House of Commons

Monday 5th March 2012 Commons Chamber

Monday 5 March 2012

The House met at half-past Two o’clock

Prayers

Monday 5th March 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Monday 5th March 2012 Commons Chamber

The Secretary of State was asked—

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

1. What recent assessment he has made of the outcomes of his Department’s work experience schemes for unemployed people.

[Julian Sturdy (York Outer) (Con)]

17. What recent assessment he has made of the outcomes of his Department’s work experience schemes for unemployed people.

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

Work experience is a very positive scheme, and 51% of people are off benefits 13 weeks after starting a placement. I am delighted to tell the House that, notwithstanding the attempts to damage the programme, it remains strong, with another 200 employers, including Airbus and Centre Parcs, wanting to get involved to help young people to gain vital experience of work.

[Stephen Metcalfe]

Will my right hon. Friend expand on the answer he has just given and tell the House what other support he has received since the row about work experience broke out? This vitally important and publicly popular initiative helps young people to get the experience they need to get into work. Would he echo Sir Stuart Rose’s comments that companies involved in the scheme should show some “backbone” and not give in to politically motivated protests?

[Mr Duncan Smith]

Before I answer that question, may I pass our message of support to the Chair of the Select Committee on Work and Pensions, who has had a terrible accident? We wish her well and a speedy recovery to her normal place for Work and Pensions questions.

There has been a lot of support for the work experience programme. A small number of people, in some cases backed by the unions, have made trouble. I shall quote Sir Stuart Rose—this is interesting because his successful career started at the bottom. He said:

“We’re offering young people the opportunity to…understand what the workplace is…really…about and it appears that there is some plan to sabotage this which…is nonsense…it seems …straightforward. You can come in, you can get work experience and if you…don’t like it after the first week you can”

leave.

[Julian Sturdy]

Given the importance of schemes such as work experience to giving unemployed people the skills they need to compete in the labour market, especially in the north, will my right hon. Friend update the House on discussions he has had with companies that support the Government in trying to achieve that?

[Mr Duncan Smith]

My right hon. Friend the Minister of State who has responsibility for employment held a meeting with a number of employers who are part of the scheme, all of whom backed and supported it. They were concerned that the message goes out that the scheme benefits young people. One employer who is not a profit-maker—the chief executive of Barnardo’s—said:

“Scrapping the scheme would have taken a lifeline from thousands of young people.”

I should also quote a girl called Dawn, who was on the programme after having real trouble finding work. She said that work experience was daunting, but that:

“It’s work experience—the clue’s in the name. Nobody is going to give you a job unless you get experience first, and that means sometimes working for free”.

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

I urge the Secretary of State to sort out the teething problems with the programme—there have been such problems. Will he look at the Morrisons initiative, which is different and overcomes many of the criticisms that have been made of the programme? Will he also be assured that many Opposition Members want a scheme that gets young people into work and work experience rather than being on the dole?

[Mr Duncan Smith]

I accept the hon. Gentleman’s positive involvement. I simply say to him that the scheme as it stands is incredibly positive. More than 50% of those who enter the work experience scheme go into work, many with the employers who took them on for work experience. The reason we set up the scheme is what young people said, and they told us, “Our problem is that when we go to an interview, employers ask us, ‘What experience have you got?' We say, ‘We don’t have experience.' They say, ‘We can’t employ you.' But without employment we can't get work experience.” I genuinely believe from our discussions with employers that the scheme is a positive move, but I will certainly look at the scheme that the hon. Gentleman talks about.

[Stephen Timms (East Ham) (Lab)]

I echo the Secretary of State’s good wishes to the Chair of the Work and Pensions Committee.

Work experience is a very good thing. The Minister of State has emphasised that the scheme is voluntary—his U-turn last week underlined that—but jobcentre letters say the opposite. They say:

“If, without good reason, you fail to start, fail to go when expected or stop going…Jobseekers Allowance could cease to be payable”.

The Department for Work and Pensions website says the same. Until recently the website also said that the minimum wage applied unless work experience was compulsory. That point has mysteriously disappeared from the site. Will the Secretary of State get a grip, clear up this extraordinary muddle and end the confusion in his Department?

[Mr Duncan Smith]

I will do a little deal with the right hon. Gentleman: I will ensure that any little discrepancies are sorted out, providing that he and his party step forward and publicly welcome the whole idea of the work experience programme and condemn the many unions, such as Unite, GMB, Unison and others, that are backing this ludicrous Right to Work programme. Will the Opposition state that the unions should withdraw their backing? Last week, we held discussions with employers, and they asked that no sanctions be taken unless they say that something has happened to damage the business or cause a problem. We have agreed that in essence, and that is how it will stand.

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

2. What steps he plans to take to reduce child poverty by 2015.

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

Across Government, we are investing in a range of programmes to tackle the drivers of child poverty. Universal credit alone will lift 350,000 children out of poverty. The previous Labour Government spent £150 billion on tax credits from 2004-2010, much of which was targeted at families with children, but despite that, as the Institute for Fiscal Studies noted recently, we are still a long way off hitting the targets. There is still much to be done.

[Mr Cunningham]

Is the Secretary of State aware that, according to the IFS, the Government will not reach their statutory target by 2015? Equally importantly, is he aware that of the 35,000 children in Coventry and Warwickshire whose families are on the poverty line and will experience a reduction of £1,400 a year, many are disabled? Will he reconsider his position on that?

[Mr Duncan Smith]

Interestingly, the IFS assumed that no changes to future policy would be made and did not account for fundamentals, such as behaviour change, or for education policies such as the early intervention work and some of the education reforms. The IFS did not consider several other policies—for example, the work with disadvantaged two-year-olds, the £180 million bursary fund, the early intervention grant and the fairness premium—which is fair enough, but we believe that they would affect its figures. We are desperately keen to eradicate child poverty, as we originally stated, and we stand by that. We did not enter power not to do that. The hon. Gentleman needs to acknowledge, however, that we also inherited a terrible deficit and huge debt problem. Those things tend to collide, but we are doing our level best—this is what universal credit does—to rectify the situation for the poorest in society.

[Mr Julian Brazier (Canterbury) (Con)]

Does my right hon. Friend agree that in a country where one child in five is growing up in a household without work, the best way to tackle child poverty in the long run is to break the cycle of dependency now running, in some cases, into three generations? Many of the measures he has mentioned, including work experience schemes, literacy programmes, subsidy programmes and so on, are designed to do that.

[Mr Duncan Smith]

I agree with my hon. Friend. We also inherited a system with far too much in-work poverty. Our aim is to move as many people as possible through universal credit and into work, and to ensure that, through universal credit, they are better off. That is the key point. I have also made the point, however, that the idea of “poverty plus a pound”, by which we just rotate money between people to move them slightly above a particular level before they collapse back, is a mistake and led to poverty rising on the previous Government’s watch.

[Mrs Anne McGuire (Stirling) (Lab)]

A recent report by the Children’s Society indicates that there will be a sharp increase in the number of disabled children living in poverty when universal credit is introduced, as a result of the £1,400 a year reduction. All the statistics show that poverty disproportionately impacts on families with disabled children. Does the Secretary of State think that the current levels of support are too generous? If not, why do the Government continue with this very harsh proposal?

[Mr Duncan Smith]

It is my belief that universal credit will hugely help people in those situations, and the transitional protection for them will also protect those who move on to a slightly different level. My main point to the hon. Lady, who I know takes this very seriously—

[Mrs McGuire]

Right honourable.

[Mr Duncan Smith]

I beg her pardon. I say to the right hon. Lady—quite rightly so and well deserved—that we are in the business of trying to secure life change through all these groups so that they can take control of their lives. My hon. Friend the Minister with responsibility for disabled people is working to ensure that it is far easier than ever before for people to get into work and take control of their lives, and that is what most of the lobby wants us to do.

[Andrew Griffiths (Burton) (Con)]

3. What steps his Department is taking to support students who suspend their studies due to illness.

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

It is important to support students who become seriously ill. Those whose illness or disability causes them to suspend their studies with the agreement of their college may be eligible for disability living allowance, which has a three-month qualifying period. A student in receipt of DLA can also claim employment and support allowance. However, those who are terminally ill are not subject to the qualifying period and can claim DLA and ESA immediately.

[Andrew Griffiths]

My constituent Ian Leech sadly lost his daughter Melissa to non-Hodgkin’s lymphoma in 2008, while she was a student. It was six months before Mel received any financial support from the Government. I am proud that last year the Government removed an important barrier to seriously ill students receiving support, by ending the rule that said that those who had to suspend their studies would be treated as having received their student loan. However, those students cannot claim ESA unless they qualify for DLA, even though they might be suffering from a disease such as cancer. Will the Minister look again at what more can be done to help students?

[Maria Miller]

I am very much aware of the case that my hon. Friend raises and pay tribute to Mr Leech, who has been a tireless campaigner for change in this area. Employment and support allowance is an income-replacement benefit; therefore, students are eligible only under limited circumstances, because their main source of financial support is the education system. However, I understand my hon. Friend’s point that a three-month qualifying period for DLA means that some long-term sick students might have to serve a waiting period before they become eligible for ESA. I am taking the opportunity presented by the introduction of PIP— the personal independence payment—to reconsider the position, and I can tell him that I am looking closely at it.

[Jonathan Ashworth (Leicester South) (Lab)]

A constituent of mine, Mr Ollie Evans, had to interrupt his studies owing to a serious illness. He was unable to claim the various benefits that the Minister has outlined; at the same time, the Student Loans Company was clawing back all types of support that it had given him. Will she commit to working in collaboration with the Minister for Universities and Science to put in place a more flexible system of support for students who have to interrupt their studies?

[Maria Miller]

The hon. Gentleman will already be aware that if students fall ill they are eligible for student finance for up to 60 days—I am sure that he will have advised his constituent of that. I can assure him that as PIP is developed and we consider the issue further, we will be talking to colleagues in other Departments. The important thing is that we have the right support in place for long-term sick and disabled students.

[Mr Marcus Jones (Nuneaton) (Con)]

4. What effect he expects the Government’s youth contract to have on the number of unemployed young people.

[Mark Menzies (Fylde) (Con)]

16. What effect he expects the Government’s youth contract to have on the number of unemployed young people.

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

We are in the final stages of preparing for the launch of the youth contract in April. We believe that it will have a positive impact on youth unemployment, providing nearly half a million support opportunities for young people. We and employers are working together to give young people the support they need to gain employment.

[Mr Jones]

At a meeting with business people in my constituency some months ago, there were calls for a small tax break, or some other form of support from the Government, to help them take on young people. I am therefore delighted that 160,000 job subsidies worth up to £2,275 will now be available for each business that employs an 18 to 24-year-old through the Work programme. Can the Minister comment on the level of interest in the scheme so far?

[Chris Grayling]

There is already considerable interest in what is planned, and I hope that it will give unemployed young people a leg-up in the workplace. We hope that the challenge that they face owing to a lack of previous experience—which we were talking about earlier—will be ameliorated, at least to some degree, by the incentive payment that we will provide, and that the result will be far more young people getting their first opportunity to get into work.

[Mark Menzies]

I thank the Minister for his original answer, but can he tell me what Jobcentre Plus will be doing differently as a result of the youth contract?

[Chris Grayling]

We are also stepping up the support that we provide to young unemployed people through Jobcentre Plus, which will include more frequent work-focused interviews. We are also recruiting more youth advisers in Jobcentre Plus to provide help to the young unemployed. We are determined to deal with the problem of youth unemployment, which in all parts of the House we agree is a massive challenge for the nation.

[Sheila Gilmore (Edinburgh East) (Lab)]

If the scheme is to cover 5% of those in the NEET category—those not in education, employment or training—what plans does the Minister have for the other 95%?

[Chris Grayling]

I assume that the hon. Lady is referring to the programme that we have just announced for 16 to 17-year-olds. Of course, the big challenge with that age group is not the total number of NEETs, because most young people move quickly back into education. However, there is a hard core of young people who spend long periods not in education or employment, and they are not in the benefits system either, so we have no direct means of engaging with them. I hope and believe that the new approach—founded on payment by results, with charitable and private sector groups working together to try to reach that audience—will make a big difference to engaging with them and getting them back into either employment or education.

[Mr Gerry Sutcliffe (Bradford South) (Lab)]

How will the scheme help people in my constituency, where youth unemployment has increased by 88% in the past 12 months? Is not this too little, too late?

[Chris Grayling]

I am afraid that the hon. Gentleman is continuing to cite figures that are statistically inaccurate. The figures to which he refers were distorted by the previous Government’s propensity to bury young people in the statistics where they would not be visible. Now that we do not put people on to a training allowance, which counts as being off jobseeker’s allowance, we are telling the truth about the scale of youth unemployment and seeing the real picture. Our statisticians have made the calculations and found that, when those statistical adjustments are taken into account, there has been no increase in youth unemployment of more than six months over the past two years.

[Duncan Hames (Chippenham) (LD)]

Rather than falling since the general election, youth unemployment in my constituency has risen by five people; it is still too high, however, and I certainly welcome the youth contract. Clearly, it has also risen in other parts of the country at a rate that the west of England has not experienced, so will there be a way of ensuring that the take-up of the youth contract will be high in the parts of the country where it is most needed?

[Chris Grayling]

I absolutely agree with my hon. Friend that this is a huge challenge for us. The truth is that, since the general election, youth unemployment has risen by approximately 100,000, with about half that increase coming from full-time students looking for part-time jobs. I regard any level of youth unemployment as too high, and I hope that the subsidies that we provide for employers who hire young people, together with the extra work experience and apprenticeship places being created through the youth contract, will help those in precisely the parts of the country to which he is referring.

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

6. What recent progress he has made on reassessing the incapacity benefit case load.

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

Incapacity benefit reassessment has been successfully implemented and the reassessment exercise remains on track to be completed by spring 2014. We are reassessing around 11,000 claimants on incapacity benefits each week. Those who are ready and fit for work are able to receive support via the Work programme. Those who are not fit for work will continue to receive ongoing support for as long as they need it.

[John Woodcock]

I thank the Minister for his answer, but is it not true that growing delays in the process are increasing the uncertainty for vulnerable people? Does he accept the evidence provided by groups such as the Barrow & District Disability Association that the call-back time for the advisers’ helpline has increased from three hours to often more than 24 hours? Does he acknowledge that if this process runs aground due to incompetence, the most vulnerable people and the taxpayer will lose out?

[Chris Grayling]

Let me repeat that the incapacity benefit reassessment process, which is just coming up to one year old, is running on time. We have some delays in the claims process for new claimants of employment and support allowance, which is resulting in people having to wait an average of five days longer to be assessed than was previously the case. That is too long. They are having to wait five days longer as a result of the changes implemented following Professor Harrington’s review, but we have a programme in place to enable us to catch up by the summer.

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

8. What estimate he has made of the cost to a typical small business of introducing real-time reporting of PAYE information.

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

Real-time reporting of PAYE information aims to reduce administrative burdens for all employers, and builds on processes that are already in place. The current burden of PAYE falls disproportionately on small employers. We are building on existing processes, and the annual saving to all businesses is estimated at £300 million per year from 2014-15. The smallest employers—those employing nine people or fewer—will be given free software upgrades by Her Majesty’s Revenue and Customs.

[Teresa Pearce]

I thank the Secretary of State for that answer. A recent HMRC consultation showed that 75% of people thought that the Government’s time scale for implementing real-time PAYE information was unachievable. All employers will have to move to the new system by October 2013 if universal credit is to succeed, yet some small businesses are still unaware of the time scale, and many are not computerised. What additional assistance will the Government provide to help such businesses to ensure that they meet the timetable?

[Mr Duncan Smith]

HMRC, which is now responsible for this measure, meets me and others in the Department regularly. We have embedded some DWP employees in the HMRC programme; they are locked together. They are, as I understand it, on time, and they are having constant discussions with large and small employers about the issues and the problems, and assessing what needs to be done to make this happen and to make all the changes. We must remember that all those firms collect those data anyway; the only question is how they report it back within the monthly cycle. We are on top of that but, obviously, we want to keep our eye on the matter.

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

Small businesses and business more widely rightly demand that the burden Government place on them is as light as possible, but the current restrictions on saving for a pension with the National Employment Savings Trust mean that businesses must deal with multiple pension providers. Last month, the Pensions Minister told me that he was reflecting on whether to remove the restrictions on NEST. Will the Secretary of State confirm that reflection will now turn into action?

[Mr Duncan Smith]

I was just discussing the matter with my hon. Friend the Pensions Minister. As the hon. Gentleman knows, we are looking at this right now. Even though we feel sympathetic to what he says, we are still reflecting on the matter.

[Andrew Bingham (High Peak) (Con)]

9. What assistance his Department has provided to vulnerable people to protect them from cold weather.

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

This winter, we have made more than 5 million cold weather payments at a cost of more than £129 million and over 12 million winter fuel payments at a cost of over £2 billion.

[Andrew Bingham]

I would like to make a plea on behalf of the pensioners in my High Peak constituency, which, as the Minister’s colleagues on the Front Bench will know from previous visits, is one of the coldest in the country. Will the Minister concede that winters in High Peak are cold, bringing increased heating costs for all our residents, but more particularly for old-age pensioners?

[Steve Webb]

I am grateful to my hon. Friend. Although I have not visited his constituency, I suspect there is a clue in the name. He will be pleased to know that three weather stations are linked to his constituency—Bingley, Woodford and Leek—and each has been triggered twice this winter, so low-income pensioners and disabled people will all have received £50 this winter to help them with their fuel bills.

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

Does the Minister accept that, despite the allowances, energy bills remain simply a nightmare for so many elderly and vulnerable people on low incomes, so would it not be appropriate for his Department to have a word with the Department of Energy and Climate Change, and particularly with the Secretary of State, about the very substantial increases in energy prices, which, as I say, are the cause of so much misery for our elderly people?

[Steve Webb]

I am sure the whole House would agree with the hon. Gentleman that high energy prices, poor home insulation and a lack of competition in the market are all issues for pensioners—and my right hon. Friend the Secretary of State is very much aware of them. I can tell the hon. Gentleman that 600,000 of the poorest pensioners received £120 off their electricity bills this winter through the warm home discount scheme—something that will be expanded in future winters.

[Tracey Crouch (Chatham and Aylesford) (Con)]

10. What steps his Department is taking to support people with mesothelioma.

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

The Department provides support for sufferers of mesothelioma by way of compensation paid through the industrial injuries scheme. The main benefit is a weekly industrial injuries disablement benefit, while lump sum compensation payments are also available through the Pneumoconiosis etc. (Workers’ Compensation) Act 1979 and the diffuse mesothelioma scheme 2008.

[Tracey Crouch]

I thank the Minister for that reply. He will be aware that, because of its shipbuilding and industrial heritage, Medway has the second highest rate of mesothelioma deaths in the UK. His Department has been in active discussions with various stakeholders regarding a compensation fund of last resort for some time now. Given that we are expecting a spike in mesothelioma deaths in the next few years, will he advise us when the discussions will conclude and the outcomes will ensue?

[Steve Webb]

My hon. Friend is a powerful advocate on behalf of her constituents on this terrible condition. We accept that this process is taking longer to conclude than we had hoped. I can assure her, however, that my noble Friend Lord Freud is continuing in active discussion with the insurance industry and others, and that we are determined to bring forward our proposals as soon as possible.

[Nic Dakin (Scunthorpe) (Lab)]

Is “as soon as possible” within the next six months or the next year?

[Steve Webb]

Rather than set an arbitrary deadline, we are keen to conclude as rapidly as possible. One important step forward has been the setting up of the employers’ liability tracing organisation. Often, people worked for firms many years ago, making employer liability insurance difficult to come by. This tracing service is helping people to get the insurance payouts to which they have every entitlement.

[Alex Cunningham (Stockton North) (Lab)]

11. What steps he is taking to tackle youth unemployment.

[Tony Lloyd (Manchester Central) (Lab)]

19. What steps he is taking to tackle youth unemployment.

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

The youth contract, to which I referred earlier, is worth nearly £1 billion. It builds on the substantial support already available to help unemployed young people to enter work. It includes more intensive support for all 18 to 24-year-olds, additional funded work experience places and a new wage incentive scheme delivered through the Work programme.

[Alex Cunningham]

The number of young people in my constituency who are not in education, employment or training is double the national average, and it has been suggested that the area should be treated as a hot spot for action. Stockton borough council is doing its bit as a local employer, but its powers are limited in the wake of spending cuts. Will the Minister take specific action to help the hardest hit areas, such as mine, and will he make proper resources available so that real things can happen, rather than tinkering around the edges?

[Chris Grayling]

As the hon. Gentleman knows, I regard the labour market in the north-east as one of our big priorities. That is why we have targeted the area with support through the regional growth fund and established an enterprise zone in the Tees valley, and that is why we are doing all that we can—through the Work programme, the different aspects of the youth contract, and our work in the skills arena in providing more apprenticeships—to bring about both private sector growth and an increase in the skills of the hon. Gentleman’s constituents to help them get into work.

[Tony Lloyd (Manchester Central) (Lab)]

The Minister has form with respect to inner-city Manchester: he once compared Moss Side to the film “The Wire”. Will he tell me whether he takes the question of youth unemployment seriously? We know that, if left unchecked, it will have an impact on all the malaises that lead to exactly the sort of thing that we see in north American cities, and we do not want to see it once again in inner-city Britain.

[Chris Grayling]

Let me say first that the hon. Gentleman clearly never read the speech that I made, and secondly that I defend my comments in relation to the country as a whole in the wake of the terrible scenes that we saw last summer. That issue is one reason why we must focus on youth unemployment, why we are investing so much money in tackling it, and why it is at the top of the Government’s list of priorities. It is just a shame that the last Government failed to deal with the problem in good times, when it started to become an issue after 2004.

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

Youth unemployment is far too high. I warmly welcome my right hon. Friend’s youth contract proposals, but does he agree that basic skills and qualifications are also vital to ensuring that young unemployed people obtain jobs?

[Chris Grayling]

My hon. Friend is absolutely right. We have introduced skills conditionality in Jobcentre Plus, and have also increased the flexibilities available to our skills providers to ensure that when a young person who is out of work has a skills gap, we can refer him or her to a training course immediately to ensure that that gap is filled.

[Robert Halfon (Harlow) (Con)]

Is my right hon. Friend aware that the number of apprenticeships in Harlow has increased by 76% in the past year? Is that not a better way of getting rid of the problem of youth unemployment than the dependency culture loved by Opposition Members?

[Chris Grayling]

My hon. Friend is right—and that statistic is no coincidence, because he, as the local Member of Parliament, has put a huge amount of effort into trying to ensure that more apprenticeship places are provided in Harlow. He deserves a lot of credit for that, as do all Members who are looking for extra apprenticeship opportunities, holding job fairs, setting up job clubs, and making a real difference to their constituents.

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

12. What recent progress he has made on the implementation of universal credit.

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

We are making good progress towards the delivery of universal credit in 2013, and I have fortnightly progress meetings with officials and weekly reports from my office. I also chair the universal credit senior sponsorship group, which brings together all Government Departments and agencies that are relevant to the delivery of universal credit. Design work is well under way and is being continually tested with staff and claimants, and the development of the necessary IT systems will continue in parallel.

[Mr Burley]

Many of my constituents complain to me that the current benefits system is far too complicated. There are more than 50 different benefits that people can claim, although no one appears to know the exact number, which leads to huge confusion among those who are genuinely in need. Can the Secretary of State confirm that universal credit will reduce that complexity, improve the user experience and, most important, make clear to all claimants that it will always pay to work?

[Mr Duncan Smith]

I can confirm that. Universal credit will put together all the benefits that are relevant to people going back to work. Benefits that are not relevant to the Work programme will not be included, but the rest will. That will hugely slim down the complexities, and will ensure that people understand that in every hour for which they work, they are better off in work than out of work. The migration will take place in three phases over four years, and each phase will bring in a new group of claimants of those different benefits until we have finally completed the process and there is a single universal credit.

