleton apple juice that many Members tried here recently. In 2010, it used 3.5 tonnes of apples that would otherwise have gone to waste, and its target for 2011 was 5 tonnes.

Those are just a few initiatives, but there are many more that I could have described. If we are to alleviate food poverty, it is important to promote, share and develop skills at all levels of food production. It could take us a considerable way towards tackling problems in the years and decades to come.

17:59

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

I congratulate my Front-Bench colleagues on securing today’s debate on this relevant and topical issue. I wish to use this opportunity to highlight the national scandal of rising poverty.

Some people find it hard to believe that food poverty really exists in this country. Last year, I was aghast to hear the former Conservative MP, Edwina Currie, say on BBC radio that she had “great difficulty” believing that people in Britain went without food. Only last week, the Secretary of State for Work and Pensions said that people are not suffering as a result of benefit changes. Perhaps they have not seen the very real and tragic situation that thousands of families and pensioners face this winter, and perhaps they have not been affected by the 4% rise in food prices over the past 12 months. However, the thousands who are forced to queue for handouts, in lines that stretch through church halls and community centres across our country, certainly are, and they include people who struggle to balance housing costs and rising energy bills, and the mums and dads who go hungry so that their children do not have to. With rising prices, higher living costs and falling wages, it is becoming more difficult for people to make ends meet. The consumer prices index shows that the average household spends 12% of their income on food, meaning that a couple with two young children spend more than £5,000 a year on food. In addition, according to the OECD figures that we have discussed a great deal this afternoon, 4% food inflation has added an extra £233 to that bill over the past year alone.

It is even harder for lower-income households to cope. DEFRA’s own statistics show that they have to spend 15.8% of their income on food—nearly 3% more than the average household. While jobseeker’s allowance for a single adult is £67.50, it is just not possible to eat healthily on £8 a week or just over £1 a day. Last May, I did the “Live Below the Line” challenge, which was organised to raise money for charities in Africa, and I lived on £1 a day for food and drink for five days. I did not have enough protein, and I got headaches. I could afford just one of the five recommended pieces of fruit and veg a day. I endured that for just five days: there are over 4,000 people in my constituency for whom that is a reality 365 days a year.

It is therefore not surprising that fruit and vegetable consumption in poorer families fell by 30% last year. It is even harder to buy food when the support to which someone is entitled is not paid on time, as I found out when I visited a Trussell Trust food bank in my constituency just before Christmas. I met a man who had walked in the freezing rain to get to the food bank. The week before, he had been in hospital recovering from heart surgery. When he came out of hospital, he was told that he would have to wait a number of weeks for his benefit payments to be reinstated. He was hungry. His district nurse had given him a food voucher, but he could not afford the bus or a taxi. He had to walk more than four miles. He was a desperate man.

That is one of three food banks operating across Liverpool. We have five in total across Merseyside providing desperately needed assistance to people who cannot afford to buy food. The figures show that the largest proportion of people seeking emergency assistance—just under 40%—do so because of delays in receiving benefit payments. With the Chancellor’s austerity programme sucking growth out of our economy and pushing up inflation and employment, it is clear that, Her Majesty’s Revenue and Customs and a reduced Department for Work and Pensions cannot cope with the demands placed on them. That is set to get worse, as it is estimated that over the next three years HMRC will lose 10,000 more staff, and DWP is set to lose 17,000 staff.

In my constituency in the past nine months, 312 people were issued with food vouchers for themselves and their families, which entitled them to at least three visits to the food bank, but the food bank would never turn them away if they needed anything more. That situation is not unique to Liverpool. There has been a huge growth in food banks across the country, with one opening every week last year. Contrary to what the Secretary of State for Environment, Food and Rural Affairs believes, I do not think that that is something to celebrate. As my hon. Friend the Member for Wakefield (Mary Creagh) highlighted, according to the Trussell Trust, the fantastic charity that runs 163 food banks across the UK, in the past 12 months, 60,000 people received help from food banks, including 20,000 children. It predicts that 130,000 people will need help this year.

My hon. Friend the Member for Bolton West (Julie Hilling) highlighted the fact that those figures are set to rise to 500,000 by 2015. The figures are staggering and awful but, faced with that crisis, the Government have pursued out-of-touch policies that are making the situation worse, not better. They are making it harder for families and pensioners to make ends meet and to cope with the rising cost of living. Tax rises and spending cuts that go too far and too fast are choking off economic recovery, pushing up prices and leading to soaring unemployment.

That reckless plan has backfired on the deficit too, with more people out of work and claiming benefit rather than paying taxes, meaning that the Government will not balance the books by 2015 as they promised. It is time to change course and get our economy growing to create more jobs. DEFRA should play its part by putting the food industry—the largest manufacturing sector in the UK—at the heart of the economic recovery and getting a fair deal for British farmers and food manufacturers. We want a competitive supply chain for growers, processors and retailers.

The Secretary of State for Environment, Food and Rural Affairs was pressed earlier about when the groceries code adjudicator will be introduced, but we did not receive clarification. We are concerned that the office will not be up and running until at least 2014-15. As price rises are 0.7% above the EU average at 4%, we need action now, and we also need to act to protect consumers from vested interests. The grocery market is dominated by four big supermarkets, which account for about 85% of the total market. Nine out of 10 people are concerned about rising food prices, and over half of them are comparing prices more when shopping for food. However, only 53% of people think that it is easy to work out which product is better value for money using the price information available on labels. Consumers need transparent pricing from the major retailers to make it easier to compare goods so that they can make informed choices. Under Labour proposals, retailers would provide clearer unit pricing for goods, with information that is easier to read, and with unit prices for promotional offers.

Today’s motion sets out to put right the failed approach of this Government, who are out of touch with the families and pensioners facing the squeeze from rising living costs. The approach set out by Labour in the motion would help the thousands of men, women and children who cannot afford to eat properly this winter, introducing measures to get our economy moving and securing a fair deal for British farmers and consumers. Unlike the Secretary of State, I do not welcome the escalation in the number of food banks: there are already three too many in Liverpool, and 163 too many across the UK. It is a tragic and terrifying indictment that we have food poverty in 21st-century Britain, one of the richest nations in the world, and that food poverty is rising. The Government must do anything and everything to reverse the situation in which over 100,000 people this year cannot afford to buy food to eat. I urge everyone to vote for the motion.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

I shall try my level best to allow everyone to speak. The wind-up speeches begin at 6.40 pm, so there is a six-minute limit on speeches.

18:07

[Andrew George (St Ives) (LD)]

I shall do my very best, Mr Deputy Speaker. I am the first Liberal Democrat speaker, and I regret the fact that we have only six minutes. Of course, I am not criticising you, Mr Deputy Speaker.

[Bob Stewart (Beckenham) (Con)]

There are no more Liberals here.

[Andrew George]

The hon. Gentleman has only just arrived in the Chamber, so I advise him not to start.

I welcome the fact that the Opposition have introduced this important debate, the full title of which is, “Rising Food Prices and Food Poverty”. That is appropriate, although I notice that the motion is rather narrow, and refers primarily to the groceries code adjudicator. Following my intervention on the hon. Member for Wakefield (Mary Creagh), I urge the hon. Member for Ogmore (Huw Irranca-Davies), when he replies to the debate, to ensure that the Opposition reflect carefully on the drafting error in the motion, which sends an unhelpful message to those of us who believe that the primary message of today’s debate concerns the speed of the introduction of the groceries code adjudicator. I urge him to withdraw the motion when he has an opportunity to do so. It is vital that we send a strong, clear message through our debate.

I acknowledge the point that many Members have made about the impact of food poverty and the fact that people have to choose between paying their rent and eating, or between paying their heating bill and eating. Nowhere does that apply more than in my constituency, which has been at the bottom of the earnings league table for years, pretty much since records began. Tragically and regrettably, a food bank is required in Penzance, which is strictly managed by an excellent team of volunteers led by David Mann, Brenda Fox and others, who do very good work. They consider it a matter of enormous regret that such things are needed.

I welcome other topics raised by the hon. Member for Wakefield, including the importance of maintaining regulation by the Gangmasters Licensing Authority and ensuring that agricultural workers are properly remunerated for their work. She expressed dismay at the failure to introduce the grocery code adjudicator. I remind her of the dismay that many of us felt at the failure of the previous Government to act in this area. However, those who have followed the debate over many years recognise that this is a matter on which there is cross-party consensus.

The hon. Member for Ynys Môn (Albert Owen), who was mentioned earlier, the former Member for Stroud, David Drew, who did some excellent work in this area, the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski), the hon. Member for South Holland and The Deepings (Mr Hayes), who is the Minister for Further Education, Skills and Lifelong Learning—Members across all parties—have recognised that the abuse of power by the supermarkets is unacceptable.

In its 2008 report the Competition Commission recognised that there was a climate of fear in the supply chain. That had been identified by the Office of Fair Trading report in 2004, when it reviewed the failure of the then supermarket code of practice and the urgent need for a grocery supply code of practice. As a result of the Competition Commission’s work, that has been in place since February 2010, but it is a little like a game of rugby without a referee. It is all very well having the rules in place, but if there is no one to enforce them, we do not know that rampant abuses of power are not occurring within the supermarket sector.

I declare an involvement as the chair of the Grocery Market Action Group, which includes representatives from the National Farmers Union, Friends of the Earth, the Association of Convenience Stores, the British Brands Group and other organisations. Since 2006 we have been providing evidence to the Competition Commission and pushing for an adjudicator. We have made the point that we need a supermarket watchdog that has proactive powers, can take information anonymously, can receive third-party and trade association evidence, and follow that through to an inquiry. Of course it is important that an adjudicator should not be able to go on fishing expeditions and waste the time and resources of supermarkets and their suppliers in undertaking pointless inquiries. That will sort itself out over time.

[Simon Wright (Norwich South) (LD)]

I know that my hon. Friend has been looking into the matter for some years. What does he consider to be the initial priorities of the adjudicator, once that office is established?

[Andrew George]

I am grateful to my hon. Friend. The objectives in the draft Bill are helpful. However, the importance of speed should be emphasised. Most of the framework is in the Bill, and I would be prepared to have it put in place early, even if we failed to achieve some of the elements that I have spoken about—proactivity, anonymity, third-party referral to the adjudicator, which is important, and the power to fine.

The Bill may well enable the Secretary of State to introduce regulations allowing the adjudicator to fine supermarkets that fall below the standards set in the Bill. To bring about reputational damage, which is the only way in which supermarkets will be made to change their practice, that additional power will be needed. It is important to recognise that not all the supermarkets and those who will be brought under the code object to the proposal. Supermarkets have been achieving record profits in the deepest recession, so to argue that they cannot afford it is rubbish.

I say to the hon. Member for Ogmore that speed is of the essence. The motion should be withdrawn so that we send a strong message to the outside world.

18:14

[Kerry McCarthy (Bristol East) (Lab)]

As we have heard, people in the UK are facing the biggest squeeze in living standards since the war. They are being hit on all sides. They are losing their jobs or their overtime or having their pay frozen. If they are self-employed, they are struggling to earn the sort of money that they used to earn. They are being hit by cuts to public services, rising fuel bills, rising rents, cuts to housing benefits, cuts to tax credits, and as we have heard today, they are being hit by rising food bills too. All those things add up and have a devastating impact on household finances.

Food prices in the UK have been rising at well over twice the rate of the incomes of the poorest. Over the past five years, food prices have gone up by 32%, rising at well over twice the rate of the national minimum wage and twice the rate of jobseeker’s allowance. Around one in every 16 people have been forced to skip meals so that the rest of their family can eat. In Bristol that represents 26,500 people in the city having to go hungry because of financial hardship. Eight hundred people in Bristol have used a food bank in the past year. Oxfam South West has reported an increase in demand on its food banks, with some reporting a 100% increase on the previous year’s total of applications for help. As we have heard, the Trussell Trust estimates that the number of people using food banks could increase from 100,000 this year to up to 500,000 by the end of this Parliament.

I congratulate the charities and Churches that run the food banks on the work they do. During the half-term recess I will be visiting the food bank in Bristol run by FareShare, which is an excellent organisation. Those charities make an immeasurable difference to people’s lives, but as Kate Wareing, Oxfam’s UK poverty programme director, has said,

“Everybody in the UK should have enough money to feed themselves and their families, whether they are in or out of work. It’s an outrage that increasing numbers of people in our country are having to visit food banks to feed themselves or put a hot meal on the table for their children.”

So although I welcome the work of those running food banks, I—unlike the Secretary of State—do not welcome the need for their existence.

Families are not only turning to food banks. The Child Poverty Action Group has found that for a quarter of the children in the UK, school dinners are their only source of hot food. In Bristol the number of children eligible for school meals has been rising. Fortunately, the local schools forum agreed to maintain funding after this Government discontinued the ring-fenced school lunch grant, but schools too will be affected by rising prices. The value of breakfast clubs is often overlooked, despite the fact that 32% of children regularly miss breakfast. The simple truth is that too many children arrive at school each morning having not eaten a proper meal since lunchtime the day before. Research by London Economics found that breakfast clubs led to a statistically significant increase in attainment and improvements in punctuality that clearly outweigh the costs. A survey by Magic Breakfast, a charity that provides breakfasts at 22p per child at 200 primary schools, including some in Bristol, found that 88% of schools see improved attendance.

In the limited time I have left, I want to talk about the problem of food waste. Many people would regard it as immoral that good edible food is thrown away when people are going to bed hungry. On a global scale, all the world’s 1 billion hungry people could be lifted out of malnourishment on less than a quarter of the food wasted in the US, the UK and Europe. Charities such as FareShare and FoodCycle are taking concerted action to tackle the problem, and doing so in a way that also encourages healthy eating, community involvement and volunteer engagement. I am proud to be a patron of FoodCycle.

Much of the problem lies in the supply chain—farming, feeding livestock, transportation, supermarket supply, restaurant policy and expenditure, and a demand for out-of-season food free from visual imperfections, as we heard from the hon. Member for South Thanet (Laura Sandys). I congratulate her on her Ugly Food campaign.

In its most recent report on the grocery market in 2008, the Competition Commission concluded that supermarkets are guilty of passing unnecessary risks and excessive costs on to their suppliers—for example, through forecasting errors by supermarkets. They might tell a manufacturer a week in advance that they will probably want 100,000 sandwiches, but on the morning the sandwiches are to be delivered, they substantially reduce their order, leaving the supplier with a pallet-load of sandwiches that they cannot sell. Worse still, many products carry the supermarket’s own brand name and supermarkets will often forbid the manufacturers to sell the products on, insisting that they must be sold to them exclusively. There is also concern that if they give the products to charity, that will damage the brand.

Particularly shamefully, supermarkets often agree a price for a product with their supplier, but when sales are less than predicted and products need to be put on price reduction, the supermarket will turn around and require the supplier to share the burden of the reduced revenue. Even worse, there are the notorious take-back agreements, whereby supermarkets return to the manufacturer produce that they have failed to sell.

Although the work of food redistribution charities is invaluable, their very existence implies an acceptance of the level of social inequality that creates the coexistence of food poverty and food waste. With more than one in five workers earning less than a living wage, low pay is so pervasive that tax credits and food parcels are required to give hard-working families the support they need simply to put food on the table. That is why I strongly support calls for the draft Groceries Code Adjudicator Bill to be brought forward in this year’s Queen’s Speech.

I will also bring forward a ten-minute rule Bill in March calling for action to enforce the principles of the food waste pyramid, which deals first with the reduction of food waste, then with the distribution of surplus food to redistribution charities, and then with sale or donation for feeding livestock, rather than food waste being sent for anaerobic digestion, or—even worse—landfill. I will be happy to talk with other Members who are interested in the Bill, and I hope that they will join me in supporting it.

18:20

[Mr David Nuttall (Bury North) (Con)]

In the Order Paper, the title of this debate is “Rising Food Prices and Food Poverty”, but I note that the words “food poverty” appear nowhere in the motion. We should start by examining what constitutes a state of affairs that can be described as food poverty. The Food Ethics Council, a registered charity, states on its website:

“Food poverty means that an individual or household isn’t able to obtain healthy, nutritious food, or can’t access the food they would like to eat.”

With so wide and all-embracing a definition, it could be argued that millions of people, including many quite high up the income scale, are living in food poverty. Having said that, there are people on limited and fixed incomes for whom paying the bills is a great struggle, but I do not accept the patronising view that they are somehow more likely to suffer from obesity because they can afford to eat only certain types of food. As we have heard this afternoon, processed and sugary foods are often much more expensive than fresh foods. I accept that food, as a variable item of expenditure, is always likely to come under pressure when there are other demands on the household budget. The question is what we can do to help those struggling to make ends meet.

I want to make two main points. First, we need to tackle the European Union’s common agricultural policy. It must be reformed. In a limited debate of this nature there is no time to do any more than flag up that disastrous policy. Few other sectors are controlled quite so overwhelmingly from Brussels as agriculture. Despite the Labour party signing away the UK rebate, supposedly in return for substantial reform, the CAP remains a complex system of subsidies and incentives that I believe distort the operation of the free market.

[Glyn Davies (Montgomeryshire) (Con)]

I am interested in my hon. Friend’s point about the impact of the CAP. Does he agree that the biggest impact is caused by completely unnecessary regulation on farming? I happen to be a livestock farmer, and the costs of some requirements, such as electronic tagging, have to be transferred and are a serious contributor to the cost of food.

[Mr Nuttall]

My hon. Friend makes an excellent point. I submit that the impact of EU regulation is of far greater concern to farmers than their relationship with our nation’s supermarkets. Despite all the tinkering with the CAP, it still takes up more than 40% of the entire EU budget. British consumers would be far better off if we were free from the tentacles of the European Union and its CAP altogether.

Secondly, I do not think that we should interfere with the operation of our retailers. The fierce competition between high street food retailers has led to the sustained availability of a huge choice of foods that previous generations could only have dreamt of. As Asda battles Tesco, which competes with Sainsbury’s, which fights with Morrisons, which battles with Waitrose, Lidl, Booths, Aldi and Marks & Spencer, all competing with each other and with smaller chains and independents, there is surely no doubt that all this competition has served to drive down prices for the benefit of all consumers.

[Julian Sturdy]

Is it not true that driving down some of those costs has been detrimental to dairy farmers? Milk prices have fallen, and the fact that supermarkets sell milk as a loss leader is having a real impact on local dairy farmers.

[Mr Nuttall]

Dairy farmers can band together and form co-operatives in order to strengthen their negotiating position, as they have done. The market solution to the problem is to have higher prices. I am conscious of the fact that many Members wish to contribute to the debate, so will leave my remarks there.

18:26

[Nic Dakin (Scunthorpe) (Lab)]

Thank you, Mr Deputy Speaker, for calling me to speak in the debate, and I apologise for not being here at the start—I was serving on a Statutory Instrument Committee.

I am afraid that the Government are yet again out of touch, in this case with families feeling the squeeze of higher food prices. At 4%, food inflation in the UK outstrips that of all other EU countries. I am pleased to follow the hon. Member for Bury North (Mr Nuttall), because of his interest in Europe, and to be able to give that context.

As my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger) and for Bristol East (Kerry McCarthy) powerfully and graphically spelt out, food poverty is a growing concern. The cost of living crisis is affecting households across the country and more families are relying on food banks. I pay tribute to the food bank in my constituency, organised by Scunthorpe Baptist Church, which does a fantastic job in helping people to meet their crisis needs, particularly when there is a dislocation in their benefit payments. As has been said throughout the debate, although we recognise the great benefits that food banks bring to society, it is a great shame and a great condemnation of where we are that people in such a rich country have to rely on them.

I am afraid that the Government are making it harder for families to make ends meet and overseeing a massive growth in handouts from food banks as families struggle with rising costs, higher bills and job insecurity. Rising food poverty is a national scandal. Last year 60,000 people relied on food handouts, including 20,000 children, and one new food bank opened every week. A family with two small children now has to pay over £233 a year more for food due to rising prices.

My hon. Friend the Member for Llanelli (Nia Griffith) drew attention to the health risks of families eating less fresh fruit and vegetables, and I was pleased to hear the hon. Member for Congleton (Fiona Bruce) speak about the contribution that people growing their own food on allotments can make. I am pleased that in my constituency there are initiatives across many primary schools whereby fruit and vegetables are grown to make children and families aware of the benefit of eating them. Indeed, Leys Farm junior school not only has such an initiative, but the produce is served in the school kitchen. There is much good practice out there that we need to build on.

Consumers want transparent food pricing by major retailers so that it is easy to compare goods and to make informed choices, and that is why unit pricing is so important. I am concerned, however, about the need to crack on with introducing the grocery code adjudicator; there is a strong cross-party consensus for putting that role in place.

I have asked several written questions on the matter and, in particular, on the issue of confidentiality in order to protect people who make complaints to the adjudicator, and the responses that I have received have all been in a similar vein: “Protecting the confidentiality of suppliers who raise complaints will be both a power and a duty of the adjudicator.” But the question is how that is done, and the key issue is how it is managed.

The security surrounding confidentiality is important. I had a meeting today with representatives of a packaging federation, and they made it clear that their members would be concerned about making individual complaints to the adjudicator, and that third-party complaints would need to be part of the structure. The hon. Member for St Ives (Andrew George) said that people in the supply chain often operate in a climate of fear, so it is important that the decisions of this House, in pushing forward the role of the grocery adjudicator, ensure that that climate no longer exists and is properly addressed.

The National Farmers Union in my constituency and throughout the country is very much concerned to ensure that there is a third-party complaints process. Alex Godfrey, who represents the NFU in Scunthorpe, has made that very clear to me, echoing the evidence that was given to the Environment, Food and Rural Affairs Committee.

I hope that this debate helps to hasten putting in place the grocery code adjudicator in a way that gains the confidence of not only the people in this Chamber, but the people out there and, most importantly, the people who might want to use the adjudicator to ensure fair play in the world.

[Mr Deputy Speaker (Mr Nigel Evans)]

I am grateful to the previous two speakers, Nic Dakin and David Nuttall, for not using their full allocation of time, as it allows at least two more speakers to get in.

18:32

[Neil Parish (Tiverton and Honiton) (Con)]

It gives me great pleasure to speak in this debate, as there is no doubt about the conclusion that we should make—that there is a link between food prices and food poverty. It is apparent that the poorest in society will find high prices difficult, and we only have to look throughout the world to find that. As the population of the world reaches 7 billion, and moves towards 8 billion by 2030, we have a greater need to produce more food, and that is where I charge the previous Government, because for much of their final period in office they did not encourage food production. In fact they said, “We can import as much food as we like”; our home production did not matter.

We therefore need greatly to increase our food production in this country, and as other Members have said, we need to use biotechnology in order to do so and to reduce our use of fertilisers and pesticides. A blight-resistant potato is coming, and it could increase food production while dramatically reducing the environmental consequences of spraying potatoes, so there is much we can do, but we have to go forward and do it.