[Ann Coffey (Stockport) (Lab)]

As the Secretary of State says, when the universal credit is introduced in October 2013, a couple with two children and working 16 hours a week will be better off in work than on benefits, so why is he introducing changes to the working tax credit this April that will make the same family £728 a year worse off than an equivalent family with no one working? That does not seem to make much sense in policy terms.

[Mr Duncan Smith]

The tax credit system, which the hon. Lady’s party left us, is administered and run by the Treasury. She said that I was bringing this measure in, but the Treasury has made that policy decision. [Interruption.] Before Opposition Members get over-excited, I should add that I of course fully support everything my colleagues at the Treasury do. I remind the hon. Lady that when universal credit is reintroduced, people who fall into the bracket in question will be £95 better off than they would be on benefits. I also remind Opposition Members that we inherited a massive debt that the last Labour Government racked up, and we have to reduce it. This measure is one of the mechanisms by which to do that.

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

13. What steps he is taking to tackle female unemployment.

[Jessica Morden (Newport East) (Lab)]

15. What steps he is taking to tackle female unemployment.

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

The Government are supporting women to move into employment, including self-employment, through the Work programme and our business mentoring scheme. We are also improving careers advice and training, and encouraging more women into apprenticeships. The action we are taking to increase flexibility in the workplace and support with child care costs will also help to open up opportunities for women.

[Mr Bain]

I thank the Minister for that answer, but she did not mention the fact that female unemployment is now at a 25-year high. The Daycare Trust has found that, with nursery costs having increased by an average of 6% in the last year, some families are no longer better off in work once child care costs are taken into account. When will the Government accept that the self-defeating cuts in child care tax credit have made the female jobs crisis far worse?

[Maria Miller]

The hon. Gentleman will also know that we are doing a great deal to help to make child care more affordable for those parents who need to use it. Early years education has been increased to 15 hours a week for all three and four-year-olds and our support for disadvantaged two-year-olds has increased by £760 million. An extra £300 million will go in through the universal credit to help women who are currently working limited hours to get access to subsidised child care. This is the sort of practical support that can truly help.

[Jessica Morden]

In Wales, women are currently being hit disproportionately hard by job losses. Indeed, last month’s unemployment figures show that there were 2,000 more women out of work but 5,000 fewer men out of work. As the public sector job losses begin to bite, what extra are the Government doing to help women in this regard?

[Maria Miller]

We entirely understand, and take very seriously, the challenges women face in getting back into the workplace, including the problem of retaining jobs. That is why the Minister with responsibility for employment, my right hon. Friend the Member for Epsom and Ewell (Chris Grayling), is putting so much effort into the Work programme and universal credit, both of which will help many hundreds of thousands of workless households into work. Again, that is the sort of practical support that can truly make a difference for women.

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

Of the 348 current vacancies listed at the Malton job centre, some of the hardest to fill are care worker posts. Will the Minister use her good offices to ensure that women returning to work are pointed in that direction as well as to skills such as national vocational qualifications?

[Maria Miller]

My hon. Friend is right: care work is now a very important job in all our communities. Jobcentre Plus has a number of vacancies in that area, and it is always trying to ensure that people with the appropriate training apply for them. As she rightly says, we also need to ensure that people have access to training, and the Work programme can help in that respect.

[Mr Philip Hollobone (Kettering) (Con)]

Motivation, employability and skills are the attributes that best help unemployed men and women into the workplace. Will my hon. Friend the Minister congratulate Conservative-led Kettering borough council, of which I am a member, on its employability and skills fair to be held this Friday, which will bring together local unemployed men and women with agencies and employers in an attempt to tackle the unemployment situation head-on?

[Maria Miller]

My hon. Friend is right: we should applaud the work of those councils, including Kettering, that ensure that such skills fairs take place. Through them, unemployed people can learn not only where the jobs are but where the training can be found. There are currently more women starting apprenticeships than men, which shows that great changes can be made.

[Ian Austin (Dudley North) (Lab)]

Despite promising policies to cut unemployment and make work pay, the Government are supporting measures that will leave many mums better off out of work. Is it not clear that these out-of-touch Ministers have not got a clue what life is like for mums struggling with food and fuel bills, given that their benefit and tax changes will cost the average family £580 this year, with thousands being hit by up to £4,000 as a result of the tax credit cuts alone?

[Maria Miller]

I am sorry, but rather than leaving the country with the massive deficit that the hon. Gentleman’s party left us, the Government are putting practical programmes in place—if these had been done when his party was in government, the country would perhaps not be facing the current fiscal deficit.

[George Eustice (Camborne and Redruth) (Con)]

14. What assessment he has made of the effect of employment trends on the operation of the Work programme.

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

We published adjusted projections of attachments to the Work programme in December. Those revised projections have been communicated to providers and published in the House of Commons Library. The revised projections take account of the latest Office for Budget Responsibility forecasts, observed trends in referrals since June, and policy changes.

[George Eustice]

I am grateful for that answer. The Work programme is a crucial element in helping the long-term unemployed back into work, and I particularly welcome the emphasis on payment by results. However, as our economy emerges from its current problems, there will be some regional variations in the job market. What is the Minister doing to monitor the situation? If necessary, might he consider a regional element to the pay structure?

[Chris Grayling]

I am pleased to be able to reassure my hon. Friend on this. I was in his county of Cornwall last week to meet Work programme providers in both the private and voluntary sectors, and what I saw was very encouraging. The progress they are making is similar to that being made elsewhere in the country, and there is no obvious sign of the regional variation he describes. I wish to pay tribute to the voluntary sector organisations I met, which are very involved in the Work programme. I pay particular tribute to Groundwork, which is running one of the most innovative motivational programmes for some of the hardest to help I have yet seen in the Work programme. That is, of course, helping his constituents and will do the right thing to help them into work.

[Alun Cairns (Vale of Glamorgan) (Con)]

18. What progress has been made on the implementation of the recommendations in Professor Harrington’s review of work capability assessments.

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

We are continuing to implement the reforms recommended to us by Professor Malcolm Harrington. He argued for a number of changes in his first report, all of which have been implemented, and we are in the process of implementing the changes recommended in his second report.

[Alun Cairns]

I thank the Minister for his response. One third of employment and support allowance claimants have mental health conditions and a significant number of initial work capability assessment decisions are overturned on appeal when further evidence becomes available about their condition. What action is the Minister taking to ensure that medical evidence is taken on board at a very early stage in order to prevent a number of appeals?

[Chris Grayling]

This is one area where we have worked very hard to secure a change. A large amount of new evidence was indeed appearing only at the appeal stage and that was one of the key things that Professor Harrington suggested we address. We are now bringing in medical evidence much earlier—at the start of the process, when the decisions are taken or when a reconsideration is taking place in Jobcentre Plus. There are now few circumstances in which new evidence appears at the appeal stage, and that is really important.

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

I am sure that the Minister will be aware of the research undertaken by Citizens Advice Scotland for its report “From pillar to post”, which highlighted some issues that Professor Harrington should be considering in his further reports. Will the Minister meet me and representatives of Citizens Advice Scotland to discuss those concerns so that he can discuss them with Professor Harrington before he undertakes his third review?

[Chris Grayling]

I have many meetings with people involved in these matters. I suggest that it is better for the hon. Gentleman and Citizens Advice Scotland to meet Professor Harrington directly to raise those concerns, rather than for me to be a middleman. We listen carefully to the recommendations he makes, and I would be happy to arrange that meeting for the hon. Gentleman.

[Paul Maynard (Blackpool North and Cleveleys) (Con)]

20. What steps he is taking to reform bereavement benefit.

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

A public consultation was launched in December 2011, seeking views on options for reforming bereavement benefits to ensure that they provide effective support to those who lose a husband, wife or civil partner. The consultation closes today and we will publish an official response to it in due course. That will summarise the comments received and outline the Government’s plans for reform.

[Paul Maynard]

I thank the Minister for that reply. Bereavements clearly cause a period of great stress for the families involved, and I welcome the Government’s review to ensure that we have a suite of payments that are fit for purpose and easy to understand. Will he bear in mind the problem that a number of my constituents have encountered, which they are struggling to understand? Benefits allowances are payable based on either the national insurance contributions of the deceased person or the widow’s or widower’s status, whereas the bereavement payment is based only on the NI status of the deceased person, and in the depth of their grief many people struggle to understand what seems to them to be an anomaly.

[Steve Webb]

My hon. Friend is right to point out that different bereavement benefits, allowances and payments have different contribution rules. One of the issues on which we are consulting is whether they should be aligned in a more accessible way and although the consultation closes today, I shall take my hon. Friend’s question as a submission to it.

[Helen Goodman (Bishop Auckland) (Lab)]

Not for the first time, I had a constituent in tears in my surgery last week as she had to pawn all her possessions to pay for her husband’s funeral. When the Minister simplifies the bereavement benefits, will he undertake not to use it as an opportunity to save money, too?

[Steve Webb]

I am pleased to give the hon. Lady that assurance. She will, I am sure, have read the consultation document we produced before Christmas, which confirms that this is about spending the support we give to people who have been bereaved in a better way, not about reducing the spend.

[Mr Rob Wilson (Reading 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)]

The Welfare Reform Bill is expected to receive Royal Assent later this week and will mark an important moment, cementing a new contract with the country that states that we will protect the most vulnerable and provide a system that is fair to the taxpayer by making sure through universal credit that work will pay. I believe that those changes are long overdue and I am grateful to all in this House who have helped to get them on the statute book.

[Mr Wilson]

The shadow Chancellor claims today that families are better off on benefits, where so many were trapped during 13 years of complex Labour reforms. Will my right hon. Friend reassure the House that he will change all that with the universal benefit and make it his mission to ensure that no family is better off on benefits?

[Mr Duncan Smith]

I can confirm to my hon. Friend that the whole purpose of the Welfare Reform Bill, including the universal credit, which is at the heart of it, is that people will be better off in work than on benefits. I am always astounded by the fact that although many Opposition Members quite legitimately say that they support the universal credit, during its passage through this House and the other place they have never actually voted for it.

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

I want to bring the House’s attention back to the question asked by my hon. Friend the Member for Stockport (Ann Coffey). She has exposed an important truth: a couple on the minimum wage were £3,000 better off in work under Labour but after the changes that will be made in April they will be £700 better off on benefits. Will the Secretary of State tell us how many people he expects to give up work because they will no longer be better off in a job?

[Mr Duncan Smith]

I do not expect anyone to give up work, because the jobcentres and the jobcentre staff will work with people to ensure that, as far as possible, they work up the hours and take advantage of the benefits that come with working more hours. I say to the right hon. Gentleman, as ever, and to the Opposition that they behave as though when they left office they left a perfect situation, but they left a massive deficit and debts piling up. He was the one who said at the time that there was no money left, so perhaps he would like to tell us where he was going to get the money from to pay off some of the deficit.

[Mr Byrne]

Let me give the Secretary of State a simple lesson in economics: the more people who are in work, the more tax comes into the Treasury; the more people who are on the dole, the more we pay out in welfare payments. That is why welfare payments are going through the roof. The Work programme is in chaos, the Minister for the Armed Forces is saying that there is a crisis in the funding model, and now we find out that people will be better off on benefits than in work. Will the Secretary of State promise us that in the Budget he will fix the situation whereby it no longer pays to go out and get a job?

[Mr Duncan Smith]

The only group that is in chaos is the Opposition. First, they have completely failed to admit and recognise that they left this economy in a desperate state. Secondly, they said that they supported key measures in the Welfare Reform Bill but have never voted for them. They also voted against some of their own measures, which we carried through in our Bill. The reality is that the right hon. Gentleman’s economics do not add up: going on a spending spree, spending £150 billion on benefits and achieving nothing is a failure.

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

T2. Will my right hon. Friend advise us what steps he is taking to ensure that benefit fraud is reduced?

[Mr Duncan Smith]

We have a whole series of measures. We recently introduced a new fraud and error strategy, which is already having some success. Future fraud will be reduced now, and agreed by the Office for Budget Responsibility in a sense, but we will reduce future fraud right now by £237 million. The plan and target is for us to reduce it by about £1.4 billion by March 2015. These are major measures over and above what we were left by the Opposition, who seemed quite content to watch fraud and error spiral out of control.

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

T3. As you know, Mr Speaker, the Wedgwood museum in Stoke-on-Trent is one of the greatest museums in the world and is facing the liquidation of its collection due to faulty pension legislation. The problem lies with the 2008 occupational pension schemes regulation and the last man standing principle, which leaves a solvent employer liable for the whole of the deficit in a multi-employer scheme. That was never meant to apply to charitable collections. Will the Minister review that legislation before we sacrifice more of our national heritage to the lawyers?

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

When any charity or other organisation joins a last man standing pension scheme, it is important that it take proper advice about the liabilities it is taking on. Obviously, that is a general observation. On this specific case, the Under-Secretary of State for Culture, Olympics, Media and Sport, the hon. Member for Wantage (Mr Vaizey), has spoken to the chairman of the Pension Protection Fund about the Wedgwood museum, has explained the importance of the collection for the nation and has asked her whether she can find a way of preventing the collection from being broken up. That is something we all want to see.

[Greg Mulholland (Leeds North West) (LD)]

T4. My constituent Vicki Gilbert relies on the disability living allowance mobility component, which gets her the blue parking badge she needs to go about her daily life. Despite the fact that she is an amputee with no possibility of recovery, she has been forced to go through periodic reassessment, and because of the backlog she has had to wait five weeks without a blue parking badge. Does the Minister agree that the process is superfluous in such situations, and will she look at this issue so that others in similar circumstances do not have to wait for their badge?

[Mr Speaker]

I feel an Adjournment debate coming on, and it will not be long.

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

I know that blue badges are incredibly important for disabled people in getting out and about and I understand the hon. Gentleman’s concerns. The Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker), is looking into the issues to do with blue badges, and I will make sure that he is aware of the comments that have been made.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

T6. Further to the question asked by my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Gregg McClymont) from the Front Bench, do Ministers agree that the current restrictions on the National Employment Savings Trust that restrict transfers and limit the amount that can be saved each year diminish the pressure on other established providers to bring down their excess costs and charges? While the Government are reflecting on this, surely they are missing an opportunity to make pensions more affordable for everyone.

[Steve Webb]

The previous Government put those restrictions in place for a good reason—to try to make sure that NEST focused on the bottom end of the market. NEST has had a positive effect and new entrants have come into the market, but we are continuing to look at that issue because we are determined to make sure that people have a choice of good-value, low-cost pension providers.

[Tessa Munt (Wells) (LD)]

T5. My constituent Gillian Reeves is actively looking for work and is expanding her skills, knowledge and experience by volunteering for local voluntary organisations and charities in Somerset. Will the Secretary of State give some clarity to those who are keen to be out of the house and busy doing something useful but are advised by their jobcentre that they must limit their volunteering to 16 hours a week or lose their jobseeker’s allowance?

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

We now actively encourage people to volunteer. I prefer to see people out of the house and doing things. They have an obligation to keep up their job search while they do so, but I shall happily discuss this specific case because it certainly is not our intention that people’s volunteering opportunities should be limited.

[Kerry McCarthy (Bristol East) (Lab)]

One of my constituents recently had his adoption allowance cut because his child received disability living allowance. We managed to get that overturned but can the Minister make sure that guidelines are issued so that adoption allowance is not cut when DLA, which is intended to meet essential needs, is received?

[Maria Miller]

I thank the hon. Lady for that question. Disability living allowance is not linked to employment or income, so I shall look into the issue she raises in more detail.

[Neil Carmichael (Stroud) (Con)]

T7. The Work programme is proving to be much needed and effective, but may I seek reassurance from the Secretary of State that there will be downstream activity from contracts so that small businesses and local community projects can also participate in delivering outcomes?

[Chris Grayling]

That is indeed happening. We now have several hundred voluntary sector organisations providing support to the Work programme in various ways, some on a localised level in local communities. They are an important part of the team delivering the project. It is a partnership between the public, private and voluntary sectors and it is making a difference to unemployed people, despite the attempts of the Opposition to put about negative stories which are completely without foundation.

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

I have a constituent with a degenerative, very painful condition who is due to lose his employment support allowance in two weeks. He feels a long way from the labour market. He also does not think he will be attractive to employers because of the degenerative nature of his illness, but to date he has had no advice or support from anyone about how he might go about getting the kind of job that he might be able to do. What advice would the Minister give my constituent?

[Chris Grayling]

We clearly have had to take a difficult decision on time-limiting, which we have debated extensively in the House. It will apply only to people who have another form of household income or who have savings in the bank. Everyone on ESA is entitled to volunteer for participation in the Work programme, so my advice to the hon. Lady’s constituent would be to discuss his situation with the jobcentre. There is specialist support available for people with health conditions and disabilities.

[Pauline Latham (Mid Derbyshire) (Con)]

T9. What progress is being made to encourage people to get the best value for money when buying an annuity?

[Steve Webb]

My hon. Friend raises an important issue. When people have saved for a pension, it is vital that they get the best possible pension out of it, and that may not be from the company they have saved with. That is why I very much welcome today’s Association of British Insurers code, which will be mandatory for members of the ABI and will make it much more natural that shopping around becomes the default, rather than something that one has actively to seek out.

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

What are the Government’s plans for the future, if any, of the Department’s contract with Atos?

[Chris Grayling]

The Department’s contract with Atos runs until 2015. We have taken no decisions about how the contracting structure will work beyond that point. Consistency of provision was necessary through the incapacity benefit reassessment process, but we will not take decisions on the detailed structure of the renewal of that contract for some while to come.

[Brandon Lewis (Great Yarmouth) (Con)]

Does my right hon. Friend agree that rather than let the Socialist Workers party and their protest groups continue to confuse a good programme such as work experience with others, we should congratulate not only the companies that are doing so much for young people, but the young people who are taking up the scheme and have the motivation to build their CVs?

[Mr Duncan Smith]

As ever, my hon. Friend has hit the nail on the head. Work experience is a great programme, which is helping lots of young people to get into work at a reasonable cost to the Exchequer. Those two things need to be borne in mind. It is no good the Opposition sitting quiet, watching while trade unions back these anarchists and try to stop decent people getting into work.

[Hugh Bayley (York Central) (Lab)]

People diagnosed with mesothelioma—141 former railway carriage builders in York have now died—can often claim compensation from their employer. The earlier they get compensation, the less they and their dependants need in benefits, so will the Secretary of State talk to the Secretary of State for Justice about fast-tracking these cases through the courts, as is currently done in the royal courts of justice in London, and making that a nationwide approach?

[Chris Grayling]

I am happy to have that conversation. We are also working hard with the insurance industry to make sure that we match employees who have suffered from the illness with employers who may have disappeared some years ago, to ensure that we find the employers liability insurance policies that can pay those employees the compensation that they so desperately need.

[Anna Soubry (Broxtowe) (Con)]

My constituent Andrew Taylor relies on the Motability scheme in order that he can work and live independently. His concern is that the personal independence payment thresholds will interfere with that. What assurance can the Minister give him, please?

[Maria Miller]

I entirely understand the importance of mobility and being able to get out and about for disabled people. It is our intention that Motability should continue to be linked to the new PIP scheme. I take my hon. Friend’s comments into account.

[Toby Perkins (Chesterfield) (Lab)]

Beverley Herbert in my constituency was one of six people recently employed on a work experience basis by a major pub chain. Within four weeks, four of the others had gone, and the two people who were there for eight weeks collecting glasses were given permanent jobs, but were sacked within two weeks. Does the Secretary of State agree that for the work experience programme to enjoy widespread confidence, safeguards are needed to ensure that it does not end up exploiting people and providing free labour?

[Chris Grayling]

If Labour Members really want to answer the questions about the work experience scheme, they need to talk to some of the young people who have been through it, got jobs in their thousands and are delighted by the support they have received. That is what a responsible Government do: try to tackle a real challenge, find the right way to solve it and do so in a cost-effective way for the taxpayer. It is just a shame that the Labour party is not more vociferous in its support for what we are doing.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

Does my right hon. Friend agree that it is a great shame that the Labour party seems unable to get behind the work experience programme and condemn the protests out of hand, and will he tell the House why he thinks that might be the case?

[Mr Duncan Smith]

I have been wondering about that. Some right hon. and hon. Members—and some more so than others—have been conspicuous by their absence in this debate, and I sometimes wonder whether their trade union paymasters have something to do with their staying quiet throughout this whole debate.

[Mr Wayne David (Caerphilly) (Lab)]

The Welsh Assembly’s Labour Government have an initiative to help unemployed young people called Jobs Growth Wales. Do the central Government support it?

[Chris Grayling]

We support any sensible measures to tackle youth unemployment, because it is a challenge for all of us. The hon. Gentleman needs to answer this question: why is his hon. Friend the Member for Hayes and Harlington (John McDonnell) chairing a protest movement that is designed to stop young people getting the work experience opportunities that would get them into work and do the right thing for them?

[Mr Speaker]

Order. The hon. Member for Hayes and Harlington (John McDonnell) will not be answering anything now in the Chamber and is under no obligation to do so, but I know that the Prime Minister looks forward to doing so after his statement.

European Council

Monday 5th March 2012 Commons Chamber

15:31

[The Prime Minister (Mr David Cameron)]

With permission, Mr Speaker, I would like to make a statement on last week’s European Council. The Council focused on the measures needed to address the growth crisis in Europe and complete the single market. It also reached important conclusions on Somalia, Serbia and Syria. I will take each in turn.

First, on growth and jobs, this was the first European Council for some months that was not completely overshadowed by an air of crisis surrounding the eurozone. The problems in the eurozone are far from resolved and we need continued and determined action to deal with them, but the biggest challenge for Europe’s long-term future is to secure sustainable growth and jobs. Ahead of the Council, Britain, along with 11 other EU member states, set out in a letter our action plan for growth and jobs in Europe. This was an unprecedented alliance involving countries from all across Europe and representing over half the EU population and a quarter of a billion people. It included our traditional partners on this agenda in northern Europe, but it also included countries such as Poland, one of the largest in the EU, and countries such as Spain and Italy in the south of Europe which previously had not prioritised this agenda.

Over the past year we have frequently succeeded in inserting references to the single market and competitiveness into Council conclusions, and the Commission’s proposals have begun to reflect that, but what was encouraging about this Council was that an EU growth agenda, based around free trade, deregulation and completion of the single market, received stronger and broader political support from Heads of State and Government than ever before. A whole series of concrete commitments to actions and dates by which those actions need to be taken was inserted into the final communiqué. Now it is vital that these commitments are fulfilled.

The reason Britain so strongly insists on the completion of the single market is its huge potential for growth and jobs at home. The single market is the biggest marketplace in the world, with 500 million consumers. Removing barriers to trade in products has clearly had a huge impact and, with one of the largest manufacturing sectors in Europe, Britain has clearly benefited from that, but the benefit can be even greater if the single market is completed in other areas where Britain also has great strengths. The first of these is services. Full implementation of the services directive could add 2.8% to the gross domestic product of the EU within 10 years, and Britain would stand to be one of the prime beneficiaries because, from financial services to legal services to accountancy, Britain has some of the leading companies in the world.

The Council also agreed to complete the digital single market by 2015, which could boost EU GDP by as much as €110 billion every year. Again, that could particularly help Britain, with our strength in digital technology and all forms of creative content, including film, television and online media.

The Council agreed a specific deadline to complete the single market in energy by 2014. That could add 0.8% to EU GDP and create 5 million jobs. Again, many of those of jobs could be in Britain, because we are a major producer and exporter of energy, with the most liberalised market in Europe.

The Council agreed that there will be a special focus on trade—including trade deals with fast-growing parts of the world—at the next Council in June. Completing all open bilateral trade deals could add €90 billion to the EU economy, and a deal with the US would be bigger than all the others put together. Britain is one of the most open trading nations in Europe, and that is why trade deals have a particular importance for us.

On deregulation, for the first time we got a specific commitment for an analysis of the costs of regulation sector by sector, and we got a repetition of our call for a moratorium on new regulations for those businesses with fewer than 10 employees. Taken together, those measures represent a clear and specific plan for growth and jobs at EU level, and we must now ensure that Europe sticks to it.