On the grocery code adjudicator, my hon. Friend the Member for Shipley (Philip Davies), who is no longer in his place, missed the point. If these wonderful supermarkets are not doing anything wrong, they have nothing to fear from the adjudicator. The point of setting up the post of adjudicator is to put him or her in place so that, if there is abuse, it can be looked at. My right hon. Friend the Secretary of State wants the role of the adjudicator introduced quickly, so we need to give the legislation parliamentary time. Farmers, growers and many other people in the food chain are often squeezed not only by the big supermarkets but by the big buyers in the chains, and that is why the adjudicator is so necessary.

I therefore very much welcome the debate and what the Government are doing to increase food production and ensure that common agricultural policy reform does not set aside more land and stop food production. There is a moral obligation to produce food not only for this country, but for the rest of the world.

[Mr Deputy Speaker (Mr Nigel Evans)]

Thank you for your time constraint.

18:34

[Dr Sarah Wollaston (Totnes) (Con)]

In the brief time that I have to speak, I shall make three points: first, about the link between food poverty and obesity; secondly, about the impact of loss leaders; and thirdly, about the role of local food production.

Data from the health and social care information centre show that one third of children are now obese, but the link between deprivation and the risk of obesity is stark. We see it in reception class, but it becomes even starker as children move through to year 6, where currently 23.6% of the poorest children, but only 12.8% of the wealthiest, are obese. The reason is the difficulty not just with buying food, but with the types of food that are the cheapest, and with people’s choices being driven by supermarkets and with the operation of loss leaders.

I would not call on the adjudicator to issue an outright ban on loss leaders, because previous inquiries have shown that such action does not reduce the cost of food overall, but there needs to be much greater clarity about the cross-subsidies that loss leaders introduce, because subsidising products such as alcohol, chocolate and crisps increases the cost of much healthier foods. We need to address that issue, because one of the Labour Government’s greatest failures, as identified by the King’s Fund, was in making progress on health inequalities, which we cannot address without tackling issues such as alcohol and nutrition. That is an important point, because obesity affects children’s life chances and costs the rest of us. We know that, unless we address obesity, by 2050 it will cost the country about £10 billion a year, so the adjudicator represents good value for money.

In addition to addressing loss leaders and ensuring that people have access to good-quality food, Ministers should also consider the role of local food production. I pay tribute to Transition Town Totnes and the Campaign to Protect Rural England for clearly setting out how supporting good, local, sustainable food webs and delivering good, fresh, seasonal produce does not necessarily result in higher prices, and for showing that we can use measures to encourage the right choice to be the healthy choice.

18:37

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

This has been a very good and wide-ranging debate, and all in all I think that we have had 12 speakers, if my maths is good—although maths is not my strong point.

The hon. Member for Thirsk and Malton (Miss McIntosh) spoke eloquently on behalf of farmers, and pressed the Government on farmers’ genuine concerns about currency and exchange rates and rising costs. She spoke also of, in her phrase, “the climate of fear” in the supply chain, and we recognise that. She pushed the Government, as she has in her role as Chair of the excellent Environment, Food and Rural Affairs Committee, to give real teeth and power to the adjudicator. She also almost referred to “good” and “bad” retailers, so I look forward to her contribution to the Labour left review or to Progress magazine.

The hon. Member for South Thanet (Laura Sandys) also spoke well, and said that the era of cheap food is coming to an end. Perhaps it is, but if so I am sure we all agree that we need the fairest prices for consumers and fairness throughout the food chain. She mentioned her involvement with, if this is correct, “Tasty but ugly like you.” I do not mean you, Mr Deputy Speaker, of course. I hesitate to lay the words “tasty” or “ugly” on you—[Interruption.] No, I will stop there.

The hon. Member for Congleton (Fiona Bruce), who represents a lovely part of the world which I know well, made a very good contribution that could have been called, “The Plot Thickens”. She talked about the importance of grow your own, and I too stress the role of allotments—given that the chair of the National Society of Allotment and Leisure Gardeners, a very good gardener, lives in my constituency—and the need to protect and enhance them. The hon. Lady talked of giant leeks, which we see also at Wales rugby matches, and she advocated growing produce in one’s garden or in one’s neighbour’s garden—although in the latter case it is always best to ask permission.

The hon. Member for Bury North (Mr Nuttall) said that there was no mention of “food poverty” in the motion. There is: it is in the title. The hon. Member for Tiverton and Honiton (Neil Parish) recognised the real problem of food poverty, on which I congratulate him, and he took issue with his hon. Friend the Member for Shipley (Philip Davies) about the nature and purpose of the adjudicator, on which we agree. There was also a thoughtful contribution from the hon. Member for Totnes (Dr Wollaston).

The hon. Member for St Ives (Andrew George) made a good contribution. He welcomed much of our motion and many of our remarks. I can clarify that we want the adjudicator in the next parliamentary Session. Will he support us? He should not let a drafting error get in the way of our emerging coalition on this matter.

My hon. Friend the Member for Stoke-on-Trent South (Robert Flello) spoke extremely well for his constituents, describing a “heat or eat” scenario—or, worse, neither heat nor eat. He went into detail on food banks and mentioned clearly that they did not exist in great numbers under Labour because there was not the need for them on the scale at which they are now emerging.

My hon. Friend the Member for North West Durham (Pat Glass) spoke powerfully for farmers in her area and the early introduction of a powerful groceries code adjudicator in the next parliamentary Session. We agree. “Fairness across the food chain”—her phrase—is a good rallying cry. My hon. Friend the Member for Llanelli (Nia Griffith) paid tribute to the work of our hon. Friend the Member for Ynys Môn (Albert Owen) on the groceries code adjudicator and called for an urgent introduction of an adjudicator with clout. She said, stirringly, that it is a disgrace that anyone should have to rely on charity to feed their family.

My hon. Friend the Member for Bristol East (Kerry McCarthy) focused expertly on food poverty, the growth in the number of food banks in Bristol and the work being done to mitigate the problem of food poverty. My hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) described the national scandal of rising food poverty, coupled with the rise in broad poverty issues throughout the UK. She gave direct evidence of the human tragedy for her own constituents, not least because of the late payment of benefits, something echoed by my hon. Friend the Member for Scunthorpe (Nic Dakin).

The Secretary of State talked widely about global issues, but did not focus on the particulars of food poverty and food banks. Labour Members picked up on astonishing complacency. She described food banks as a triumph for the big society, rather than a tragedy caused by the Government’s social and economic policy. How many more food banks do we need before we can proclaim the big society a resounding success?

[Mrs Spelman]

When the hon. Gentleman checks Hansard tomorrow, he will see that I did not use the word “triumph”. Opposition Members have failed to observe that, for many decades, many institutions in this country have helped the poor and needy. If he has never been to a harvest festival and understood that churches collect food to distribute among those in their community who really need it, he is not alert to how much that is part of British culture.

[Huw Irranca-Davies]

Charitable effort has indeed always been part of this country, before the phrase “big society” was invented, but never with the proliferation that we currently see. It is a tragedy.

Let me relate a direct story about one not unusual family of four in England today. One parent is out of work and the other is in a low-paid job. Before Christmas, they found themselves behind on their mortgage, with their council tax debt racking up and the gas and electricity meters running out of money. They receive working tax credit and child tax credit, both of which will soon be cut by the Government. Their home is increasingly cold and dark and the only things in their cupboards are food parcels from the local food bank. The right hon. Lady shakes her head, but they buy what fresh food they can when they can, but without the support and kindness of local people, they would simply go hungry. We would love that to be fiction, but such are now the facts of life for too many families.

Into that harsh reality stumbles a throwback to the 1980s—a former Conservative Minister who was then the hon. Member for South Derbyshire. When confronted recently with that dire social and economic regression, she boldly answered:

“Are you telling me people in this country are going hungry? Seriously? Seriously?”

Yes, seriously—former Conservative Ministers might not want to believe it, but it is a searing indictment of the Government that more and more people across England, Wales, Scotland and Northern Ireland find themselves relying on food banks, one of which was opening every week last year. Those people depend on the generosity of others to get by.

Last year, 60,000 people received help from a food bank, a figure that the Trussell Trust predicts will rise to 130,000 in the next year. For all those impoverished families who now need a voice in the Chamber, the words and sentiment of the former Member for Ebbw Vale echo down the years: this is their truth, our truth—tell me yours. What is true across the UK is true in my constituency and neighbouring constituencies. From Llanharan to Gilfach Goch, and Maesteg to Pontycymmer, and all points between, food banks proliferate.

We should pay tribute to the many volunteers and organisations involved, such as the Bridgend food bank and the Pontyclun food bank, but the issue is a terrible indictment of the economic misery inflicted on families under this failing coalition Government. I challenge the Minister and the Government to dispute that stark reality. The Government’s failing policies and inaction on the economy mean that families are finding it hard to make ends meet and struggling to cope with rising living costs, higher energy, housing and food bills, and the constant fear that they could lose their jobs—if they have them—at any time.

For too many, eating is losing out to heating and housing costs. Charities warn that having a job is now no protection; an estimated 10% of food bank recipients are middle earners whose salaries have been cut or frozen or who have recently lost their jobs. Food prices rose by more than 4% last year. Lower-income families are eating less fresh fruit and vegetables. They spend more than 15% of their income on food. In real terms, it comes down to a couple with two young children spending an extra £233 on their annual food bill.

When surveyed by Which? in the last year, more than half of consumers said that increasing prices made it difficult to eat healthily. Nearly 90% genuinely fear the increasing cost of food. Those are startling figures. However, when people need help, the Government seem torn between prevarication and paralysis when it comes to taking action that will go some way towards easing the pressure on people’s wallets—not least by assisting farmers and manufacturers of the food we eat with the retail and financial challenges that they face.

When in government, Labour took action after the hike in food prices in 2008 to address that challenge and to produce more food sustainably. In 2010, we published the first Government food strategy for 60 years and our priority was a sustainable, affordable competitive food sector. We gained cross-party support for the supermarket ombudsman—to ensure a fair deal for farmers and food producers, who still need a fair deal from major retailers—and for the implementation of the groceries supply code of practice in February 2010.

Yes, there was more to be done, but the creation of an ombudsman—the groceries adjudicator—to enforce and monitor the code of practice was a recommendation of the Competition Commission and is supported by the Environment, Food and Rural Affairs and Business, Innovation and Skills Committees. It would do a great deal for farmers, food manufacturers and the public. It was not just us asking for it.

[Andrew George]

I have to put the hon. Gentleman right. The Competition Commission was empowered and used its power to introduce the groceries supply code of practice; it was not the last Labour Government. Will he retract that claim?

[Huw Irranca-Davies]

I am happy to say that the code is in place, and that happened while the Labour party was in government. I agreed with the hon. Gentleman when he said last September:

“Every week the government fails to act, farmers are finding themselves in more difficulty.”

So let us get on with it.

We do not want bluff and bluster; we do need action. As my hon. Friend the Member for Wakefield (Mary Creagh) said, we ignore the perfect storm of rising prices, falling incomes and food poverty at our peril. I urge the House to support the motion.

18:48

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon)]

I compliment my hon. Friend the Member for St Ives (Andrew George), who bowled the hon. Member for Ogmore (Huw Irranca-Davies) and hit the middle stump, showing the paucity of the motion. I offer advice to the hon. Gentleman and his colleagues—they simply cannot support the wording in the motion. It is a sign of desperation to pray in aid somebody who has not been in the House for 15 years when referring to Conservative or any other policy.

It is clear from this afternoon’s debate that Members on both sides of the House take seriously the challenges posed by food price inflation. It is also clear that down the years Governments of different complexions have seen varying degrees of price volatility. Of course I agree with hon. Members on both sides that wonderful work is done by charities and other organisations to support people on low incomes. That has always been the case. But please can we not pretend that in some parallel universe those charities were all forced into action on 6 May 2010 and that their existence is totally the result of the coalition Government? That is such a puerile and facile argument. Let us have a mature debate. I hope to add some thoughts in the few moments that I have.

Some Opposition Members have sought to ascribe the responsibility for high prices to the coalition. Clearly, that is undermined by the fact that food prices were rising at a faster rate under the previous Government. Likewise, we know that food price inflation was outstripping general inflation at one point last year, only for the situation to be reversed later in the year. The dynamics of where food prices stand at a particular point in time are of secondary importance to hard-pressed families who are balancing their budgets. Those families want to know what action is being taken to help, not just by Government, but by a range of organisations that have a distinguished track record in this regard.

We have heard of some excellent initiatives in the area of food provision and redistribution. We know about Healthy Start, which is a Government initiative. We have heard about FareShare, which provided 8.6 million meals in the last financial year. Many hon. Members have spoken about food banks, which are organisations set up by wonderful, community-minded people with real compassion. We applaud their activities. However, I say to Opposition Members, in particular the hon. Members for Liverpool, Wavertree (Luciana Berger) and for Bristol East (Kerry McCarthy), that it is ridiculous to say that the rise in the need for food banks is attributable to this Government. This Government spend £122 million a day just to pay the interest on the debt that their Government left us. That is what we have to spend before we even pay off the debt.

[Luciana Berger]

Will the Minister give way?

[Richard Benyon]

No, I will not give way.

The motion is almost entirely consumed with statements about the introduction of the groceries code adjudicator. We agree on the importance of introducing an adjudicator. That is why we have published a draft Bill and are getting on with putting it in place. What is rather more puzzling is the position of the Opposition, who wasted 13 years without introducing the adjudicator, even though they knew that power was shifting from the suppliers to the retailers and had received evidence on that. Despite that, they criticise this Government for not having completed the process in 18 months.

The motion refers to “delays”. The only element of delay is in the motion itself, which demands that the adjudicator be introduced in the next Parliament. The hon. Member for Ogmore explained that that was a drafting error. In that case, he must tell Members not to support the motion. Any Member who supports it is showing a paucity of ambition, because it means that they want the adjudicator to be introduced early in the next Parliament. The hon. Gentleman will have to withdraw the motion. That is the only thing to do. The hon. Member for Wakefield (Mary Creagh) might want to wait until after the next general election to introduce the adjudicator, but the coalition has no such intention. We will carry on with the work in hand and bring it in during this Parliament.

Aside from the rather narrow focus on the adjudicator, there has been a series of interesting and useful contributions on the work that can be done to mitigate food prices. I pay great tribute to my hon. Friend the Member for South Thanet (Laura Sandys) and wish her social enterprise well. It sounds like an interesting idea. I pay tribute to my hon. Friend the Member for Thirsk and Malton (Miss McIntosh), who made some interesting comments about the social impact of the threat of high food prices. I confirm for her that the groceries code adjudicator will consider anonymous submissions. She talked in particular about the fruit and vegetable sector. Those suppliers can approach the groceries code adjudicator anonymously.

The hon. Member for Llanelli (Nia Griffith) asked when the groceries code adjudicator would be introduced. I hope that we have answered her question. The draft Bill is available. I cannot second guess what will be in the Queen’s Speech. I would be in trouble if I did.

My hon. Friend the Member for Congleton (Fiona Bruce) spoke about local and home-grown food. I pay tribute to what is happening in her constituency. My hon. Friend the Member for St Ives was absolutely on target. He sought, as I do, cross-party consensus because on these issues this House sometimes produces more heat than light. If we look at the matter in detail, we see that there is a lot more that we agree on than separates us.

The Government are hugely supportive of food banks and other organisations that work to open up access to food. The coalition Government have been clear from the outset about the importance that they attach to third sector and civic activity. The success of many organisations in this area demonstrates why we are right to work hand in glove with them in delivering social solutions.

This debate has demonstrated the extent to which food price inflation is shaped by an intricate matrix of interrelated global circumstances. To stand here and pretend that the Government can step in and bring down food prices at a stroke would be disingenuous. The Government can put measures in place to ameliorate the worst effects of food price inflation, which we are doing through measures such as our continued support for Healthy Start and other schemes. One of the biggest determinants of food prices is global and domestic supply, and this Department has put farming and food production at the heart of its business plan. Whether it is in stripping away the needless bureaucracy that has swamped farmers, developing a strategy for balancing the needs of greater food production with protecting our environment, or helping to fund innovation and increased competitiveness, this Government are highly attuned to the need to increase high-quality food production domestically.

My right hon. Friend the Secretary of State is personally driving a great deal of work with other countries to help to meet the food supply challenges set out in the Foresight report. We are investing time and energy to ensure that we are working hand in glove with others on that important challenge. Understandably, the effects of that will take time to be felt.

The fact is that there is no silver bullet. The Opposition should know better than to pretend that the adjudicator will be the cure-all for hard-pressed families. What families need now is for the Government to deliver real help right now to get living costs down to a manageable level. To that end, the Opposition should support freezing the council tax, cutting fuel duty, cutting income tax for 25 million people, extending free child care, increasing the child tax credit, taking action on energy prices and many other measures. They were strangely silent on those measures throughout the debate. That is the programme that the coalition Government will continue to deliver in parallel with our work to increase food security and keep food prices down.

I believe that the House is united in its concern for those who struggle to manage their food bills. That is as it should be. However, this debate has laid bare the absence of any ideas from the Opposition. That is in marked contrast to the practical steps that the coalition is taking to help hard-pressed families up and down the country. On that basis, the motion should be rejected.

Question put,

18:58

Division 435

Ayes: 223

---

Labour: 213
Scottish National Party: 4
Plaid Cymru: 3
Alliance: 1
Democratic Unionist Party: 1

Noes: 293

---

Conservative: 249
Liberal Democrat: 42

Youth Unemployment and Bank Bonuses

Monday 23rd January 2012 Commons Chamber

[Mr Deputy Speaker (Mr Nigel Evans)]

Before I call the first speaker, may I say to both Front Benchers that a large number of Back Benchers have signified that they wish to take part in the debate? I ask them for some time constraint in their opening speeches to allow as many Back Benchers as possible an opportunity to speak.

19:13

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House notes with concern that unemployment has risen to its highest level for 17 years, youth unemployment has now reached a record level of 1.04 million and the number of young people claiming jobseeker’s allowance for over six months has more than doubled since January 2011; believes that cutting spending and raising taxes too far and too fast has choked off the recovery and pushed up unemployment and that it was a mistake for the Government to abolish the Future Jobs Fund; recognises that rising unemployment and the Government’s failing welfare to work programmes are leading to a higher benefits bill, which is contributing to the £158 billion of additional borrowing announced in the Autumn Statement; further notes reports that multi-million pound bank bonuses are set to be paid out this year, even in banks where the share price has almost halved; and in view of the most recent figures on unemployment, calls on the Government to take urgent action to kickstart the economy to promote jobs and growth and to reconsider its refusal to introduce a tax on bankers’ bonuses this year, in addition to the permanent bank levy, to fund 100,000 jobs for young people.

We have called the debate to raise the alarm on a crisis that is now on the verge of becoming a national disgrace—the disgrace of a few getting rewarded for failure while many more pay the heavy cost of the failure of the Government’s economic policies. However, the motion is not just a critique. It is also a call for action, a reminder to the Government that, despite the damage that has already been done, they still have a choice. There is an alternative—Labour’s five-point plan for jobs and growth could get people back into work, get our economy moving and get the deficit down in a balanced and sustainable way.

Every hon. Member who is present will have met victims of the unemployment crisis in their own constituency. They are families devastated by the arrival of the dreaded redundancy letter and afraid of what the future will bring, and parents determined to do the right thing and provide for their children but unable to make ends meet.

[Matthew Hancock (West Suffolk) (Con)]

The hon. Lady mentions unemployment in Members’ constituencies. Does she recognise that, based on the claimant count, unemployment in Leeds West has fallen by 106 since the election? Which of the Government’s policies would she recommend as being to blame for that?

[Rachel Reeves]

Youth unemployment in my constituency, like in most of our constituencies, is rising fast, whereas it was falling at the time of the last election.

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

May I share with the hon. Lady the figures for her own constituency? Youth unemployment rose by 625 between 2005 and 2010, which was a 103% rise, yet rose by 25 between 2010 and 2011, which was a 2% rise. Can she explain why it rose so much between 2005 and 2010?

[Rachel Reeves]

The hon. Gentleman might be aware of the global financial crisis that took place. Between 1997 and the start of the financial crisis, unemployment and youth unemployment were falling in my constituency and nationally, and at the time of the last general election unemployment was falling. Now, it is rising.

Government Members are in denial about what is happening. The reality is that, over the past year, long- term youth unemployment has more than doubled. It is a reality that the Opposition recognise and would do something about, whereas Government Members ignore it.

[Toby Perkins (Chesterfield) (Lab)]

Is it not clear that what we have heard in the first moment or two of this debate is Conservative Members saying, “It’s all right, everything’s going great”? We have record youth unemployment, and all we hear from Government Members is laughter and complacency.

[Rachel Reeves]

I think many of our constituents watching this debate will say exactly that. The Government are in denial. Youth unemployment is at a record high, and Government Members say, “There’s not a problem. We don’t need to do anything about it. Everything is fine.” That is not the reality for our constituents.

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

Even if this is a laughing matter for the Government, it certainly is not for us. My constituency has among the highest levels of youth unemployment. It is a tragedy—there is no other way to describe it—when young people are simply unable to find work. I have been in touch with Jobcentre Plus, and there is no doubt about the difficulties and hardships for such young people. Yet for the Government, it is a laughing matter.

[Rachel Reeves]

My hon. Friend speaks for the many families and young people in all our constituencies who are experiencing a crisis, and I give him credit for recognising their challenges.

[Andrea Leadsom (South Northamptonshire) (Con)]

Does the hon. Lady feel at all positive about the Government’s steps to create new apprenticeships for young people to get them into real jobs that will endure?

[Rachel Reeves]

The reality is that the Office for Budget Responsibility has examined all the Government’s plans and predicts that unemployment will continue to rise all the way through this year, and the OECD predicts that it will rise next year as well. That is their verdict on the Government’s economic policy.

[Several hon. Members]

rose—

[Rachel Reeves]

I will make a little progress, because we know that many Members want to speak. I will try to give way again later.

Although many of our constituents are very fearful about the future, not everyone is looking to the future with fear and trepidation—not for all the question of how their money will last until the end of the month, or whether they can afford to heat their homes and eat three meals a day. For the past week, we have been hearing stories of banks preparing to pay bonuses to a few hundred senior employees amounting to hundreds of thousands, even millions of pounds in another multi-billion pound bonus season.

The Opposition believe in rewarding hard work and encouraging enterprise that contributes to the prosperity of the economy, but this is about fairness, responsibility and proportion. It is about the difference between rewards for success and rewards for failure.

When millions of families are struggling to find work, businesses are having their loan applications turned down and banks are continuing to rely on taxpayers’ hard-earned money for their very survival, the vast majority of people in all our constituencies find the idea of such sums being paid to a small number of individuals unacceptable. People rightly feel that we did not bail out the banking system to perpetuate a business-as-usual model or to pay big bonuses when ordinary workers are losing jobs. Surely we bailed out the banks to protect the businesses and families that depend on banks serving and supporting the wider economy.

[Mr John Redwood (Wokingham) (Con)]

Will the hon. Lady explain why Labour Ministers accepted and approved such grotesque contracts for RBS, so that they now personify payment for failure?

[Rachel Reeves]

We introduced a bank bonus tax to get some money back from the banks. The Government refused to go ahead with it and, instead, gave the banks a tax cut this year. That is not acceptable, and that is what the motion is about.

While banks seemingly return to the business-as-usual model, aided and abetted by the current Government, last week the Office for National Statistics published another set of dreadful unemployment numbers. Total unemployment is now at its highest since the summer of 1994. Women’s unemployment is the highest it has been since autumn 1987. Youth unemployment is now the highest since comparable records began. The number of young people claiming jobseeker’s allowance for six months or more has doubled in just 12 months.

Those figures on their own are shocking enough and should be sufficient to end all debate and drive the Chief Secretary and the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), to urgent action. However, most worrying is the fact that, on every measure, and according to every forecast and to the Government’s Office for Budget Responsibility, unemployment is set not to fall, but to get worse.

The Office for Budget Responsibility’s projection, alongside last year’s autumn statement, showed unemployment rising to 2.8 million this year. The OECD expects unemployment to rise to 9% in 2013. If unemployment continues to rise at the rate that it has done in the past six months, it will reach 3 million this summer. The economy may well be headed back to recession—we will hear the grim reality on Wednesday.

However, it is clear that, although the situation is now perilously close to tipping point, and the Government’s failures are mounting, they could still take action. Yet since taking office in 2010, the backfiring of their attempts to cut too far and too fast has added a shocking £158 billion in extra borrowing.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Does my hon. Friend agree that the growing trend of extended unemployment—more than six months—for young people creates the real worry that we will have a lost generation unless the Government act?

[Rachel Reeves]

My hon. Friend is right that long-term youth unemployment has a scarring effect, which affects more and more people throughout the country. It is similar to the situation in the early 1980s and early 1990s—the last two times a Conservative Government presided over a recession.

With more people out of work and fewer businesses succeeding, the Government end up paying out more in benefits and getting less in through taxes. They are filling that gap with the £158 billion more borrowing. The inheritance that that leaves for the next Government will mean more tough decisions about taxation and spending—the unnecessary and avoidable cost of the Government’s failure.

[Mrs Madeleine Moon (Bridgend) (Lab)]

Unemployment among all 16 to 24-year-olds on jobseeker’s allowance in the Bridgend constituency is 8.8%. Would one way forward be to grant a one-year national insurance holiday, so that small businesses could take on young people, give them employment and the opportunity to experience work?

[Rachel Reeves]

My hon. Friend is exactly right. That is why, as part of Labour’s five-point plan for jobs and growth, we include a national insurance holiday for all small businesses taking on new workers—a policy that would help small businesses and the more than 1 million young people who are desperately searching for work.

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

Does the hon. Lady accept responsibility for the failure to skill up our young people to take on jobs? For example, after the Labour party’s 13 years in office, we had the smallest proportion of 16 to 18-year-olds studying maths of any OECD country.

[Rachel Reeves]

People are not getting jobs at the moment not because they do not have skills but because the jobs are not available. In all our constituencies, five or 10 people are chasing every job. That is why unemployment is rising. Until the Government take responsibility for that, the numbers will get worse, not better.

The price that families struggling with the consequences of redundancy and young people forced to abandon their career plans pay is incalculable. We cannot go on like that. Maybe some hon. Members—we have already heard from many of them—greet the prospect of rising unemployment with a degree of fatalism, perhaps resignation. They may feel that the punishment being inflicted on innocent families and young people is the sad but inevitable consequence of austerity and economic adjustment. Indeed, as I said earlier, there is a grim familiarity about the figures, which bear a depressing resemblance to the record of previous Conservative Governments.

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

The hon. Lady talks about a grim familiarity. Does she acknowledge that every Labour Government in history ended with higher unemployment than they started with? After a 40% rise in youth unemployment under the previous Government, some humility is required on both sides of the House, but not least on hers.

[Rachel Reeves]

Unemployment has reached 3 million twice, both times under Conservative Governments. At the last election, unemployment was falling; today, it is rising.

[Mr Stuart]

That is because we are clearing up your mess.

[Rachel Reeves]

In the 1980s and early 1990s, unemployment reached 3 million. Was that because Conservative Governments were clearing up a Labour mess? Really? I think it was because of the policies that Conservative Governments always pursue—policies that hurt young people and put more people out of work. That is the reality of Conservative Governments.

Labour Members are not complacent. We do not say that it is inevitable, that it has got to happen and that 3 million unemployed is a price worth paying. Labour Members are not prepared to give up on young people and we urge the Government not to give up on them, either.

In the coalition agreement, the Government said that a fundamental goal would be to

“sustain the recovery and to protect jobs.”

Before the election, the Prime Minister told voters that jobs would be his top priority. He said:

“I understand if you leave people unemployed, and short term unemployment becomes long term, then it becomes a lifetime of unemployment. It’s a waste of life. I must stop it happening.”

He was right then, but he does nothing now. The Deputy Prime Minister said earlier this month that

“supporting people into work is my priority for 2012”.

He is right, yet he does nothing.

We must—and we will—hold the Government to their promises because we cannot allow the next generation to be denied the chance of expanded opportunities that has always been the promise of Britain.

[Margot James (Stourbridge) (Con)]

Will the hon. Lady acknowledge that long-term youth unemployment is falling—and, indeed, has fallen by 5%? Will she also acknowledge that half a million new jobs have been created in the private sector in the past year? Currently, there are 90,000 vacancies in retail, 44,000 in hospitality and 11,000 in construction. What matters is that the Government, through the Work programme and so many other interventions, are maximising the skills and training for young people to get them into work.

[Rachel Reeves]

In the hon. Lady’s constituency, long-term youth unemployment has gone up by 25% in the past few months. I do not know what she says to her constituents—“There’s loads of jobs out there. Just go and get one”? More people are chasing jobs than there are jobs available. That is because the Government are pushing more and more people out of work. I am sorry that the hon. Lady does not know the numbers for her constituency, but we know.

[Charlie Elphicke (Dover) (Con)]

The hon. Lady talked about the scarring effect of the fast-buck culture. Will she condemn the right hon. Member for South Shields (David Miliband) for taking a consultancy with private equity?

[Rachel Reeves]

I will not condemn my right hon. Friend for taking a job. I am talking about the reality of the challenge that people in our constituencies face. More and more people are out of work. We should listen to them. They are saying that they are getting degrees, A-levels and vocational qualifications but that they cannot find work. As I have said, many would be shocked that many MPs say, “That’s just inevitable—it’s just what happens, and nothing can be done about it.” That is not acceptable. Our constituents see unemployment rising. The House should be taking action to address that challenge.

[Sheila Gilmore (Edinburgh East) (Lab)]

I would have intervened earlier, but I was trying to work out the arithmetic of Government Members. We are constantly told that 500,000 jobs were created last year, but we have been told about them for the past 20 months. Does my hon. Friend agree that Government Members cannot constantly refer to those same jobs, which were largely the result of the stimulus applied by the previous Labour Government?

[Rachel Reeves]

I agree with my hon. Friend. We have to look only at the forecasts from, for example, the independent OBR, which says that unemployment will continue to rise this year, or at the OECD numbers, which say that unemployment will continue to rise into 2013. That is the reality.

I am sure we will hear the Chief Secretary to the Treasury and others defend the Government’s inaction and talk about their various half-baked and half-hearted solutions. We look forward to hearing a report on the progress of those initiatives, and in particular what difference the Government expect them to make to future unemployment. As I have said, the OBR has said that there is no reason for it to revise its unemployment projections as a result of the Government’s measures.

The Government’s response is inadequate for the scale of the challenge. When the Prime Minister was challenged last week on his performance on unemployment, all he could do was admit with regret that youth unemployment is a problem. However, the Opposition are asking the Government not simply to acknowledge they have a problem—we all know that—but to do something about it. The Prime Minister says he takes responsibility for everything that happens in our economy, but taking responsibility means taking action.

[Claire Perry (Devizes) (Con)]

Unemployment in my constituency is creeping upwards and long-term unemployment is coming down, but in both my constituency and the hon. Lady’s constituency apprenticeship starts are increasing at an incredibly rapid rate. Can she and I agree on one thing: that the best way to get young people into work is to get them such opportunities with the private sector, and relentlessly to support them, as this Government are doing?

[Rachel Reeves]

I expect the hon. Lady’s constituents, like mine, regret that the Government cancelled the future jobs fund, which was helping young people back into work. Since that cancellation, long-term youth unemployment in her constituency has gone up not just by a little bit, but by 36%. That is the reality that her constituents face day in, day out.

I hope we will not hear the usual hand-wringing—although I might have to give up that hope—or the usual shoulder-shrugging or blame-shifting. The jobs crisis is not a fact of life or a force of nature, and the Government cannot play the innocent bystander, as they have tried to do. The jobs crisis is a result of the choices they have made. They chose to cut too far and too fast; to abolish employment programmes that were working; and to destroy job opportunities in both public and private sectors.

[Mark Pritchard (The Wrekin) (Con)]

The hon. Lady approaches such matters very thoughtfully indeed, and as a future Labour leader I would expect nothing else of her, much to the shock and horror of the shadow Chancellor.

Does the hon. Lady accept that the economy needs to be rebalanced and that we need more tax producers than tax consumers? Surely we can all agree on that.

[Rachel Reeves]

I am not sure how the Government will rebalance the economy by throwing more people on the scrapheap. Perhaps the hon. Gentleman and I will just have to disagree, but that does not seem to me to be the way to rebalance the economy and to get it growing again.

Despite the Government’s mistakes, they still have choices open to them.

[Susan Elan Jones (Clwyd South) (Lab)]

None of the automated Government Members mentions the VAT tax bombshell, because they must know in their heart of hearts the absolute disgrace of the VAT increase for small companies. Does my hon. Friend agree that when Labour Members speak of a VAT cut for home improvements, we are speaking up for jobs in construction in a way that some Government Members will never understand?

[Rachel Reeves]

The cut in VAT to 17.5% is part of Labour’s five-point plan for jobs and growth. It would put £450 in the pockets of an average family, which is desperately needed to help people who are struggling with the rising cost of living—the rising train, energy and petrol prices.

We have rising unemployment and excessive bank bonuses, but it does not have to be that way. While millions of families up and down the country struggle with the effects of redundancy and millions of young people lose the hope of fulfilling their potential, very little is being asked of those with the broadest shoulders. Despite his pre-election promises to tackle the bonus culture, the Prime Minister will not take the measures recommended by the High Pay Commission to make a difference. Despite the Government’s call for more shareholder activism and engagement as a check on excessive remuneration, they wash their hands of the reported decision to award more than £1 million to the chief executive of RBS, in which they are a major shareholder.

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

Will the hon. Lady express some degree of regret, because bank bonuses under this Government are 40% lower than they were under the previous one? She must tell the House who it was who gave Sir Fred Goodwin his knighthood.

[Rachel Reeves]

The Leader of the Opposition has said that the knighthood for Fred Goodwin was not warranted, but I do not remember hearing Conservative Members saying that he should not get a knighthood when it was awarded.

Bank bonuses were taxed at 50% in the last year of the Labour Government. That brought in £3.5 billion, which was used to help to support families and to support young people back into work. Unlike Labour, which introduced a tax on bank bonuses, the Government are introducing a tax cut for banks this year. That tax cut is unwarranted and unjustified as unemployment and youth unemployment continue to rise.

The Opposition proposal is simple. While banks are still not doing their job—they are not supporting jobs or growth—the Government must step in to ensure that resources are put to better use. A 50% tax on bank bonuses above £25,000 would, on a cautious estimate, raise enough revenue to support the creation of 100,000 jobs for young people.

We know that such a measure would work because it has worked before. Labour’s 2010 bank bonus tax raised £3.5 billion, according the OBR. The future jobs fund, which was created by the previous Labour Government, supported more than 100,000 people back into work. That is a record of which Labour Members are proud. By contrast, the Government have chosen a tax cut for the banks and a belated, half-hearted and ineffective response to rising youth joblessness.

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

My hon. Friend is making an excellent speech on Labour’s proposal to create 100,000 jobs for the young from a bankers’ bonus tax. The north-east is bucking the national trend in manufacturing, which is in the doldrums in the rest of the nation, but 7,000 private sector jobs were lost in the past three months of 2011, whereas 4,000 public sector jobs were lost. Given that clear disparity, what does my hon. Friend make of the Prime Minister’s rhetoric on the creation of private sector jobs?

[Rachel Reeves]

My hon. Friend speaks passionately about his region of the north-east, and I know he does a huge amount of work for businesses, young people and families in his constituency.

The reality is that northern towns and cities are paying a particularly high price for this Government’s policies. In my city of Leeds, the local authority is losing more than 25% of its grant over the next four years. As a result, more people are losing their jobs and fewer services can be provided. It is people in the poorest areas who are paying the highest price for this Government’s policies.

[Several hon. Members]

rose—

[Rachel Reeves]

I will give way to the hon. Member for Pudsey (Stuart Andrew), who can perhaps try to justify the cuts in the grant to Leeds city council over the next four years.

[Stuart Andrew (Pudsey) (Con)]

The hon. Lady talks about cuts to Leeds city council, but does she not remember that it was her Government who took away neighbourhood funding, stripping the city council of £118 million and, funnily enough, giving the money to Sedgefield?

[Rachel Reeves]

In Pudsey, which is my next-door constituency, long-term youth unemployment has increased by more than 20% in the last few months. I am sure that the hon. Gentleman will agree that the cuts that Leeds city council is having to endure over the next few years are out of all proportion to any reduction in the neighbourhood grant under the Labour Government. His constituents and mine are the people paying the price.

I hope that we can show in this debate that the House is in touch with the problems of those who are paying the highest price for the failure of this Government’s policies. Hon. Members will know from their own constituencies the heart-breaking stories behind some of the statistics that we have already gone through today, and I am sure that we will hear some of those stories in the debate this evening. Most of all, I hope that this debate will be focused on action—effective and practical measures that can make a difference for the millions at the sharp end of this crisis. The Government have no excuse for inaction. A tax on bank bonuses would be fair and proportionate, and would enable us to address the immediate, pressing and growing challenge of getting young people back into the jobs that are so needed.

19:39

[The Chief Secretary to the Treasury (Danny Alexander)]

I welcome this opportunity to discuss youth unemployment and bank bonuses. Both matters are hugely important as we tackle this country’s extremely difficult economic circumstances. The recent youth unemployment figures demonstrate just how significant a challenge we face repairing the damage that the previous Government inflicted on the economy, restoring growth and creating new jobs in the recovery. This coalition Government will not let the young and the vulnerable bear the brunt of these difficult times, nor will we let them bear the consequences of the previous Government’s profligacy. Youth unemployment is not a price worth paying.

One thing that the shadow Chief Secretary failed to mention was the record of the Labour Government, who oversaw a 40% rise in youth unemployment.

[Meg Hillier]

rose—

[Danny Alexander]

I will give way to the hon. Lady, and then I will make some progress.

[Meg Hillier]

What would the right hon. Gentleman say to the young people in my constituency, where there has been a 12.5% increase in youth unemployment among 18 to 24-year-olds from December 2010 to December 2011, on this Government’s watch?

[Danny Alexander]

I would say to them that in very difficult times we are doing everything we can to support them. Let me tell the House what we are already doing.

[David Miliband (South Shields) (Lab)]

rose—

[Danny Alexander]

Hold on. I will give way to the former Foreign Secretary, but let me make just a little progress.

We are already providing more apprenticeship places than any previous Government, with an increase of 400,000 in the last year and a commitment to 1.2 million over the entire spending review period. That is at least 250,000 more than the previous Government’s commitment, although the shadow Chief Secretary seems to oppose that increase. As announced in the autumn statement, we are also launching a new £1 billion youth contract to help get young people into work, so that they can learn a trade and get equipped for their future career. Starting this spring, the youth contract will support up to 500,000 young people into education and employment opportunities. The youth contract wage subsidy is targeted at employers in the private sector, creating sustainable private sector jobs for the long term.

[Toby Perkins]

The Chief Secretary talks about the previous Government’s record, but I feel as if I am listening to a broken record, because when we are here to debate a motion about this Government’s policies, all we hear is him harking back to the last Government. Will he come up with something constructive about what he is going to do for the millions of people who are unemployed and looking to him for some guidance?

[Danny Alexander]

I fear that the hon. Gentleman was planning his question so carefully that he did not listen to my remarks about apprenticeships or the youth contract, which is a vast improvement on the wasteful future jobs fund, which offered subsidies almost three times as high as the youth contract and funded too many temporary jobs in the public sector. In fact, almost 50% of participants in that scheme were claiming benefits again within eight months of starting a future jobs fund job.

[David Miliband]

The right hon. Gentleman quoted the figure of 40% for the rise in youth unemployment under the previous Government. It is correct that youth unemployment started rising in 2004, but the allegation against the current Government is that they have made the situation much worse. In my constituency of South Shields there was a 210% increase in long-term youth unemployment in 2011 alone. That is what he has to answer for. It is not that he invented the problem, but his policies are making it worse.

[Danny Alexander]

The Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) will address the statistical changes that the previous Government made. However, the right hon. Gentleman was in government during a boom, yet his Government presided over an increase in youth unemployment. We are facing serious economic challenges in this country, caused in large part by the actions of the previous Government, and we have to take steps to resolve those problems.

The youth contract offers young people the prospect of long-term private sector employment. It is a scheme that has the full backing of the private sector. As John Cridland, director general of the CBI, has said, it strikes at the “scourge of youth unemployment”.

[Sheila Gilmore]

McDonald’s, which is apparently getting £10 million a year for training people in the things that it normally trains them in and calls the process apprenticeships, said in The Sunday Times yesterday that it had not created a single extra job with that money. What is the Chief Secretary’s response to that?

[Danny Alexander]

I have visited companies around the country, in Scotland and England, that have created a significant number of new jobs and new apprenticeships, providing a significant increase in skills. That is the right way to go about it, and that is what we are trying to do with the increase in apprenticeships. I hope that the hon. Lady will welcome that. It is fair to say that the apprenticeships programme and the youth contract complement our Work programme, which is the biggest payment-by-results employment programme that this country has ever seen. The Work programme will provide personalised support to around 2.4 million people over the next five years, helping those most at risk of long-term unemployment.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

In Plymouth we are dependent on the public sector, and we are also a garrison town. As a result of the Government’s defence decisions, we are seeing a lot of young men, in particular, losing their positions in the services and becoming unemployed. Those coming out of the services are relatively highly skilled, putting pressure on the few vacancies that we have in Plymouth and cutting long-term unemployed young people out of the market. We have seen a 96% increase in the number of the long-term unemployed in Plymouth. What will this Government’s policies do for those young people? Absolutely nothing in Plymouth.

[Danny Alexander]

The youth contract, which I have mentioned, along with the Work programme and many other things that we are doing, will help the young people in the hon. Lady’s constituency, and I very much sympathise with the position that she has described.

[Mary Macleod (Brentford and Isleworth) (Con)]

Does my right hon. Friend agree that apprenticeships are an important part of the solution, by giving young people the opportunity to build their skills? We have record numbers of apprenticeships; indeed, the number of them in my constituency has doubled.

[Danny Alexander]

I agree with my hon. Friend: the apprenticeship programme is a vital part of tackling youth unemployment and lifting the skills in our work force. It is a real shame that the Opposition now seem to be opposing the extra investment in apprenticeships that we have made.

[Lilian Greenwood (Nottingham South) (Lab)]

rose—

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

rose—

[Danny Alexander]

I am going to make some progress, and I will give way again shortly.

Across the wider economy we are doing everything we can to foster renewed prosperity, create new jobs across the UK and return the country to sustainable growth. Whether we are talking about regulation, the planning system, reducing corporate taxation, our investment in infrastructure or the tax cuts that we are delivering for low-income workers, we are putting forward ambitious plans—plans that we need in these difficult times.

[Claire Perry]

rose—

[Danny Alexander]

I will give way in a moment.

We have plans that will help to foster a recovery led by our private sector, by entrepreneurs and by exporters, creating the kind of growth that the Opposition failed to deliver in over a decade in government. We face the monumental task of dealing with their legacy of unsustainable spending and debt-fuelled consumption, which left the coalition the task of dealing with the largest peacetime deficit on record.

[John Cryer (Leyton and Wanstead) (Lab)]

rose—

[Geraint Davies]

rose—

[Danny Alexander]

I will give way in a moment.

The Opposition do not seem to realise that tackling that deficit is the vital precondition to sustainable growth. It is only by tackling the deficit that we can provide the certainty, stability and low interest rates that are critical to a recovery. The past 18 months have seen sovereign debt downgrades across the Europe, bail-outs of the weakest Eurozone economies, and countries racing to consolidate at the behest of the bond markets.

[Claire Perry]

I should like to bring a local business perspective to the debate. I had dinner last week with a group of people representing small businesses in the Wiltshire area, all of whom said that their businesses looked reasonable and they were thinking about hiring. Most importantly, they said that they had benefited enormously from the economic stability that the Government had created. Has my right hon. Friend heard anything from the Opposition that amounts to a coherent economic policy, or are they simply offering a wish list of chops and changes, and opposing for opposition’s sake?

[Danny Alexander]

I have heard nothing coherent from the Opposition, and I have heard nothing from the business community in this country but support for our policies to deal with the deficit and restore this country’s economic credibility. The coalition has never shirked its responsibility to take tough and sometimes unpopular decisions to tackle the deficit and pull the country out of the hole that the previous Government dug. Because we did not delay, and because we took action to get ahead of the curve, we can cut the deficit on our own terms and shelter the UK from the debt storm that has engulfed our nearest neighbours.

[Rachel Reeves]

The right hon. Gentleman says that the Government are tackling the deficit, but will he confirm how much extra borrowing there will be during this Parliament, compared with the prediction when they took office? Is that not a cost of their failed economic policies?

[Danny Alexander]

I can confirm that according to the latest forecast, there will be significantly increased borrowing compared with the previous one. The hon. Lady should have explained in her opening speech that her policies involve substantial further increases in borrowing, which would destroy this country’s economic credibility and the hard-won low interest rates that we have achieved.

As a result of our action, we have record low bond yields that feed through to record low interest rates, which benefit households paying mortgages and businesses refinancing loans right across the country. Whereas our bond yields are just 2.1%, those of Spain have risen to 5.5%, those of Italy remain over 6%, and those of Greece have climbed to a staggering 34%. Even a 1% rise in our market interest rates would force taxpayers to find an extra £21 billion in debt interest payments. A 1% rise in effective mortgage rates would result in an extra £10 billion for mortgage payments.

The Opposition have had 18 months to come to terms with the mess they created, but they still do not get it. It has taken them 18 months to move from the wrong place to all over the place. The Leader of the Opposition called the pay freeze an

“ideological attack on the public sector”,

but he now accepts it. The shadow Chief Secretary to the Treasury called the uprating of pensions with the consumer prices index an “ideologically driven move”, but it is a move that the Opposition have now accepted for their party’s own pension scheme. So let us be clear—financial discipline is not ideological; it is a necessary condition for effective government. In the past 10 days, members of the Labour shadow Cabinet have succeeded in proving that they cannot even convince themselves of the credibility of their economic policy.

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

Will the right hon. Gentleman explain his idea of economic stability to my constituents? In my constituency the long-term youth unemployment rate has risen by 162% in the past year. Will he explain how his stability will affect the people of Stoke-on-Trent who are losing jobs hand over fist because of his policies?