I turn to wider international issues. On Somalia, the Council welcomed the conference held in London last month and the important conclusions that we reached, cracking down on piracy and terrorism and supporting a Somali-led process for a new representative and accountable government.

On Serbia, Britain has always been a strong supporter of European Union enlargement, from eastern Europe to the countries of the western Balkans. That policy has clearly demonstrated success in embedding support for democracy and human rights across the continent, so I was particularly pleased that the Council granted Serbia candidate status. I have no doubt that this decision would not have been possible without the courageous leadership of President Tadic. It was he who secured the arrest of Ratko Mladic, closing one of the darkest chapters in Serbian history, and it was he who took the brave decision to engage in a dialogue with the Kosovans.

It is also right to mention the leadership of the Kosovan Prime Minster, Hashim Thaci. He too has been prepared to enter into constructive dialogue with Serbia. That decision has rightly been rewarded by the European Commission, starting the process that can lead to a new contract between the European Union and Kosovo. That is the first important milestone on the long road for Kosovo itself to join the European Union.

Let me turn to the grave situation in Syria. I know that the whole House will join me in welcoming the safe return of British photographer Paul Conroy, who escaped from Baba Amr last week. I spoke to him this morning and he described vividly the barbarity that he had witnessed in the city. The history of Homs is being written in the blood of its citizens.

Britain is playing a leading role in helping to forge an international coalition to try to do three things: first, to make sure that there is humanitarian assistance for those who are suffering; secondly, to hold those responsible for that appalling slaughter to account; and, thirdly, to bring about the political transition that will put a stop to the killing. We must pursue all three at the same time.

First, on humanitarian assistance, Britain has already provided an extra £2 million to agencies operating on the ground in order to help deliver emergency medical supplies and basic food rations for more than 20,000 people. But the real problem is getting that aid into the affected areas. Now that the Syrian Government have occupied Baba Amr, they have a duty to allow humanitarian access to alleviate the suffering that they have caused. Britain will be working this week to secure a United Nations Security Council resolution that demands an end to violence and immediate humanitarian access. The longer access is denied, the more the world will believe that the Syrian regime is determined to cover up the extent of the horror that it has brought to bear on Baba Amr.

Secondly, we are working to make sure that those responsible for crimes are held to account. The European Council agreed that there must be “a day of reckoning” for those who are responsible. Britain and its European partners are working together to help to document the evidence of those atrocities so that evidence can be used at a later date. International justice has a long reach and a long memory.

Thirdly, we are working for a political transition to bring the violence to an end. The European Council was clear that President Assad should step aside for the sake of the Syrian people, and it supported the efforts of Kofi Annan to work for a peaceful process of political transition.

Syria’s tragedy is that those who are clinging to Assad for the sake of stability are in fact helping to ensure the complete opposite. Far from being a force for stability, Assad’s continued presence makes a future of all-out civil war ever more likely. What can still save Syria is for those who are still supporting and accommodating Assad's criminal clique to come to their senses and to turn their back on the regime. It is still possible that Syria’s national institutions can be saved and play their part in opening a path to an inclusive, peaceful and decent transition. We will deploy every tool we can—sanctions, aid, the pressure of diplomacy, reaching out to the opposition in Syria and beyond. We will work with anyone who is ready to build a stable, inclusive, non-sectarian, open and democratic Syria for all Syrians. That is the choice that is still open to those in authority in Syria. Now is the time for them to make that choice, before it is too late.

Finally, on Friday morning, 25 member states signed the intergovernmental agreement on the fiscal compact. This binds countries in the eurozone to a budget deficit of no more than 0.5%, and it involves countries giving up the power to write their own budgets if they go beyond it. Britain is not signing this agreement. Britain is not in the euro, Britain is not going to join the euro, so it is right that we are not involved. But it is important that we continue to ensure that vital issues such as the single market are discussed by all 27 members. That is exactly what happened at this European Council. Far from not being included in the vital discussion that affects our national interests, Britain helped to set the agenda at this Council and Britain helped to ensure its success. I commend this statement to the House.

15:40

[Edward Miliband (Doncaster North) (Lab)]

May I thank the Prime Minister for his statement and associate myself with his words on Somalia and Serbia?

Let me turn first to the pressing issue of the continuing violence in Syria. The pictures and testimony coming out of Homs in the past few days, and again today, are truly horrific, with women and fathers telling of their children being murdered in front of their eyes. Responsibility for the brutal repression and murder of innocent people lies firmly at the door of President Assad and his regime. It is appalling—I agree with the Prime Minister on this—that the Syrian Government have so far even refused requests for humanitarian access. In this context, it is even more important that Britain puts pressure on the international community to back a United Nations resolution and address this desperate situation.

May I ask the Prime Minister a few questions? First, will he update the House specifically on what he believes the UK and the EU are able to do to support the Arab League and the joint special envoy in his efforts somehow to broker an end to the bloodshed? Secondly, what steps are now in train to strengthen sanctions against the Assad regime, including through the proper enforcement of the Arab League sanctions? Thirdly, given that the Russian Government are responsible for vetoing the last UN resolution on Syria, does the Prime Minister agree that they will be judged by their actions rather than their words on Syria? No doubt he will be speaking to President-elect Putin in the coming days. What will he be telling him in those conversations? I hope—I am sure that I speak for the whole House and the country in saying this—that he will make it clear to President-elect Putin that action is necessary and that the Russian position is frankly unacceptable.

Let me turn to other matters discussed at the European Council, particularly jobs and growth. At his press conference on Friday, the Prime Minister was uncharacteristically shy—indeed, totally silent—about the main event of the summit: the signing of the fiscal compact. He did at least mention it today at the end of his statement, although I am very struck by the fact that in the written copy that was kindly distributed to me before he delivered it, the word “treaty” was used, but he could not bring himself to use that word. Of course, the reason he was uncharacteristically coy in his press conference is that his veto was not a veto; the treaty has gone ahead. Can he confirm that for all his claims, both the European Court of Justice and the Commission will be fully involved in implementing the treaty? Can he tell us how he will find out about the result of the meetings, in which a whole variety of economic questions that will affect the UK will be discussed? Apparently, his spokesman was asked about this last Wednesday, and the best that he could manage was to say, “The Prime Minister may not be in the room, but he will be in the building.”

[Chris Bryant (Rhondda) (Lab)]

He’s Elvis!

[Edward Miliband]

Yes, he is Elvis. I do not think that the spokesman’s comment is very reassuring.

It is a matter of record that the Prime Minister spent Thursday complaining that he felt frustrated because he did not feel that the other 25 leaders were taking enough notice of him as they prepared to sign the new treaty. However, on Friday, he claimed that in less than 24 hours, his powers of persuasion had once again triumphed:

“The communiqué has been fundamentally rewritten in line with our demands.”

After the experience of the veto, I am sure that he will forgive us all for being a little sceptical about his claims.

Let us examine the Prime Minister’s claims. He said that big strides forward were clear from the communiqué on energy, micro-enterprises, the single market and reducing trade barriers. However, will he confirm that the commitment on the energy market was in the conclusions of last February’s Council, that the commitments on the single market and trade simply echo those following the October 2011 Council, and that the supposed progress on micro-enterprises was in the conclusions of last December’s Council?

Listening to the Prime Minister, I had a sense of groundhog day. I then realised why. He sent the same letter to the European Council a year ago. Believe it or not—of course, we do believe it—he claimed the same triumph then:

“I organised a letter…making the case for action on growth, on deregulation, on completing the single market, on extending it to services… I think this has had a real impact”.

The people behind him are not looking amused. If last year’s letter had such an impact, why did he have to send it again? For the avoidance of doubt, I will place last year’s letter in the Library of the House, because it will probably be next year’s letter as well. For all the Prime Minister’s slapping himself on the back, the reality is that not one job has been created, not one family helped and not one business boosted. Why does he not learn the lesson that empty claims of a European triumph lose him credibility at home and influence abroad?

Why did the Prime Minister not press those countries with fiscal headroom at the summit to stimulate growth in Europe? Why does he not lead by example and sort out the jobs crisis here at home? He said on Friday and repeated today that there was not an air of crisis about the euro. Will he tell the House whether he thinks that a sustainable solution has been put in place for the euro area, because that is one of the most important long-term issues that we face and that the European economy faces?

The reality is that we have a Prime Minister who is isolated and without influence. He is unable to argue for jobs and growth because of his own failure at home. He achieved nothing for Britain at this summit. For all the good it has done us, he could have given the summit a miss and gone horse riding instead.

[The Prime Minister]

First, let me thank the right hon. Gentleman for what he said about Syria and answer his questions specifically. On the special envoy, we are helping Kofi Annan. Indeed, we are funding part of his mission. The right hon. Gentleman asked about sanctions. We are on round 12 of the EU sanctions against the Syrian regime. We will continue to ratchet up the pressure in every way that we can, with sanctions, asset freezes, travel bans and the like.

The right hon. Gentleman raised the issue of Russia and China. We will make it very clear, as we have already, that their veto was completely wrong. Their reputations are suffering as a result in the Arab world. I will be speaking to President Putin later today and will say that it is important that we have a unified UN Security Council resolution about humanitarian aid and access that puts a stop to the appalling killing that is taking place. I know that there is all-party support for that.

Turning to the EU Council, the right hon. Gentleman said that the communiqué did not change between the arrival of the countries at the EU Council and its conclusion on Friday. If he had done his homework properly—he was working very closely on his gags, and they are getting better—he would have noticed that there was no mention of deepening the single market in services in the original communiqué, but that we now have a clear commitment to that; that there was no mention of tackling regulated professions and properly opening up the single market, but that that is now clearly in the communiqué; and that there was no reference to deregulation, but that we now we have, for the first time, sector-by-sector analysis so that we can see the cost of regulations. When Labour used to go along to EU summit after EU summit, it never got half of that sort of thing.

On the issue of the treaty, there is one big problem in the right hon. Gentleman’s position, which is that he has got to make up his mind—would he have signed it or not? Why does he not just nod for a yes or shake for a no? I think I know the cause of the confusion. It is that there is a slight division between the Leader of the Opposition and the shadow Chancellor about whether they want to join the euro. The shadow Chancellor has said that it will not happen in his lifetime, whereas the Leader of the Opposition, when asked whether he would join the euro, said that it depended on how long he was Prime Minister. I agree with the shadow Chancellor—clearly, the Leader of the Opposition should not be Prime Minister in our lifetime.

[Sir Malcolm Rifkind (Kensington) (Con)]

May I welcome the European Council’s decision to prepare further targeted sanctions against Syria? If Russia continues to refuse to accept its responsibilities, should not the Arab League and Turkey, on their own incentive but with full support from the United States and Europe, close their land borders and airspace to all exports destined for Syria? If that were combined with a United States-led naval brigade, would it not prevent further armed supplies from being delivered to the Assad regime, thereby possibly saving the lives of tens of thousands of Syrian people?

[The Prime Minister]

My right hon. and learned Friend, with all his experience, makes an intriguing suggestion for further steps that the Arab League could take. Indeed, it has shown great leadership in putting pressure on Syria. However, if we want to turn the pressure up on the regime, a United Nations Security Council resolution that could be unanimously agreed and that was tough about humanitarian access and the unacceptability of what is happening should be part of the picture.

[David Miliband (South Shields) (Lab)]

May I welcome what the Prime Minister said about the developments in the western Balkans? However, I wonder whether he agrees that the most significant piece of economic news last week was the decision of the Spanish Government to amend their austerity programme in the face of stagnation and recession. The Prime Minister of Spain said he thought that when circumstances changed, policy should change. Is that not the kind of common sense that we need here?

[The Prime Minister]

I am not at all surprised by what the Spanish Prime Minister did. After all, he is stuck inside a fixed exchange rate system with no ability to have an independent monetary policy. If we had listened to the right hon. Gentleman all those years ago and joined the euro, we would be in the same boat.

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

Does my right hon. Friend agree that the responsibility for the appalling treatment being handed out to the people of Homs rests as much with those who authorise it as with those who carry it out? Is he aware that in the course of last week, Hillary Clinton said that there was a case for regarding President Assad as a war criminal? Does he agree?

[The Prime Minister]

I do agree with that. I believe that, as the Foreign Secretary has said, it is now a criminal regime. That is why it is so important that we gather the evidence of the war crimes, the human rights abuses and the dreadful things that are being done in Homs and elsewhere. As we collect that evidence, we need to be very careful to try to join all the dots, right up the chain of the command, to the people who run the regime. However long it takes, it is important that we are clear that there should be a day of reckoning when those who are responsible for crimes are made accountable for them.

[Mr Denis MacShane (Rotherham) (Lab)]

I thank the Prime Minister for highlighting the role of Boris Tadic and of Hashim Thaci, the Prime Minister of Kosovo, in moving the western Balkans forward. I should declare an interest—I recently published a book on Kosovo, which I hope all hon. Members will read. Does the Prime Minister agree that the next step forward is for Serbia to recognise Kosovo, as 90 other UN member states have done? That decisive step would help to bring more stability, peace and co-operation and a European future to the western Balkans.

[The Prime Minister]

I know that the right hon. Gentleman has considerable expertise in this area, and I thank him for welcoming the news. We have to understand that Serbia has already taken some quite important steps forward that were difficult for it to take. I was concerned that the European Union should demonstrate its openness to the steps that President Tadic had taken, because slamming the door in his face after he had taken them could have encouraged the extremists in Serbia rather than people who want to have a peaceful European future.

[Mr William Cash (Stone) (Con)]

In congratulating the Prime Minister on his veto—[Interruption.] It would have been an EU treaty had the Prime Minister not exercised the veto. In congratulating the Prime Minister on his veto and on his insistence on growth, does he recognise that we are at a crossroads, with two separate European treaties—one in line with the Lisbon treaty, and the other in breach of it? With the Chancellor of Germany now insisting on a further leap towards political union, will the Prime Minister take forward his current concerns about the legal position of the non-EU treaty to the European Court?

[The Prime Minister]

I am grateful for my hon. Friend’s support. He is absolutely right that that treaty places no obligations on us. It is worth making the point that it does not have the force of EU law: not for us, not for the EU institutions and not for the countries that sign it. As he knows, my view is that while we have reserved our legal position on the use of the institutions because there are real concerns, the path he outlines—of a legal challenge—is a less good one than using our leverage and influence to ensure that the agreement sticks to fiscal union rather than gets into the single market. That is the right approach and the one we are pursuing.

[Tony Lloyd (Manchester Central) (Lab)]

Everybody knows that without growth, it is virtually impossible for Greece’s problems to be reconciled. The Prime Minister talks about growth—he talks, for example, about a detailed account of regulatory reform—but nothing he has said and nothing that came out of the Heads of Government meeting gave a programme for growth. Where are the drivers for that?

[The Prime Minister]

I am afraid I do not agree with the hon. Gentleman. Britain has leading industries in services, energy and the digital economy. If we can complete the single market in those areas, there are real opportunities for British business. The additions to gross domestic product that we would have through completing the single market in those areas would partly mean jobs, investment and growth here in the UK. When there is no room for fiscal stimulus, as there is not in the UK because the budget deficit is so big, and when we already have a very accommodating monetary policy, the right way for growth is to look at structural reform and changes, just as we are doing through the EU.

[Nicholas Soames (Mid Sussex) (Con)]

Does my right hon. Friend agree that ambitious companies looking for growth in Mid Sussex will be extremely pleased with the steps the Government took towards seeking to resolve the crisis in Europe through growth? May I suggest that he looks further back—to European Councils of the past 10 years—to see how many good ideas signed up to came to naught, and could well, with a bit of effort, have come to something good?

[The Prime Minister]

My right hon. Friend is correct about this. Of course, Europe has on many previous occasions signed up to wonderful rhetoric about single markets, energy and all the rest of it. That is partly what the Lisbon agenda—not the treaty—was all about. What is different this time is that there was real pressure from the 11 countries that signed the letter with Britain to insist on actions and dates by which those actions would be taken. We must still ensure that those things are achieved. Many countries will want to hold up getting rid of regulations on services and many will want to keep some of those regulations on small businesses, but we now have a majority in the EU to try to fix those things in a way that is good for our country.

[Kate Hoey (Vauxhall) (Lab)]

Does the Prime Minister believe that the European Council will ever publicly criticise China, not just for what it is doing—or not doing—in Syria, but for what it is doing to its own people, particularly in Tibet? That is being done behind closed doors, with no brave photographers and journalists able to get in. Will the European Council start taking on the might of China?

[The Prime Minister]

One advantage of having forums in which the EU meets the Chinese leadership is that the EU can speak on behalf of all members about the importance of human rights, the rule of law and some of the issues the hon. Lady raises. Sometimes that is a useful way for pressure to be brought to bear. The EU Council president and the Commission President should have no compunction in doing that.

[Jane Ellison (Battersea) (Con)]

Many UK citizens, especially in London, are world leaders in the provision of services such as legal and insurance services. What are the roadblocks to regulatory reform? I am sure that the Prime Minister will join me in echoing the words of the Mayor of London, who said that we are always happy to see more businesses come to London.

[The Prime Minister]

The roadblocks come in two forms. First, there is the fact that the services directive has not been fully implemented, and some countries have been blocking it. Those countries—Germany is among them, I think—are now undergoing infraction proceedings by the European Commission. The second part of the problem concerns the number of regulated professions in Europe that countries continue to regulate separately rather than open up to competition. Britain has a relatively good record on both the services directive and getting rid of regulated professions but we need to keep up the pressure.

[Chris Bryant (Rhondda) (Lab)]

Was there any discussion of the European arrest warrant? I ask because the Prime Minister will know that a lot of his Back Benchers want Britain to withdraw from it, whereas the Liberal Democrats want no change at all. If he insists on riding two horses at once, may I suggest that he campaign for reform rather than withdrawal?

[The Prime Minister]

This was a European Council devoted to discussion of the economy and foreign affairs, so there was no discussion of the European arrest warrant.

[George Eustice (Camborne and Redruth) (Con)]

I welcome the consistency with which the Prime Minister has argued for the development of the single market. Does he agree that a successful single market does not require harmonised employment laws? Can anything be done at this late stage to mitigate some of the damaging effects of the agency workers directive in particular?

[The Prime Minister]

On the agency workers directive, it is difficult, because it has already effectively been implemented. However, as I and other countries said, it is no good pursuing a growth agenda in the EU if, at the same time, the Commission is still coming forward with directives that cost business and industry a huge amount of money. I mentioned the new ergonomics directive—believe it or not—which will cost business many hundreds of millions of pounds. As I said, however, with the new Prime Ministers in Italy and Spain, there is now southern support for the northern agenda of deregulation. We need to ride that horse as fast as we can.

[Sir Stuart Bell (Middlesbrough) (Lab)]

Is not the great challenge facing the European democracies the need to marry deficit reduction with sustainable growth in the interests of their peoples? Will the Prime Minister confirm that the present restructuring of Greek debt is the largest of its kind in history and a testament to the eurozone’s capacity to bring stability to the euro? Building on the questions from my right hon. Friend the Leader of the Opposition and my hon. Friend the Member for Manchester Central (Tony Lloyd), is this sustainable growth not essential for our country as well as the eurozone?

[The Prime Minister]

I agree with the hon. Gentleman on this point: 40% of our exports go to eurozone countries and we want those countries to recover. We have to accept, however, that doing that while dealing with fiscal deficits is enormously challenging. On Greece, those of us who are sceptical about the euro and who do not want to join it must accept, whatever our views, that the Greeks have made their choice. That is the path that they want to pursue. Whatever our misgivings, we must allow them to make those decisions to make their economy more competitive within the eurozone.

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

Given that the evidence from last week’s summit is that full participation in the EU is the best news for jobs and growth in this country and for all our neighbours, will the Prime Minister tell us the best estimate of the number of extra jobs that completion of the digital services and energy single markets will achieve by the end of this Parliament? Will he also reassure the House that we will lead the way in dealing with tax fraud and tax evasion at the next European summit in June?

[The Prime Minister]

We believe in dealing with tax fraud and tax evasion. That is vital. On the jobs effect of completing the energy and digital services single markets, I have given the GDP figures for how much it would add to the EU, but if the right hon. Gentleman would like, I could perhaps look at how many jobs that could convert into. It is worth noting, however, that the Commission’s forecast for growth this year is that Britain will grow faster than France, the EU and the euro area. Furthermore, according to International Monetary Fund figures, we will grow faster than France, Germany, Italy, Spain, the EU and the euro area this year and next year.

[Stewart Hosie (Dundee East) (SNP)]

The conclusions from the summit were clear:

“Innovation and research are at the heart of the Europe 2020 strategy.”

They are also vital for growth at home. The conclusions also referred to intellectual property, research and development, and patent protection. Can the Prime Minister give us an assurance that concrete progress was made towards a unitary patent protection scheme, as agreed by the Competitiveness Ministers last June, and also update us on the parallel process for the unified patent court?

[The Prime Minister]

There has been quite a breakthrough on the unified patent process, because the EU has been discussing this for, I think, around three decades. There is now an agreement among those countries that want to go ahead and have a unified patent process, so that is a success. There is not yet agreement about where the court should be. We strongly believe it ought to be in London, because London is the centre of international litigation and finance, but the French believe it should be in Paris and the Germans believe it should be in Munich, and there is what is known as a negotiation under way.

[Mr Peter Bone (Wellingborough) (Con)]

We are very lucky to have a British bulldog of a Prime Minister fighting for our interests in Europe, and of course, the Prime Minister is nearly always right on most things. [Hon. Members: “But…”] No, not “but”. Earlier he quite rightly said that Spain could not grow without devaluing its currency. I know that he cannot tell us what he says in private, but can we assume that the advice in private is significantly different from what he can say in public?

[The Prime Minister]

I did not quite say what my hon. Friend said. Spain is forecast to have a decline in its GDP this year. It has tough targets for its fiscal deficits, which it is trying to reduce, and at the same time its Government, like all others in Europe, want to get back to a position of growth. The point I would make is that I have always believed that it is better as a country to have both fiscal and monetary levers at our disposal, so that we have the most flexible way to respond to economic circumstances. In Britain, we are able to have tough measures to reduce our fiscal deficits, but at the same time, because we have an independent monetary policy, set by the Bank of England, we are not constrained by being members of a currency bloc. That is why I oppose Britain joining the euro—ever.

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

The Prime Minister takes great pride in having achieved a deeper and greater commitment to completing the single market and deregulation. Last Friday the hon. Member for Sevenoaks (Michael Fallon) said that some EU financial services proposals

“verge on the discriminatory, verge on protectionism”.

Has the Prime Minister made any progress on doing something about that?

[The Prime Minister]

We are making quite good progress on the financial services dossiers. We are having to deal with them one by one. There are some cases where we are actually arguing that countries ought to be able to regulate even further than the EU is allowing—for instance, in building up capital in our banks. However, there are some difficult financial services directives, which we have to deal with one by one, to make sure that they are proportionate and not threatening to our financial services industry, which, as I say, is not just an asset for Britain, but an asset for the whole of Europe.

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

Will my right hon. Friend elaborate on what he means by “reserving our position” in relation to the fiscal compact? Does it indicate that Her Majesty’s Government doubt the lawfulness of the compact under EU law and are considering a legal challenge at some future date?

[The Prime Minister]

Let me try to shed some more light on that. The position is this. I think there are some major legal question marks over what the 25 EU members have signed up to. However, the best thing for Britain to do, instead of going for an outright legal challenge—which might be partly successful—is to say, “We have our misgivings and concerns. We’ve reserved our position, but we won’t challenge, so long as you are sticking to the elements of fiscal union and not the single market.” I have given this considerable thought and I think that that is the right way forward, not least because there are some things being done in the agreement that the EU treaties give permission for, because they allow member states, as my hon. Friend will know—he is a great expert on this—to do things together under some circumstances. Therefore, the legality is not completely black and white. That is why I think it is in Britain’s interest to use our leverage to make sure that those involved stick to the fiscal union and do not get involved in the single market.

[Kelvin Hopkins (Luton North) (Lab)]

There are newspaper reports that the Prime Minister is one of a group of four Conservative EU leaders who are proposing to ostracise François Hollande, who is soon to be the socialist President of France. Given that Monsieur Hollande is more of a Euro-realist than President Sarkozy, would it not be sensible to work positively with him, instead of against him?

[The Prime Minister]

I can confirm that I am not part of any secret pact. I basically take a pretty straightforward approach, which is that it is not normal practice to see candidates in the middle of an election. I have made exceptions on occasion, but I am not going to make an exception in this case.

[Conor Burns (Bournemouth West) (Con)]

I congratulate my right hon. Friend on pursuing a growth and deregulation agenda at the EU Council. Did he have an opportunity over the weekend to see the reports in the newspapers here about proposed changes to the working time directive that would allow employees to add sick leave and paternity and maternity leave to their end-of-year holiday entitlement? Does he agree that such proposals run entirely counter to his agenda? Will he confirm that the Business Secretary would have his full support if he were to oppose them here in the United Kingdom?

[The Prime Minister]

My hon. Friend makes an important point. We have a blocking minority on extending the working time directive and we need to ensure that we keep that together. In my view, however, this is the sort of area that the European Union should not have got into in the first place.

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

Will the Prime Minister confirm that the UK will not be represented at meetings of the 25 countries?

[The Prime Minister]

We are not signatories to the agreement, so we will not be represented at the meetings. What was interesting about Friday was that, although they signed an agreement, there was only one meeting, which was a meeting of the 27 that discussed, funnily enough—[Interruption.] I was in the room at the time—[Hon. Members: “Ooh!”] We discussed not only the single market but single currency issues.

[Mr James Clappison (Hertsmere) (Con)]

I warmly welcome my right hon. Friend’s statement. Among the dubious legal matters contained in the fiscal compact, which is not an EU treaty, are the provisions relating to what is described as “reverse qualified majority voting”, which sounds bad and is even worse than it sounds. Will he be extremely vigilant and ensure that this coercive and profoundly undemocratic practice is not extended into the EU proper?

[The Prime Minister]

My hon. Friend makes an important point. This treaty does not have the force of EU law, either on us, on the institutions or on those that have signed it. I am sure that he could give us a very straightforward explanation of reverse qualified majority voting, but I can tell the House that it is basically a way to impose the will of a group of countries on to others, and I do not think that it is the way forward. But we still have not heard from the Opposition whether they would sign this treaty or not—[Interruption.] Well, would you sign it? Nod for yes; shake for no. Yes or no? It is one way or the other. Even Wallace and Gromit could do this! What is so difficult? Why don’t we ask the Leader of the Opposition’s brother? Maybe he could tell us. This is farcical. This thing now exists, and everyone else has signed it, so would you sign it or not? Utterly, utterly feeble.

[Nick Smith (Blaenau Gwent) (Lab)]

The Prime Minister’s officials were reported to have told the Press Association during the summit that he was frustrated at being ignored. Despite jockeying for position, why does he think that his European colleagues might want to ignore his advice on how to grow their economies?

[The Prime Minister]

I think that one might have been better if it had stayed in the stalls; it was never going to make it out on to the course. I was frustrated that the original draft of the communiqué did not have the actions and the dates that the 12 countries that signed the letter authored by Britain had asked for. I was frustrated because, if half the population of Europe, in countries as diverse as Spain, Italy, Poland and Britain, all ask for actions to be taken, they should be taken. But the good thing is that, at the end of this European Council, all the key issues that we asked for in the letter—which is in the Library of the House of Commons—are now in the Council conclusions. If the hon. Gentleman has plenty of time, he can slip on his nosebag and have a good look.

[Harriett Baldwin (West Worcestershire) (Con)]

Will the Prime Minister confirm that, at this meeting and other European meetings, political leaders need to have a clear idea of what is in their national interests, that decisions often have to be taken in the middle of the night on whether to participate in treaties, and that we cannot dither for weeks afterwards about whether to sign them?

[The Prime Minister]

Fortunately, at this European Council, the dinner only went on until about 11 o’clock at night, so it was not the middle of the night. However, my hon. Friend is right. There is now nowhere for opposition parties anywhere in Europe to hide. This thing exists, and the Opposition need to work out whether they would sign it or not. They cannot tell us that. Even though they say that they want to be at the heart of Europe and complain that we have put ourselves on the sidelines, they cannot answer that question. Would they sign it: yes or no?

[Mark Durkan (Foyle) (SDLP)]

The Prime Minister has mentioned a special focus on trade deals with fast-growing parts of the world. Will that focus take account of human rights experiences in those parts of the world, and how will he ensure that this push does not compound the frustration of poor developing countries that are waiting for trade justice?

[The Prime Minister]

On trade justice with the poorest countries in the world, the EU has quite a good record on giving those countries duty-free access to our markets under the “Everything but Arms” agreements. Where we should make more progress is, for example, on the free trade agreement with Korea, which is worth up to £0.5 billion to the British economy. There are opportunities for many more free trade agreements, which include all sorts of different stipulations but could make us more prosperous here at home, too.

[Nicky Morgan (Loughborough) (Con)]

Does the Prime Minister agree that the lack of support shown by the Leader of the Opposition and Labour Members for the measures on growth taken at the EU Council show a real lack of respect and support for the manufacturing and small business sector both in my constituency and in those of all other Members?

[The Prime Minister]

My hon. Friend makes an important point. To be fair to the last Government, they spent quite a lot of time trying to push issues like the energy single market and the digital single market, so one would have thought that there would be some sort of welcome for the progress that has been made. Instead, we got absolutely nothing from the Opposition and a complete silence on whether they would have signed up to what they think was the important bit of the European Council—the signing of the treaty. If they think it is so important, they should be able to say whether they would have signed it.

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

While condemning totally and without reservation what has happened in Syria—the President should certainly be condemned as a war criminal and be brought to justice in due course—should there not be some hesitation about the sort of people we support, bearing in mind the wrecking of wartime graves over the weekend by armed militia in Libya, which was a despicable act, damaging the graves of those who fought and sacrificed their lives in the fight against Nazism?

[The Prime Minister]

I agree that what happened in Libya with the desecration of those graves is completely unacceptable. To be fair to the interim Libyan Government, they condemned it absolutely, clearly and frankly in terms when it happened several days ago. We now need to make sure that those graves are fully restored and that the Libyan Government properly help in doing that. The interim Libyan Prime Minister is going to be in Britain this week, and he will meet my right hon. Friend the Foreign Secretary. I hope that I will see him, too. We will make it clear in terms how important it is to put those graves right. On Syria, there are all sorts of questions about who is involved in the Syrian opposition. We have to ask careful questions, but we should be clear that the people of Syria would best be served by a transition away from this dreadful President.

[Joseph Johnson (Orpington) (Con)]

The Commission estimates that concluding all trade deals currently on the table would add about €60 billion to European gross domestic product. Did the Council show appreciation of the urgency of getting on with this important task?

[The Prime Minister]

There is a sense of urgency, which is why the June Council will be dedicated to this issue. There are obviously some different views within the European Council and there are the familiar cries about not going ahead unless there is full reciprocity. I believe that Britain, as an open trading nation, should be in the vanguard of arguing for these deals, because we have a lot to gain from them.

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

It was obviously right for the Council to concentrate as a priority on the bloodshed and murderous actions of the Assad regime in Syria, but does not the example of what happened in Libya at the weekend emphasise why we should not lose focus on what is happening elsewhere in the middle east and north Africa? In view of some of the reverses that have taken place, will the Prime Minister give us an update on what the European Union is doing to support moves towards democracy and human rights in those countries?

[The Prime Minister]

What the European Union has been doing—I think it is right—is to rewrite its neighbourhood agreements and neighbourhood partnerships to make them more conditional on political reform and economic progress. I am still optimistic about what is happening across the middle east. For all the difficulties there are in Libya, at least that country has the prospect and the chance to make peaceful progress. We see that happening in Morocco, but what is happening in Egypt is clearly far more challenging. Europe has a real influence to bring to bear here, but we should be clear that our money and our help has some strings attached in terms of political and economic reform.

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

I thank the Prime Minister for his statement and warmly congratulate him on not signing the fiscal compact agreement. Article 16 of the agreement provides that within five years at most, a further attempt will be made to bring the agreement into the legal framework of the European Union. I am sure that my right hon. Friend will remain as Prime Minister throughout that period, so can he reassure me and the House that if such an attempt is made, he will exercise his veto once more?

[The Prime Minister]

I certainly agree with that, but let me make this point to the hon. Gentleman. Those who say that the veto did not achieve anything must ask themselves why other European countries are so keen to try to fold this agreement back into the treaty. That is important.

We made our position very clear. We made it clear that we would not allow a EU treaty to go ahead unless it contained proper safeguards for the single market, for financial services and in relation to other issues, and nothing has changed in that respect.

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

Last week it was revealed that youth unemployment in the EU had risen to 5.5 million—an increase of 269,000 in the last year. One in two young people in Spain and Greece does not have a job. Where is the plan that has arisen from this summit to deal with youth unemployment? Is it not the case that without such a plan, there will be no return to growth and no resolution of Europe’s debt crisis?

[The Prime Minister]

The hon. Gentleman is absolutely right. The levels of youth unemployment in many countries in Europe are completely unacceptable. There is a wide spread of practice—from countries such as Holland and Germany with very low rates to countries such as Spain and Greece with very high rates. Britain needs to do better, and that is why we are investing about £1 billion in measures such as the youth contract.

This morning I was at a meeting with employees of Tesco, which has announced the creation of an extra 20,000 jobs in the next two years, including 10,000 apprenticeships. It is absolutely committed to the work experience scheme. I must say this to Opposition Members: one of their number is chairing the Right to Work campaign, which is basically a bunch of Trots trying to destroy the scheme, and they have got to get serious about it.

[Several hon. Members]

rose—

[Mr Speaker]

Order. A good many Members are still seeking to catch my eye. I remind the House that today is also an Opposition day, and I have to factor that into my thinking as well. What is required is brevity—to be exemplified, I feel sure, by Mr Geoffrey Clifton-Brown.

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

The failure of the Assad regime to allow humanitarian assistance into Syria is utterly despicable. What does my right hon. Friend think are the chances of the Russians and Chinese abstaining on the relevant United Nations resolution?

[The Prime Minister]

I think that we must work not just to get them to abstain, but to try to get them to support a resolution that is about humanitarian access and is clear about the unacceptability of what is happening. I know that my right hon. Friend the Foreign Secretary has had a long telephone conversation with Foreign Minister Lavrov, and I hope to speak to President Putin later today. Although we are not going to agree with Russia on all that needs to happen in Syria, I hope that we can agree about the bottom-line things that absolutely do need to happen.

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

I welcome the Prime Minister’s emphasis on the importance of creating a digital single market. Does he agree that a vibrant digital single market is vital to the future competitiveness of the European Union?

[The Prime Minister]

My hon. Friend has made an important point. I believe that, for instance, not all the 27 members of the European Union have licensed iTunes in their countries. Given that Britain has a leading role in music, film, television and the creative industries, completing the digital market is as important to us as completing the single market in cars is to Germany. It is absolutely vital to us, and people should not think that it is a small issue, because it is a big one.

[Dr Sarah Wollaston (Totnes) (Con)]

The Assad regime is committing crimes against humanity in Syria. Are there any further practical measures that Britain and the EU can take against both China and Russia to help to stop them colluding with this mass murder, or should individual consumers be making choices in boycotting goods from China until they do?

[The Prime Minister]

I think that there is evidence that both China and Russia feel the pressure that their previous veto has brought about. The Arab League is absolutely unified in the view that what is happening in Syria is completely unacceptable, and I think that Arab League countries saying that to China and Russia will have an influence, as well as our saying it. I think that there is a lot of diplomatic pressure to be brought to bear, and I hope that in the coming days we can really make that happen.

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

Did the European Council discuss the points made by the Saudi Foreign Minister, who said that Saudi Arabia would not take part in any action unless it led to

“the quick protection of… Syrians”,

and that focusing on humanitarian aid was “not enough” while the killings were going on?

[The Prime Minister]

Clearly humanitarian aid on its own is not enough: it is not good enough if all we do is feed and clothe people while the slaughter continues. That is why, as I have said, we must also focus on the other bits of pressure that we can bring to bear, such as the sanctions—that is the diplomatic pressure—and also gathering the evidence of what is happening. We should not underestimate that. Britain has, I think, sent some people to the Turkish border, and we are co-ordinating with others so that we can take the testimony and receive the evidence of the terrible things that have happened. It is all those things combined.

Of course it would be good if there were more that we could do. We have to recognise the difficulties of the situation, and some of the ways in which it differs from the Libyan situation. However, there is more that we can do than just provide humanitarian aid.

[Karen Bradley (Staffordshire Moorlands) (Con)]

What practical steps can be taken to ensure that the humanitarian aid to Syria reaches the people who so desperately need it?

[The Prime Minister]

My hon. Friend is right: that is the key question. If the Syrian authorities will not allow that aid to get to areas such as the Baba Amr district of Homs, it will not reach the people who need it. While we are doing what we can to provide the resources and work with the expert agencies, we need the Syrian authorities to allow that aid to get through. That is why the United Nations Security Council is particularly important.

[Charlie Elphicke (Dover) (Con)]

May I, too, congratulate the Prime Minister on his statement? I am especially pleased with the measures in paragraphs 15 and 19 of the Council conclusions on the completion of the digital single market, the energy market and the services directive. Can the Prime Minister tell us a little more about how he was able to move Europe in the direction of growth by getting the measures in the conclusions renegotiated?

[The Prime Minister]

I am grateful to my hon. Friend. Most of the measures in paragraph 15 were not in the original draft of the communiqué. What was decisive was that it was not just the usual suspects, such as the Swedes, the Danes, the Dutch and the British, coming forward with the agenda; we also had support from the Italian and Spanish Prime Ministers, who have not always championed this agenda, but who now see that it is vital for European growth.

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

Consistency delivers results, so whereas Opposition Members have been criticising the Prime Minister for being consistent in pushing for a digital single market, I congratulate him because, apart from silicon valley, the UK is uniquely placed to take advantage of that. More specifically, did he get a chance to discuss with his colleagues why it costs so much more to start a company in Europe than in America, Canada or India?

[The Prime Minister]

My hon. Friend makes a good point. The truth is that if we want to get anywhere in Europe, we have to be a bit of a bore about things and keep going back to them again and again and again. Countries across Europe need to look at all the steps we have put in the way of people starting up businesses. There is the venture capital issue, for instance: for every dollar raised in Europe for venture capital, $5 are raised in America. That is yet another area in which Europe needs to do better.

[Christopher Pincher (Tamworth) (Con)]

The Opposition have—entirely co-incidentally, I am sure—tabled a motion for debate in a few minutes’ time on the low carbon economy. Does the Prime Minister agree that the completion of the single energy market—which he has championed and which will create 5 million jobs across the continent—will go a long way towards addressing the concerns in that regard?

[The Prime Minister]

I think it will: I think completing the energy single market is good for jobs and good for growth. It is just disappointing that the Opposition have tabled motions on low carbon, and then they reduce carbon even further by sitting in their offices.

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

I welcome the announcement on micro-exemptions, but will this focus on the existing stock of rules and regulations or just the flow of new ones?

[The Prime Minister]

The moratorium does what it says on the tin: it is intended to stop the further flow of regulations. I hope the sector-by-sector analysis will start to look at the stock of regulations. Part of the problem with the way the EU works is that when the Environment Ministers all get together they think about the environment but not about the costs, and when the Social Affairs Ministers get to together they think about social affairs but not about the costs. We have to get all these groups of Ministers to focus on the cost to business of what they agree to, and this is an early start down that path.

[Graham Evans (Weaver Vale) (Con)]

The entire House will welcome the Government’s prompt action on humanitarian aid, but will my right hon. Friend the Prime Minister make sure that those perpetrating the atrocities in Syria will be held to account by the international community?

[The Prime Minister]

That is essential. Syria is not a signatory to the International Criminal Court, but that does not mean that we should not collect the evidence and hold these people to account for their crimes, and Britain and others are doing that work right now.

[Andrew Jones (Harrogate and Knaresborough) (Con)]

What measures were agreed by the Council to make progress towards the completion of the single market? I am thinking in particular about the digital services and energy sectors, as businesses in Yorkshire—my area—will be well placed to take advantage of opportunities that may arise in them.

[The Prime Minister]

The key point was that in paragraph 15 we are setting dates for the completion of these markets, which I hope gives my hon. Friend’s businesses and constituents confidence. But what we have to do now is make sure that individual steps are taken to make that happen and that where countries are holding things up, we support the Commission in making sure that infraction proceedings are taken against them.

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

The British Chambers of Commerce has calculated that the cost of EU regulations to British business is a whopping £7.5 billion each and every year, and the figure is growing. What measures were discussed to turn back that tide, especially for small and medium-sized enterprises?

[The Prime Minister]

The two elements of the moratorium are to try to stop things getting worse for the smallest businesses, and the sector-by-sector analysis, so that we can start to build a picture of exactly what is costing business and how much and then try to put the pressure on to have the regulations reduced.

[Mr Julian Brazier (Canterbury) (Con)]

I congratulate my right hon. Friend on the new coalition he has built for deregulation and growth in the single market. Is it not time that Mr Van Rompuy and the Commission remembered who they are meant to be working for?

[The Prime Minister]

I am grateful for my hon. Friend’s question. It was an interesting Council in that regard, because a number of countries, Britain included, were not happy with the original communiqué. So even before the opening session—when we hear from the President of the Parliament—was over, a number of countries had intervened to say that the letter we had written and the measures we wanted were not properly reflected in the communiqué. That had quite an impact on the Council and the Commission recognising that they needed to take these into account.

[Jeremy Lefroy (Stafford) (Con)]

I welcome my right hon. Friend’s clear statement on deepening the single market in services, a cause he continuously champions. When does he think we will see UK companies bidding for continental rail franchises, as Dutch and German railways bid for franchises here?

[The Prime Minister]

Of course that should happen now under the procurement directives that have already been signed. We need to do two things, the first of which is to make sure that those are properly enforced by the European Commission. Domestically, we ought to learn the lessons of great businesses that actually work with their customers and their suppliers on a long-term basis so that they know what is coming up next.

[Mr Speaker]

I thank the Prime Minister and colleagues for their succinctness, which enabled 44 Back Benchers to question the Prime Minister in 41 minutes of exclusively Back-Bench time.

Points of Order

Monday 5th March 2012 Commons Chamber

16:31

[Chris Bryant (Rhondda) (Lab)]

On a point of order, Mr Speaker.

[Mr Speaker]

The day would not be complete without a point of order from the hon. Member for Rhondda (Chris Bryant).

[Chris Bryant]

You probably do not know this, Mr Speaker, but my constituency contains a Remploy factory, which does a very good job of recycling electronic equipment, and we are hearing a lot of mood music at the moment about whether it is going to close. Last week, the Minister for disabled people visited the factory without notifying me that she was coming. A lot of workers at the factory are vulnerable and very uncertain about their future, and they take this scuttling in and out of my constituency as signifying that their jobs are going to go. They are very worried about the situation. I hope that you might be able to have a word with this Minister and urge her that if she has something to announce, she should do so soon and in this House.

[Mr Speaker]

I am grateful to the hon. Gentleman for his point of order. The Minister for disabled people will have heard, or she will shortly hear, the point he has made. He will know that it is not a rule contained in our Standing Orders but rather a convention—a custom or courtesy—of the House that a Member visiting another Member’s constituency notifies that Member in advance of the intended visit. I remind Members on both sides of the House of the importance of adhering to that courtesy. No matter whether the Member visiting is a Back Bencher, a Minister or an Opposition Front Bencher, this is a courtesy and it should be upheld. In addition, if a Minister has an announcement to make, it should be made first to the House and, depending on the nature and content of the statement, it might well take the form of an oral statement. I must say that breaching the convention is a risky enterprise and doing so in respect of the constituency of Rhondda is especially risky, as it is almost certain that the hon. Gentleman will raise the matter, as he has just proved.

[John Hemming (Birmingham, Yardley) (LD)]

On a point of order, Mr Speaker. The Backbench Business Committee has come under some criticism for not allocating time for a debate on health, and the website www.labour.org.uk/wheresmydebate complains about the absence of such a debate. Would it have been in order for the leader of the Labour party to speak to the Leader of the Opposition and allocate time today to debate the issue of health, or would that have been out of order?

[Mr Speaker]

The leader of the Labour party and the Leader of the Opposition are one and the same person. The hon. Gentleman is a very clever and sophisticated fellow and it might well be that he has raised a very clever and sophisticated point, but if he has it warrants time to be contemplated. It might be too clever and sophisticated for the Speaker, and at any rate I will not deal with it now, but I shall reflect on the hon. Gentleman’s points, as I invariably do, and we will see where we get.

Opposition Day

Monday 5th March 2012 Commons Chamber

[Un-allotted Day]

Jobs and Growth in a Low-carbon Economy

Monday 5th March 2012 Commons Chamber

[Relevant document: The Eleventh Report from the Energy and Climate Change Committee, The Future of Marine Renewables in the UK, HC 1624.]

[Mr Speaker]

The first of the two debates is on jobs and growth in a low-carbon economy—[Interruption.] A man of the seniority of the hon. Member for Sevenoaks (Michael Fallon)—a figure of considerable celebrity in the House—does not have to shout from a sedentary position. We can all see and admire him from a distance.

16:35

[Caroline Flint (Don Valley) (Lab)]

I beg to move,

That this House believes that the achievements of the previous administration and cross-party support for the Climate Change Act 2008 underpin the attractiveness of the UK to green investment; notes this Government’s promise to be the greenest Government ever; regrets that under the present Government investment in clean energy, particularly wind power, has declined and the UK has fallen to thirteenth in the world for investment in green growth; further regrets the delays to the Green Investment Bank, the lack of clarity over financing of the Green Deal, the uncertainty surrounding funding for carbon capture and storage, the chaotic mismanagement of the cuts to the feed-in tariff for solar power, and the undermining of zero-carbon homes; further believes that the effect of these policy failures, mixed signals from the Government and open hostility from Government backbench Members to action to cut carbon emissions have exacerbated investor uncertainty, hit small and medium-sized businesses, and reduced the UK’s ability to attract, retain and increase investment; rejects the idea that the transition to a low-carbon economy is a burden and believes it has the potential to be a major source of jobs and growth for the UK; and calls on the Government to bring forward an active industrial strategy for low-carbon growth by providing a stable policy framework to unlock private investment, improving public procurement, developing a low-carbon skills strategy, rebalancing the economy to support growth in the regions and encourage manufacturing, and engaging communities in the transition to a low-carbon economy.

I congratulate the Secretary of State on his appointment and welcome him to his new position for our first exchange at the Dispatch Box. We would have met sooner, but he chose not to come to the House to defend his Department’s shambolic mismanagement of cuts to the feed-in tariff for solar power, which, according to the Government’s own estimate, will see at least 5,000 people lose their jobs this year. The right hon. Gentleman was missing from the Commons because he was opening the world’s biggest offshore wind farm in Walney, Cumbria, where he said:

“Britain has a lot to be proud of”.

Indeed we do. The North West Evening Mail reported in 2008, under the previous Labour Government, that permission had been granted at Walney,

“helping to give the UK the highest operating offshore wind capacity in the world.”

The legacy of Labour’s active support for renewable energy is taking shape and we share his pride in the foresight of the previous Labour Government.

Nearly 1 million people already work in environmental industries in the UK, with the potential to create 400,000 more jobs. We are concerned that Britain is being left in the doldrums, however. We must get on board or risk missing out on growth, job creation and a revival of Britain’s manufacturing sector. Today, we have an economy without growth, inflation still at 3.6%, unemployment at a 16-year high, borrowing that will be higher every year for the next five years and a Government who are strangling growth and destroying jobs. Where other countries see a market that is already worth more than £3 trillion and opportunities for new industries, new skills, new supply chains and—yes—new energy sources, the Government just see burdens for business and blots on the landscape.