[Danny Alexander]

If the hon. Gentleman looks around Europe at the countries that have failed to tackle their deficits, he will see much more serious economic problems—problems of the kind that we would have here if we followed Labour’s policies. He should start by apologising for the mess that his party made of the economy.

[John Cryer]

rose—

[Danny Alexander]

I am going to make some progress now.

As the Secretary of State for Business, Innovation and Skills outlined today, we will also take the tough decisions to tackle excessive executive pay. At a time when millions of workers face a pay freeze or worse, and when many businesses are confronting a difficult trading environment, the highest-paid cannot be disconnected from reality. That is why the Secretary of State announced new measures to drive through greater transparency on executive pay, to empower shareholders to deliver responsible pay, and to reform remuneration committees to break the old boys club.

It is for that same reason that the Government are leading efforts, domestically and internationally, to reform our banking sector fundamentally in order to protect our competitiveness while safeguarding our stability. We are abolishing the tripartite system of regulation that failed so dramatically in the run-up to the last crisis, and putting the Bank of England in charge of both micro and macro-financial supervision. We are reforming the sector itself, as recommended by the Independent Commission on Banking, to safeguard the UK’s position as host to a world-class financial services sector without putting UK taxpayers at risk.

We have implemented a permanent bank levy to ensure that banks make a fair contribution to tackling the deficit, reflecting the risks that they pose to the system while encouraging them to move away from riskier models of funding. As we announced in the autumn statement, we have increased the levy from 1 January this year to ensure that it yields at least £2.5 billion a year, which is more than the amount yielded by the previous Government’s one-off tax on bonuses—a tax that

“failed to change the industry’s behaviour over pay”.

Those are not my words, but those of the previous Chancellor, who was responsible for the policy in the first place.

Through the Financial Services Authority’s remuneration code, we have ensured that bonuses are deferred over at least three years, and linked to the performance of the employee and the firm. Through the disclosure regime, we have provided more transparency than ever on pay. And while the previous Government managed to get only four of the top 15 banks to sign up to the code of practice on taxation for banks that was introduced in 2009, we have ensured that all are signed up.

Our expectations of the banking sector are clear: banks should make a full and fair contribution. They must respect the spirit, not just the letter, of the law, and make a commitment not to use artificial schemes to avoid tax. The new Bank of England Financial Policy Committee, established as a result of this Government’s reforms, has warned that in these turbulent times it is capital levels, not bonus payments, that have to be the priority. Did the hon. Member for Leyton and Wanstead (John Cryer) want to intervene?

[John Cryer]

I wanted to intervene while the right hon. Gentleman was speaking earlier.

[Danny Alexander]

The hon. Gentleman may intervene now if he wishes to.

[John Cryer]

Going back to the subject of unemployment rates, youth unemployment in my constituency has gone up by 140% since the election. That is what is happening now, not what happened under the previous Government. Will the Chief Secretary to the Treasury deal with the immediate issue and tell us why that is happening? Will he also tell us whether he thinks it is a price worth paying?

[Danny Alexander]

As I made clear earlier, I do not consider it to be a price worth paying. That is why the Government are doing everything possible, through investment in apprenticeships, in our youth contract and in the Work programme, to ensure that there are opportunities for people.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

Will the right hon. Gentleman tell us how many jobs the Work programme has created?

[Danny Alexander]

I cannot give the hon. Lady that information—[Hon. Members: “Ah!”] I welcome her to her place and congratulate her on her election. In due course the Minister of State, Department for Work and Pensions, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling) will provide that information. I can tell her, however, that Work programme providers are making a difference across the country, helping people to come off all sorts of benefits and acquire the necessary skills and support to get back into work.

[Toby Perkins]

rose—

[Meg Hillier]

rose—

[Danny Alexander]

I have already given way to the hon. Gentleman and to the hon. Lady, and I want to make some progress.

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

The right hon. Gentleman will be aware that while the living standards of those on low and medium incomes are going down, the wealth of the super-rich is going up. Will he give an undertaking that he will take action on this issue, and that the gap between rich and poor will be smaller by the next election?

[Danny Alexander]

The Government have taken on the issue of ensuring that the wealthiest pay a greater share, to ensure that there is fairness in our deficit reduction plans. For example, we have increased capital gains tax and put in place the new bank levy that I have mentioned. We have also maintained the 50p rate of income tax. We are making substantial changes to ensure that the wealthiest pay their fair share.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

On the point just raised in an intervention, we hear much crowing from Opposition Members, but does my right hon. Friend think that they might persuade their former leader and Prime Minister, Tony Blair, to pay more than £315,000 in tax on a £12 million income?

[Danny Alexander]

My hon. Friend has made his point, but I do not think that it is for me to comment on the tax affairs of any individual taxpayer.

[Meg Hillier]

Last week the right hon. Gentleman made a speech in which he talked about co-operatives, and ideas to bring them into the mainstream. When the Government had the choice and opportunity to remutualise Northern Rock, why did they sell it off to a private bank? Surely a mutual would have been fairer to all, particularly to the taxpayer, than a cheap sell-off.

[Danny Alexander]

I am quite confident that in that case we chose the option that was best for the taxpayer, best for Northern Rock customers and best for the many hard-working people who work for Northern Rock in the north-east of England. I think that was the right decision on all those bases.

[Toby Perkins]

Will the right hon. Gentleman give way?

[Danny Alexander]

No, I will not.

I mentioned the Financial Policy Committee of the Bank of England and its comments. That is why the FSA will scrutinise all proposed bonuses to make sure that they are not paid at the expense of rebuilding capital. There has already been some progress, with levels of bonus payment down significantly. Hon. Members should consider how far they have fallen. When the shadow Chancellor was a City Minister in the Treasury, bonus levels were £11.6 billion, whereas last year they were almost half that, at £6.7 billion. We fully expect them to fall further this year.

[Lisa Nandy (Wigan) (Lab)]

May I ask the right hon. Gentleman to consider one more fact before he concludes on this subject? When youth unemployment rose under the previous Government, that was largely due to increases in labour supply, but since his Government took over, the massive increases in youth unemployment have been due to a collapse in labour demand. That is why the Opposition are so desperately asking his Government to change course. If the hon. Gentleman cares about this issue, as he has said that he does, will he confirm today that he will change course and prioritise growth over jobs?

[Danny Alexander]

I am not sure that one can prioritise growth over jobs—and that is the first explanation I have heard from Opposition Members of the reason why youth unemployment rose during Labour’s time in office. I do not know whether that opinion is shared by those on the Front Bench.

As I have made clear, we are prioritising tackling youth unemployment. We do not want to see young people blighted by long-term youth unemployment as they were in the 1980s. That is why the youth contract, our investment in apprenticeships and the Work programme are all necessary to help young people back into work.

[Several hon. Members]

rose—

[Danny Alexander]

I will give way to the hon. Member for Barrow and Furness (John Woodcock), who has not intervened before.

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

The Chief Secretary is being very up-front with the House about the fact that he believes that he is doing everything in his power to tackle youth unemployment—yet according to the Office for Budget Responsibility’s own figures, unemployment is scheduled to rise in the coming period. Does he think that that rise is inevitable?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I call Douglas Alexander.

[Danny Alexander]

I do not think that he is on the Government Front Bench any more, Mr Deputy Speaker.

A fair account of the OBR’s forecast would also reflect the fact that it says that unemployment will come down to 6.2% by the end of the forecast period. That is a fair reflection of the OBR’s forecast. Of course I wish that we had not inherited such desperate economic circumstances from the previous Government, I wish that they had not left us the largest budget deficit in peacetime history, and I wish that we had not inherited a situation in which, as the same OBR report to which the hon. Member for Barrow and Furness refers showed, the damage done to our economy by the bust was even deeper than expected. He should probably reflect on that point, too.

On bonuses, we fully expect them to fall further this year and, as we approach the season, let me be clear that this is just the start. Across the banking sector, Labour allowed a sense of bonus entitlement to grow. In no other industry is there such a distorted culture of bonus entitlement. Following 13 years of Labour Government we have come some way towards dismantling that culture in the banking sector, but we accept that we have a long way to go to make a fundamental change in attitudes to pay. The coming bonus round provides another chance for the banking sector and its shareholders to demonstrate leadership on pay. That message is already getting through. As Otto Thoresen, director general of the Association of British Insurers, wrote to bank chairs last December,

“it can no longer be business as usual for this remuneration round.”

I agree with that, and the Government will play our part.

We have already said that for RBS and Lloyds Banking Group there will be a limit of £2,000 on cash bonuses, as we also imposed last year.

[Richard Fuller (Bedford) (Con)]

There is a lot of consensus on both sides of the House that people who are wealthy should be looking to see what they can do to help. Part of what the Opposition miss is the fact that one thing the Government have done—although they could do more—is to promote the enterprise investment scheme, which gives people the opportunity to invest directly in small businesses. Will my right hon. Friend tell me what he is doing to promote that scheme, and in particular, how small businesses that benefit from it can also take part in the youth contract?

[Danny Alexander]

The Government have made decisions to improve the benefits available through the enterprise investment scheme precisely to encourage more people to invest in small firms in such a way. The new seed enterprise investment scheme, which we announced in the autumn statement, will further help new businesses to be created through that route.

We have already said that for RBS and Lloyds Banking Group there will be a limit of £2,000 on cash bonuses, as was imposed last year, and let me reiterate that the bonus pool this year must be far, far lower than it was last year, and more transparent too. Tackling bank bonuses and youth unemployment is not just an economic challenge, but a challenge that is at the centre of the coalition’s purpose, which is to promote a sustainable and responsible banking sector that puts consumers’ needs at the centre of the financial system.

[Julie Hilling (Bolton West) (Lab)]

Will the right hon. Gentleman give way?

[Danny Alexander]

I shall give way one last time, and then I shall finish my speech.

[Julie Hilling]

Is the right hon. Gentleman confirming, then, that the chief executive of RBS will only get a £2,000 bonus?

[Danny Alexander]

I am doing no such thing, because those announcements will be made in due course. I have said that bonuses in the banks that we own will have to be far lower than they were last year. The cash element of bonuses will be limited to £2,000 for all employees, but of course there are other parts to bonuses, too.

Returning our country to prosperity has been the founding purpose of the coalition Government, but in our determination to restore growth, we will put fairness at the very heart of our recovery, tackling gross inequity in senior pay and tackling the perils of youth unemployment to ensure that young people’s prospects are not blighted in the way that those of too many were in the 1980s.

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

Will the Chief Secretary give way?

[Danny Alexander]

No, I am going to make some progress now.

A fair and sustainable recovery demands leadership, and that is exactly what we are providing. Labour cannot be taken seriously on the economy until it admits the mistakes it made when it was in power. If Labour was really changing its position on the economy, the first thing it would do is say sorry. Sorry for letting youth unemployment get out of control, sorry for letting the banking sector get out of control, and sorry for letting the deficit and debt get out of—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Hon. Members should calm down, as a lot of Back-Benchers want to speak as well.

[Danny Alexander]

I do not think that those on the Opposition Front were trying to shout the apology that the country wants from them. They should say sorry, too, for letting the deficit and the country’s debt get out of control. Instead, all we have heard today is the apology of a speech made by the shadow Chief Secretary.

[Rachel Reeves]

I wonder when the electorate might get an apology from the Liberal Democrats for trebling university tuition fees and imposing a VAT bombshell.

[Danny Alexander]

I am sorry that the shadow Chief Secretary did not take the opportunity to offer an apology for the terrible mess made by her party and the Government of which the shadow Chancellor was a leading member.

It is the coalition Government who are investing in skills, infrastructure and innovation to create new opportunities in the recovery. It is this coalition that is reforming a broken financial sector to entrench greater stability and embed long-term sustainability. It is this coalition Government alone who are determined to face up to today’s economic challenges to build tomorrow’s fair, prosperous and sustainable economy.

[Several hon. Members]

rose—

[Mr Deputy Speaker]

Order. I remind hon. Members that there is a six-minute limit on speeches.

19:59

[Mr George Mudie (Leeds East) (Lab)]

I want to raise three points. The hon. Member for Devizes (Claire Perry), who has left the Chamber, said that all we were proposing was a wish list. It is a wish list and I cannot understand why the Government are opposing it. Regardless of how they view our performance and their performance on youth unemployment, not enough is being done, and the first wish in the motion is for £2 billion to be put in to help with youth unemployment. I think that is a decent thing to have on a wish list. Secondly, we are asking for that money to come from the people who caused the difficulty, and that would be a very good thing.

I heard some of the comments directed at my hon. Friend the Member for Leeds West (Rachel Reeves) and I think of parallel universes. I envy Government Members if they have the situation that they described in their constituencies. I have represented my constituency for 20 years as an MP and 20 years as a councillor and it is probably in its saddest state since the ’80s, which were a desperate time. Unemployment among youngsters then was along the levels we are seeing now, and as a result their lives were blighted and their self-esteem and confidence went. That situation affected families and communities, and it was one of the saddest times to represent a community. When the Labour Government came in they put in a lot of money and effort and they made a difference, but they did not finish the job and those issues remain. Communities are blighted by low self-esteem, low confidence and low ambition, and the real fear now is that that will be entrenched beyond any help or hope. I do not understand how anyone can abuse the shadow Chief Secretary when she raises the issue of youth unemployment, or read a speech with the kind of blandness we have just heard, as though they were describing a perfect world. This is about people’s lives and their families’ lives being ruined.

[Rehman Chishti]

Looking at what we are doing now, does the hon. Gentleman welcome the Government’s pledge to put £150 million towards the creation of university technical colleges, which will improve the skills of our young people?

[Mr Mudie]

I would rather the Government had not trebled tuition fees. I would rather that instead of spending £150 million they were taking the opportunity to raise £2 billion to put into youth employment. This is a very serious, non-political matter and people’s lives are going to be ruined unless they get urgent help. We should see that as a priority, and we should have no compunction about taking that money from the people who caused this difficulty. Governments, rating agencies and regulators also played a part but the sheer greed and irresponsibility of the banking and financial industry takes my breath away.

[Jake Berry (Rossendale and Darwen) (Con)]

Will the hon. Gentleman give way?

[Mr Mudie]

No, because I am short of time.

The people who caused the difficulty earn huge salaries because of gambling in the investment market, which has brought country after country and bank after bank to their knees, and which is now imperilling people’s standard of living—their homes, jobs and future. I find that unacceptable.

The shadow Minister has called for leadership, but real leadership would not involve avoiding questions about whether there is going to be a limit of £2,000 on bank bonuses. The senior director of RBS will be disappointed if he is not allowed to take his £4 million and the chief executive is expecting £2.5 million, but this is in a bank that the Government own. If we want leadership, it should come from the Chancellor and the Government, who should take the steps that are needed.

[Esther McVey (Wirral West) (Con)]

Will the hon. Gentleman give way?

[Mr Mudie]

No, I am sorry because I will be stopped quite soon.

The last point I want to make concerns the irresponsibility of the banks in refusing to operate Project Merlin, which would have brought jobs for younger and older people. The cynical and shoddy way that they got out of that agreement is totally unacceptable, as is the way they are refusing to fund small and medium-sized businesses. If we are going to rebalance the economy, that is the area that will provide the jobs. We need the Government to show some leadership because the banks must be forced to fund and put resources into that sector.

20:14

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

Youth unemployment and bankers’ bonuses are both too high, and the Opposition hope that by taxing the latter they can help the former. Let us first agree that help for the young unemployed is vital. The scar of joblessness destroys self-respect and will also damage the long-term economic growth rate of this country. What are the Government doing about it? They have already announced a record number of apprenticeships—440,000 in this Parliament—as well as a £1 billion youth contract and more than 250,000 more work experience places. The proposal for a tax on bankers’ bonuses is what I want to focus on. My starting point is that crony capitalism and big financial rewards for failure not only are morally offensive but they subvert the principles on which successful capitalism depends.

[Jake Berry]

Let me pick up on the point about things being morally offensive. We have heard about the Leader of the Opposition calling for Fred Goodwin’s knighthood to be removed. Does my hon. Friend agree that if that happened it would also make sense for former Labour Cabinet members who were part of the Government who led to this bankruptcy for Britain to give up their peerages in the other place?

[Mr Ruffley]

That is an interesting suggestion. I also think that the former Prime Minister should make a personal apology when our Prime Minister, who is an infinitely better one, strips Sir Fred Goodwin of that ill-deserved knighthood.

Currently, there are excessive bonuses within the sector that give capitalism a bad name. They have fostered the belief that there is a class of people who pay themselves pretty much what they like while the rest of the country has to deal with the consequences of what many of those people served up to this country by way of financial crisis. The idea that this is something that Conservatives are casual about is utterly false. The speculation by the Mayor of London about what the greatest pro-enterprise Prime Minister of the previous century would have thought of today’s sorry state of affairs was interesting. He said that we should ask

“what Margaret Thatcher would have thought of a system where directors sit on each other’s “remcoms”—remuneration committees—and defend each other’s expanding awards, even when the directors in question have presided over commercial disaster of one kind or another. She would have thought it was absurd.”

All Conservatives think that is absurd and that something must be done about it. We think that two things should be done. First, we want to encourage people of talent to come to the UK, stay here and make the City of London the greatest financial capital on planet Earth. The second thing we need to do is foster a regime in which performance is more closely tied to reward. Quite frankly, that is not extant.

I suggest that a new blanket tax on bankers’ bonuses would undermine those aims, or at best do nothing to advance them. It would do nothing to distinguish between cases in which an executive had genuinely earned a reward by turning around a failing organisation, increasing profitability or increasing returns to shareholders, and cases in which executives had taken advantage of lax scrutiny to take excessive rewards for their failure. There is a distinction between the rich and the undeserving rich, of whom Sir Fred Goodwin is a terrible exemplar.

[Geraint Davies]

The hon. Gentleman talks about bankers, but he will be aware that among the FTSE 100 companies, there has been an average 49% increase in directors’ pay, and many of those companies have not had a proportionate increase in share value or profitability. Is he saying that his Government should introduce specific measures to cap pay increases for non-banker directors of FTSE 100 companies? If he is not, he is saying nothing.

[Mr Ruffley]

I am not suggesting that for a minute, and if the hon. Gentleman bothered to read the motion, he would see that it relates to excessive bankers’ bonuses.

The fact remains that we have to be careful when we talk about a tax on banking. My right hon. Friend the Chancellor sensibly introduced a levy on bank balance sheets, something that the Labour party was not prepared to do. We were one of the first countries in the world to do that, and it will raise more than £2.5 billion a year. Instead of introducing another tax as the motion proposes, we should do more to discourage the granting of excessive bonuses in the first place. That would have a very happy by-product. When Robert Jenkins gave evidence to the Treasury Committee last week—for those who have not been initiated into these affairs, he is a member of the interim Financial Policy Committee, and a former banker—he said something very interesting:

“Every £1 billion of less bonus would support £20 billion of additional small business lending.”

I defy anyone on either side of the House to deny the wisdom of that.

I am talking about the unjustifiably excessive bonuses paid to executives in banks that have failed or are failing. Stephen Hester is, we are told, looking to accept a bonus for 2011, despite the fact that his bank’s share price has fallen out of bed. Eric Daniels, who was the chief executive of another failed business—Lloyds-HBOS—took seven-figure bonuses before he was booted out. What the Labour party needs to understand is that that culture, which we all deprecate, did not grow up in the past 18 months. I hope that Labour will show a bit more humility in this debate than it has done so far. It did not regulate the banks properly; it sat by while these bonuses were being paid, year after year; and it gave knighthoods to the miscreants who accepted them. Incidentally, it was the Labour Government who allowed some private equity bosses to pay very little tax—less tax than the cleaners in their offices. We shall therefore take no lessons from Labour on regulation and on what we do about a state of affairs that I think we all agree is unacceptable.

Shareholders are not doing their job sufficiently well; that is why I urge the Government to change the law so that the threshold for shareholder approval of remuneration packages is shifted from 50% to 75%. I know that Fidelity, one of the largest holders of shares in UK banks, strongly supports that. Also, fund managers do not have much incentive to think in a long-term fashion; that is why I hope that the Financial Policy Committee, when it is up and running, and the Prudential Regulation Authority—the new regulator—will ensure that the Financial Services Authority’s remuneration code, which covers only 2,500 firms, covers very many more. Bonus clawback—clawing back money given to executives who depart in disgrace and failure—is something that the Government need to talk about. Lloyds is apparently looking into that.

More tax is not the answer; better regulation, under this Government, is.

20:23

[Lisa Nandy (Wigan) (Lab)]

I want to make the case as to why, at a time when not everything can be priority, this subject really ought to be one. It is not just because in my constituency of Wigan, one in four young people is not in education, employment or training, and it is not just because I have begun to detect a sense of hopelessness among them that really frightens me. It frightens me because for nearly a decade before I came to this place, I worked with some of the most disadvantaged children and young people in this country, and what I am detecting in my constituency is a ripple effect: the sense of hopelessness is spreading outwards from the most disadvantaged to groups of young people who previously had strong hope for the future and strong resilience within themselves and their families. It is because young people cannot wait that I want to make the case for the proposal in the motion.

We heard from my hon. Friend the Member for Leeds West (Rachel Reeves) about the wage-scarring effect, and we heard a powerful speech from my hon. Friend the Member for Leeds East (Mr Mudie) about the impact that youth unemployment has on young people’s confidence. I have seen for myself the levelling-down effect when jobs are scarce: graduates leave university with a sense of despair because they have to take jobs that they could have got three years earlier; 18-year-olds leave college with a sense of despair because they have to take jobs that they could have got two years earlier; and 16-year-olds are left with literally nowhere to go. That is why the issue should be our top priority: it is different, and it cannot wait.

I worked for five years for the Children’s Society, which has spoken out very powerfully about child poverty this week, and I saw what happened to young people who were put out of work in the 1980s. They never recovered resilience in the labour market and were forced to bring up their children in workless households. Twenty years later, we were still dealing with the impact of that, so I say to Ministers that they are storing up trouble for future generations if they do not take action now.

I am concerned about what I have heard, because the Government are tinkering when what we really need is a step change in approach to the wider economy and to this issue. Young people have a very, very strong sense of fairness, which is why the starting point that my hon. Friend the Member for Leeds West has chosen is exactly the right one. More than anyone else whom I represent, young people understand the concept of something for something. They have seen the education maintenance allowance, which they worked hard to get, axed; they have seen Aimhigher, which raised the number of young people in my constituency going to university by 40% in six years, axed; they have seen tuition fees hiked up way beyond anything they could even conceive of paying; and they have seen the future jobs fund, which was making a dramatic difference to their confidence and to their friends’ confidence, axed. At the same time, they see bankers’ bonuses and pay continue to rise, so it is no wonder that they are angry.

[Meg Hillier]

Does my hon. Friend agree that there may be poverty among young people—my constituency, unfortunately, was shown to have a high level of poverty by the excellent work that she referenced—but there is no poverty of aspiration, certainly not in my constituency? Will she comment on whether that is the case in hers?

[Lisa Nandy]

I share that sentiment, but I am concerned. Those young people are turning to a Government who said, “If you work hard and try hard, we will support you” but they see poverty of aspiration from the Government. They are angry, because the Government have broken the deal and the pact that, if young people tried hard, they would have the chance of a better future.

[Duncan Hames (Chippenham) (LD)]

The hon. Lady is making a typically impassioned and impressive speech. On the question of whether the Government broke the deal, would she not, given her experience before coming to the House, acknowledge that youth unemployment has been rising consistently since 2004? In my constituency, unemployment trebled in the previous Parliament, so the Government need to be prepared to look at proposals and solutions other than those that did not work in previous Parliaments.

[Lisa Nandy]

I am afraid that the facts do not bear that out. I agree, however, about the stubborn problem of structural youth unemployment, which I shall come on to.

I want to use the last few minutes of my speech to discuss what more must be done if we are serious about giving young people hope for the future. I have made the case that, although the Work programme is a welcome step, it is tinkering when we need fundamental change in the system. Job preparation, while worth while and extremely important for some of my constituents, who need support, confidence and help to get a job, is not enough if there are no jobs to go to.

That is why I believe that growth, growth and growth have to be the Government’s priority. In my constituency, and across the country, as we have heard from my hon. Friends, there are simply no jobs to go to. I have argued that increases in youth unemployment under the previous Government were caused by an increase in labour supply. The increase in youth unemployment under this Government is the consequence of a collapse in labour demand. The focus on youth unemployment masks a rapid fall in youth employment, which is partly accounted for by the abolition of full-time education places. If Ministers are serious about this issue, they must speak to their hon. Friends in the Department for Education, and make the point that it does not make any sense to cut education places at a time like this.

Will Ministers commit today to using every lever at their disposal? There are so many things that a Government can do, and it is distressing for young people to hear that the economic situation dictates inaction, when in fact we could have action and we could have it now. The Government could use their procurement power to ensure that young people have apprenticeships—it is immoral to award public contracts to firms that will not give apprenticeships and opportunities to our young people. The Government could also use their procurement power to make sure that those contracts go to firms that provide real, lasting, paid jobs with a decent career structure, to give those young people the resilience in the labour market that they need. That is why I urge Ministers to think again about the future jobs fund. I know that that has become a political issue, but I and my colleagues have seen the dramatic long-term difference that it was beginning to make for young people in our constituencies.

Structural youth unemployment remained stubbornly at around 10% under the previous Government, despite huge efforts, particularly by my right hon. Friend the Member for Morley and Outwood (Ed Balls), to do something about it. The only way to tackle structural youth unemployment is through partnership working, with the public, the private and the third sectors. I have seen recently some attempts to focus on the most disadvantaged young people—for example, in young offenders institutions—and a focus on education to lead young people into employment.

Ministers should be very careful about how they set targets and measure progress. For some of the young people with whom I have worked, with the extremely serious problems that they have had, simply getting up in the morning and eating breakfast has been a challenge. Ministers must be careful not to throw away real progress for some of the most disadvantaged young people in this country, or they will not tackle the structural problem of youth unemployment, which we tried so hard to deal with. Ministers know that some young people—disabled young people, young carers, those with transport difficulties—need extra help. I am sure Ministers know that, and I hope that help will be forthcoming.

Inaction on this issue is a moral choice with lasting consequences for a group of young people whom those on the Government Benches may never meet, but to whom they owe a heavy responsibility.

20:32

[Jake Berry (Rossendale and Darwen) (Con)]

It is clear to everybody in the House, regardless which side they sit on, that we are facing exceptionally difficult economic times in this country. I calculated that by the end of this speech, with a six-minute time limit in force and with no interventions, we will have spent in excess of £500,000 just on debt interest. Our national debt is like a credit card, and the sooner we get to grips with it, the better. I do not want to have to look the next generation of young people in the eye and say, “We were the Government, we were the group of MPs, who shoved our heads in the sand and refused to tackle our national debt,” so that we could pass it on to them.

We have seen a hugely unwelcome increase in unemployment, and an exacerbation of the existing problem of youth unemployment. The Leader of the Opposition admitted in November last year that youth unemployment was not invented by this Government, but was a problem under the previous Government. The motion seeks to link the problem of youth unemployment simplistically to a failed tax on bankers’ bonuses.

This truly is the tax that keeps on giving. So far, there have been proposals to use it to tackle unemployment among older people, to tackle unemployment among younger people, to fund capital projects, to reverse VAT increases, to cut taxes on fuel, to cut VAT on home improvements, to build 25,000 more houses, and today to create 100,000 new jobs. That clearly shows that the Labour party has no new ideas. It cannot be only today’s ICM/Guardian poll that is depressing them. It is also the fact that a party that claims to represent the workers has come to represent the something-for-nothing culture, a party that claims to fight inequality increased inequality in 13 years in government, and at the end of the largest economic boom that we have ever witnessed, Labour left 270,000 more young people out of work than when it came to office. That is an appalling legacy. The solution is not more of the same, not to pile debt on debt, not to try and spend ourselves rich.

The motion sounds like the Opposition are being advised by Charles Ponzi and has about as much credence as the claim by the captain of the Costa Concordia that he slipped and fell into the lifeboat. The Government, however, must take true steps to tackle youth unemployment, and there is no panacea.

One thing we must do is tackle the skills gap. The hon. Member for Leeds West (Rachel Reeves), who is no longer in her place, said that she hoped MPs would today bring forward positive solutions on the question of what they can do. A little-known fact about the junction 4 retail park in Darwen—unless one is the MP for the area—is that it is the country’s specialist area for the creation of computer games. When I ask those businesses how many young people from the area they employ, they say none, because young people in Darwen are leaving our schools without the menu of skills that the businesses want when they recruit. That is why it is vital that we continue to increase the links between schools and local employers.

[Esther McVey]

It is not just computer games and electronics companies that say that. The Institute for Manufacturing, the Institute of Physics and the chemicals industry say that we have not produced enough people in science to be the technicians and engineers, that we have a dearth of those skills and that they have had to bring in people from outside the country to do those jobs, which is a crying shame.

[Jake Berry]

I agree. Of particular joy to me is the fact that my constituency has a new academy school, which has entrepreneurship and technology at its heart. We are starting to have those conversations with business in order to equip our young people for the jobs market.

I want to talk about what hon. Members can do positively in their constituencies to tackle youth unemployment. As we have heard, much of it is about leadership. At the start of next month I will launch the “100 in 100” campaign in my constituency, which is my pledge to get 100 people into 100 apprenticeships in 100 days. Building up to this, I have visited as many local companies as I can to talk with them about what we hope to do, and I have found that there is a huge appetite for giving young people a chance.

[Gordon Birtwistle (Burnley) (LD)]

I congratulate my hon. Friend on the initiative he is leading in his constituency. I did the same thing only last year, and the companies in Burnley were delighted to take on 107 apprentices in 100 days, which shows that there are companies that are keen to take on young people. A vast number of skilled people working in the manufacturing sector in our area are now in excess of 40 years of age, and the companies recognise that in future they might not have the skills to deliver the products that the world wants.

[Jake Berry]

I thank my hon. Friend for making such an eloquent point. As my near neighbour, he is really throwing the gauntlet down, but I am confident that Rossendale and Darwen will more than beat 107 apprenticeships in 100 days.

I want to talk about some of the businesses that I have been to see that are going to support us and that, even before we started, pledged to give a young person a chance by taking on a new apprentice. Businesses from every section of the economy are involved, not just those in the biblical trades or manufacturing. They include Home Manor residential nursing home, Whitehead’s traditional butchers, DHJ Weisters Ltd, Aquasoft Solutions, which is a computer company, McCambridge Group, Crown Paints, WEC Group, which is an engineering company, Turnbull Prints and Anglo Recycling. We have across the entire constituency a commitment from business to give young people a chance.

When I talk with those businesses, they tell me that the Government’s signal that they want to rebalance the economy and will support apprenticeships has helped them to decide to take on apprentices. One thing in particular has changed their mind: the pledge to give a £1,500 incentive to smaller firms to take on a young person. We can get involved in the debate about what is right and wrong about the apprentice scheme and what else we should be doing, but I appeal to all hon. Members to go out there, speak to businesses in their constituencies, advocate why they should support young people, why they should invest in their work force, why young people would be good for their business, bringing fresh ideas and new skills, and ask them whether they will take a young person on and give them a chance.

If just throwing money at the problem solved youth unemployment, the previous Government would have done so, because they threw lots at it. The only way we can solve part of the youth unemployment problem is through training and leadership, and leadership should come from hon. Members, from employers and from the Government. There is nothing more important than getting our young people back to work.

20:40

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

At first glance it might seem as though youth unemployment and bank bonuses are separate issues, or that if they are linked it is only at the level of an argument about fairness or equity. But that is not the case. The level of reward at the very top of the financial services industry is not just an argument about fairness or equity, although it is certainly that; it is something that has a material effect on the functions carried out by our financial institutions, including the level of lending available to the economy and, thus, the capacity for job creation in it.

I should make it clear that I am talking about bonuses at the very top. We should not forget that the vast majority of people who work in the financial services industry receive ordinary salaries, and that if they do get a bonus it is of a modest amount to which no one would object.

Indeed, we all value the employment created by our financial services industry, but there is a broader problem, which we all know. In recent years we will have all met businesses that cannot find the funding that they need to keep going or, in some cases, to expand, grow and employ people. Sometimes that is because the price of credit rises so much that the business in question cannot afford it, but sometimes it is because the credit is not available on any terms.

No Government can second-guess every individual lending decision, but there is no doubt that access to finance has become a barrier to the creation of employment. This Government’s answer was to get together with the banks in the Merlin agreement, which was based on gross lending, not net. Let me give the House one politician’s verdict on such agreements. He said:

“This would be completely letting the banks off the hook. It’s perfectly possible for banks to achieve a gross lending target while withdrawing capital from small to medium-sized businesses.”

He went on to say that, in agreeing to gross lending targets, the previous Government allowed the banks to run rings around them. I am of course quoting the current Business Secretary, who had that opinion on gross lending agreements before he came into office—and then supported exactly the same thing.

The right hon. Gentleman subsequently pirouetted and said that the Merlin project had not worked, telling the House last month:

“The Merlin project certainly did not succeed in its central objective, which was to achieve growth in gross lending by banks.”—[Official Report, 8 December 2011; Vol. 537, c. 397.]

The banks’ argument is that they are under conflicting pressure both to increase the amount of capital that they hold and to lend more to business. They tell the public and they tell us politicians that we can have either safe and secure banks or more lending, but not both; and that brings us back to bonuses.

The hon. Member for Bury St Edmunds (Mr Ruffley), who is no longer in his place, referred to the evidence, given last week to the Treasury Committee by the new regulatory body responsible for financial stability, which suggested that that was not the case at all.

[Meg Hillier]

Does my right hon. Friend wish to comment on the sudden enthusiasm of Conservative Members for regulation, given that, when regulation was proposed by the previous Government, they were not keen on it at all?

[Mr McFadden]

There are many quotations from Conservative Members calling for less regulation during the previous Government’s period in office, but I refer to the Treasury Committee evidence from Mr Robert Jenkins, a former Credit Suisse trader who is now a member of the Bank of England’s Financial Policy Committee. He recently made a speech in which he said:

“The truth is that banks can strengthen their balance sheets without harming the economy. They can do so by cutting bonuses, by curtailing intra-financial risk-taking and by raising term debt and equity.”

As the hon. Member for Bury St Edmunds said, last week Mr Jenkins told the Select Committee that if the banks reduced the bonus pot by £1 billion, that would make available £20 billion more for small businesses.

This weekend, the banks hit back at that estimate. The Sunday Times was briefed, by an industry insider who clearly has a thing or two to learn about rapid rebuttal, that the real figure if bonuses were cut would not be £20 billion but only £13.5 billion. That argument is based on whether we apply the capital and regulatory rules that exist at the moment or those that may come in future. But whether the figure is £13.5 billion in future or £20 billion at the moment, the argument is clear: reward is an issue not only about fairness, but about the function that we want the banks to have in the economy.

Of course it is galling for a nurse on a pay freeze to be paying for a crisis that they did not cause and then to see a seven-figure bonus, but it is more than galling—the truth is that we have been presented with a false choice between restoring the capital position of banks and supporting lending in the economy. There is not an automatic trade-off between levels of safety and levels of funding once we take into account issues of reward at the top. Put simply, less money in excessive pay at the top would make more available for the lending we need to create jobs. That is why youth unemployment and bank bonuses are linked.

I have one final thing to say. In the coming days, we are going to hear a lot about what top bankers are entitled to contractually; no doubt that argument will be wielded by Ministers. However, contracts are not the only thing that matters. Context matters too, and the context is the greatest squeeze on family living standards since the war. That should be taken into account by the bankers themselves as we decide on restraint on bonuses.

The banking industry is hugely important to this country, but its relationship with the public has been broken. It is time to repair that relationship, and there is no better place to start doing that than in striking a better balance between reward at the top and the job that we want the banks to do—to lend in the real economy.

20:47

[Stephen Williams (Bristol West) (LD)]

The motion links the issue of bankers’ bonuses and youth unemployment. With my constituents in Bristol West, I agree that the levels of both are currently excessive.

I shall deal with bonuses first. Executive pay is meant to be the reward for company growth and shareholder return. Over the past decade, executive pay has gone up by an average of 13.6% each year, but the growth in the index of the top 100 companies on the London stock exchange has gone up by only 1.7% each year. Executive pay has vastly outstripped the underlying growth in the companies over which the directors have presided.

Bonuses, of course, are usually the worst manifestation of spectacular reward—sometimes for just modest return for the company’s shareholders, or even a paltry return. Even worse, they can be a pay-off for corporate failure. Today my right hon. Friend the Secretary of State for Business, Innovation and Skills announced the Government’s action to deal with that excess in the boardroom. The boardroom is the place where that excessive behaviour should be tackled and reined in, and shareholders need to take action in shareholder meetings.

The coalition Government will implement or consult on 10 of the recommendations of the High Pay Commission. Taxes, of course, have a role to play, but it is a subsidiary one. The behaviour itself needs to change. Under the previous Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), the bonus tax was a failure according to the terms that he used to describe it when he announced it in the Budget. It was meant to curtail behaviour in the boardrooms of banks, but it failed completely.

At that time, the underlying rate of income tax and national insurance on the recipients of bonuses was 41%; under the coalition Government, the figure is 52%. When we factor in employers’ national insurance, we see that roughly two thirds of the value of a bonus comes back to the Treasury. In addition, the permanent bank levy will raise £2.6 billion for each subsequent year of this Parliament, which is more in net terms than the bonus tax raised under the Labour Government.

The previous Government were, of course, in office for 13 years. They had ample opportunity to do something. I sat through five Queen’s Speeches, in each of which a raft of legislation was announced by Her Majesty, but not once did I hear of an attempt to tackle corporate greed. Indeed, I would say that the Labour Government, certainly for their first eight years, positively encouraged corporate greed. We just heard from the right hon. Member for Wolverhampton South East (Mr McFadden). The Cabinet Minister to whom he reported in the latter years of the Labour Government, Lord Mandelson, said famously that he and new Labour were

“intensely relaxed about people getting filthy rich”.

It was the Labour Government who gave a knighthood to Mr Goodwin.

[Mr McFadden]

I have heard that quotation twice today and I think that it is time to complete it. Lord Mandelson went on to say,

“as long as people pay their taxes”.

[Stephen Williams]

That makes it all right, does it? Is it okay to encourage the culture of corporate greed and excessive behaviour as long as people pay their taxes? Of course, the former Chancellor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), reduced the rate of income tax that those people were paying. All that Labour promised for shareholders was an advisory role to rein in such behaviour, whereas the Government have today announced binding votes for shareholders so that they have some control over the executives who are supposed to report to them for the value of their companies.

Youth unemployment needs to be set in the overall context of unemployment in the United Kingdom and in other developed economies. The overall unemployment rate in the United Kingdom is 8.2% of the work force. In the United States it is 9.1% and in the eurozone it is 10.1%. In many eurozone states, the rate is much higher than the average. Youth unemployment tends to follow the same trend. It tends to be roughly double the rate in each country. What is happening in this country is not unique among our main competitors.

Youth unemployment is also not a new problem. At least the right hon. Member for South Shields (David Miliband), who was with us earlier, has had the grace to acknowledge that under the Labour Government youth unemployment rose, even during times of strong economic growth and the longest sustained boom since the second world war. In the more than 20 years since 1992, the rate of youth unemployment among 16 and 17-year-olds has remained stubbornly flat and has barely changed, whatever the underlying economic conditions. [Interruption.] The hon. Member for Edinburgh East (Sheila Gilmore) is shaking her head. I suggest that she looks at the Library’s statistics on this matter, specifically for 16 and 17-year-olds.

[Sheila Gilmore]

In the early years of the Labour Government, did not youth unemployment fall far below the level inherited from the previous Conservative Government because measures were taken?

[Stephen Williams]

Before the hon. Lady intervened, I repeated that I was talking specifically about 16 and 17-year-olds. The Library’s youth unemployment statistics show that from 1992 to the current year the rate of youth unemployment has remained stubbornly at about 200,000, whatever the underlying economic conditions. For 16 to 24-year-olds, the broader group, the unemployment figure did not fall below 600,000, even at the height of the boom.

[Sheila Gilmore]

rose—

[Stephen Williams]

I will not give way again because the time would count against me.

Youth unemployment is a long-term problem and we need long-term reform to tackle it. That is why the coalition Government are right to introduce the pupil premium, which will enable young people from disadvantaged backgrounds who are on free school meals, as I was, to get a leg-up in life. It is right that the coalition Government are embarked on a programme of welfare reform. We already have in place the Work programme, which offers assistance to people who are unemployed after nine months or, for 18-year-olds, after six months. It is right that we are raising the threshold at which people start to pay income tax. It is when people enter the jobs market for the first time that they are likely to be on the minimum wage or on low average earnings if they are working part time. The rise in the income tax threshold will disproportionately affect young people who are entering the labour market. It is also right that the coalition Government are massively expanding the number of apprenticeships. However, we also need short-term help for people who, through no fault of their own, find themselves unemployed because of the economic circumstances. I am therefore pleased that my right hon. Friend the Deputy Prime Minister has announced the youth contract, which will start in April, with 410,000 places over the rest of this Parliament, 160,000 of which will be wage subsidies of £275 per new job created.

What will help the young unemployed most is economic stability and recovery, together with the confidence that this coalition Government are putting in place the policies to deliver those two things. The low rate of interest that we currently have helps not only households but businesses that are seeking to expand. The Government have a clear focus on stable finances and growth. We should contrast that with Labour’s somersaults, U-turns and ever-elastic bonus tax, which has no credibility as it seems to have funded every single promise that the party has made since the general election.

As the hon. Member for Wigan (Lisa Nandy) said, unemployment is a tragedy for every young person who has experienced it. I grew up in a community scarred by youth unemployment. I witnessed it among my friends—I even experienced it myself at one point in my career—and I do not want another generation to be blighted by it. The Government are taking action, and credibility is a key part of that.

20:56

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

If I said that the Chief Secretary’s defence of the Government’s position was unconvincing, that would be generous.

I want to focus on bank bonuses and the impact that they have on the economy, particularly on youth unemployment. It is striking that this year the pig-fattening season in the City—otherwise known as bonus time—happens to coincide not only with unemployment among young people exceeding 1 million but with the rest of the population being informed, through research undertaken by Resolution Foundation, that the pay freeze is now expected to last until 2020. Last year the squeezed middle, which represents about a third of the population, suffered a big 4.2% real-terms fall in their incomes; now they are being told that by 2020 they will have £1,700 a year, or about £33 a week, less than they had in 2007—an 8% drop even before inflation kicks in. On the other hand, the City’s 1,200 code staff—the people who take and manage risk—will this year take home, on average, about £1.8 million. That is £34,500 a week or, to put it another way, 78 times the average wage.

Of course, those people are the elite—the risk takers. It is not a bad reward for those who took and managed risk so skilfully until 2008 that as a result, a gargantuan bail-out was required that has cost this country and the Government £70 billion, and torn a hole in the Government budget amounting to 8.5% of GDP, £120 billion. That is the difference between the deficit before the crash and 11.6%, which was the figure afterwards, and it is still projected to lead in 2013-14 to a national debt of about £1.4 trillion—slightly more than the nation’s entire income. That is not a bad achievement for just over 1,000 people. It is a pretty good thing that there were not a million of them, as that would have bankrupted the economy totally.

What makes this greed—and that it is what it is—so unconscionable is that it is so unrepentant. There has not been a shred of remorse or apology for what has been done to the country; indeed, it has been quite the opposite, with an arrogant decision that we should return to business as usual as though nothing has happened. As my right hon. Friend the Member for Wolverhampton South East (Mr McFadden) rightly said, the banks have not even fulfilled the very modest requirements of them under Merlin to increase lending to businesses and home owners and contribute to the creation of jobs, especially for young people. Indeed, the opposite has happened. Lending to business has actually declined because of the degree of deleveraging, and the number of jobs going to young people has also declined, leading, of course, to a disastrous increase in unemployment.

The truth is that the bankers do not seem to get it. There is public outrage that a banking system that owes its continued existence to massive Government intervention can still pay itself mega increases in salary and bonuses, and that in an age of austerity 90% of investment bank profits are directed not at strengthening balance sheets, at shareholders’ dividends, at lowering costs to customers or at creating jobs for young people, but at a gigantic personal pay-off.

I simply ask this: what is the justification for bankers’ bonuses? Bonuses were what caused the reckless stampede into derivatives, securitisation and other new-fangled financial instruments that it turned out all those clever chaps in the City did not even understand. Even now, they still do not want to put their money into what the nation really needs, which is jobs for young people—that is what the debate is all about—and a massive revival of manufacturing industry. In 2010 the UK deficit on traded goods was a staggering £100 billion, which is the worst by far that this country has ever suffered, and 2011 is likely to be much the same, or possibly worse. That is unsustainable, and dealing with it should be our No. 1 priority.

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

My right hon. Friend is making a powerful case. Does he agree that the other problem is that bankers are still obsessed with the short term? That is why they are not investing in such things as manufacturing. They are still obsessed with the short-term measures that deliver them large-scale bonuses.

[Mr Meacher]

My hon. Friend makes a very important point. As I am sure everyone in the House realises, there is far too much short-term instinct, particularly in the City. What we need, and have not had, is the relational banking that exists in the mittelstand in Germany. Banks there spend a lot of time, effort and money producing a long-term relationship with manufacturing units that they can support. That is the type of model that we need in this country, but it is not what we have got.

The banks continue to put their money overwhelmingly into property, mortgages, offshore speculation and tax havens, all for their own enrichment, and stuff the rest of the economy and jobs for young people. I am putting it strongly, but there is huge bitterness outside, as one can see from the August riots, from the Occupy movement and from many other instances of anger beginning to bubble up.

[Esther McVey]

Will the right hon. Gentleman give way?

[Mr Meacher]

No, I will not give way now.

Bankers’ bonuses have already nearly proved the ruination of this country. What we need is a smaller banking sector that serves the real needs of this country, and particularly of its young people, if we are to avoid a lost generation. Saying no to bonuses, or at least taxing them, is certainly the right way to start.