Under Labour, Britain was open for green business. When we left office, the UK was ranked third in the world for investment in green business, investment in alternative energy and clean technology reached £7 billion, energy generated from new renewable sources doubled, the UK’s global lead in offshore wind had been achieved and the Climate Change Act 2008 had been a world first with cross-party support. Even the Prime Minister did his best in opposition to detoxify his party’s brand and establish new green credentials. Who could forget the photo of the Prime Minister hugging a husky—or was it a hoodie? It was probably both, as there was a lot of hugging going on in those days. Who could forget the fanfare that greeted the wind turbine installed on the Prime Minister’s roof—only to be taken down later—or the Prime Minister’s much-heralded pledge that his would be the “greenest Government ever”? Where did it all go wrong?

The Secretary of State is new to his post, but he should know that on this Government’s watch the UK has fallen from third in the world for investment in low-carbon businesses to 13th, behind China, Germany, the United States, Italy, Brazil, Canada, Spain, France, India, Japan and Australia. On his first day, the Secretary of State declared that there would be

“no change in direction or ambition”

but unless our ambition is to fall even further, a change is exactly what we need.

[Charlie Elphicke (Dover) (Con)]

The right hon. Lady waxes lyrical about the importance of a low-carbon economy, but is it not the case that under the previous Labour Government, emissions barely changed at all and were rising when her party left office? Does not the fact that there are so few Labour Members in the Chamber today show how little commitment her party has to this issue?

[Caroline Flint]

I am very proud that we not only met our Kyoto target on reducing carbon emissions but exceeded it. I am also proud that we set in train a number of initiatives that the coalition Government have in some ways had the sense to follow. It is a good thing that this country got agreement on our targets for reducing carbon emissions because business investors say it is important for them to know that there is coherence in countries’ party political structures on this matter. It is a shame that the legacy that has made this country a favoured one for investment is now moving away—partly because of the mixed messages coming from Government Front Benchers. For example, what the Secretary of State has to say might be in conflict with what others say and might not tally with what the Chancellor of the Exchequer says at his party conferences or elsewhere.

[Several hon. Members]

rose—

[Caroline Flint]

Let me make a little more progress. We know that businesses will not invest, build factories or create jobs until the Government end the dithering, stop shifting the goalposts and get behind the industries of the future.

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

On that very point, would my right hon. Friend be interested to know that literally dozens of people in and around Swansea are losing their jobs as a result of the withdrawal of the feed-in tariff? What is more, Tata Steel has just announced an opportunity for people to go home, not work at all and be paid half-pay, simply because of this ridiculous unilateral carbon pricing. On both sides—heavy industry and green energy—uncertainty is leading to less investment and to lay-offs; it is disgusting.

[Caroline Flint]

As I have said, the Government have confirmed that, based on their own estimates, 5,000 people in the solar industry alone will lose their jobs this year, including constituents in my hon. Friend’s constituency. Last week, business after business lined up to say that billions of pounds-worth of future investment is now on hold because there are serious question marks over the Government’s commitment to wind power. We are on the cusp of a new industrial revolution that is shaking up the old world order. We have to be leaders, not followers, in this revolution. It is about creating a new economy that is cleaner, leaner and more competitive and that provides the energy we need. We all know that the longer we delay action, the costlier it will become to mitigate and adapt to climate change, and the economic opportunities will slip through our fingers.

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

Does the right hon. Lady agree that the Mayor of London, Boris Johnson, is setting an excellent example? He set up the London green fund, from which he has committed £50 million towards the London energy efficiency fund, some 86 buildings have already been refitted and greened and there are another 297 public buildings in the pipeline. All that is going to create about 700 new jobs.

[Caroline Flint]

Of course, the Mayor is also pushing up the price of public transport, which means that more people might get into their cars. However, there is room for discussion regarding one point that the hon. Lady made. Labour and Conservative local authorities up and down the country have been looking at ways of helping their citizens, particularly those in social housing. That is why it is a crying shame that so many local authorities of all political persuasions have had to cancel or put on the back burner plans to use solar power in their social homes and community buildings; 100,000 social homes are losing out because of this Government’s decisions on solar power.

[Several hon. Members]

rose—

[Caroline Flint]

I will give way again shortly.

Whatever one thinks of the British weather, we are not short of wind. Apparently, we are the windiest country in Europe, and we should be a world leader on wind energy, onshore and off, but last year there was a 40% fall in the amount of new wind capacity being brought online, with only one offshore wind farm being completed.

Where we sought to support offshore wind manufacturing by establishing a £60 million fund to attract investment, nearly two years—two years!—after the Government promised to support the scheme, and only after a string of critical press reports, just one project has been awarded funding. Some 98% of that budget, which Labour initiated, remains unspent. As the Select Committee noted in its report, the UK has the best marine energy resource in Europe. It has the potential to supply 20% of current electricity demand and create 10,000 jobs by the end of this decade, but this Government’s decision to close the £50 million marine renewables deployment fund and replace it with a £20 million innovation fund dented confidence and undermined certainty in the business community.

[David Mowat (Warrington South) (Con)]

I have listened carefully to the right hon. Lady’s catalogue of achievements by the previous Government in this area, but can she explain why, given all that, in the last year of the previous Government, we were 25th out of 27 in the EU for use of renewable energy? Furthermore, in 2010, that decreased, which is extraordinary.

[Caroline Flint]

We doubled renewable energy generation under the Labour Government. We established Britain as a world leader in offshore wind capacity. I think I am right in saying that we were at the top of the league in investment. Was there more to be done? Undoubtedly, but the record that we left is being harmed significantly on a daily basis by the actions of this Government.

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

My right hon. Friend may be aware that I switched on 30 offshore turbines at North Hoyle off the coast of my constituency about eight or nine years ago. Those were the exact same turbines that the current Prime Minister referred to as “giant bird blenders”. What does she think of the Conservatives’ attitude to offshore wind?

[Caroline Flint]

Of course, the Conservative attitude to wind, offshore or onshore, has been represented by 101 Conservative MPs who wrote to their Prime Minister complaining about our attempts as a country to utilise that resource that is at our disposal. Unfortunately, the Chancellor of the Exchequer believes that we should not pursue the potential of this new energy revolution faster than Europe—we should go back to the slow lane. In the 1980s wind developers decided that there was insufficient support from the Government of the time—we all know which party that was—and they went elsewhere. That is why Denmark became the world leader in this area and we missed an opportunity.

As a result of those decisions in the 1980s, we have been playing catch-up ever since. We must not destroy the foundations laid in the past five years or so by not making the right decisions now and playing to those who do not understand that the future is a new form of energy and a new way of empowering our citizens to control prices and at the same time have cleaner energy.

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

It is entirely the case that not everything done by the Labour Government in this area was ineffective or poor, and I pay tribute to the things that they did. The one thing that they did not wake up to until the very last months of the Labour Administration was the need to do much more for renewable energy. Does the right hon. Lady accept that the figures when Labour left office show that of all the 27 EU countries, the UK was at the top for the amount that it still needed to do in percentage terms to reach its 2020 target of 15%? The UK had 12.8% yet to go, compared with all the other countries, which had made a much more significant change during the period of our Labour Administration.

[Caroline Flint]

I thank the right hon. Gentleman for his courtesy in acknowledging that the Labour Government achieved a number of important milestones in renewable energy, and showed leadership worldwide in setting climate change targets and targets for the reduction of carbon emissions that were and continue to be challenging. However, I do not accept the woeful description of what we did in government. We doubled renewable energy generation and established Britain as a world leader in offshore wind capacity and in the prototype development of wave and tidal technology, but our achievements are now under threat. As a result of this Government’s mixed messages and failing policies, investment in green growth in the UK is falling. For instance, investment in wind energy fell by 40% in the first year they were in power.

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

I suggest to my right hon. Friend that for many years there was a consensus across the House that there was no need to invest in renewables because we were self-sufficient in gas and oil. The fact is that no one would have invested when we had such riches off our own shores. We all took time to learn the lessons, but when we did we moved very fast indeed.

[Caroline Flint]

I pay tribute to my right hon. Friend for her contribution to that effort. We have to be realistic about the fact that the strategies in this area have been affected by different forms of complacency over many decades on what we could rely on and what was certain in our changing world. Also, importantly, even if we could rely on certain energy sources for a period of time, that would not help us do what we need to do: reduce our carbon emissions. That is why some of the comments from Government Members are so worrying. They could lead people into false arguments about how relying on new ways to access different forms of fossil fuels is somehow the answer. Those sorts of messages are very difficult for investors to understand, because they do not project a sense of moving forward and seem to reflect a view held by some Government Members that, rather than a transition away from fossil fuels, there will be an opportunity around the corner that will allow us to go back to relying on them. We cannot accept that. That is why the Opposition decided to allocate some of our time to debate this and why we will continue to talk about it in future to ensure that we stay on track, because we believe that this opportunity cannot be missed.

[Several hon. Members]

rose—

[Caroline Flint]

I will make some progress before giving way again.

In government, we set up a system of feed-in tariffs to support solar and other forms of microgeneration. Within 18 months the solar industry had grown from 3,000 employees in 450 businesses to 25,000 people in nearly 4,000 businesses. Our vision was shared by many other countries; Germany installed half the world’s solar panels and supported 250,000 jobs and Australia could boast at Durban about the completion of 1 million homes with solar PV. What can this Government boast about? Cutting off an industry at its knees put hundreds of businesses at risk, destroyed thousands of jobs—5,000 according to the Government’s own estimate—increased the import of Chinese solar panels and denied millions of households the chance of a little more control over their energy bills. I will not dwell on the catastrophic series of events that have left us where we are. Suffice it to say, even the Energy and Climate Change Committee, chaired by the hon. Member for South Suffolk (Mr Yeo), has stated that

“the damage to both investor confidence and to some consumers could have been avoided.”

[Steve Brine (Winchester) (Con)]

I am listening carefully to the right hon. Lady’s speech—there are a number of Government Members who are. Is she seriously suggesting that she left a feed-in tariffs regime that was fit for purpose and that the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), did not have to salvage it from the car crash he found when he took office?

[Caroline Flint]

Well, it took the Government 18 months to give six weeks’ notice to the industry, but the truth is that Labour always said that this scheme and others that support fledgling sectors need to be reviewed and that prices will change and come down, but not in the way the Secretary of State and his predecessor indicated. It caused mayhem in the system and has left other business investors in green technologies questioning whether they should dip their toe in the water. The fact is that the Minister is now offering pie-in-the-sky predictions of the UK overtaking Germany in solar capacity by 2020. He needs to get real. Just how can he cut support for solar power by 70% in six months and still expect to overtake Germany by the end of the decade?

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

I most certainly have not said that. Would the right hon. Lady care to tell me when I said it and what her source is?

[Caroline Flint]

When we last discussed the issue, on an urgent question, the hon. Gentleman suggested that we were aiming for something like 22 GW of solar power by 2020, but then again we cannot always take what he says—

[Gregory Barker]

Will the right hon. Lady give way?

[Caroline Flint]

No, I will not—[Hon. Members: “Ah!”] When I am in the middle of answering one intervention, I think that I should be allowed to complete it before I take another one. I know that the hon. Gentleman gets very excited on these occasions, and that it makes his hair even curlier than it is already, but the truth, I understand, is that today he has already had to revise down some of his statements about the cost of solar. So, again, we will go back and look at the issue, but I am happy to write to him with chapter and verse on some of the things that he has said over the past six months which have been changed on many occasions.

[Gregory Barker]

The right hon. Lady is absolutely right: I did say that our ambition is now 22 GW of solar energy by 2020. But if she was on top of her brief she would know that there is already 28 GW of installed solar in Germany, so would she like to apologise and retract her statement?

[Caroline Flint]

If the hon. Gentleman’s ambition is not to be as good as Germany, that is one thing, but one thing is for sure: his efforts over the past six months have certainly not put us in a position to get anywhere near Germany’s aspirations. I should be very interested to see the detailed plan of how he expects us to reach 22 GW, given what he has done to the solar industry in just a short space of time.

[Ben Gummer (Ipswich) (Con)]

Will the right hon. Lady give way?

[Caroline Flint]

No, I am going to make a little more progress, if I may.

The future is not just in new sources of energy, but in adapting and transforming existing energy generation. We all know that with carbon capture and storage we are on the verge of developing a hugely valuable and exportable technology, but we know also that that opportunity will not last for ever, and the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) knows that other countries are seeking to develop that technology and that demonstration projects in Canada and Australia are already under way.

I know that the Government have announced a new competition in this sector, but I hope that they take the opportunity to bear down on the projects that we know and understand, because, with a new competition and 20 other projects sitting on a shelf somewhere, we must decide quickly which proposals known to us have the best prospects of success. There is a lot riding on the scheme, as the Minister knows, in this country and in terms of European support, so we all want to begin to develop the technology without further delay.

We know also that new nuclear power stations will need to be built over the next decade. Nuclear is important to us, and Labour understands that. It provides one seventh of the world’s electricity and one third of the European Union’s, and if we do not invest we will only import more French nuclear electricity. With 63 new nuclear power stations under construction worldwide, we have to make sure that we learn in real time the lessons of those overseas projects in order to ensure that the next generation of nuclear power in this country is delivered as efficiently as possible and maximises job opportunities for people in the UK.

Personally, I have found it quite helpful to talk to the people involved in those projects in order to understand what we can learn, and to take some of the risk out of delivering our own capacity more efficiently.

[Ben Gummer]

The right hon. Lady has spoken much about the previous Government’s record. They had six energy White Papers, of which only the last mentioned nuclear power in any substantive capacity at all, yet she has the front to come to the House and tell Government Members that we should think about nuclear power, when under this Government permission will be granted for new nuclear power stations.

[Caroline Flint]

I was trying to be helpful in terms of where we are. When we left government, we recognised that we did need to build more nuclear power stations. I am not sure whether all the Conservative party’s coalition partners necessarily accept that. I think that they have an opt-out from any vote on the issue on the Floor of the House.

[Simon Hughes]

We do.

[Caroline Flint]

That is correct, I hear from the right hon. Gentleman.

Labour is clear that nuclear has to be part of energy provision. I am merely saying, in a constructive way, that we know from projects overseas that often such projects—63 are under way worldwide—are not delivered on time and come in over budget. We must ensure that not only our civil servants but our industrial partners are seeing what lessons can be learned to avoid our repeating some of the risks that have delayed projects elsewhere. I think that it is helpful to offer that to the debate and to assure the Government of our support for developing energy in this field as part of the diverse mix that we need.

[Charlie Elphicke]

rose—

[Caroline Flint]

I will make a little more progress.

In government, we recognised that at a time when public money is in short supply, a green investment bank could leverage in private investment. That is extremely important to our ambitions for the next level of energy generation that we want our country to achieve. In his autumn statement, the Chancellor boasted that he had funded the first ever green investment bank. Now, however, the Government are set to borrow a staggering £158 billion more than they planned a year ago, and the green investment bank will not have full borrowing powers until 2016 at the earliest. The Government’s claim that the green investment bank is part of a strategy for growth looks somewhat thin—like the rest of the strategy—if it is able to deliver any real investment only at the tail end of this decade.

The green deal is yet another example of a policy that we set in train in government but now appears to be headed for a car crash. Originally, the Government claimed that the scheme would create up to 100,000 insulation jobs by 2015, reaching 14 million homes by 2020 and 26 million homes by 2030. Now, sadly, the jobs forecast has been downgraded by nearly half. Transform UK believes that the green deal will reach only a fifth of the number of households that the Government expect, while the number of those in fuel poverty could reach 9 million by 2016. We still have no detail on the interest rates that will be charged, which is significant for whether anybody will be willing to take up the green deal.

As well as having a coherent strategy to improve the energy efficiency of our existing housing stock, we need new homes to be built to the highest standards. The Government could have ensured that a new gold standard was created with the code for sustainable homes, which I launched as Housing Minister, but they have fudged and watered down the commitment on zero-carbon homes. We should add to that reports that the Government, in the form of the Secretary of State for Education, are planning to undermine the green building code for schools. That worries me because, yet again, the Government’s role in stimulating new building methods and making new markets appears to be overcome by short-termism and lack of vision.

We need an active industrial strategy to bring about the energy industrial revolution. First, to unlock the £200 billion of private investment, we need clear signals and clear intent from the Government, unsullied by the voice of the Chancellor of the Exchequer playing to the gallery at the Tory party conference. Secondly, we need better procurement to ensure that public money is spent in a way that supports the low-carbon economy. Housing benefit is one example of that. In our manifesto, we said that we would consider regulating parts of the private rented sector because of the way it acted, which we felt was inappropriate to its tenants and not a shining example of the best that we could expect in that part of the housing market. Unfortunately, however, the Government have set their face against any regulation of the private rented sector, even though housing benefit is paid towards 40% of private rented tenancies and homes in the private rented sector are the least energy-efficient. I have suggested that we use housing benefit to drive up energy efficiency standards in the private rented sector. That would also create a supply chain for installers delivering the products and small businesses manufacturing them, and it could save tenants as much as £488 a year on their energy bills.

The third part of an active industrial strategy is skills. New industries cannot survive with an ageing work force. I am sure that Ministers are as aware as I am of some of the problems in different parts of the energy sector, including nuclear, in this regard. We hope that the modernisation of our energy infrastructure will happen in the next decade. The people who will do that are already in our education system, and we have to make sure that they are prepared for the future in terms of our energy security.

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

My right hon. Friend makes an important point about the skills that will be necessary for the future. In Hull, where we are hoping to become a renewables hub, we are well aware of the need to take such skills into account in education. Does she think that Ministers in the Department for Education have fully understood the need for their involvement in promoting the skills that we will require?

[Caroline Flint]

The extent to which Departments are joined up in the endeavour of realising the potential for new energy industries and jobs worries me tremendously. There are opportunities not only in providing cleaner energy, but in manufacturing the infrastructure to make it happen. I have mentioned the contradictions between the Treasury and the Department of Energy and Climate Change. I am not convinced that the Department for Business, Innovation and Skills is on board with everything that DECC wants to do. It is also worrying to hear that the Secretary of State for Education is downgrading the efficiency standards for new school buildings. This is one way in which we can use the muscle of Government procurement to make a difference without spending any more money. There are hundreds of ways in which that can be done.

We need a skills strategy. It is not only the school buildings that are important, but what is taught in our schools and how that links with industry. We must reach young people. However, we must not forget the work force in the existing fossil fuel industries. How can their skills be refreshed and transferred to the new industries as they come online? There must be hope for our young people, but there must also be hope for those in work that even if there are changes in their jobs, new jobs will be available for them and their families.

Fourthly, the Government must help to rebalance our economy. This, too, relates to the point made by my hon. Friend the Member for Kingston upon Hull North (Diana Johnson). Britain’s industrial heartlands—places such as the Humber, the north-east and Cumbria—have the business-cluster potential, the skills, the production, the ports and the energy to forge these new industries. We do not want to be a country that just installs products from overseas; we want to manufacture them. In the 1980s, small wind power developers drifted away from the UK due to a lack of support. Britain’s loss was Denmark’s gain and we have been playing catch-up ever since. Of the £1.2 billion cost of constructing the Walney wind farm, 40% went on turbines and parts that were not made in Britain. We have to do more to develop our supply chain and to support manufacturing in this country, rather than in Germany, Denmark and, increasingly, China.

Marine energy is still a nascent technology, but the potential is there. It would be unforgivable if we lost out on the economic benefits in the way that we did with wind energy in the ’80s. DECC and BIS must work together to be market makers and to build confidence in the British supply chain so that overseas energy companies know that there are British manufacturers who can do the job. At the very least, I would like to know, as a member of the public, what proportion of the steel used to produce turbines and other energy infrastructure is made in the UK.

Finally, the Government must empower the public in energy efficiency, and ensure that the public and communities become energy producers as well as consumers. The green deal must be delivered on fair terms to those people. In the Budget, the Government could cut VAT on home improvements, including those that increase energy efficiency, to 5% to give our economy the boost that it needs and to give power to people and communities.

The UK is not short of the capital skills or technology that are needed to make the transition to a low-carbon economy.

[Dame Joan Ruddock]

My right hon. Friend, in her excellent speech, has described the Government’s catalogue of disasters in the area of green jobs and growth. Is it any wonder that Friends of the Earth said in its report that it found little or no progress in three quarters of the 77 green policies of this Government that it examined? That is the reality of what this country is facing.

[Caroline Flint]

That is the reality. That saddens me because the foundations had been laid for a journey on which I believed there was cross-party consensus, which Labour worked hard to achieve in this House. It worries me that we have a Government who are short of a coherent political vision. As a result, we are in danger of missing a golden opportunity, not just to reboot our economy, but to build a more resilient and responsible economy for the future, built on not just sustained but sustainable growth.

If we fail to grasp this opportunity, it will be the public who pay the price through jobs and growth going overseas and through higher energy bills, as we become ever more reliant on volatile fossil fuel prices. UK plc needs an active industrial strategy focused on growth, skilled job creation and a revival of Britain’s manufacturing sector, which can be both clean and green.

[Mr John Redwood (Wokingham) (Con)]

Will the right hon. Lady give way?

[Caroline Flint]

I will not give way to the right hon. Gentleman, because he was not here for the start of the debate.

Today, we can send out a clear message that a new industrial revolution is upon us and that Britain is determined to lead it. I commend the motion to the House.

17:09

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

I am grateful to the right hon. Member for Don Valley (Caroline Flint) for securing the debate, as it gives me the opportunity to come to the House for the first time as Secretary of State for Energy and Climate Change. I thank her for her welcome at the start of her remarks. I look forward to our debates, and I hope that despite some of the remarks at the end of her speech, we can have a constructive dialogue that shows the country and the world that there is significant consensus in the UK about the urgent need to tackle climate change. In that way, we can both attract the investment that is needed and continue to lead the international debate that it is crucial to keep winning.

I wish to take this first parliamentary opportunity to reaffirm the coalition’s commitment to being the greenest Government ever. My predecessor had a fantastic record of delivering policies that will protect the environment and consumers while making our energy infrastructure competitive.

Much of what the right hon. Lady said about our record was simply unrecognisable and unrelated to the facts. I was also disappointed to see no mention of consumers or bill payers in the Opposition’s motion. Under the previous Government, the link between energy and climate change and end users was often overlooked, and the link between the economy and our efforts to tackle climate change was not nearly strong enough. The coalition, on the other hand, has been successful in recognising that within our economic priority to foster growth, create jobs and make Britain competitive, we must pay heed to our obligation to tackle climate change while at the same time empowering and supporting consumers.

I want to make it absolutely clear that the energy bills of consumers and businesses will be a priority in my thinking. At the Department for Business, Innovation and Skills, I was the Minister responsible for consumer affairs, and I am worried about the impact of high bills on consumers. In a consumer empowerment strategy that I published last April, I talked about empowering consumers through collective purchase and collective switching. One would have thought that the Labour party would have been concerned about those matters in its 13 years in government, but it was not. I say to the right hon. Lady that in our work, including since I have taken office, we are pushing collective purchasing and collective switching, which will empower consumers, make energy markets more competitive and get a better deal for consumers.

[Caroline Flint]

Have not the Opposition held two debates about energy prices? One was during the energy summit, and unfortunately the Secretary of State’s predecessor did not take the opportunity to talk about collective switching. The Labour party supports collective switching, but also reforming the energy market to make the energy generators put their energy into a pool and open it up to being sold in a transparent way. Will he support us on that?

[Mr Davey]

I am very grateful when the Labour party raises the matter of energy bills, because my constituents are concerned about their bills. The problem is that the Labour party did not do anything about the matter when it was in government. We are pushing collective switching, which Labour had 13 years to do. Some countries in continental Europe have been experimenting with the idea, but I am afraid her party did nothing.

[Charlie Elphicke]

I congratulate my right hon. Friend on his newish appointment. My constituents are concerned about the many renewable and carbon commitments that the previous Government put on the backs of the poor through energy bills, particularly those such as the renewable heat incentive, carbon capture and storage commitments and feed-in tariffs. How are this Government looking after the least well-off, whom the previous Government were busy plunging into fuel poverty?

[Mr Davey]

My hon. Friend will know that the costs of the renewable heat incentive and CCS were put on to consumer bills under the previous Government. We have removed those levies, and those schemes are now paid for through taxation. That is a classic example of how we have helped consumers.

[Dame Joan Ruddock]

I congratulate the Secretary of State on his new position. He refers to the desire to be the greenest Government ever, and we really must hold him to that. Why, then, does he think a leading environmentalist, whom his party courted before the election, said at the end of last year that the coalition was

“on a path to becoming the most environmentally destructive government to hold power in this country since the modern environmental movement was born”?

[Mr Davey]

I certainly do not recognise that description of this Government. It has been commented in one or two places in the press that the one thing to which I have been most committed throughout my political life is environmentalism—my first political activity was in the environmental movement. I can therefore tell the right hon. Lady of my complete commitment to that agenda.

The motion contains some good points. Cross-party support, for example, for the Climate Change Act 2008 makes the UK an attractive place to do clean-energy business—the right hon. Member for Don Valley was gracious enough to admit that the coalition parties supported the Act, which is important. A consensus on many such issues, whether energy infrastructure investment or climate change, is extremely important, because they are about investors investing over decades. If we are to hit our 2050 target, we need to give those investors and the wider economy a lot of confidence.

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

I welcome the Secretary of State to his post, in which he has the opportunity to set a new course for the Government. May I suggest constructively that, first, he needs to give certainty to green investors, big and small? The Government have shaken that certainty—he should not listen to his officials. Secondly, he needs to avoid carbon leakage from existing energy-intensive users, whose confidence his predecessor managed to shake. If he can deal with those two things, which have gone deeply downhill in the past two years, he will do this country, green jobs and the green economy a service, in both steel and wind.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. There seems to be a lot of wind in these long interventions from both sides. Can we have shorter interventions? I should say to Front Benchers, and let Back Benchers know, that it looks like we will have to introduce a limit of six minutes because of the amount of time that has been taken.

[Mr Davey]

Thank you very much, Mr Deputy Speaker.

I know the hon. Member for Ogmore (Huw Irranca-Davies) takes a real interest in such issues and has a good track record in speaking up for them, but I do not recognise his points. My right hon. Friend the Member for Eastleigh (Chris Huhne) played a fantastic leadership role as Secretary of State for Energy and Climate Change. He set the Government’s ambitions at a far higher level than any previous Government. It is my job to deliver on those, which I intend to do.

[Simon Hughes]

I welcome very warmly my right hon. Friend to his new post. Will he confirm that, consistent with his past, present and vision for the future, green campaigning groups and the devolved Administrations will always be welcome to discuss with him their ambition, so that we can be a uniting coalition for a green country, to which he has always aspired?

[Mr Davey]

I certainly can give my right hon. Friend that commitment. I have already met many non-governmental organisations and have spoken to the devolved Administrations. It was my pleasure and privilege to work on this agenda with him over a number years. He showed fantastic leadership when this was not a popular issue. He did more than almost any other hon. Member to put this issue on to the political agenda, and I pay complete tribute to him.

[Mr Redwood]

Does the Secretary of State agree that if Britain’s energy is a lot dearer than that of her competitors, we will drive a lot of industry to a lot of other countries? There will be as much CO₂ in the world, but we will be short of jobs.

[Mr Davey]

We need to look carefully at our energy-intensive industries, which is probably what is behind my right hon. Friend’s question. However, there is a danger in the debate that some of the economic analysis is too static. As the world moves to its climate change targets, industries across the world must be more energy-efficient. Industries in countries such as ours that can steal a march and become first movers will prosper by becoming more energy-efficient. Some of the market signals that are needed are rightly happening, but I accept that we need packages for energy-intensive industries.

[Geraint Davies]

rose—

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

rose—

[Mr Davey]

I shall make progress and take interventions later.

Since coming to office, the Government have already seen significant new investment in clean energy. Our policies have stimulated new growth, supported new jobs and delivered new capacity. The UK is becoming more attractive to investors. Billions of pounds are being poured into our low-carbon economy, and more and more clean energy is coming on stream. The average annual growth in our low-carbon and environmental goods and services sector is estimated at more than 5% right through to the end of this Parliament, and low-carbon goods and services account for 8.2% of the UK’s GDP—a higher proportion than in Germany.

Since last April, companies have announced plans for £3.8 billion of investment in the UK renewable energy industry, and £600 million has been invested in onshore wind alone. A recent report by Ernst and Young showed that the UK is now the fifth most attractive place to invest in renewable energy—up from sixth last year—and we remain the most attractive place in the world for investment in offshore wind. The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Wealden (Charles Hendry) was telling me that 95% of offshore wind installations occurred off our shores last year.

[Caroline Flint]

On the Ernst and Young report, is it not the case that the attractiveness of investment in the UK has only returned to the position it was in November 2010? Is not the truth that, since the right hon. Gentleman became a member of the Government, we have gone from third to 13th place worldwide in terms of actual investment in renewables in the UK?

[Mr Davey]

I think that the right hon. Lady is quoting from the Pew report, but those data were provisional. According to the new data recorded by Bloomberg, investment is twice as much. I am afraid that she needs to do her homework before she comes to the House.

Unlike the right hon. Lady, we have made good progress on the green investment bank. The recruitment of the bank’s chair and senior independent director is under way. [Hon. Members: “Where’s the progress?”] The right hon. Lady and the hon. Member for Liverpool, Wavertree (Luciana Berger) need to calm down. If they do, they will hear that 32 bids were submitted to host the bank, which suggests an awful lot of interest and attraction. Those bids have come from right across the country. It is because of such interest that we have allowed extra time to ensure that we make the right decision on the location of the bank. Right hon. and hon. Members seeking to have the bank in their constituency ought to give credit to the Government for taking their representations seriously.

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

Will the Secretary of State confirm that the Leeds city region has made an excellent bid for the green investment bank? It is, I hope, one of the best bids that he has seen.

[Mr Davey]

When I used to attend Business, Innovation and Skills questions, as a Minister in that Department, I noted that there were more questions on the location of the bank than on any other subject. I thought I might not get so many in my new position, but I see that I am already getting them. I refer my hon. Friend to my right hon. Friend the Secretary of State for Business, Innovation and Skills.

Subject to state aid approval, the bank will be operational by the end of the year. But from next month, we will pave the way for the establishment of the bank with a programme of direct coalition investment in green infrastructure: we have made £100 million available to invest in smaller waste infrastructure projects on a fully commercial basis; a further £100 million has been made available for investment in the non-domestic energy efficiency sector; and the coalition is ready to co-invest in offshore wind projects. The bank is on course to begin investing its £3 billion of initial capital by the end of the year.

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

Has the Secretary of State read the small print from the Chancellor on the future of the green investment fund? He has said that it will not be a bank until the target for debt to be falling as a percentage of GDP has been met —2015 at the earliest but probably now 2017. It is not a bank, and, on that formula, will not be so for a very long time. Will he ask the Chancellor to change that formula so that the green investment fund can become a green investment bank, which he suggests it already is?

[Mr Davey]

My right hon. Friend the Chancellor would not have had to make that statement had Labour left the economy in a decent state. The fact is that we are having to clear up Labour’s deficit. Nevertheless, at the same time, we have established the green investment bank—something that it was unable to do even in the good times. That we are doing it in the difficult times shows our commitment to the environment.

That investment is already yielding real benefits. According to one survey, four out of five wind and marine energy companies are planning to hire more staff by this time next year. Many of those companies are small or medium-sized businesses, while many operate in areas that have otherwise struggled to attract investment. All are helping to rebalance and rebuild our economy, and hasten the low-carbon transition. For example, Evance Wind Turbines in Loughborough has doubled the size of its UK manufacturing facility and has expanded its work force by 25%. Sales have grown by over 200% since last January. Samsung announced plans last month for a new wind turbine plant in Fife—a £100 million investment that is expected to create more than 500 new jobs. Let us also consider Rolls-Royce, whose £400 million nuclear deal with Areva will support hundreds of highly skilled jobs, including in Rotherham. Even closer to the constituency of the right hon. Member for Don Valley, is the Don valley power project at Stainforth. It is one of the most advanced carbon capture and storage projects in Europe, and is looking to break ground in 2013, employing 2,000 people at the peak of construction and creating 200 jobs for normal operation. Those companies and many, many more are building the clean-energy infrastructure that will power Britain’s future, not just in generations to come, and not in some far off world, but in the weeks and months ahead. Some 4 GW of renewable electricity is expected to come online in the coming year—a doubling of capacity since May 2011. That is a real achievement.

A common thread running through some of the Opposition’s rhetoric concerns stability for investors. I would like to address that, because there is a difference between the parties on this issue, and it is plain for all to see. Let us take nuclear power. I am the first to admit that pushing ahead with new nuclear was not an easy decision for my party, but we have taken it, and we will do it. Let us contrast that with how Labour dithered over new nuclear, so that for the best part of a decade not a single new nuclear plant was authorised. It was the coalition that took forward the national policy statement on new nuclear, paving the way for the first new power station since 1995. However, I was grateful for what the right hon. Member for Don Valley said about nuclear power. Her strong support from the Opposition Front Bench for our new nuclear programme is welcome. It is important that we take politics out of such decisions, so I am grateful that we are making some progress.

[David Mowat]

Will my right hon. Friend give way?

[Mr Davey]

In a second.

On renewables, Labour missed chance after chance, allowing other countries to steal a march, so that when we came to office, the UK was near the bottom of the European renewable energy table—as some of my hon. Friends have said—despite our strong natural resources. We were ahead of Luxemburg—

[David Mowat]

And Malta.

[Mr Davey]

My hon. Friend is right. However, we were behind Bulgaria, Romania and the Czech Republic. We were at the bottom of the European league. This coalition Government are going to rocket us up that league. We want to ensure that our incredible offshore wind potential is realised. It was Labour that failed to do its job properly in government. If Labour had not done so, we would already have more manufacturing, more design and more added value here in Britain. Instead, we have seen manufacturers in Europe and Asia seize much of the supply chain value. In contrast, since we came to power, our policies to support manufacturing at ports and set up the offshore wind developers forum are already beginning to yield results. Foreign companies such as Siemens are now looking to invest in UK turbine manufacturing, and British companies such as David Brown are exporting technology to developers such as Samsung.

Investors and businesses want policy stability, but Labour could not deliver in government. Let us take the feed-in tariffs scheme—which Labour voted against in the last Parliament. Given an opportunity to encourage sustainable clean-energy industries here in this country, Labour dropped the ball. It should not have been necessary to review FITs, but they were not properly designed in the first place. The seeds of instability had already been planted by Labour Members. Labour’s scheme had no flexibility to change tariffs in response to the rapidly changing technology costs. As a result, 80% of the costs of FITs in 2015 will go towards paying for just 20% of the generation capacity, which was installed under Labour’s scheme. Under our new, improved scheme, we expect to get three times as much electricity generation for less than one third of the cost. When it comes to solar power, Labour is the party of the few, and the coalition is the Government of the many. There will be many more installations, and many more households will benefit. There will also be much more carbon dioxide taken out of the system.

[Dame Joan Ruddock]

On that point, the Secretary of State’s predecessor has said that there is a need for a community energy tariff in relation to the FITs. I have spoken in the House about the tremendous damage done to the social housing sector by the Government’s cuts. I note, however, that there is now no reference to a community energy tariff in the consultation. Will the Secretary of State say something today specifically about what he intends to do about that?

[Mr Davey]

Under the scheme that the previous Government devised, there was no such system. The new scheme that we are consulting on contains proposals for a community guarantee for tariffs on which we want to hear people’s views. I hope that the right hon. Lady will engage with that consultation, because I think that that is a very positive proposal.

Following on from what I said about collective switching, I would now like to say a little more about what the coalition is doing to help, protect and empower consumers. We want to help people to heat their homes at a lower cost by improving the energy efficiency of their homes. That is why we are pioneering the green deal. We are creating a brand new market framework, designed to be driven by consumers and businesses, which will secure billions of pounds of private sector investment in Britain’s building stock. We are working with the finance industry to ensure that there is a sufficient supply of low-cost finance from day one.

The right hon. Member for Don Valley criticises a lack of progress, but we are designing an entirely new means of financing the re-fitting of Britain’s housing stock. We are the first country ever to do so, and we want to get it absolutely right. We have held in-depth discussions with a wide range of banks and other financial institutions, and established a round-table forum of key investment banks and investors. My right hon. Friend the Business Secretary has stated that the green deal is a priority for the Green investment bank. We are also in discussions with the European Investment Bank to see how it can support the green deal. I believe that we have an ambitious agenda that will help consumers up and down the country as it is rolled out.

[Mr David Hanson (Delyn) (Lab)]

Why is it, then, that representatives of local businesses came to my constituency office last Friday to tell me that there was gross uncertainty over the future of the green deal? They told me that they could not make plans because an interest rate had not been set, and that they were worried about losing businesses and the impact on jobs. In fact, one firm, which employs 55 people, did not expect to still be in business on 31 December. Why is that the case, if everything is so wonderful, as the Secretary of State maintains?

[Mr Davey]

I would have thought that the right hon. Gentleman would know that the scheme is not going to be launched until the fourth quarter of this year, and that we will be making announcements in the run-up to the launch. I hope that he explained to his businesses that they will need to look for the Government’s announcements, and that they should feel positive about a scheme that is going to happen under this Government and that did not happen under the previous one.

[Mr Hanson]

Will the Secretary of State start, then, simply by saying on what date he will set the interest rate for the green deal, so that businesses can plan for the future? This involves long-term investment decisions for them, as well as for consumers.

[Mr Davey]

The problem with some of the Opposition’s criticism is that they do not seem to realise that this will be a market-based system, and that the Government will not set the interest rate. The right hon. Gentleman needs to understand that green finance companies such as those I have just been talking about will set the interest rate.

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

The Secretary of State has said that the Government will not intervene in that way. Is he aware of the German example, in which the German Government have taken the lead and subsidised the interest rate down to 2.65% for a similar green deal scheme? The uptake for that scheme is 100,000 homes a year. This Government’s ambition is for our scheme to be massively larger than the German one, and we want to see that ambition realised, but how does the Secretary of State expect to achieve that when the interest rate has not yet been set? There are indications that it will be set at 6% or above, but polling shows that that would result in only 7% of the British public being interested in the scheme.

[Mr Davey]

I am afraid that the hon. Lady is slightly confused. The German scheme is a personal loan scheme. Our green deal scheme is attached to utility bills; it could not be more different. The structures that she is talking about would therefore not work in the scheme that we are introducing.

The Labour Government were, frankly, equivocal about the capacity and suitability of our energy infrastructure. The coalition is therefore having to work doubly hard to compensate for the missed years. Our reform, set out in our White Paper last year, will secure our energy supplies, guarantee returns for investors and safeguard consumers from volatile internationally-set fuel prices. Critically, it will deliver energy infrastructure that will ensure Britain can evolve into a competitive low-carbon economy. We are introducing a mechanism to ensure that there is sufficient capacity, too.

[David Mowat]

I have been listening carefully to the Secretary of State’s remarks. He tends to use the terms “low carbon” and “renewables” interchangeably; they are, of course, not the same thing. The Climate Change Act 2008 asked us to reduce carbon, not necessarily to build renewables. In any event, will he confirm that all low-carbon sources of energy, including carbon capture and storage and nuclear, will be eligible for green investment bank funding?

[Mr Davey]

I am delighted to confirm that. I am sorry if my hon. Friend thinks I am interpreting low carbon as renewables, which is not our position. When we look at electricity market reform and talk about low-carbon technology, we are indeed talking about new nuclear and carbon capture and storage as well. I hope I have reassured my hon. Friend on that point.

[Dr Whiteford]

May I welcome the Secretary of State to his new post? I am glad that carbon capture and storage has been mentioned, as I have a constituency interest in gas carbon capture and storage at Peterhead, which provides a classic example of an opportunity missed in recent years. Will the Secretary of State take the opportunity today to set out a clear timetable for that technology? Personally, I believe that gas is a really flexible technology that will help balance the intermittency, so when can we expect an announcement?

[Mr Davey]

As the hon. Lady will know, we intend to announce our competition for CCS soon. I cannot give her the date today, but we are clear that we will make it soon and in time to dovetail as best as possible with the European money that will also be available for some of these pilots.

[Ian Lavery (Wansbeck) (Lab)]

rose—

[Mr Davey]

I will give way, but then I want to make some progress.

[Ian Lavery]

Will the Secretary of State confirm which of the four carbon capture and storage projects will be gas, which will be coal and when they will be delivered?

[Mr Davey]

I have to explain to the hon. Gentleman that there will be a competition. People will put in projects of all different types; then the competition will be judged. It would be completely wrong for me to say that we will favour one technology or another. There is going to be a competition, and it will be carried out with proper process.

A skilled and flexible work force are not only critical in delivering a cost-effective, low-carbon transition; they are also a key part of this Government’s offer to young people. The Department for Business, Innovation and Skills has set out a vision for radical reform of the further education and skills system to deliver skills for sustainable growth. Apprenticeships are at the heart of this strategy—arming employers and individuals with the support, funding and information they need to make the right choices. The skills strategy for England covers the whole of the economy, including green skills and sustainable development. It is a demand-led model to help deliver the skills training that businesses and individuals need.

The Government have put in place institutions to support this approach, such as the growth investment fund and national skills academies, and we have set up specific initiatives to ensure that we have in place the skills to meet our green objectives. These include a national skills academy for environmental technologies to develop standards, deliver training and upskilling for tradesmen and women and technicians to install and maintain low-carbon systems; funding for a renewables training network, led by RenewableUK, to tackle the shortage of skilled workers in green energy industries; a talent bank for the gas, power, waste management and water industries led by the energy and utility skills sector council; the creation of up to 1,000 green deal apprenticeships, subject to business take-up; a new “skills for a green economy” group of sector skills councils and others to help businesses understand and address green skills needs; and work to raise awareness of the green economy through the TUC-led unionlearn initiative. Taken together, they show how we are creating a strong and flexible platform to meet the skills needs for the green economy transition.

The coalition remains absolutely committed to the low-carbon transition. We will secure clean energy supplies at the lowest cost to consumers, making our homes and businesses more efficient and our electricity greener. Since taking office, we have put in place new policies to secure growth in clean energy investment, jobs and capacity. These policies are already bringing real benefits up and down the country. I have to say that I do not recognise the characterisation of this Government’s record that we heard from the right hon. Member for Don Valley. I do, however, agree with the Opposition’s contention that the low-carbon transition has the potential to be a major source of jobs and growth for the United Kingdom. I encourage Opposition Members to stop talking down our industries and our opportunities and instead to focus their energies on making the case for the low-carbon transition, in this place and in their constituencies. I believe that the sector has a hugely positive future, and that it is central to our growth strategy.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. As so many Members wish to speak, I am now introducing a six-minute limit.

17:40

[Phil Wilson (Sedgefield) (Lab)]

I welcome the Secretary of State to his new position.

As has already been said, nearly 1 million people are currently employed in the low-carbon economy, and there is the potential for 400,000 jobs in the industry to be created by 2020. That represents a great opportunity for growth in jobs and gross national product in the north-east.

Last week I received a full and comprehensive briefing from NEPIC, the North East Process Industry Cluster, which has offices in Teesside. It represents 500 companies as diverse as petrochemical, biotechnological and pharmaceutical. They employ 35,000 people, with a further 200,000 in the supply chain, and generate over 30% of the region’s GDP. NEPIC wants the industries that it represents to focus on a wider bio-resources sector incorporating fuels, heat, electricity and chemicals.

For example, MGT Power wants to construct a 300 MW power plant that will generate electricity from imported wood. Progressive Energy wants to gasify coal using carbon capture to store CO₂ and produce syngas as a building block for green foodstocks or energy. That project has been submitted to the European Investment Bank by DECC for consideration for funding under the EU’s new entrants reserve scheme. TAG Engineering Services is to build monopiles for the offshore wind farm industry. Those and other initiatives will help to grow the low-carbon economy, and will aid employment and economic growth in the Tees valley.

Geographically, Sedgefield is covered by what is known as the Tees Valley plain, and has become a target for a great deal of wind farm development in recent years. County Durham has an excellent record on renewable energy: 22% of its energy needs come from renewable sources. The only English county that can beat that is Northumbria, which is also in the north-east. In my constituency, Dalkia has built a 17 MW biomass facility at Chilton. The development has my support, and that of the town and county councils. It employs about 40 people, and the money provided through a section 106 agreement will help to fulfil the local population’s ambition to establish an energy service company.

Chilton town council has applied to the Government’s social action fund for additional funding to engage in energy-efficiency tasks. I understand that the Government have said that the funding needs to be in place by 15 March, but the town council has not heard whether it has been lucky in its bid. Although I believe that the fund is run through the Cabinet Office, I hope that the Minister can make inquiries to establish whether the money will be made available, because it will go towards employing people to help limit fuel poverty.

Those are all laudable initiatives. Some may take time to achieve, but I am sure that they will be achieved, and they are proof that the people of Chilton are prepared to embrace the need for renewable energy. However, I believe that what they face now is unfair, and is making Chilton—and, indeed, the main areas of population in my constituency, Newton Aycliffe and Sedgefield—a renewable-energy hot spot. The Dalkia biomass facility is north of Chilton. Just south of it, E.ON proposes to construct potentially the largest wind farm in England, consisting of 45 wind turbines, or no fewer than 29. E.ON has designated an area of 7.5 square miles of my constituency for the wind farm site, known as the Isles. That is 5% of the area of the constituency and is the size of Newton Aycliffe, home to 28,000 people.

Given that there are wind farms at Butterwick, the Walkway, Lamb’s Hill and Moorhouse Farm, all within a few kilometres of the Isles, it is no surprise that local people are saying that enough is enough. Chilton is caught between a biomass facility and a potentially huge wind farm—so huge, in fact, that it will be the Secretary of State who makes the final decision.

I hope that when the Minister visits Chilton on Wednesday, he will be able to meet some of those who are campaigning against the wind farm. I oppose the proposal, and I do so from a position of strength, because my county is set on reaching the 2020 renewables targets, a record about which most of those from the south of the country who oppose wind farm development cannot boast. I hear a lot of warm words from the Government about giving people a say on wind farm development, but the planning Minister, the hon. Member for Bromley and Chislehurst (Robert Neill), said in this House on 17 November 2010:

“It would…be inappropriate to direct the Planning Inspectorate to refuse a planning appeal solely because of community opposition because there may still be strong national or local policy support for a proposal.”—[Official Report, 17 November 2010; Vol. 518, c. 807W.]

There is an element of truth in that, but when a planning authority states that the local landscape is full to capacity and cannot take any more wind farms, I believe it should be listened to—especially, in this case, as other parts of England do not have a record that compares with that of County Durham.

I am not dead-set against all wind farms. Offshore wind farms will, if we get the economics right, be a great asset to the country and create thousands of jobs in the north-east. That is why I am opposed to any great cut in wind farm subsidy: that may knock the industry off a cliff and cause a loss of jobs and investment in the Tees valley. However, subsidies do need to be kept under constant review.

If we are to win the fight against climate change, we will need to win hearts and minds. We need to take people with us, but when people feel engulfed by developments, do not feel as though they are being listened to, can point out of their window at a biomass facility—as the residents of Chilton can—or can point at a wind farm development, as in Sedgefield, Trimdon or Morden and Bradbury, I think they have the right to be listened to in detail when other developments are proposed.

I am pleased our motion calls for the engagement of local communities in the transition to a low carbon economy. I mentioned at the beginning of my speech the potential in respect of offshore wind and investment. That must continue in the Tees valley, as the implications for jobs are huge.

17:46

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

I want to pay tribute to the Department of Energy and Climate Change, and in particular to the Minister of State, my hon. Friend the Member for Wealden (Charles Hendry), for the work that is being done on carbon capture and storage. There have been a number of very important positive announcements in recent weeks: the decision to include gas as well as coal; the establishment of the Office of CCS within the Department, which is giving focus to this area; and the holding of a number of industrial days, which culminated a couple of weeks ago in 200 or 300 CCS industry representatives debating in London with the Department. The head of the CCS Storage Association described the relationship between the industry and the Government as “tremendous”.