21:03

[John Glen (Salisbury) (Con)]

I am grateful for the opportunity to participate in the debate. I would like to make three points, but before I do I wish to put on record my grave concern about the issue of youth unemployment. It is most regrettable that when we have debates such as this, Opposition Members seek to label Government Members as being glib and unconcerned about the plight of their constituents who are in real difficulty.

I was put here by the people of Salisbury, and in my constituency 340 young people between the ages of 16 and 24 are unemployed. I readily concede that that number is significantly higher than it was in the previous year, but I do not accept the comments of the hon. Member for Walsall North (Mr Winnick), who is no longer in his place, that somehow my colleagues and I do not care. I am not complacent about the matter or unwilling to acknowledge the grave seriousness of the problem of youth unemployment, nor am I unwilling to listen to suggestions from Members of all parties of how to tackle it effectively.

I do not see the point of belabouring the fact that the trend from 2004 was in the wrong direction, or that there were 279,000 more unemployed young people when we came to power than there were in 1997. As the right hon. Member for South Shields (David Miliband) said, that trend started in 2004, well before any global banking crisis. Let us therefore be honest in the debate about the nature of the problem and how long we have faced it.

However, we must realise that we owe it to those young people to find a lasting and effective solution. The Opposition suggest that the Government’s cuts and tax increases have choked the economy, that our welfare-to-work programmes are failing and that borrowing has increased, so that the solution, very simply, is to tax bankers’ bonuses and introduce a permanent bank levy. That is supposed to sort everything out overnight.

I have three concerns about that. Fundamentally, I am worried about the economic literacy of such a proposal. One cannot just buy jobs. That logic led to the current ruinous situation. It is misguided on several levels. The Government are doing things to address the points that the right hon. Member for Oldham West and Royton (Mr Meacher) legitimately highlighted: the grave frustration and anger about bankers’ bonuses. However, the banking levy that the Government introduced, which was effective from January 2011, will yield more than the one-off policy on bankers’ bonuses in the last year of the previous Government. That is factually correct.

The Government will take on board the Vickers commission’s conclusions, and reforms to the banking sector will be adopted. However, when the right hon. Member for Wolverhampton South East (Mr McFadden), who is no longer in his place, worked alongside former Prime Minister Tony Blair in No. 10 Downing street, I wonder where the desire to reform the culture and the system of banking bonuses was then. We have all failed to address the creeping callus of immorality in our society.

However, the notion that the Government can somehow just kick-start things and buy a few jobs here and there does not do justice to the macro-economic realities. The financial systems—the markets—will not see more spending as a signal that the Government are serious about tackling the underlying problem of the debt in this country. Interest rates would rise. That would lead to mortgage payments rising and businesses losing confidence in making investments.

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

I am listening carefully to the hon. Gentleman, and I do not want to impugn him or any of his colleagues who are genuinely concerned about, for example, the plight of young people in my constituency. I meet college students who are devastated because of the impact of withdrawing education maintenance allowance and trebling tuition fees, and the fact that 10 people are chasing every job. However, all the evidence shows that some of the measures, such as enterprise zones, that the Government have introduced have no effect. Would the hon. Gentleman like to comment on that?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Can we have short interventions?

[John Glen]

The Government have not been complacent. They have made, and are making, relentless attempts to deal with the difficulty—the £1 billion investment in the youth contract, 250,000 work experience places and 440,000 apprenticeships demonstrate Government action. The effect is not immediate; things will not change overnight, or in the next three months. We must be realistic about what it takes to rebalance the economy. However, 20,000 extra apprenticeships with £1,500 attached to each will encourage people in the private sector, including small businesses, to take on new people.

We must recognise that there needs to be long-term fundamental change in our economy. We must pay down the debt, reduce the burden of regulations and develop schemes that incentivise private sector employers to make the leap and invest in our young people. We must recognise the reality that we are in an international scenario, and that simply pressing a few buttons in the Treasury will not deliver immediate outcomes. Reheating the flawed logic and instincts of the late 1970s, which said that we could press those buttons and jobs would appear, is flawed.

The most senior economic adviser to the former Prime Minister and Member for Sedgefield said in 1997 that the Government whom he served had a golden economic legacy. That is not what this Government had when they took power nearly two years ago. It will therefore take time, but there is no complacency. There is a determination to face up to the underlying economic challenges. Only when we have done that will we have a sustainable basis for dealing with the problem—the deep and desperate problem—of youth unemployment.

21:10

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

It is timely that I follow the hon. Member for Salisbury (John Glen), who lamented the increase in youth unemployment in his constituency, which is less than half the 1,305 people aged 24 and under claiming jobseeker’s allowance in my constituency—an increase of 12.5% on the same time last year.

In December 2011, 420 jobs were advertised in jobcentres in Hackney, which equates to around 14 claimants per vacancy. Young people who are just leaving school or college are competing for those jobs against people who have work experience on their CV, which is one reason why I lament some of the changes this Government have introduced—getting that experience is crucial to helping people to get on their career path.

Hackney is a very young borough—around a third of Hackney residents are under the age of 24—which means that youth unemployment is a particularly striking and important issue in my constituency. The percentage of 18 to 24-year-olds who have been unemployed for six months in Hackney is now higher than the national and London averages. In December 2011, 2.1% of young people in Hackney had been unemployed for six months, compared with 1.5% in London and 0.9% nationally. In Hackney, 1.2% young people were unemployed for more than 12 months, compared with 0.5% in London and 0.6% nationally. One of my concerns is that we are seeing a growing trend of longer-term unemployment for young people. They might be small in number, but the trend is in the wrong direction.

It is important that we hear from young people themselves. I have been talking to providers of the Work programme in my constituency that work with some of the hardest-to-reach people. The private companies take the easier-to-place people and give specialist agencies and organisations the harder-to-reach ones. Janet Usoro, the student contact co-ordinator at East London Advanced Technology Training, which is a third sector IT training company for young people based in my constituency, told me of a young man who comes from a troubled background. His mother has mental health issues and his father is unknown to him, and he had difficulties in the past with drugs that resulted in a prison sentence.

This young man decided to get his life back on the straight and narrow and at ELATT has achieved NVQ levels 1 and 2 in IT networking. He is progressing through level 3. He has gained confidence and found new personal self-discipline. He is on the right track, but with his background, his chosen career path will require a record of work experience and extra support, which, I worry, the Work programme is not entirely equipped to give him. I hope the Minister responds to that in his summing up.

Anthony Harmer, the chief executive of ELATT, tells me of his worries about long-term, sustainable funding for the high-level support work it does with such difficult-to-reach young people.

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

As the hon. Lady has raised a specific point, may I put it to her that the Work programme providers have complete freedom to do what works to help people into work, including securing work experience places for them? It is my hope that the providers in her area find work experience places precisely for someone such as the young man she describes, even if they have not found work experience through the Government scheme or Jobcentre Plus.

[Meg Hillier]

If what the Minister says transpires, I will be a very happy Member of Parliament for Hackney South and Shoreditch, but I am picking up on the ground that that is not happening in the way that it should be. The bulk of the business is going to private providers, for the easier-to-place people, and they are taking the money, but the harder-to-reach people are going to the voluntary providers, which are struggling to make the packages work because their funding is crumbs from the bigger table. There may be a structural issue, which I hope the Minister will watch closely as the programme is rolled out, because we do not yet know about the success of the Work programme. Ministers herald it as a success, yet we have seen no figures or results, for all the reasons that have been well rehearsed. This is an issue that the Minister, if he is serious about his job, needs to monitor.

In my area, the third sector agencies are picking up the harder-to-place young people, after what we might call cherry-picking. However, I am not trying to be political; I am concerned that those young people should get that work. Ian Ashman, the principal of Hackney community college, has similar stories to tell. For example, he has told me about Kevin, a 23-year-old father of two with a baby on the way who had an accident going to work one day and, as a result, lost his job. After 100 job applications, he has not been able to find another job. When it comes to full-time college courses, although the college has a good relationship with the local jobcentre, the employment advisers there do not know enough about what colleges can provide. As the Minister is probably aware, that concern was shared by 44% of colleges in a recent Association of Colleges survey. Full-time courses such as those provided by Hackney community college are not always appropriate for young people such as Kevin, because of the impact on their benefits. Indeed, there is an issue with young people wanting to progress and improve their lives, but often being unable to undertake the extra qualification or study that they need. Where do they go in the meantime? As we have heard, some of the apprenticeships on offer are not really true apprenticeships. I am all for more apprenticeships if they are real apprenticeships, but not if they amount to cheap, unpaid work experience.

Agencies, job brokers and colleges need long-term sustainable funding to help their work with the most difficult-to-reach people, which is something we need to look at. The young people in my constituency are not interested in party politicking; they want to know that there is a career path for them. We have seen huge improvements in schools in my constituency, with more than 84% at one school alone getting A* to C grades at GCSE, and seven young people placed at Cambridge, including one young woman who had a baby at 15 and is now at the university with her child. There is real opportunity and a real desire to achieve in Hackney. There is no poverty of ambition among the young people in my area. Most of all, however, we need to get those young people on pathways into jobs. We need work experience available, so that they can get the experience they need to compete in the job market. I want to see the unemployment levels in my constituency fall dramatically.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. There are still six speakers, and we have to bring on the Front Benchers at 9.40 pm. I am going to have to drop the time limit to four minutes, in order to get in all the Members who want to speak.

21:17

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

Thank you, Mr Deputy Speaker; I shall try to keep to four minutes.

I start by echoing what my hon. Friend the Member for Salisbury (John Glen) said. I do not believe that there is anybody in the House who does not want to try to do as much as possible to help the youth unemployed, and I genuinely mean that about all parts of the House. It is easy to score cheap political points, but deep down, I think that there is probably no one in this House, on either side, for whom that is not true. We feel this to be such an important issue for many of the reasons that have been outlined today.

I will come to why I think the motion is not helpful in solving the problem, but let me say that no matter how we approach the issue, everyone wants to do something about it. That is the nature of party politics: the Opposition have a different approach to those of us in government. When I look around at the unemployed young people in my constituency, I think about how to help them. Equally, I have met young people on apprenticeships—16-year-olds—and seen the difference that being able to go out has made to their lives. There are children whom I have known over many years who have got an apprenticeship and who now go out to work. One sees them visibly maturing before one’s eyes, becoming more confident in themselves and thinking about what it means to get a career and move along that path. However, the flip side of the coin is the children and young people who have not been able to get an apprenticeship or get those jobs. We think, “Well, for every high there must a low,” and we worry deeply about the effect that that will have on young people. But is it fair to offer them false hope by suggesting that taxing bankers’ bonuses could create jobs for them?

I worry about the message that we send out from this place, because there is nothing worse than false hope. We have seen so many examples of it in the history of politics. During elections, people vote for something that they believe will give them x, y or z, only to be bitterly disappointed later. It is also easy for the Opposition to make promises—I mean this not as a comment on the Labour party but as a general remark—when the reality of changing circumstances means that those promises cannot be fulfilled. Another good example is that, following the austerity Budget, we were hoping to reduce the structural deficit by the end of this Parliament, but because of the changes in the world economy since then, it does not look as though we will achieve that until 2016 or possibly 2017.

[David Simpson (Upper Bann) (DUP)]

Does the hon. Gentleman agree that a further way in which the coalition could help small to medium-sized businesses would be to reduce the heavy burden of bureaucracy that they have to deal with? A further area in which they could be helped is that of energy costs.

[Alec Shelbrooke]

I am grateful to the hon. Gentleman for that intervention. Bureaucracy has strangled small businesses over the past 13 years and made it almost impossible for the people running them to say, “Let’s go out and employ a few people. Let’s take a punt on it and see what happens. Let’s grow our business and see whether we can grow the economy.” If they tried to do that but did not succeed, the bureaucracy meant that it was very hard for them to scale back the business afterwards. I believe in protection for workers—I think we all do—but there has to be a reality check at some point. Just keeping people employed because of bureaucracy while watching a company go bust does not serve anybody.

That is why the Government have adopted a programme of tackling bureaucracy and some of the more nonsensical parts of the health and safety at work legislation. I have talked to the local businesses in my constituency and found that they have hired, on average, one full-time equivalent employee to deal with the increase in bureaucracy. That is not job creation; that is sapping the resources from a company that might be willing to go a step further.

I am exceptionally worried about creating false hope. My hon. Friend the Member for Rossendale and Darwen (Jake Berry) made it quite clear how many promises have been made about a bankers’ bonus tax, including the suggestion that such a tax would create 100,000 jobs. Bankers are already paying 50% tax on those bonuses. Do I personally agree that the head of RBS should be getting the size of bonus that he is getting when its share price has halved? No, I do not, but I did not draw up his agreement and I do not know what the small print says. I do not know why he feels entitled to take that bonus. Do I think it right that he should do so? No, I do not, but we are not legally in a position to do anything about it. We have to look at the position that we have got ourselves into, and try not to make those mistakes again.

I do not want to get back into the same old hoo-hahs that we have across the Chamber on these issues. We see the same old faces on the other side, and we all have a history, in these ding-dongs, of talking about whether the austerity measures are working and what would happen if we did not do what we are doing. Whenever we introduce a policy to try to rebalance the economy, there will be a negative effect. There is a recession throughout Europe and the world, and growth is practically flat across the whole of the European Union. We have to do something about that. This Government are trying to do something. They are trying to invest in apprenticeships, for example. Their apprenticeship scheme has the advantage over the jobs scheme introduced by the previous Government in that it involves the private sector rather than the public sector. I hope that we can bring hope to the young unemployed in this country, without a false dawn.

21:24

[Mr Iain McKenzie (Inverclyde) (Lab)]

It will come as no surprise that I want to focus on the UK unemployment blackspot that is Scotland. Scotland’s unemployment crisis has become a national tragedy with 250,000 people out of work, and our young people are one of the hardest hit groups. The number of young people claiming jobseeker’s allowance for more than six months has soared by 93% in my constituency and unemployment in Scotland has risen by 8.6%, with some 19,000 more people out of work this year. Scotland now has higher unemployment than the rest of the UK, with 200 Scots losing their job every day. Those figures only confirm what families in my constituency already know, which is that we are facing an unemployment emergency.

[Jake Berry]

As the hon. Gentleman is addressing his concerns to unemployment in Scotland, can he confirm whether it went up or down during the last quarter?

[Mr McKenzie]

Unemployment in Scotland is suffering the double-whammy of not only the UK Government but the Scottish Government. It is obvious where the Scottish National Members are tonight—they are not in the Chamber debating unemployment in Scotland.

For my constituents and millions of hard-pressed families, reports in the news that RBS is preparing to offer a bonus of more than £1 million to its chief executive look like nothing more than huge reward for failure. That leaves my young constituents to ask only one question: what about us? So, what about them? Labour has for some time argued for a tax on bank bonuses to fund 100,000 jobs for young people. Our country needs a new plan for jobs, so the Government should adopt Labour’s five-point plan for jobs, incorporating the tax on bankers’ bonuses to fund those 100,000 jobs for young people and a temporary VAT cut to help people struggling with rising prices, and kick-start the economy.

Jobs for young people in my constituency of Inverclyde are of the utmost importance, which is why we cannot wait for the UK or Scottish Government to act and have commenced putting in place our own plans. I acknowledge the efforts made by the hon. Member for Rossendale and Darwen (Jake Berry) in going around all the businesses in his constituency and I can tell him that I will be taking up that challenge over the coming weeks and months. Unfortunately, I might not have the handsome list of businesses that I have visited to quote, which is unfortunate and will make the challenge more difficult. I, along with my Labour-controlled council and my MSP, will commit to searching for jobs and, I hope, to attracting other businesses to the constituency.

I have highlighted in the House before the Labour-led council’s brave decision to go it alone with the future jobs fund after that initiative was scrapped such a short time ago by the Government. We are uniquely successful: we were the second best-performing local authority in the country as regards the future jobs fund, putting some 500 young people a year into employment, 80% of whom remained in those jobs. That again will prove successful. Now, after clever procurement by my council, which has delivered projects under budget, we are in a position to put more funds into alleviating the disgrace of youth unemployment.

As a small council we cannot continue to finance such projects indefinitely, so we need both the UK and Scottish Governments to act now and implement plans to alleviate youth unemployment. Getting people, and especially our young people, back to work is the best way to put the UK, Scotland and Inverclyde back on the right course. As the Deputy Prime Minister said:

“I think fairness starts with doing the right thing for our young people”.

He went on to outline a £1 billion plan to provide subsidised work and training placements to thousands of young people. That initiative has all the hallmarks of a watered-down version of Labour’s future jobs fund, which the coalition scrapped after coming to power. The initiative guaranteed under-24s out of work for six months or more a job or training. The young people in my constituency need work and they need opportunities. They do not wish to live on benefits, but they still await action from this Government and the one in Edinburgh on tackling youth unemployment.

Our young people cannot take another year of failure from Government to react to the crisis. They need, they deserve and they have the right to a job. It should be the duty of all Governments to eliminate unemployment.

21:29

[Richard Graham (Gloucester) (Con)]

It gives me huge pleasure to join this debate in which we can all surely agree with the hon. Member for Leeds West (Rachel Reeves) that youth unemployment is too high and must be reduced. As many hon. Members have said, none of us is complacent on this issue, so what to do? The hon. Lady had three main suggestions: spend more, lower VAT, and bash the bankers. There was also a possible fourth suggestion of bringing back the future jobs fund or, as she put it, creating 100,000 jobs. The first of those suggestions has been utterly discredited and the second did not work. On the third suggestion, no Government except those of the ex-USSR and the current Democratic People’s Republic of Korea create jobs. We must be clear that the business of government is about setting the conditions in which businesses can create jobs. It simply does not work when Governments try to create jobs.

On the future jobs fund, the evidence we looked at in the Select Committee on Work and Pensions was absolutely clear: it was expensive and public sector-dominated. It was useful and it did give experience, but no future jobs came from it.

[Mel Stride (Central Devon) (Con)]

My hon. Friend makes a powerful point about the future jobs fund—that it was basically about short-term jobs that did not last. Does he agree that this Government’s approach to apprenticeships and investing in young people and skills will give us sustainable, long-term jobs for the future?

[Richard Graham]

My hon. Friend is entirely right and brilliantly anticipates the thread of my argument.

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

If the future jobs fund was not a success, why have the Government introduced the youth contract, and is it not simply a watered-down future jobs fund?

[Richard Graham]

Let me be clear that I was not writing off the future jobs fund—I did say that it was useful. However, there are better ways of dealing with these issues, which the Government have identified and are going ahead with.

I was coming to a point that will answer the hon. Gentleman’s query about our alternatives to the hon. Lady’s four main ideas about how the problem of youth unemployment can be solved. I believe that we need a mixture of different things. We need to allow manufacturers to thrive again by reducing corporate tax and the bureaucracy that surrounds their activities. We need to encourage their entrepreneurial spirit. Happily, and by chance, I can show hon. Members an excellent packet of tea that is made in Gloucester and exported to China. I also have in my pocket an aluminium pedal made on the Bristol road in Gloucester and exported to Australia. These examples show that the entrepreneurial spirit is alive and kicking in my constituency and I hope that all Members’ constituencies have similar companies doing great things. Both the companies I have mentioned are looking to take on apprenticeships this year. That speaks to the point made by my hon. Friend the Member for Central Devon (Mel Stride) about the heavy support and increased numbers of apprenticeships that the Government are delivering.

We also need incentives for small and medium-sized enterprises and I am very grateful that the debate I led in Westminster Hall last year, in which many hon. Members spoke up in favour of SMEs, was heard by the Government, who have introduced those incentives so that SMEs can take on apprentices. If every member of the Federation of Small Businesses in the land took on one apprentice, the largest part of the problem of youth unemployment would be solved. Similarly, we can all lead by example by taking on our own apprentice. I wonder how many Members from the Labour party have taken on an apprentice. We can also encourage businesses in our communities to take on apprentices and we can create apprenticeship fairs and job fairs. I am delighted to be welcoming the employment Minister to the skillsfest in Gloucester on 9 February, when he will see what we are doing to promote all aspects of the Government’s programme and will be quizzed by businesses on what more he can do to help them to grow.

The motion mixes an unacceptable fact—high youth unemployment—with an unpopular sector: banking. It is my strong belief that hammering our financial services sector, which is vital to this country, and destroying jobs in it will not help to create jobs elsewhere, so I propose, as an alternative, an idea that I believe would resonate across the land. It came to me when opening a regenerated bank branch in Gloucester two months ago. It would enable banks to reconnect with their customers and grow cost-efficiently, and it would support our communities by reducing youth unemployment. The idea is simple: every bank in the land should take on one apprentice in each of its branches. That would include the Co-operative Bank, which is shortly, I hope, to take over the Cheltenham & Gloucester branches from Lloyds. If the financial sector pursued that idea, Members in all parts of the House, instead of haranguing bankers, would be able to praise them for their role in solving the problem of youth unemployment. Some talks have already taken place; I hope that there will be more. I commend that policy, rather than the motion before us, to the Minister.

21:35

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

At the centre of this debate is the question of what the optimum balance should be between growth and cuts, and in what time scale we should bring down the deficit. I contend that the debate should not be some sort of auction about who will cut what when; it should be about who has the most creative, realistic growth strategy, predicated on what has happened in the past. Let us look at the Labour party’s record, to which people have referred. Post-1997, we created 2 million more jobs. We replaced interest rates of 10% to 15% with very low rates, thanks to the independence of the Bank of England. With those jobs and those taxpayers, we doubled our investment in the health service and reduced debt. We have a fine record to build on.

In 2008, as we all know, there was a financial tsunami, generated by sub-prime debt in the United States. Our then Prime Minister, my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), got together with Barack Obama to ensure that we delivered a fiscal stimulus, and that there was not a depression. We had a shallow recession, and then fragile growth. Then the Tories arrived, and immediately announced 500,000 job cuts. Consumer confidence and demand were thrown out with the bathwater. Immediately, people in the public sector thought that they were going to lose their jobs, and would not spend money. People in the private sector stopped taking on employees, and we ended up with the deficit rising. The deficit forecast is now £158 billion above what it was; when Labour came in, the deficit forecast was falling. The question is what we should do to bring back confidence.

[Charlie Elphicke]

Will the hon. Gentleman explain whether he agrees with the shadow Chancellor, who said the other day,

“we are going to have keep all these cuts”?

[Geraint Davies]

I am not opposing having to make savings and cuts. I am saying that the key is growth. As a business man in Swansea said to me, “It would be no good laying off my workers and selling my tools if I was making a loss; I would need to grow my sales while making savings.” That is the focus. That is why there is a five-point plan focused on national insurance for the building industry, on VAT for extra consumption, and on taxing banker bonuses to generate jobs and infrastructure growth.

In addition, we need a credible growth strategy focused on the growth opportunities in the global economy, namely the emerging consumer markets in India, China and south America. What are we doing to re-engineer our financial markets, our modern manufacturing, and our services, so that they are tailored to those markets? What will we do about getting capital opportunities from surplus-rich countries such as China, or oil-rich countries, so that they invest in our infrastructure? What are we doing to skill ourselves up for future markets? Those questions do not seem to be being asked or answered tonight.