There was criticism about the decision to pull back from Longannet last year. It was said that that would slow things down, but it has proved to be a positive move, and there seems to have been a strategic rethink of what we are trying to do, how we are going to achieve it, how we are going to include European money, and how we are going to support clusters. On the eve of DECC announcing the new terms of its CCS competition, we have an industry that is enthused, a Government who are focused, and, most importantly, a positive dialogue and a sense of mutual support, which is vital for the success of such a tricky and unproven technology.

This change of philosophy is important for Yorkshire and the Humber, as it is the best placed region in the UK to deliver on CCS, with its heavy-industry heritage and its proximity to North sea storage. Much work has already been done to position the region to make the most of CCS. There are four or five main projects, including Don valley, Killingholme, Ferrybridge and Tata Steel, and nowhere else in the country has so many potential projects.

On pipelines, the National Grid has already undertaken initial consultation work, with very positive feedback from the public, and CO2Sense—we are grateful for the fact that the Department for Business, Innovation and Skills has supported it, and continues to do so post-Yorkshire Forward—has been bringing together people and expertise in the region. Yorkshire and the Humber has so many pieces of the required CCS jigsaw: the right industrial heritage, a good geography and location, projects that are ready, and a team of people who are collaborating and have a vision.

A commitment to the Yorkshire and the Humber cluster through the upcoming process would give a massive boost to the economy, with some 55,000 construction jobs in the construction phase alone, inward investment opportunities, export opportunities with countries such as China, and opportunities at home, too, created by additional revenues and extra skills as universities in the region, including York and Leeds, develop expertise and technologies to meet the business demand. There will be huge economic benefits, and there will be a great rebalancing of our economy, if we can get the commitment from the Department and from the European Union.

I wish to finish by encouraging Ministers to do the following: accelerate further the timelines for the competition; focus even more on the cluster benefits; encourage Europe to push forward on its side of the financial bargain; and avoid the Opposition’s legacy of picking a project here and there across the country, and instead focus on a region, Yorkshire and the Humber, to develop the critical mass and ensure that Britain is a world leader in CCS.

17:50

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

In the past, the industries in my county and constituency were farming, coal—based on the Point of Ayr pit, which the Conservatives closed, at the cost of 1,000 jobs—and seaside towns, which have had 40 years of steady decline. The jobs in my area are now increasingly in the renewable energy sector. One of the great stimulators of that process was introduced by Labour in the late 1990s, when my right hon. Friend the Member for Neath (Mr Hain), the then Secretary of State for Wales, allowed my county of Denbighshire and the neighbouring county of Conwy to come in on the objective 1 bid. As a result, £124 million was invested in Denbighshire over a seven-year period. The pièce de résistance—the best project we had—was a £17 million research and incubation centre, the OpTIC centre in St Asaph.

That centre will create 100 new opto-electronic companies over the next 10 years. It is based in the north Wales area—the third biggest for opto-electronics in the world. We build to our success in Wales, and we have had excellent success in renewable energy. Dyesol, a small two-man company, relocated from Australia to the OpTIC centre in St Asaph, and it is now working on organic photovoltaic paint that can produce electricity. It is working with Corus, down the road in Shotton, so that when that company produces its sheet steel, with the paint by Dyesol, electricity will be automatically created. The OpTIC centre is also working on fusion powers. There are two ways to fuse atoms and create power, one of which is by magnets and the other is by lasers. That work is being conducted in my constituency and I am very proud of the centre.

The OpTIC centre also contains the Centre for Solar Energy Research, which represents the future for jobs and growth, which lies in investment in research and development. Three weeks ago, I addressed the solar photovoltaic supply chain conference at the OpTIC centre, where I encountered very disappointed people—my right hon. Friend the Member for Delyn (Mr Hanson) met a similar delegation last week. I spoke to dozens of people who were disappointed about what has happened on the feed-in tariff.

The OpTIC centre was founded by a great man, Dave Rimmer, who had a vision for the area, and he got the funds together to get the centre up and running. Glyndwr university has taken it over and runs it in conjunction with Cambridge university, Cranfield university and University college London. For the future of renewables and low-carbon technology in our country, we need to look to top-flight universities to co-operate with practitioners in the provinces; we need to put the theory and the practice together.

In the OpTIC centre in St Asaph, we have a Welsh solution to a British problem. The centre has been acknowledged: Rhodri Morgan, the then First Minister of Wales, visited it on the same day as the then Labour Secretary of State for Energy and Climate Change—now Labour’s leader—addressed a conference there; and the current Prime Minister has also visited. So we have a prestigious centre in St Asaph, and the British Government should look to it as a means of spreading best practice around the whole UK.

My area does not just contain the OpTIC centre, because it also has the Sharp factory in Wrexham, the biggest solar panel factory in western Europe. It undertook its future budgeting on the basis of the plans the Labour Government gave it for feed-in tariffs. The company recruited its people and set its plans in motion, only to have the rug pulled from beneath it. It was one of the companies in north Wales that were upset by the proposed changes to the feed-in tariff. These companies need certainty, not uncertainty.

Let me now discuss wind power. As I have said before, I turned on 30 turbines off the coast of north Wales. I do not think that it is any relation, Mr Deputy Speaker, but these turbines were at North Hoyle. The then Secretary of State for Wales, my right hon. Friend the Member for Neath, switched on a further 30 turbines some two years ago, and in two years’ time, those at Gwynt y Mor will be up and running. When all those turbines are running, we will have the biggest concentration of wind turbines in the world. North Wales is playing its full part in renewable energy, creating jobs and growth.

I should also mention the Wylfa power station, which is to be redeveloped—an £8 billion investment, creating 2,000 to 3,000 jobs in the local economy. These big investments have been made because of the stability promoted by the former Labour Government, but we now have instability because of the coalition. In the future, my area will see the development of anaerobic digestion, tidal impoundment power off the coast and underwater wind turbines.

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

My hon. Friend might know of the two pioneering marine renewable companies in my constituency. Does he agree that their situation shows how the lack of continuity and support is affecting our credibility? Indeed, it is losing us export markets because of the influence on the ability to invest in the future?

[Chris Ruane]

Absolutely. The disappointment is shared by international developers, such as Sharp, as well as medium-sized and small enterprises in low-carbon creation.

I mentioned the underwater marine current turbines that will be located off the coast of Anglesey, where we are also looking at biomass. My hon. Friend the Member for Ynys Môn (Albert Owen) has coined the phrase “energy island” and that is what it is. However, it is not just the island, but the whole of north Wales that is playing its full part. As I say, we are looking to the Government to create that certainty for the big international operators, the national operators and the regional operators, so that they can put their investments in place to create jobs and growth for the future.

17:57

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

I am very happy to follow the hon. Member for Vale of Clwyd (Chris Ruane), and I pay tribute to the opportunities and success in north Wales. I visited the area when I shadowed the energy and climate change brief in the previous Parliament, and I must say that the whole of the north Wales coast and the area off the north Wales shore is a fantastic site. It gives us not only the success we have had already, but huge potential.

I am pleased to welcome my right hon. Friend the Secretary of State for Energy and Climate Change to his post, to join his colleagues in the Department’s team—

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

Where is he?

[Simon Hughes]

Clearly, he has gone out for his tea just at the moment. I will tell him off later, but even the ever-energetic Energy Secretary has to have a cup of tea some time.

I am glad that we are having this debate, and I pay tribute to the right hon. Member for Don Valley (Caroline Flint) for choosing this important issue. She knows my commitment to it and I am grateful for the acknowledgement of the work I have tried to do in this area for many years. The Labour Administration had many successes, the Climate Change Act 2008 being the biggest, and the Leader of the Opposition, as he is now, tried hugely hard at the Copenhagen summit, which I, too, attended, to rescue it, as far as was possible, from the disaster that was otherwise afflicting it. Happily, he made sure that there was good progress that could be built on in the years to come.

I have to say to the right hon. Lady that in some areas Labour clearly did not deliver. I do not wish to spend most of my time discussing the past, because we all have a duty to work together to ensure that we have the best possible present, but the renewables figures I cited were not speculation; they were the figures that are in the record. The energy figures for the EU show that we were the worst at achieving the renewable energy targets we had set. The table is commonly available and the share of renewable consumption as a proportion of our target showed us in the worst possible light. That was not acceptable and this Government will, I know, do better. It was a defeat of the Labour Government in the House of Lords that got the feed-in tariff system going and that was resisted by the right hon. Gentleman who is now the Leader of the Opposition. The European common energy market was never delivered in 13 years of Labour government. On all those things, the record was not all that the right hon. Lady might wish to make us believe it was.

There was one area in which Labour had a clear position with which I disagreed and with which I still disagree. I am not committed—the Liberal Democrats are not committed—to nuclear power. We do not think that it is the solution—[Interruption.] There had to be negotiation for the coalition agreement but we have made it clear that it is neither necessary for the future of British energy policy nor good for investment in jobs. It creates very few jobs compared with community-based and renewable energy schemes, and the criterion negotiated, while we retained our opposition, was that it would go ahead only

“provided there is no public subsidy”.

I and colleagues will remain eternally vigilant that there will be no direct or indirect public subsidy for nuclear. It is unacceptable in any other context and we have spent and wasted far too much on nuclear power in the past.

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

Without nuclear, where will my right hon. Friend get the base load supply of electricity that does not depend on fluctuating winds and variable sun?

[Simon Hughes]

The answer is very easy. We still have huge capacity in gas and oil—

[Mr Lilley]

Oh, so we are back to fossil fuel?

[Simon Hughes]

No. As my hon. Friend the Member for West Aberdeenshire and Kincardine (Sir Robert Smith) knows, we have that capacity and I have argued consistently that it is possible to have clean coal and to ensure that we use the modern technologies through carbon capture and storage to achieve it. If we have a proper energy grid across Europe, we can capitalise on the solar power from the south and the hydroelectric power from elsewhere. It is entirely possible to do that—although that is, of course, a matter of dispute.

[Nic Dakin (Scunthorpe) (Lab)]

The right hon. Gentleman was very clear that there should be no subsidy for nuclear. Does he not feel, as many people do, that the carbon floor price, as it is currently constructed, acts as a subsidy for nuclear?

[Simon Hughes]

A very lively debate is going on about that point in the context of the European energy policy, which, as we heard the Prime Minister say earlier, will at last be delivered by 2014. We must ensure that we apply the same rules in that context as we do in all others.

When the coalition Government were formed, we set 23 objectives for energy and climate change policy. I hope that Ministers might either now or by the second anniversary put in the Library a report on how far they have gone towards achieving those objectives. Many have already been achieved and Ministers have set out down the road towards achieving the others. We already have £60 million invested in world-class offshore wind conversion in our ports to produce jobs and many people are being trained as apprentices to work on the green deal. We have a green deal energy efficiency initiative for homes across the country and a decision on the green investment bank, the location of which will be announced soon. Let me repeat what I have said publicly in the past: I do not think it should be in London. It should be elsewhere in the United Kingdom so that the benefits can be spread, and I say that as a London Member of Parliament.

We have a legally binding target for a 50% reduction in UK carbon emissions by the mid-2020s. We have the establishment of the low-carbon technology and innovation centres, a 25% improvement in energy efficiency standards for all new buildings, support for green buses, subsidies for the purchase of electric vehicles, a reduction in carbon emissions from central Government buildings of an almost incredible 14% over 12 months and—I pay tribute in particular to my right hon. Friend the Member for Eastleigh (Chris Huhne)—very successful participation in the climate conferences in Cancun and Durban, which has ensured that we are at last on the right road to international agreement and making up for what we did in the past.

Ministers also took difficult decisions after listening to what the public were saying about fuel costs. Fuel duty was cut last April, the automatic fuel duty escalator was scrapped, the planned rise this January was postponed to August and the next planned increase was cancelled. Petrol and diesel are, on average, 10p per litre cheaper than they would have been had the original plans gone ahead. Such decisions are always controversial in the environmental movement and the real world, and fuel prices obviously keep up with other prices, but the Government have responded to meet people’s concerns about their family budgets. The saving for the average motorist will be £144 and the average haulier will be £4,400 better off. Labour raised fuel duty 12 times while in office and planned for six further fuel duty rises after the election. We have done better than that.

I commend what my right hon. Friend the Secretary of State said on taking office about the Government’s plan on solar power. He wants to ensure that many more people benefit so that it can continue to be rolled out as a successful project. Combined heat and power equally has a very important role to play.

In conclusion, may I give the newly led administration in DECC my shopping list? First, will they ensure that we have the skill base to deliver the green economy, which is so important? That needs apprenticeships and good training. Secondly, will they ensure that we have energy efficiency in our schools and public buildings, including converting waste to energy more efficiently? Thirdly, will they incentivise community energy? Fourthly, will they not allow themselves to be distracted by the nuclear power persuaders? And finally, will they support the biodiesel industry in the future?

18:06

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

I am happy to agree with the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) when he says that the headquarters of the green investment bank should not be located in London. He will probably guess where I think they should be located.

It is not just people in Edinburgh who have been asking what is happening with the green investment bank after yet another delay last week. The Government’s announcement on the location of the headquarters had been promised by the end of February, but the deadline was put back. I might be damaging our chances by saying this, but it seems to me to be bare-faced cheek on the part of the Secretary of State to say that the fact that 32 cities have put in a bid for the headquarters excuses the delay in the Government’s announcement. If the delay was for just a few weeks, that would, perhaps, be understandable, but let us not forget that it looks like the delay means that the establishment and operation of the green investment bank will be nearly a year later than the date on which we were first told that it would be set up.

Let us not forget that on 30 June 2010, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), gave the proposals the go-ahead and that in November 2010 the Department’s business plan expected the green investment bank to be operational in September 2012. On 23 May 2011, the Deputy Prime Minister said that the green investment bank would begin to provide funding from as early as April 2012. Now we are told, however, that it will be operational from the end of the year, subject to state aid approval. I suspect that that means that in practice we will not see the green investment bank in operation until well into 2013, almost a year late. That is extremely concerning and is also a condemnation of the way in which the Government have taken forward the proposals on the green investment bank. One cannot blame a year’s delay on the fact that there are 32 rather than 20 cities interested in the proposals.

The delay is not only affecting the Government’s credibility on this issue but, much more importantly, putting us in real danger of losing jobs, making us miss opportunities for green investment and waste time that other countries will take advantage of at our expense. I have heard reports that some companies have been holding back on investment because they have wanted to wait and see what will happen with the green investment bank, and I hope that that has not been the case, although I fear that it has.

Those comments will no doubt affect Edinburgh’s bid for the green investment bank—although, in reality, I am sure that the Government will not make a decision on that basis, and we have a very good case as Edinburgh has a combination of financial services skills, the technical knowledge, a manufacturing base and academic skills as well as broad-based support across the political agenda—but I must say that the delay is extremely concerning and alarming. Will the Minister tell us when the Government expect the green investment bank to start operating in reality? I do not mean when it will have a brass plaque on the door saying, “Green Investment Bank”. What I want to know is when it will start putting money into an industry that has great potential in all our constituencies. Opportunities have been lost as a result of this delay, and I hope there is no further unnecessary delay. If the Minister wishes to continue the cross-party support there has been for a green investment bank, he needs to assure all of us in the House that there will be no further delay. So far, there have been missed opportunities and a loss to the economy, but I hope that will not continue for much longer.

18:10

[Brandon Lewis (Great Yarmouth) (Con)]

I want to focus on my region in East Anglia and on jobs. In East Anglia, between Great Yarmouth in my constituency and Lowestoft in the constituency of my hon. Friend the Member for Waveney (Peter Aldous), we have a whole energy hub. That hub is quite an important factor in the context of the direction we are moving in with energy. Back in 2001, the industry employed about 20,000 people in our region across 6,000-odd companies. The growth, with what is on the table now and what has developed since 2001, means around 105,000 jobs in the industry in our region alone, with a turnover for those businesses of about £13 billion a year. What is on offer to the industry at the moment with the contracts that are out there, particularly for renewable energy and with the offshore wind farm option, is potentially another £50 billion-worth of contracts, with particular focus on carbon capture.

The way in which Departments have worked together has been useful for our area and in helping our industry to grow, and it has been welcomed by people in the industry across Great Yarmouth and Lowestoft. The Department for Communities and Local Government, the Department for Business, Innovation and Skills, the Treasury and the Department of Energy and Climate Change have worked together to make sure that we get the best out of our region and provide the best for our country, not least in terms of the important issue of energy security. We have been able to secure an enterprise zone, which means about 2,000 jobs with 80 businesses. I am hopeful that the very first business to open in the enterprise zone when it starts this April will be Seajacks in Great Yarmouth, with a focus on servicing the offshore wind farm industry. In the 25-year life of that enterprise zone, which is focused on energy and particularly on low-carbon energy, we believe there could be a potential 13,500 extra jobs and 200 extra businesses coming into our region alone.

Much of the advantage and development there has been in the industry has come from people in the industry working together, taking the proverbial bull by the horns and putting together the East of England Energy Group, which works well at representing the area across the world. It has shown the huge opportunities on our doorstep to develop extra jobs and apprenticeships and to publicise them across the industry. It is a multinational industry, with multinational companies such as Perenco, Halliburton, AMEC and others basing themselves in our area to take advantage of the opportunities that are now there because of the way in which the Government are delivering. The interest that has been shown by Ministers from across Departments and Secretaries of State who have visited our area and met businesses has shown the industry that they are interested in it, that they want it to grow and that they believe we have an offer in our area. We welcome that.

The Government have said they want Britain’s businesses to benefit from the £200 billion of infrastructure needed by 2020. Will the Minister comment on the fact that some in the industry believe that when they compete overseas they are sometimes at a disadvantage because other countries overly favour businesses from their own country? I would appreciate hearing his comments on that and our Government’s view of what we can do to balance that situation here.

We also need to make sure that we get in the skills and match them to what the industry needs. In areas such as Great Yarmouth and Lowestoft, the Skills for Energy group is coming together under an excellent chairmanship. It brings together companies such as AMEC, EDF, Seajacks, Shell and others to ensure that we are developing, across our colleges and universities, the qualifications and skills needed so desperately by the energy industry, and the engineering industry that comes off it through the supply chain, to fill the jobs that are on offer locally. Given that this debate concerns jobs and growth, that is very important.

The green investment bank has been mentioned many times. That is vital for funding, particularly development funding, in the industry and for giving certainty to the industry about the ability to develop and finance that funding. It is a very welcome introduction because this area is hugely complicated. As I have mentioned the bank, let me make a pitch for Norwich to have it, as it is in such close proximity to the whole energy hub. Nowhere else in the country could match that; Norwich is the perfect home for the bank. If the Minister would like to support those points or to comment on them, his comments would be welcome.

Lastly, let me touch on earlier comments about the low-carbon economy. We have the advantage of potentially being able to service, look after, develop and help construct, through our deep-water port, the new offshore wind farm that is going to be developed, which will be a huge asset both economically and as part of our energy offer. There is also the issue of carbon capture, with the Deborah field project very closely off our shoreline being worth, possibly, around £1 billion. Potentially, 25% of that could go to our supply chain, so there is a huge opportunity for East Anglia to develop. That is another advantage to our economy coming as a result of what the Government are doing, and for that I thank everyone at DECC. Most importantly, I am glad that Departments are working together to make sure that we can offer businesses the best opportunities and an environment in which they can develop the skills and encourage local education suppliers to develop the skills that the industry needs so that we are developing not just jobs and job opportunities but the skills to fill those jobs. That is vital when we are developing jobs and growth in our economy.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. To accommodate more Members, the time limit is being reduced to four minutes.

18:15

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

I am speaking in the debate because the unemployment rate in Hull is 14.2% for those aged between 16 and 64, whereas the national figure is 8.6%. This area has tremendous potential for jobs and the economic growth that Members across the House want because we know that unless the economy starts to grow, we are not going to be able to reduce the deficit.

I want to talk about Hull and the Humber area because we have been very fortunate in being able to put together a proposal for Siemens to come to east Hull to develop wind turbine manufacturing and use those turbines out in the North sea. However, that has been a battle, and I do not think the Government have done their best to assist Siemens in coming to the city. There seems to be a silo approach in BIS, DECC and other Departments, so there is not the joined-up thinking that is needed to make this part of the economy really grow and deliver for the country.

Let me pay tribute to the work of Matt Jukes, who works for Associated British Ports, to Hull city council and Councillors Steven Bayes and Steve Brady, to Mark Jones and to those in the chamber of commerce in Hull, particularly Dr Ian Kelly. They have worked together to push forward the renewables agenda in the city. We are very fortunate in having the university of Hull, which plays a leading role in the development of the renewables sector. We now have the local enterprise partnership, with Lord Haskins as our chair, and I hope that we are on the final stretch towards making sure that Siemens, and the associated supply chain businesses that would follow it, come to Hull and the Humber area. The Government need to get their act together and make sure that, in future, they speak with one voice on this agenda. Hull has put in an application for the green bank and I hope that it will be considered alongside all the other cities that have applied.

The debacle over feed-in tariffs has resulted in job losses in my constituency. Carillion, which is consulting on 150 jobs going in the city, tells me it is doing that because last October’s announcement on feed-in tariffs meant that it had to restructure its whole business. It looks likely that Carillion will pull out of Hull completely. I am sure that the Minister well knows that, as I said at the start of my speech, unemployment rates are already high in the city. Any job loss is a disaster for the individual and their family as well as for the wider economy in the city. Part of the Government’s problem is that they are rushing into things without properly thinking through the effects their measures will have.

I was very pleased that my right hon. Friend the shadow Secretary of State gave a speech at the Aldersgate Group in February, when she talked about the need for an active industrial strategy for green growth. I am interested in two particular issues in that regard. First, there is the skills agenda and the need to ensure we get skills training and education right for the people who will go into the renewables industry in future. The second issue is about rebalancing the economy. In areas such as Hull and the Humber, it is vital that this growth industry—renewables—is promoted and supported as much as possible by the Government.

18:19

[Caroline Nokes (Romsey and Southampton North) (Con)]

I appreciate the opportunity to contribute, albeit briefly, to the debate. It would be remiss of me not to mention the bid from Southampton, which I can assure the Minister is an excellent one, to host the green investment bank.

It is striking from the Back-Bench contributions that rather than an endless drip of negativity, there is a commitment to the innovative and exciting technologies that are growing in many parts of the UK. Last week in Westminster Hall there was a debate on Government incentives for renewable energy. The right hon. Member for Don Valley (Caroline Flint) may not have been aware of it, but the focus was on the generation of energy from waste. Had any members of her party been present, they would have heard the commitment of the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) to the eight technologies in the renewable energy road map.

However, the debate is not just about solar or wind. If we are to have security of energy supply, we need a suite of technologies, which is why I shall focus briefly on the generation of energy from waste by a company in my constituency, SeAB, which has patented a method of anaerobic digestion in shipping containers. That might sound a little strange to many Members, but the method has the capacity, on a small scale, to use the waste product from farms, schools, restaurants and food production to generate the energy needs of the same organisation.

Anaerobic digestion has the potential to play a massive role in both biomass heat production and electricity generation. Every year the UK produces about 100 million tonnes of food waste, manure and sewage sludge that is suitable for such treatment. Although of course we want the amount of waste to be minimised, using waste to generate electricity is a very green way to meet some of our energy needs. The UK has long been at the forefront of designing such technology, and SeAB and other small companies operating in this sector are using Government support in order to make the difficult transition from concept to deployment. SeAB is successfully making that transition, deploying its system with commercial success, for example at Sparsholt college in Hampshire and on the Southampton university science park.

The commitment to anaerobic digestion was present in the coalition agreement, in the renewable energy road map, and in the strategy published jointly by the Department for Environment, Food and Rural Affairs and DECC last June, and I look forward to the publication of the annual progress report this summer. As my hon. Friend the Minister of State said last week, 56 actions have been identified to tackle the key barriers to deployment. I do not pretend that it is easy or that there are not significant challenges. There are, but I welcome the inclusion of anaerobic digestion in the feed-in tariffs scheme.