In Swansea, I am talking with prospective manufacturers from India about linking up with the university and providing a manufacturing base to build on the cutting-edge life science research taking place there. I am talking with possible investors about investing in manufacturing facilities. There are companies such as Tata near Swansea, which are already investing in the modern manufacturing of steel, which will have six layers and can create its own energy and heat, so there are new global opportunities. This debate has been completely focused on who will cut most, when. That is going nowhere. We cannot cut ourselves out of this economic problem. We have to grow, invest and reposition our industry.

[Glyn Davies (Montgomeryshire) (Con)]

I should like to give the hon. Gentleman another chance to support the Opposition’s policy of acknowledging both that they support the cuts programme introduced by the Government and that they made quite a few mistakes when they were in government.

[Geraint Davies]

We need a balance of savings—certainly not cuts against our productive capacity—with the main focus on growth and jobs, as has always been the case. The shadow Chancellor said that he cannot predict the future—he does not have a crystal ball—and in three years’ time, with the situation ruined by a Government who have destroyed industry and opportunity, it is likely that we will face an even worse situation, so promises cannot be made about reinstating things subject to Government cuts. The key point is that unless we have a growth strategy, as Barack Obama is trying to do—and Europe is trying to reskill in a global environment —we have no hope, given the Government mantra that all that they can do to save business is cut, cut, cut. All that that leads to is the death of industry. I shall leave it there, and let us focus on growth.

21:41

[Stephen Timms (East Ham) (Lab)]

We have had a very good debate. In June last year, the Prime Minister told the House that cutting the deficit faster would revive private sector confidence. That was the basis of the strategy with which we were presented for private sector investment and jobs to surge. Tragically, that has not happened. The business confidence monitor from the Institute of Chartered Accountants says:

“UK Business confidence has collapsed”.

It says:

“Confidence has declined across all sectors and all regions.”

Nobody now claims that the coalition strategy is working to boost confidence. Confidence has evaporated, and the strategy has clearly not worked.

We are debating the consequences tonight: unemployment rocketing; youth unemployment of over 1 million, and becoming worse—the highest that it has ever been. My hon. Friend the Member for Wigan (Lisa Nandy) drew attention to the growing sense of hopelessness and the long-term damage to our economy. My hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) pointed to the growth of long-term unemployment among young people as particularly damaging.

As a result of that failure, the Government have to spend a great deal more on benefits. It is worth comparing the latest forecast from the end of last year showing how much they intend to spend on benefits in the year after next with the forecast a year earlier. Projected benefit spending in the year after next has gone up by £5.4 billion. The overall estimate of borrowing has gone up by £158 billion—a figure at which the Chief Secretary to the Treasury balked at admitting. The Government are determined to press ahead with their version of the benefit cap, which the Department for Communities and Local Government says will add 20,000 to annual homelessness figures, with massive Exchequer costs. The ill-judged attack by the Secretary of State for Work and Pensions on the bishops at the weekend has led to yet another defeat for him in the other place.

All along, we have been told that the solution to all these problems was the Work programme. Let me begin by welcoming the U-turn by the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling). I welcome his change of heart, because until now he has refused to allow Work programme providers to publish any data on their performance. Today, he has announced that he is going to change his policy.

[Chris Grayling]

rose—

[Stephen Timms]

Perhaps the Minister will tell us when the guidance to which he referred will be published.

[Chris Grayling]

I am a little puzzled. I could be wrong, but I thought I heard the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) say that the Labour party supported the benefit cap, but the right hon. Member for East Ham (Stephen Timms) has just said that they do not. Would he tell us which is right?

[Stephen Timms]

We do support the benefit cap. The version that the Minister is pressing through is, as the House of Lords has rightly pointed out, going to cause huge costs for the Exchequer. I hope that even now the Secretary of State will think again before returning to the House with the measure next week.

The Work programme was rushed, and badly prepared. As we pointed out at the time, there should have been a plan for transition to the new programme. There was no plan. We can glimpse how the Work programme has been going by looking at the number of people coming off benefit each month. The number plummeted last May, when the flexible new deal stopped, and it stayed low as the Work programme got going. I invite the Minister to compare the months after May with the same period the previous year, because he will see that poor Work programme performance resulted in 86,000 people not getting into work who should have done. That is probably a permanent unemployment rise. The damage will be with us for years.

The Government told us that the Work programme would enlist an army of voluntary organisations to give specialist help to jobseekers. To begin with, we were told that 508 voluntary sector organisations would be involved. By August, that number had fallen to 423. Next week the Government will count once again. Last week, apparently, at a crunch meeting, voluntary sector organisations told the Minister that they were being used as “bid candy” to win contracts. Some of them still have not had a single referral since the Work programme began last summer.

The “Open Public Services White Paper” promised, as I quoted to the Minister earlier:

“Providers of public services from all sectors will need to publish information on performance and user satisfaction.”

I welcome the Minister’s U-turn on performance. What about user satisfaction? Let me tell him about the satisfaction of one user, the father of a constituent of mine, who came to me to complain about his daughter’s experience on the Work programme. She received a letter referring her to mandatory work activity. It was completely incomprehensible; I will send the Minister a copy. She lives in my constituency in east London. The letter appeared to require her to report on an unspecified date to an address with a postcode in Sheffield, and the telephone number was given as 000. It was a shambles. It is no wonder the Work programme is not delivering and youth unemployment is rocketing.

[Esther McVey]

When I read the title of today’s Opposition day debate, which mentioned youth unemployment and bank bonuses, I thought it was a list of Labour’s worst failings—youth unemployment up by 40% and a banks bonus culture developed under Labour and signed, sealed and delivered with a knighthood under Labour—so will not the right hon. Gentleman concede that where Labour messed up, the coalition is cleaning up?

[Stephen Timms]

We had some discussion in the debate about the future jobs fund. The Minister has awarded a contract for the evaluation of the Work programme. I welcome the fact that he has done that. He should read the evaluation of the future jobs fund carried out by the same organisation that he has commissioned to evaluate the Work programme. It points out just how effective the future jobs fund was and the crucial value for young people of

“a real job with a real wage”.

We need a new approach. We should repeat the tax on bankers’ bonuses to bring in £2 billion, funding 100,000 real jobs for young people. We need, once again, a temporary cut in VAT to rebuild momentum in the economy, as the VAT cut did before the general election. A further VAT cut on home improvements would give the construction industry, which is in a desperate state, the chance that it needs. We should bring forward investment in schools, roads and transport, and we should listen to the Federation of Small Businesses and give small firms hiring new staff a break from paying national insurance—five points that would give us, at last, a chance.

21:49

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

Let me start by making it absolutely clear that tackling unemployment and youth unemployment is right at the top of the Government’s list of priorities. I share the frustration of my hon. Friend the Member for Salisbury (John Glen) at some of the comments from Opposition Members. My right hon. Friend the Secretary of State for Education, to whom I pay tribute, is firmly of the view that the decline in the teaching of history in this country is a lamentable failing in our education system, and we realise precisely why when we listen to the Opposition. They have forgotten the history not of 10 or 100 years ago, but of two years ago: the mess they left behind for us.

Someone listening to Opposition Members tonight might think that youth unemployment had been created in the past 18 months, but the truth is that when Labour left office 18 months ago youth unemployment stood at 940,000. It has since risen by 100,000, which we wish had not happened. Half of that increase has come from students in full-time education looking for part-time work. The Opposition talk about surging youth unemployment, and I get increasingly frustrated by their use of figures, because they keep up the spurious claim that long-term youth unemployment under this Government has rocketed, but that is utterly untrue. A like-for-like comparison that removes all of the ways in which they massage the figures reveals that long-term youth unemployment today is actually lower than it was two years ago. There is one other fact that they do not mention: fewer people in this country are on out-of-work benefits today than were at the time of the general election. Let us hear nothing about the failures of the past 18 months, and let us never forget the failings of 13 years of Labour government.

We have had a thoughtful debate and heard some sensible contributions, including those from my hon. Friends the Members for Bury St Edmunds (Mr Ruffley), for Rossendale and Darwen (Jake Berry), for Bristol West (Stephen Williams), for Salisbury (John Glen), for Elmet and Rothwell (Alec Shelbrooke) and for Gloucester (Richard Graham). We have also had a snapshot of the past, present and future of the Labour party. On the future of the party, I must say that the hon. Member for Wigan (Lisa Nandy) made some thoughtful contributions on things the Government might do, and I listened carefully to what she said. We also had a bit of a throwback from the right hon. Member for Oldham West and Royton (Mr Meacher), who talked about bankers’ bonuses while conveniently forgetting that the bankers’ bonus pool in the City of London was twice as big under Labour as it is today.

I was also struck by the lack of ambition among Labour Members. When they went through their plans yet again—we have to bear it in mind that the money from their proposed bankers’ bonus tax has been announced for nine different things so far; another bit of history they have conveniently forgotten—we realised that the reality is that they are talking about creating 100,000 places in a replacement for the future jobs fund. I see that as rather unambitious, because the package of support we have put together will help, and is helping, far more young people into employment.

We have a clear strategy to support the creation of jobs in the economy and provide help for those people, older and younger, who are looking for work. We have set out some of those measures. My right hon. Friend the Chief Secretary to the Treasury, the Chancellor of the Exchequer and the Treasury team set out in the autumn statement a range of proposals to do everything we can to stimulate and support the growth of business. I am particularly pleased that in the last quarter private sector employment in the economy increased at a time when we face huge economic challenges that were described recently by the Governor of the Bank of England as probably the most difficult in modern peace time history, if not ever. Yet against that background we are determined to give business every opportunity to grow and develop through investment in infrastructure, measures in the tax system and the measures we are taking to deregulate—for example, in relation to health and safety—in order to support business growth. There is no other way of securing the future of our work force or job creation in the economy.

We cannot go back to the uncertainty and instability under the previous Government and under the right hon. Member for Morley and Outwood (Ed Balls), who is chuntering away on the Front Bench and forgets the severe damage that he and his colleagues did to the economy when they were in office.

Alongside the work that we will do and are doing to ensure that business has the best possible opportunity to grow and to create jobs, however, we have put in place a package of support for the unemployed that I believe is more ambitious and more successful than anything that the previous Government did.

Let us start with our work experience scheme, which will double in size under the youth contract and is already helping large numbers of young people to move into work.

[Sheila Gilmore]

I am sure the Minister agrees that work experience programmes should give people skills that they do not already have, and perhaps confidence if they have not worked for a long time, so why has it been made compulsory for people who have already done the work or had the training to go into jobs such as shelf-stacking, on which I know the Conservative party is so keen? Why is that relevant to people who already have such experience?

[Chris Grayling]

I simply cannot understand the view that Opposition Members have of our retail sector. Our larger retailers are national and international businesses, with hugely varied career opportunities for young people. The manager of a single supermarket can run a £100 million business, so let nobody say that giving an unemployed young person the opportunity to show to a supermarket chain their ability to contribute to that organisation is nothing but a possible footstone for a long-term career.

The proof of the pudding is in the eating, because more than half the young people who are going through our work experience scheme are moving off benefits quickly afterwards. When we make a comparison with the future jobs fund, from which about half moved off benefits immediately afterwards, we find the total cost of that scheme was between £5,000 and £6,000 per placement, whereas the total cost of our work experience scheme—of achieving a similar result—is about £300 per placement. Which do Opposition Members think represents better value for the taxpayer?

Alongside that, we are also delivering 170,000 wage subsidies, through the youth contract, to employers who take on young people, and that is the big difference between our philosophy and that of the Opposition, who simply want to recreate another scheme with artificial, six-month job placements in the public or voluntary sectors. We are trying to create a path to a long-term career for young people. That is what the wage subsidies in the youth contract will do, and it is also why we have expanded by so many the number of available apprenticeships. They are not about short-term placements; they are about building long-term career opportunities. Since we took office, we have increased massively the availability of apprenticeships in the economy, precisely because we believe that our young people are best served by creating a path that they can follow to a long-term career opportunity.

The right hon. Member for East Ham (Stephen Timms) talked about the Work programme, which is providing much better and more intensive support for the long-term unemployed than previous schemes, and about the flexible new deal, which we inherited last year. Let me, however, give him some statistics about that. It cost the Department for Work and Pensions £770 million, and it achieved 50,000 job outcomes in six months—at a cost of £14,000 per job outcome. Does that represent good value for money or a programme worth keeping? Does anybody seriously believe that that programme had the effect he describes?

I am confident that, by contrast, the Work programme will deliver results because it is based on payment by results, and because we have created an environment in which the organisations, large and small, that are delivering the programme are paid only when they succeed in getting somebody into long-term employment. Having now been around the country and visited almost all the providers, I have seen a team of people who are motivated, determined and succeeding in getting the unemployed back to work. I meet people who have not worked for years but who have got back into employment, and people who did not believe they could get back into work but are getting back into employment.

When we publish the figures, and we will, I look forward to demonstrating that that approach makes a difference to the prospects of the long-term unemployed in this country—

[Mr Alan Campbell (Tynemouth) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Main Question put accordingly.

21:59

Division 436

Ayes: 225

---

Labour: 215
Scottish National Party: 4
Plaid Cymru: 3
Alliance: 1
Democratic Unionist Party: 1

Noes: 302

---

Conservative: 256
Liberal Democrat: 44

Business without Debate

Monday 23rd January 2012 Commons Chamber

Delegated Legislation

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Education

That the draft Special Educational Needs (Direct Payments) (Pilot Scheme) Order 2011, which was laid before this House on 7 December, be approved.—(Stephen Crabb.)

Question agreed to.

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Local Government

That the draft City of Birmingham (Mayoral Referendum) Order 2012, which was laid before this House on 5 December, be approved.—(Stephen Crabb.)

The Speaker’s opinion as to the decision of the Question being challenged, the Division was deferred until Wednesday 25 January (Standing Order No. 41A).

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Regulatory Reform

That the draft Local Better Regulation Office (Dissolution and Transfer of Functions, Etc.) Order 2012, which was laid before this House on 6 December, be approved.—(Stephen Crabb.)

Question agreed to.

Administration

Ordered,

That Angela Smith be discharged from the Administration Committee and Mark Tami be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection..)

Environment, Food and Rural Affairs

Ordered,

That Tom Blenkinsop and Cathy Jamieson be discharged from the Environment, Food and Rural Affairs Committee and Iain McKenzie and Ms Margaret Ritchie be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Scottish Affairs

Ordered,

That Graeme Morrice be discharged from the Scottish Affairs Committee and Pamela Nash be added.—(Geoffrey Clifton-Brown, on behalf of the Committee of Selection.)

Closure of Downhills Primary School, Tottenham

Monday 23rd January 2012 Commons Chamber

22:15

[Mr David Lammy (Tottenham) (Lab)]

The petition is from the governors, parents, teachers and community of Downhills primary school in Tottenham.

The petition states:

The Petition of residents of Tottenham,

Declares that the Petitioners believe that there has been inadequate consultation about the Secretary of State for Education’s plans to close Downhills Primary School and re-open it as an academy; that the Petitioners value the links with the community that the school has maintained over the last 100 years; that the Petitioners believe that the Secretary of State’s plans are undemocratic and undermine the recent progress that has been made towards improving standards at the school and that the Petitioners oppose any attempts to change the status of the school without the consent of the community.

The Petitioners therefore request that the House of Commons urges the Secretary of State for Education not to exercise his powers to close Downhills Primary School and re-open it as an academy.

And the Petitioners remain, etc.

[P000998]

Gender Balance in Broadcasting

Monday 23rd January 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Stephen Crabb.)

22:16

[Nadine Dorries (Mid Bedfordshire) (Con)]

I was inspired to apply for this debate when, at a Christmas party, I met a very successful and very well-known BBC broadcaster who shall remain anonymous. What I was told shocked me, not least because that very famous individual told me that should he raise the issue within the BBC, life would be made so difficult for him that the end of his career would be just around the corner. I was given a quick resumé of how the BBC behaves with regard to women and female broadcasters, and the sexism inherent not only in the BBC but throughout the broadcasting arena and journalism in general. It was a shocking story.

What is even more shocking is that in the case of the BBC, the general public, 52% of whom are women, pay a licence fee to endorse the behaviour in question. According to the Library, the BBC receives £293 million a year in Government grants, £3.5 billion in licence fee revenue, £888 million from commercial business and £12 million from selling content overseas. It could not earn the last two figures without the Government’s subsidy and the licence fee.

Before I cite some of the examples that highlight the disparity in gender balance in the BBC, may I ask the Minister whether, when the next round of negotiations with the BBC begins and he decides whether to hand over another lump sum of taxpayers’ money and agree the licence fee settlement, he would like to tell the BBC that until it gets its house in order it will not be getting the dosh? In fact, may I go further? I think it is about time the Minister set up a parliamentary Committee to scrutinise the decision-making process within the BBC. Whatever it is doing at the moment, it is simply wrong.

I am not advocating degrading quotas; I am talking about basic commercial common sense. I have only half an hour, so I will cite just a few examples of what I am talking about. First, however, I wish to name-check Kira Cochrane and Alexander Campbell, as I have taken some of what I am about to say from work that they have researched and published, and Frances Rafferty from the National Union of Journalists, who has been very kind and helpful in sending me useful links and information.

Let us begin with radio, and Radio 2. The most listened-to music radio station in the world has not a single female daytime broadcaster. Is that not shameful? Radio 1 has one daytime female presenter. However, Radio 2 has “Sally Traffic”, whose job seems to be moving in and out of one studio after another to massage the egos of the male presenters who are there throughout the day. Although she outstrips most of the presenters in wit and rapport, I imagine that she earns a fraction of what the male egos that she massages do. Sally appears far more intellectual and witty than every male broadcaster whom she has to humour. However, the BBC bosses, whoever they may be, appear not to have noticed that.

[Tessa Munt (Wells) (LD)]

As far as I could see when preparing for this evening, there is not one woman with children in Radio 2’s management above assistant producer level. That includes the producers, the executive producers, the head of programmes and the controller of Radio 2. That situation may not come as a surprise.

[Nadine Dorries]

I thank the hon. Lady for that contribution. I have that table of figures, but I decided to concentrate on what the general public see from the BBC. However, I thank her very much for that intervention.

Even though the BBC is wholly funded, one way or another, by taxpayers, half of whom, as I said, are women, the BBC bosses seem to feel that the person who pays the piper does not need representing on daytime radio.

Mr Speaker, I am sure that you remember the amazing Annie Nightingale, and that you grew up, as I did, listening to her on Radio 1. She has more music knowledge in her little finger than the majority of radio presenters today on Radio 1. Do you know what Annie Nightingale does now, Mr Speaker? She presents one programme, one night a week, from 2 till 4 am. That is where the BBC has consigned Annie Nightingale. Jo Wiley is on Radio 2 three nights a week from 8 till 9.30 pm. That is as good as it gets. It is a double travesty. Vanessa Feltz is on Radio 2 weekday mornings from 5 till 6.30. Another music legend—I am sure you remember her name, too, Mr Speaker—Liz Kershaw, is on Radio 6 on Saturday afternoon from 1 till 4. That is where the BBC has placed those fantastic women.

Let us consider the male presenters on the BBC. Some of them are in their 70s and still in primetime spots, yet those women have been consigned to the graveyard. If the BBC placed a banner on top of Broadcasting House and wrote on it, “The BBC does not believe that women deserve to be represented on BBC radio”, that banner would be 100% accurate.

It is frankly amazing that Annie, Liz, Vanessa and Jo have kept hold of their jobs at all, because we all know what the BBC attitude is to women of a certain age. One female radio presenter was not so lucky. We have all heard about the treatment of Sarah Kennedy, who was harassed out of her Radio 2 early morning spot in the most appalling way after 17 years’ service. Mocked by Radio 1 male presenter Chris Moyles in a tribute evening to yet another male presenter, Terry Wogan, Sarah eventually threw in the towel, citing a campaign by two BBC male employees to get her out of her job. Sarah was not so lucky: someone was after her job. It is only because of the public outcry and anger that that graveyard spot, which was a good platform for a new male presenter trying to climb the ladder, is now hosted by Vanessa Feltz.

Let us move to news and current affairs. The “Today” programme on Radio 4 has 7 million listeners a day. Many of them are influential and decision makers. Yet only 16% of the voices heard on the “Today” programme—comprising both contributors and presenters—are women’s. As Jane Martinson states on the women’s blog, and as others have pointed out, if the female presenter is away from the presenting team, one can go two whole hours in the morning when listening to the “Today” programme without a single female voice, and have male voices speaking at you throughout all that time.

[Tessa Munt]

When we look at the structure of the radio system and the controllers of Radio 1, Radio 2, Radio 3, Radio 4 and Radio 5, we see that only Radio 4 has a female controller. The director of radio and the director-general are both male. I am sure that the hon. Lady agrees that in local radio, it is horrific that only one woman presents a breakfast show, out of 43 such flagship programmes.

[Nadine Dorries]

Perhaps the hon. Lady and I should apply for a joint Adjournment debate.

When questioned about the fact that there were no female voices on Radio 2 for two hours on one particular day, BBC editors said that that was okay because they did not receive any letters of complaint. I wonder whether they thought for a moment that the nation’s women are far too busy to write letters to male BBC editors. I suspect that most women believe that the BBC is so male dominated that there is no point in writing. Most women have read about the high-profile cases of Sarah Kennedy, Miriam O’Reilly, Anna Ford, Selina Scott, Moira Stuart, Arlene Phillips and others. Sensible women will think, “What’s the point of writing to such an ageist, sexist organisation—even if I am paying for it?”

If radio is not bad enough, one can only cringe at television, especially the BBC. Let us consider the more popular and highly rated programmes. It would appear that in the minds of TV bosses, the viewing public only enjoy watching ageing male hosts accompanied by young blonde females. I shall list some of the names: Forsyth and Daly, of “Strictly Come Dancing”; Chiles and Bleakley; Schofield and Willoughby; and Cowell and Holden. Even on sensible “Countdown”, we find Stelling and Riley. “Elderly male, young female” is an unchallenged formula.

It is not just that women’s representation on radio and TV is woeful, but that sexism and ageism are combined, and at their worst, in current affairs and politics. Only one in 10 women working in television are aged over 50. As the number of people that TV employs shrinks, the biggest losers are women, by two to one.

I note that on the day of this debate the “Daily Politics” show invited three female MPs as guests—a rare day indeed, and a sticking plaster over a gaping wound. At least this debate has had a tiny effect, even if for just one day. Perhaps it is time the BBC took a long hard look at its political news and current affairs programmes on both radio and TV, because the way in which they are presented says, to me and everyone else, that the BBC believes that women are not capable of presenting such programmes, and therefore by implication that they do not watch them.

Perhaps if women did watch such programmes, they could relate to the people presenting them. Let us forgive Andrew Marr’s line-up of the best 20 political moments of 2011, and the fact that each and every politician was male. Let us not include David Dimbleby or Jeremy Paxman or Jeremy Vine; let us give them an exemption, because all three are undeniable experts and silos of historical political knowledge, and considered to be more national treasures than presenters. I will do a quick round-up of the men who present TV news and current affairs: Robinson, Naughtie, Webb, Campbell, Marr, Craven, Davis, Snow, Stewart, Murnaghan, Boulton, Sopel, Mair, Simpson, Mason, Pienaar, Stourton, Portillo, Esler, Edwards, Matt Frei, Murphy, Austin, Gibbon, Crick, Thompson and Islam. That is just the top layer of news and current affairs. I challenge any hon. Member to start a list of women. They would get stuck at three names.

Hon. Members may have noticed that the name of Mr Andrew Neil was not in that list, but I will give him a quick mention. I have had an outburst against this particular gentleman; I am not proud of the fact that I described him as an ageing, overweight, orange toupee-wearing has-been. One could describe a number of male presenters in those terms. However, I made that outburst because of the outwardly sexist comments that that particularly rude man has made about female politicians on his “This Week” programme, which almost every week features three ageing men and a token woman. Why are we women paying for that? Not only do we not want to watch it; we object to paying for it. Mr Neil has a verbose style that is aggressive, abrasive and often rude, which massively turns women off. He uses the shadow public health Minister as his token female only to attack her on the programme, which he does frequently, including last week. Because she declined to appear, he again made unpleasant sexist comments about her.

I remember the first time I appeared on his programme. I was asked to appear on a Monday morning; all the MPs were on their way to the House of Commons and they could not get anyone else to speak. I ran over to College green and did a little piece to camera and gave a quick quote on David Cameron’s election campaign. Mr Neil thought I could not hear him as I finished, but I still had the earpiece in, and heard him say, “Well, she looked tired and out of breath there didn’t she?” Would he have said that about a male politician who had run over to College green to do that piece? No. It was another sexist, negative Mr Andrew Neil pearler, saved just for the women politicians. How can we possibly encourage more women into Parliament, when they see men like that, and the media in general, making sexist comments about female politicians? The Home Secretary was on the front of Total Politics magazine today, but all anyone has spoken about is how she looked and what she was wearing, not what she had to say or the substance of the article. Why would any woman want to join us in this place when that is how they are regarded and spoken about?

The BBC is seen as the holy grail by the left. I believe that an irrational desire by the left to protect the BBC and not attack it or highlight its faults has allowed the present situation to occur, under the prolonged former governance by Labour. It is a worrying theme that the left irrationally protects what it regards as the issues on its turf, sometimes to the detriment of women. MPs are also loth to challenge the BBC, for fear that they will no longer be invited to make their points on television or BBC programmes—and I will probably be living proof that they are right. However, such considerations are cowardly.

In conclusion, the left may have ignored the behaviour of the BBC while it was in government, but if the Minister continues that pattern of behaviour, I and others will view it as a dereliction of the duties of his office. I would like him to tell us in his response what steps he will take, apart from using the financial hammer—which I mentioned at the beginning of my speech—with which he can hit the BBC over the head. What else is he going to do to end the culture of ageism, sexism and poor-quality male-dominated programming that we women are paying for, and are subjected to?

22:30

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

I am grateful for the chance to respond to this important debate. My hon. Friend the Member for Mid Bedfordshire (Nadine Dorries) has a formidable reputation for bringing difficult issues to the House and raising subjects that others might fear to bring to public prominence. The representation of women across the media, but particularly at the BBC, is an important issue that is worth addressing.

Many of the statistics that my hon. Friend quoted are very much a cause for concern. Some of them came from a recently established campaign group called Sound Women that aims to support and celebrate the work of women in UK radio. It published an important report called “Tuning out”—which one can find on its website, soundwomen.co.uk—that was commissioned by the training agency Skillset, which I work with closely to promote skills in the creative industries. The report found that women are less likely to make it to the top of radio, making up just a third of senior managers and less than a fifth at board level. It will not surprise the House to hear that women in radio are more qualified than men, with three quarters having degrees, compared with less than two thirds of men. However, women are still paid less, by an average of £2,200 a year.

Older women with children are less well represented, as the hon. Member for Wells (Tessa Munt) said. In fact, a lot of women abandon the radio industry after the age of about 35. As was also pointed out by the hon. Lady, who supported my hon. Friend so ably in this debate, out of 50 BBC local radio breakfast shows, only one is presented by a woman. Some 84% of reporters and guests on Radio 4’s “Today” programme are men. Indeed, on 5 July 2011, one would have had to wait from 6.15 am until 8.20 am to hear one female contributor, alongside the 27 male contributors to that programme. My hon. Friend therefore raises an important point.

Having raised those issues of concern, let me make it clear that I am nevertheless an admirer and respecter of the BBC, which forms the cornerstone of public service broadcasting in this country. Personally, I for one think it is the finest public service broadcaster in the world today. We want to ensure that the BBC remains a national asset, but as my hon. Friend rightly pointed out, if it is to maintain its pre-eminence and prominence, it must address the issue of gender imbalance. We are well aware of the criticism that too many of the presenters at the BBC are men, and of the calls for more women presenters.

I want to make an important point; I am sure that my hon. Friend will regard it as a cop-out, but I am going to make it anyway. It is that the BBC is independent of the Government, and I do not think that Members would want to have it any other way. I do not think that they would want politicians to use a particular issue as an excuse to interfere too closely with the operational or editorial independence of the BBC. There is therefore, quite rightly, no provision for the Government to become involved in the BBC’s day-to-day operational and editorial decisions. For the same reason, the Government are equally committed to the independence of other broadcasters, and will not seek to intervene directly in their on-screen or staff gender balance.

The BBC agreement does, however, place a duty on the BBC executive board to make arrangements for promoting the equality of opportunity between men and women. The BBC executive board is accountable to the BBC Trust, and it is the duty of the trust to ensure that the duty on equality of opportunity is met. The BBC, Channel 4 and S4C are all subject to the Equality Act 2010, which seeks to eliminate discrimination and harassment and to advance equality of opportunity. Under the terms of the Act, all those broadcasters must publish equality objectives every four years, and publish information to demonstrate compliance with the general equality duty.

[Tessa Munt]

I am sorry to interrupt the Minister, but I find myself amazed that, while six of the 39 DJs at Radio 1 are women—all those DJs form the opinions of young women and young men across the country—that station had a greater number of female DJs in 1987. Setting four-year objectives does not seem to be having any impact whatever, if nothing has improved in all the intervening years.

[Mr Vaizey]

The hon. Lady makes her point forcefully, and I shall come to the points that she and my hon. Friend have raised.

I have mentioned the editorial independence of the BBC, and it is important to point out that all broadcasters’ content and output services are exempt from the provisions of the Equality Act, to ensure that politicians do not interfere in the editorial independence of those broadcasters.

Ofcom, the independent regulator, also has a duty in regard to the promotion of equal opportunities, and we are in the process of reforming that. I must emphasise that that does not mean that we will take those obligations any less seriously. However, with the Equality Act 2010, we believe that equality duties will be undertaken more efficiently with legislation in one place. We will be consulting shortly on our proposals, and I hope that the hon. Lady and my hon. Friend will participate in the consultation.

I think that to talk about redressing the balance is to put it too strongly, but I want to use this opportunity to point out areas in which broadcasters have made progress. My hon. Friend and the hon. Lady have both, quite rightly, highlighted the imbalance that exists in broadcasting, but it is worth pointing out that 50% of BBC Trust members are women. The proportion of females on the BBC executive board is only 42%, but that is still a far higher proportion than is found on the majority of corporate boards. Within the whole staff of the BBC, women make up 49% of the total, and more women are joining the organisation than men at the moment.

[Nadine Dorries]

That is an interesting figure. If we were to look at the proportions of men and women among the total number of people in the House of Commons, we would probably find that they were about the same, taking into account the administrative and secretarial jobs. It does not actually mean anything to say that half the staff of the BBC are women. Those in the key jobs—the important, opinion-forming jobs; the ones that people listen to—are men. A bit like the House of Commons.

[Mr Vaizey]

Certainly as far as I am concerned, the people in the House of Commons who do the administrative and behind-the-scenes work are as important, if not more important, than those who do the front-of-house work. I take my hon. Friend’s point, however, which is to draw attention to the public face of the BBC and to ask how female-friendly it is. I shall come to that point later. Let me finish my short defence of the BBC, however. In BBC Vision, for example, 63% of the staff are women and, in the audio music division, 53% of the staff are women.

My hon. Friend talked about The Guardian’s recent interest in the number of female presenters on BBC radio and, of course, Jane Garvey has raised the issue on “Woman’s Hour”. I noticed that today a very rare event happened on “Woman’s Hour”, as a Conservative MP appeared and it was a woman, my hon. Friend the Member for Redditch (Karen Lumley). That is, in a way, some progress. The BBC has some outstanding female presenters and it might amuse my hon. Friend the Member for Mid Bedfordshire to know that when the corporation sent us the list, at the top was Annie Nightingale. She can read into that what she likes. There were also Sarah Montague, Fearne Cotton, Shelagh Fogarty, who happens to be a personal favourite of mine, Jenni Murray, Lauren Laverne, Mariella Frostrup, Jo Whiley, Zoe Ball, Moira Stuart and, of course, Jane Garvey. If I might abuse my office, I am personally very disappointed that the BBC did not include Rachel Burden in that list. As hon. Members will be aware, she is the formidable female presenter on the BBC 5 Live Breakfast show, which is the show I listen to in the morning. There are some formidable presenters on the BBC.

In Channel 4, 58% of the employees are women, which represents a 1% increase on the previous year. Four out of seven of the executive team are women and so are six out of the 13 board members. Since we are trading names and numbers, as it were, Channel 4 also has a strong representation of women presenters, including Cathy Newman, obviously, who has recently joined Channel 4 News. Mary Portas, Kirstie Allsopp, Sarah Beeny, Katie Piper, Jo Frost, Anna Richardson and Davina McCall all lead their own shows.

There are also powerful women in the channel’s film and dramas: Vicky McClure in “This Is England”; Lauren Socha in “Misfits”; Meryl Streep in “The Iron Lady”, who won the 2012 Golden Globe award for best actress; and Olivia Colman in “Tyrannosaur”. Channel 4 has the formidable Baroness King leading its equality and diversity practice and, behind the scenes, it has also tried to tackle some aspects of production where women are under-represented. Channel 4 has placed a special emphasis through its online education projects on working with female writers and developers, a group still under-represented in the digital media.

Those are the statistics and the points that might balance the formidable case made by my hon. Friend the Member for Mid Bedfordshire. I noticed her reference to her spat with Andrew Neil, and I do not know whether she has talked herself out of appearing on “The Daily Politics” in future. I hesitate to make any joke about that, because when I heard that she had described Andrew Neil as an orange, overweight, toupee-wearing has-been, I was going to say that almost all those adjectives probably apply to me.

My hon. Friend made some very serious points and this has been an ongoing issue in the media, which is why we have very good campaign groups such as Women in Film and Television. The organisation Sound Women would not have been created out of thin air—there must have been a problem with women appearing on radio as presenters.

My offer to the hon. Member for Wells and to my hon. Friend the Member for Mid Bedfordshire is to broker a meeting with both of them—if that would be all right with you, Mr Speaker, as they both made formidable contributions to the debate—with the director-general of the BBC, Mark Thompson, and we will sit down and discuss this issue. It is an issue that we must keep pressing at. Some people might regard it as frivolous or something that makes good copy for a parliamentary sketch, but my hon. Friend made a valid and fundamental point: we want to hear a balance of voices on the radio and to see a balance of presenters on the television. We do not want to set quotas or diktats, but we do want to maintain a dialogue and pressure. I look forward to brokering that important meeting.

Question put and agreed to.

22:44

House adjourned.

Ministerial Correction

Monday 23rd January 2012 Ministerial Corrections

Monday 23 January 2012

Transport

Monday 23rd January 2012 Ministerial Corrections

Departmental Consultants

[Jonathan Ashworth]

To ask the Secretary of State for Transport which consultants and advisers her Department has employed in respect of the (a) Thameslink programme, (b) Thameslink rolling stock procurement and (c) Intercity Express programme; how much she has budgeted in respect of each such contractor; and how much each contractor has invoiced to date.

[Official Report, 23 November 2011, Vol. 536, c. 411-12W.]

Letter of correction from Mrs Theresa Villiers:

An error has been identified in the written answer given to the hon. Member for Leicester South (Jonathan Ashworth) on 23 November 2011. The full answer given was as follows:

[Mrs Villiers]

[holding answer 21 October 2011]: The information requested can be found as follows.

[Mrs Villiers]

[holding answer 21 October 2011]: The information requested can be found as follows.

Written Ministerial Statements

Monday 23rd January 2012 Written Statements

Monday 23 January 2012

ECOFIN

Monday 23rd January 2012 Written Statements

[The Chancellor of the Exchequer (Mr George Osborne)]

The Economic and Financial Affairs Council will be held in Brussels on 24 January 2012. The Chancellor will attend. The following items are on the agenda to be discussed (as of 20 January 2012):

European Markets Infrastructure Regulation (EMIR)

Ministers will have an exchange of views on the outstanding issues on EMIR. Trialogues have been ongoing since ECOFIN reached general agreement on 4 October. The outstanding issues relate to the process for authorisation of central counterparties (CCPs), and provisions relating to third countries. The Danish presidency is seeking a solution that retains the key principles of the Council position while integrating a number of the European Parliament’s concerns.

On the authorisation of CCPs, the Government believe that the National Competent Authority must have a pre-eminent role. Therefore, any agreement should maintain the principles established at the 4 October ECOFIN. On third country provisions, the objective should be the smooth functioning of the global derivatives market while providing ex ante legal certainty to market participants. It is important that jurisdictions recognise the global nature of the derivatives market and ensure that legislation enables the smooth functioning of this market in a safe manner.

Proposals from the Commission on Economic Governance

ECOFIN will hold a first exchange of views on two Commission proposals to strengthen economic governance. There are no direct policy implications for the UK as these proposals apply to the euro area only. The first proposal concerns strengthening surveillance of budgetary policies. It would require: euro area member states to present their draft budgets at the same time each year and give the Commission the right to assess them; closer monitoring and reporting requirements for euro area countries in excessive deficit procedure; and that euro area member states have in place independent fiscal councils and base their budgets on independent forecasts.

The second proposal concerns strengthening economic and fiscal surveillance of euro area countries facing, or threatened with, serious financial instability. It aims to ensure that the surveillance of member states under a financial assistance programme, or facing a serious threat of financial instability, is: robust, follows clear procedures and is embedded in EU law. Under the proposal, the Commission would be able to decide whether a member state experiencing severe financial instability should be subject to enhanced surveillance. The Council would be able to issue a recommendation to such member states to request financial assistance.

The UK welcomes these proposals, as they will play an important role in improving fiscal stability in the euro area, which is a good outcome for the UK. The Government are however keen to ensure that, despite applying only to the euro area, these proposals maintain the role of the Council and EFC.

Presentation of the Presidency work programme

The presidency will present Ministers with its work programme. It has four priorities:

A responsible Europe—making progress on financial regulation dossiers and multi-annual financial framework (MFF) negotiations;

A dynamic Europe—revitalising the single market and encouraging policies which stimulate EU growth;

A green Europe—advancing energy efficiency and climate change initiatives; and

A safe Europe—including combating terrorism and ensuring the EU speaks with one voice on international affairs.

The Government agree that making progress on financial regulation dossiers is important, and will want to see budgetary restraint in the MFF negotiations. The Government support efforts to stimulate EU growth and strengthen the single market.

European Semester (incl. Annual Growth Survey and Euro-Plus Pact)

Ministers will have an exchange of views on the second European semester. The Government believe that the European semester should identify and prioritise policy measures that promote jobs and growth. To achieve this, ECOFIN Ministers need to ensure that fiscal consolidation and tackling macro-economic imbalances is pursued alongside growth-enhancing structural reforms. The Government do not agree with the focus on taxation in the annual growth survey; it is important that member states retain the flexibility to shape their own tax policies to suit their economic circumstances.

Follow-up to the G20 Meeting of Finance Deputies (Mexico, 19-20 January 2012)

The presidency will give a debrief of the G20 Finance Deputies’ meeting. Items include: the global economy and framework; strengthening of the international financial architecture; financial regulation including financial inclusion; and energy and commodities. This agenda item will provide further clarity on the direction that Mexico would like to take.

Implementation of Stability and Growth Pact

Ministers will discuss the Commission’s assessments of Belgium, Cyprus, Malta, Poland and Hungary’s progress on correcting their excessive deficits. The Commission has assessed that the first four member states have taken effective action and no further steps under the Excessive Deficit Procedure (EDP) are necessary. For Hungary, the Commission proposes to move to the next stage of EDP and recommends that the Council decides that no effective action has been taken to bring the deficit below 3% of GDP in a sustainable manner. Subject to this decision, the Commission may then propose new recommendations, with a view to Hungary effectively addressing its excessive deficit. The Government believe that sound public finances are essential for sustainable economic growth.

Revised Code of Conduct of the Stability and Growth Pact

The presidency will ask Ministers to endorse a revised code of conduct. The code of conduct provides guidelines on: the implementation of the stability and growth pact and the content of stability and convergence programmes. The code of conduct has been updated in the light of the new economic governance legislation. The Government support the revised code of conduct.

Eurogroup-plus meeting on 23 January

Ministers will meet on 23 January, prior to ECOFIN. They will discuss the intergovernmental agreement and follow up to the December European Council. Ministers will also discuss the European stability mechanism. On growth and competitiveness, the Government are at the forefront of driving the EU growth agenda, and will continue to press for action. On the intergovernmental agreement, the Government will be engaging constructively in discussions. The UK will not be party to the new treaty.

School Travel Pathfinder Schemes

Monday 23rd January 2012 Written Statements

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

I am required under section 80(1) of the Education and Inspections Act 2006 (EIA 2006) to prepare and publish, before 1 January 2012, an evaluation of the operation and effect of school travel schemes approved under schedule 35C to the Act.

The School Travel (Piloting of Schemes) (England) Regulations 2007 made provision for the piloting of the school travel schemes and listed the information which local authorities were required to include in their applications to pilot such schemes. As none of the schemes submitted fully met the criteria, none of the schemes was approved, and consequently there is no evaluation to publish. I am therefore proposing, by means of an order under s80(2) EIA 2006, to provide for the cessation of the school travel scheme provisions in section 508E and schedule 35C of the Education Act 1996. The order will specify 1 August 2012 or a date shortly after on which the provisions are to cease. 1 August 2012 is the earliest date cessation can be effected under s80(3) EIA 2006.

Healthy Lives, Healthy People: Improving Outcomes and Supporting Transparency

Monday 23rd January 2012 Written Statements

[The Parliamentary Under-Secretary of State for Health (Anne Milton)]

Today I am publishing the new public health outcomes framework. “Healthy Lives, Healthy People, Improving outcomes and supporting transparency”. This will help enable Government, Public Health England, the NHS and local government to be held to account in how well we are doing in improving and protecting the nation’s health. To do this, we have focused on the most important things we want to do to improve and protect the nation’s health and wellbeing and improve the health of the poorest, fastest.



The White Paper “Healthy Lives, Healthy People: Our Strategy for public health in England” (Cm7985), described a new era for public health, with a higher priority and dedicated resources. We set out the scope for a new public health system refocused around achieving positive health outcomes for the population and reducing inequalities in health. This public health outcomes framework sets the context for the system, from local to national level. This is a national framework and local priorities and objectives will be set through local health improvement plans. The framework sets out indicators to measure how we are improving and protecting health at key stages in peoples’ lives and to reduce inequalities in health.



We will continue to work across Government and with our partners in public health, local government, the NHS, other public services and the third sector to improve the data we will rely upon to provide information on how we well we are doing to improve outcomes.



“Healthy Lives, Healthy People, Improving outcomes and supporting transparency” has been placed in the Library. Copies are available to hon. Members from the Vote Office and to noble Lords from the Printed Paper Office.



The document is also available at: www.dh.gov.uk/health/2012/01/public-health-outcomes.

EU Treaties

Monday 23rd January 2012 Written Statements

[The Lord Chancellor and Secretary of State for Justice (Mr Kenneth Clarke)]

The Home Office and the Ministry of Justice have prepared the second annual report to Parliament on the application of protocols 19 and 21 to the treaty on European Union (TEU) and the treaty on the functioning of the European Union (TFEU) (“the treaties”) in relation to EU Justice and Home Affairs (JHA) matters. The report is submitted on behalf of both my own Department and that of the Secretary of State for the Home Department.

On 9 June 2008 the right hon. Baroness Ashton, the then Leader of the House of Lords, made a statement setting out commitments by the Government to Parliament in respect of the scrutiny of decisions to be taken by the Government in accordance with protocol (No. 21) to the treaties on the position of the UK and Ireland in respect of the area of freedom, security and justice (“the Justice and Home Affairs opt-in protocol”). These commitments were designed to ensure that the views of the Scrutiny Committees should inform the Government’s decision-making process.

This included a pledge that the Government would lay a report in Parliament each year and make it available for debate, both looking ahead to the Government’s approach to EU Justice and Home Affairs policy and forthcoming dossiers, including in relation to the opt-in, and providing a retrospective annual report on the UK’s application of the opt-in protocol.

On 20 January 2011, the Minister for Europe confirmed in his statement to Parliament on enhancing parliamentary scrutiny of decisions in the area of EU Justice and Home Affairs that the coalition Government have undertaken to maintain this commitment, and this is the second such report. It covers the period 1 December 2010 to 30 November 2011. For completeness the report also covers the application of protocol 19 to the treaties on the Schengen acquis integrated into the framework of the EU (“the Schengen opt-out protocol”). The Government’s decision-making process for this protocol is the same as for the Justice and Home Affairs opt-in protocol.

Maritime Training Scheme

Monday 23rd January 2012 Written Statements

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

Further to my announcement of 22 June 2011, I would like to inform Parliament of the outcome of the independent review into the requirement for Government support for merchant navy training and skills development and how best to spend any continuing Government funding.

I have concluded that continuing Government support for maritime training is required. The consultants’ findings, accepted by the independent panel, were that there was a good value for money case for the retention of Government funding. Evidence was presented to me showing that for each working year of a seafarer who has benefited from Government funding, approximately £14,500 in additional output is created relative to that of a UK worker displaying average productivity.

With over 90% of the UK’s import and export trade by weight transported by the maritime sector, I believe continuing Government support in this area will reflect our ongoing commitment to economic growth and will help to maintain the competitiveness of this sector.

I have therefore decided to provide a budget of £12 million a year for the support for maritime training scheme for the remainder of this Parliament. In view of the forecast national shortage of trained seafarers and the need to develop the next generation of UK officers and ratings, I intend that the majority of the budget be focused on supporting initial training for cadets studying at junior officer level with the remainder supporting ratings training and ratings to officer conversion training.

I will be making a number of minor changes to the current scheme to achieve greater value for money by maximising the intake of trainees while ensuring more rigorous accountability structures are in place.

These changes are consistent with the Government’s wider commitment to improve the transparency and accountability of public spending.

I will also be considering longer-term options to deliver merchant navy training within an overarching skills and apprenticeship framework.

A copy of the consultants’ findings and the recommendations made by the independent panel have been placed in the Library of the House.