There are significant employment opportunities to be had. SeAB may be a small company, but let us not forget that small and medium-sized enterprises are the backbone of the British economy. Small can be beautiful, and can certainly provide jobs across the country.

18:22

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

As the former chair of Flood Risk Management Wales charged with leading Wales forward in adapting to climate change, I am pleased to speak in the debate. The Welsh Assembly Government have sustainable development at the core of their constitution. I shall put in a bid for Swansea as the site for the green investment bank, given the access to the natural wind and wave power, the great universities there and the financial cluster in Cardiff to support it.

We are living in a world where the population will grow from just under 7 billion to 9 billion people in the foreseeable future. China and other emerging economies are driving up the price of oil as a result of economic growth. That means that opportunities for green investment increasingly show a higher prospective rate of return. That is why the present Government, like the previous Government, should invest now rather than later to get niche global leadership in fledgling green markets, targeting exports to emerging markets and providing the critical economies of scale at home to make that possible.

I have in mind the Government’s procurement programme. One can imagine a new generation of solar tiles being installed in all schools, for example, or the Government working with Tata Steel, which is based in Port Talbot, near Swansea. Tata is developing new cutting edge steel comprising six layers, which creates its own electricity and can warm buildings. Working through the procurement system could help to bring about a step change in green technology for Britain. We should think carefully about that.

I have been campaigning for the electrification of the railway from Cardiff to Swansea. There is a question mark over the cost-benefit ratio, but as the costs of diesel and the alternative means for the locomotion of trains get more and more expensive, it is self-evident that electrification will be an investment worth making sooner rather than later.

Nuclear is clearly part of the future. I know that the Secretary of State has previously campaigned against nuclear and the Liberal Democrats say there should be no subsidy, but again it is about embracing the future. It was a great dereliction of duty on the part of the Government to withdraw the loan to Sheffield Forgemasters, which would have assumed global leadership in an emerging market in nuclear production. That was a disgrace.

Tata Steel, which I mentioned earlier, has suffered from the unilateral carbon pricing that we have seen from the Government. Only last week it announced an opportunity for workers to go home and receive half-pay, when it should be motoring forward in emerging markets. Airbus in north Wales is at the forefront of carbon wings. Half the aircraft in the world are created by Airbus. We should embrace the future there, as with wave power. We should not just use our export focus to sell green technology and green products in emerging markets, but recognise that the capital opportunities in oil-rich countries and those with trading surpluses could help investment here, rather than UK inward investment remaining at the perimeter of Europe.

There are great opportunities for a green trajectory to an early recovery, rather than the stupid focus on cuts, cuts, cuts and the environment being seen as in competition with economic growth. I visited Olchfa school last week, which wants to put the green economy—the environment alongside the economy—at the forefront of any future agenda.

18:27

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

As in the case of most Opposition motions, there is much in the motion before the House with which I agree. For instance, there have been mixed signals from Government over the level of their commitment to the renewable energy programme, and that uncertainty has hit the confidence of many investors. The uncertainty was reinforced by the letter from 106 of my colleagues to the Prime Minister calling for a reduction in the subsidy offered to onshore wind farms.

I appreciate that those who signed the letter did so with the best of intentions. They believe that renewable energy should not be subsidised because it is uneconomic. However, some in the anti-onshore wind farm lobby demonstrate slightly muddled thinking. I have heard many opponents say, “But of course I support offshore wind farms.” Let us be quite clear. A threat to onshore wind is a potential threat to offshore wind. Although it is unquestionably true that wind energy is currently uneconomic, with the new generation of wind turbines, wind energy will become cheaper and more predictable. It is also worth pointing out that onshore wind is the cheapest form of renewable technology that can deliver at scale.

[Glyn Davies (Montgomeryshire) (Con)]

I was not one of the 106 Members who signed the letter, but if I had not been a PPS, I would have done so. Does my hon. Friend not accept that sacrificing a beautiful part of Britain to be covered by perhaps 600 wind turbines is an abomination, and anybody representing such an area would be totally committed to opposing it?

[Gordon Henderson]

Yes, I accept what my hon. Friend says, but that does not mean that onshore wind energy is wrong. It means that it must be put in the right place. If we start from the premise that the nation needs to increase the percentage of our energy obtained from renewable sources, increasing onshore wind energy production is financially beneficial to the country because it reduces the need for other, more expensive forms of green power. There are those who question the need for renewable energy at all, and I appreciate their point of view. I disagree fundamentally with them, but I acknowledge their right to hold an opposing view.

As it happens, although I believe that, in an effort to cut lung diseases and global warming, we must reduce the amount of pollution we pump into the atmosphere, my primary reason for supporting renewable energy and reductions in the use of fossil fuels is concern about energy security. We are importing ever more energy into the United Kingdom and, in order to maintain supplies, we are increasingly at the mercy of events over which we have no control. Oil prices continue to fluctuate alarmingly and unrest in the middle east could affect supplies. A couple of years ago we saw Russia cut the flow of gas to Ukraine. It could easily do the same to us or push up the price of gas to even higher levels. It is worth repeating that spiralling household energy bills are driven by higher oil and gas prices and fluctuations in the exchange rate, not support for renewable energy.

Let us not forget that oil and gas are finite resources. The high price of energy is a growing problem, but at least we have energy. As fossil fuels begin to run out, as they inevitably will before the end of this century, energy prices will become so high that people will simply be unable to afford to use their cars or heat their homes. I have been to countries where power cuts are used to manage energy consumption and are a way of life. It is not inconceivable that in 50 years’ time people in this country could routinely flick a switch and find that the lights do not come on. If we are to prevent that from happening, we need to invest in a range of alternative, non-fossil energy sources. That is not an investment we can leave for our children and grandchildren to make; that would be too late. We need to invest now. We need to invest in nuclear power stations and renewable energy sources such as tidal, wind, biomass and anaerobic digestion.

Of course, investing in renewable energy will not only provide us with increasing energy security, but will have the beneficial side effect of creating thousands of extra jobs. Let us take wind energy as an example. Nationally, RenewableUK estimates that 6,000 people are directly employed in the onshore wind sector. That figure could grow to up to 12,000 direct and 19,000 indirect jobs by 2021. In my constituency, Vestas is considering building a factory in Sheerness, which would create 2,000 jobs. Our community took a hard hit recently when our local steelworks went into administration, with the loss of 400 jobs. I genuinely believe that the United Kingdom needs a thriving wind energy industry. More importantly, Sheppey needs that wind turbine factory.

18:32

[Nic Dakin (Scunthorpe) (Lab)]

It is a pleasure to follow the hon. Member for Sittingbourne and Sheppey (Gordon Henderson), who spoke much sense in his contribution, particularly on the opportunities provided by the renewables sector, both onshore and offshore wind, for ensuring energy security, which is a key issue for businesses and individuals across this country, and for creating jobs, because the motion is about jobs and growth in a low-carbon economy. This is a great opportunity for a renaissance, a second industrial revolution in green jobs to drive the UK forward into this century and to create jobs and growth.

I particularly value the opportunities associated with renewable energy because close to my constituency, on the south Humber bank, there is a huge opportunity to develop a big area of land for the manufacture and deployment of renewables technology. It is a great opportunity, along with the potential for development on the north bank of the Humber, which my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) outlined in relation to Siemens’s interest there. Together with the Able UK development on the south bank, that represents a site of European significance for driving the UK’s renewables industry forward. As has already been said in the debate, we need the opportunity not only of site, but of skills. We must ensure that the proper skills development is in place to take advantage of that opportunity.

I am concerned that UK taxpayers and energy bill payers should not end up resourcing jobs outside the UK. It is absolutely crucial that we ensure that the supply chain is developed to provide jobs within the UK’s renewables sector. Otherwise, we will find a huge missed opportunity. I will be interested to hear what the Minister has to say about how the Exchequer, the Department of Energy and Climate Change and the Department for Business, Innovation and Skills are working together to ensure that appropriate incentives are in place to develop the renewables industry supply chain in the UK so that we get maximum benefit. We also need to ensure that the penalties that are in place for energy intensive-industries are properly addressed. Industries such as the steel industry, which is crucial to not only the old industries of the past, but the new renewables industries, have made huge strides in becoming energy efficient.

[Ian Lavery]

My hon. Friend mentioned energy-intensive industries. Is he aware that, due to the carbon taxes that the Government are imposing on energy-intensive industries, Rio Tinto Alcan will close its plant in my constituency sometime this week, which will affect 600 jobs directly and 3,000 in the supply chain?

[Nic Dakin]

My hon. Friend makes a good point. We have already heard that 400 jobs are going in Sittingbourne and Sheppey, and now more jobs are going in his constituency. That is of great concern and underlines even more why we need to ensure that what happens in the renewables industry reclaims our industrial future in a way that we are at risk of not doing. The Chancellor came forward in the autumn statement with a package relating to energy-intensive industries, but it is still unclear to those industries what the detail of the package means. It is time that businesses on the ground had some clarity on what the package will mean. Otherwise, we will find more closures by companies such as Rio Tinto Alcan. Time is of the essence. We cannot afford to dilly-dally on such matters.

During the debate many hon. Members have drawn attention to the shambles of the solar feed-in tariff saga. I hope that everyone in the House and outside has learned from the mistakes so that we can ensure that in other significant areas, such as wind and other renewables, we do not make similar errors and create missed opportunities. I have said everything I wished to say, and I thank you, Mr Deputy Speaker, for allowing me to contribute.

18:37

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

My right hon. and hon. Friends on the Government Front Bench will probably be relieved to hear that I do not intend on this occasion to dispute the wisdom of the renewables targets that we have imposed on ourselves or had imposed upon us by the European Union. If we take those targets as given, we must accept the need to tax or ration fossil fuels and to subsidise or set quotas for renewables if we are to meet them. However, I dispute the premise that appears to underlie contributions to the debate from both sides of the House: that the move from low-cost energy to high-cost energy can generate jobs or growth. Such a move might be necessary, but we delude ourselves if we imagine that it will have either of those effects.

Subsidies can boost employment in the area that is subsidised, just as taxes can reduce employment in the area that is taxed, but the suggestion that subsidies can produce a net increase in additional jobs, as the right hon. Member for Don Valley (Caroline Flint) suggested, is a delusion. It is self-evident nonsense and involves abolishing the rules of arithmetic, because we would destroy as many jobs with the taxes we would have to levy to pay for the subsidies as the subsidies given at other points would create. That is essentially the green version of the old broken windows fallacy, according to which we can create jobs by breaking someone’s windows because the householder would have to employ a glazier, who would have to employ glassmakers and the people who produce the other raw materials. That fallacy was destroyed ages ago and should not be reproduced by Members on either Front Bench.

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

I am wondering whether my right hon. Friend is making an interesting and strange bid for the siting of the green investment bank in either Hitchin or Harpenden.

[Mr Lilley]

We have absolutely no desire to have what is essentially a sub-prime bank in our area. The idea that we can boost—[Interruption.] It will be a sub-prime bank, because the Government have said that it will not accept prime investment opportunities, which will be left to the market. The bank will be able to lend only to those opportunities that are not attractive to industry—despite huge subsidies, quotas, publicity and fashion. In short, it will be able to lend only to the sub-prime opportunities, so let us hope that it is a long time coming. We do not want it in Hitchin.

The idea that we can boost productivity by replacing competitive sources of energy with uncompetitive sources of energy is so ludicrous that it is strange it has passed without comment today. We have a need for electricity generation. If we invest a certain amount of money in wind, which is four times as expensive as gas turbines, we will get for a given investment only one quarter of the electricity that we would if we relied on gas turbines. With onshore generation we will get half the electricity that we would from gas, so the idea that we can boost growth through low-productivity, high-cost industries is nonsense, and we should cease deluding ourselves that we can. It has been suggested that we might be able to generate jobs in the supply industries for those forms of energy, but it is nonsense to suppose that subsidising the use of renewable technologies automatically results in an increase in the domestic production of equipment for them. It manifestly has not; there is no reason to suppose that it should; the Government are not allowed to give subsidies to those equipment suppliers under EU rules; and in any case the record of Governments trying to pick winners is lamentable and miserable, so it is probably just as well that they cannot.

[David Mowat]

The thrust of my right hon. Friend’s comments—that we cannot generate jobs with lower-productivity activities—is right, but if we accept that the Climate Change Act 2008 is right also and we have to decarbonise, we reach a position whereby we ought to decarbonise ruthlessly with the cheapest option in front of us, which takes us to nuclear power rather than to some of the others.

[Mr Lilley]

As one of the five people who opposed the 2008 Act, I do not necessarily accept my hon. Friend’s premise, but I will for the purposes of debate, and if we are going to meet those targets we should do so as efficiently as possible. Nuclear is one of the best ways, but the cheapest of all is gas turbines, and gas might become cheaper in this country if we exploit the potential for shale gas, which has halved the cost of gas in the United States.

[Zac Goldsmith (Richmond Park) (Con)]

On subsidies, can my right hon. Friend name a single nuclear power plant in the history of the sector that has not existed on the back of vast public subsidies? Has there ever been an unsubsidised nuclear power plant?

[Mr Lilley]

I am not sure whether some of the early ones were subsidised, but nuclear power is more attractive economically—the point that my hon. Friend the Member for Warrington South (David Mowat) made—than some of the very high-cost renewables.

As Harold Macmillan remarked, when both sides of the House are agreed, they are usually wrong. They are wrong on this occasion, they invariably end up scratching each other’s backs and intellectual rigour goes out of the window. It is time that we looked rigorously at what is involved. It may be necessary to do what is under discussion, but we should not kid ourselves that it is going to create an industrial revolution, green growth or green jobs. It is going to cost a lot of money, and we are going to be worse off so that future generations can have a better climate.

18:43

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

One of my great Welsh forebears, Aneurin Bevan, once said that we live on a land made of coal, surrounded by sea, and it would take an economic genius for anyone to go cold or hungry.

What I hear from this debate today is that we have the greatest natural resources in the world, yet we are standing by and watching as we get left behind by the rest of the world. China has half the market in solar power batteries; Brazil is already investing in ethanol production for its cars; and the Danes are using wind power to produce their energy. What are we doing? We are falling from third to 13th in green technology investment. That cannot go on.

For too long I have been worried about debates on green energy and technology. I have been one of those who has said, “This is our last best chance,” but the real problem is that we talk in the abstract and in the future, so as we are only a few weeks away from the Budget there are three fundamental things that the Government can do to increase jobs and growth in the low-carbon sector.

The first, quite surprisingly, is to be found in mortgage repossessions, of which Wales has had 5,000 over the past year. It seems an economic fallacy to put those properties back on the market to be sold at below market level, when the banks could bring about equity investment, keep people in their homes and provide for energy-refitting such houses, so that their value increases. We could also look at refitting every public building to stimulate the construction business.

Secondly, with growth on the floor, I genuinely believe in and have come round to the idea of a mini stimulus: not a stimulus on the level that we saw in 2008, when we tried to keep the economy going while it was failing, but something based on what we have learned from that. If we look for example at the car scrappage scheme, we see that in 2009 a targeted stimulus put more new cars—2.4%—on the road, while at the same time emissions dropped for the first time in 13 years. We could look at that again, but instead of talking about just car scrappage, we could talk about hybrid cars as well.

The third and final thing that I would like the Government to do is to talk about not only the green investment bank, but about picking two cities and making them energy independent. The two that I would pick are Cardiff and Bristol, because they could bring about an investment project, such as the Severn Bay barrage, that would produce more energy through tidal and wind power.

Those are great opportunities that we can invest in and look at, and the Government can do so now. They have it in hand. This is our last chance, and as I see time is ticking down, I suggest that we take it.

[Mr Deputy Speaker (Mr Nigel Evans)]

The winding-up speeches will start at 10 minutes to 7.

18:39

[Peter Aldous (Waveney) (Con)]

I am grateful to you, Mr Deputy Speaker, for calling me to speak in this debate, which gives us an opportunity to review the Government’s work on the green economy over the past two years, and to provide some thoughts on how they should move forward over the remaining three years of this Parliament. My comments will, I hope, complement those of my hon. Friend the Member for Great Yarmouth (Brandon Lewis).

In what are difficult times financially, when we do not have as much money to go around as we would like, the Government have come forward with a full range of initiatives that will help to achieve the transition to a green economy. What is now required is, first, to see those policies through to fruition in order to ensure that they achieve their objectives and, secondly, to maintain the coherent, consistent policy framework that is necessary to provide long-term private investors with confidence and security.

East Anglia has an opportunity to play an important role in creating green jobs and helping to rebalance the economy. My colleague—my hon. Friend the Member for Great Yarmouth—and I have set out to make the case to the Government that, if they invest in the green economy in East Anglia, the area can play a pivotal role in promoting sustainable growth and creating new jobs. The Government have stepped up to the plate with the New Anglia local enterprise partnership, which covers Norfolk and Suffolk, being awarded green pathfinder status. I attended its conference last Thursday, when the objective was to work up proposals to include in the manifesto that it will present to the Government in the spring.

To help stimulate the green economy the Government have created an enterprise zone in Great Yarmouth and in my constituency, and they have granted the two ports core status as centres for offshore renewable engineering. Other initiatives that will help to create growth in the low-carbon economy are the green investment bank, the green deal and the roll-out of super-fast broadband.

A lot of work still needs to be done, but I believe that the foundation stone has been laid to create a new and exciting industry. I was going to move on to talk about the five challenges that we need to address, but I shall leave it to my other colleague, to my west and south, my hon. Friend the Member for Suffolk Coastal (Dr Coffey), to say a few words.

18:49

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

I thank my hon. Friends the Members for Waveney (Peter Aldous) and for Great Yarmouth (Brandon Lewis) for their continued championing of East Anglia as the energy coast.

It is fair to say that there will be no economic growth without increased energy consumption, and the challenge to decarbonise our economy comes at a time when we have to spend about £200 billion on rebuilding it. The electricity market reforms have been very positive for the construction of new nuclear power stations. That did not happen under the previous Government, and I am proud that it will be happening under our Government. Sizewell C will be a key employer for many years to come, and it will afford construction opportunities in the near future.

My hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) talked about energy from waste.

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I apologise to the hon. Lady, but it is time for the wind-up speeches.

18:50

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

Having rejoined the debate and expertly managed to avoid the no doubt helpful contribution by the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), I congratulate the Secretary of State on his much-anticipated and well-briefed promotion to his new portfolio and on his first engagement in Parliament in that role. When he was confirmed in his position, he made much of his determination to continue with the policies of his predecessor, so we have a new man in charge but the same policy in place. At least he has not continued with one feature of his predecessor’s appearances in this House—the speeches of inordinate length. We should be grateful for small mercies. It is a shame, though, that much of the content turned out to be very similar, with the same mixture of obstinacy, complacency and diversionary abuse.

The change of Secretary of State has given the Government an opportunity to reassess their policy prescription in the light of the evidence of falling investment in the green economy, taking the UK from third to 13th place, and to make good much of the rhetoric of the past two years on the opportunities for growth and investment to help to rebalance the economy and to build vital skills that could create and keep jobs in every part of the country. Those opportunities should not be missed. However, there is genuine concern that a combination of the effects of Government policies elsewhere, the Chancellor’s comments on a range of related issues at party conferences, and the hapless approach of the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), on feed-in tariffs are combining to reduce the attractiveness of those opportunities, not least in renewable energy.

The Secretary of State spent some time in Scotland this weekend, and he will have appreciated that Inverness is a little less crowded and a little windier than Surbiton, and that is not just because he was at the Scottish Liberal Democrats’ conference. I welcome his recognition of the benefits to Scotland and the rest of the country of the single energy market and the mechanisms within it to improve infrastructure and promote new developments that work in the interests of the whole of the UK. As well as appreciating the potential for renewable energy in Scotland he will also, according to press reports, have witnessed some of those who are less convinced at the staged wake at the conference. For the avoidance of doubt, it was an unofficial wake outside rather than something on the agenda inside.

As well as the opportunities, significant costs are associated with the investment needed to update our energy infrastructure. The right hon. Member for Hitchin and Harpenden (Mr Lilley) and my hon. Friend the Member for Sedgefield (Phil Wilson) expressed concern about that. However, we should be realistic. There are no no-cost options, but there are opportunities to be realised. An over-reliance on fossil fuels will cost more in the long term and lead to bigger increases in consumers’ bills, and our generation plant is largely coming to the end of its useful life. The need to reduce carbon emissions, which is accepted by the Government but not necessarily by all Government Members, means that there is a pressing need to renew that infrastructure, and to do so in the right way.

We should also be maximising the opportunities for jobs in our economy to build growth and provide employment in the parts of the UK that are suffering the most economically, not least because of the impact of other aspects of Government policy. That was pointed out in an intervention by my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) and in the speeches by my hon. Friends the Members for Sedgefield and for Scunthorpe (Nic Dakin). Many places around the UK are well placed to be the hubs for renewable energy because they combine the port infrastructure, the manufacturing expertise and the chance to develop new export opportunities. We have heard about the need for joined-up thinking within Government to attract that investment. Much of that depends on confidence, as the Secretary of State observed, and the Government must be aware that the shambolic handling of the feed-in tariff debacle has dented confidence more widely across the energy industry. I hope that Ministers learn some lessons from that sorry exercise, because it not only has direct consequences for jobs and businesses, as my hon. Friend the Member for Kingston upon Hull North said, but sends a wider message to the industry.

The hon. Member for Skipton and Ripon (Julian Smith) highlighted the importance of CCS, quoting Professor Jeff Chapman, and reflected on the decision on Longannet, which many Members are sorry has been unable to be demonstrated on a commercial basis. We should not forget, however, that the work at Longannet, including the FEED—front-end engineering design—study, will bring some benefits to potential future CCS projects, and it is important that we learn from that. I hope that as the Government outline their new competition, they do not use criteria that restrict the ability of many potential CCS projects to go ahead.

My hon. Friend the Member for Vale of Clwyd (Chris Ruane) highlighted the importance of innovation and development to provide high-quality, high-skilled and exportable jobs, and the important link between academic institutions and industry in developing those jobs around the UK.

The right hon. Member for Bermondsey and Old Southwark, with his own unique style of collegiate behaviour, helpfully highlighted the differences among the Liberal Democrats on nuclear. We must all be clear that we need baseload generation as well as renewable generation, and that nuclear, despite many other aspects about which people express concern, is, like renewables, a low-carbon energy.

My hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz), the hon. Member for Romsey and Southampton North (Caroline Nokes) and my hon. Friend the Member for Swansea West (Geraint Davies) put in, or repeated, their bids for the location of the green investment bank. I think that everyone did that apart from the right hon. Member for Hitchin and Harpenden, who said that he did not want it in his constituency, so that might bring the number of bids down from 32 to 31. However, the most important issue in relation to the green investment bank is not its location but whether it is up and running. The Secretary of State suggested that its operation as a bank has probably been delayed until 2017. My hon. Friend the Member for Southampton, Test (Dr Whitehead) reminded him that that is a direct result of Government policies elsewhere.

In the extensive press coverage on the Secretary of State’s appointment, various anonymous Members among his coalition partners said that they were very pleased that he had got the job because he is a much more collegiate figure than his predecessor—although that would not be difficult. Labour Members must hope that he learns to stand up to the Treasury as well, because Treasury dominance has too often overridden important aspects of the green economy from which we need to benefit in the period ahead.

The hon. Members for Great Yarmouth (Brandon Lewis), for Waveney (Peter Aldous) and, briefly, for Suffolk Coastal (Dr Coffey) highlighted the potential of offshore industrial opportunities in their constituencies and the need to ensure procurement benefits, as far as possible, for indigenous companies—a point also made by my hon. Friend the Member for Scunthorpe.

The hon. Member for Sittingbourne and Sheppey (Gordon Henderson), in an interesting and courageous speech, made clear the problems that the mixed messages coming from the Government and from Government Members are creating as regards some of the investment decisions that may or may not be made. He made the important point that while there may be costs associated with renewable energy, there are also costs associated with an over-reliance on declining and volatile resources. We need to bear that in mind.

My hon. Friend the Member for Scunthorpe made some important points on behalf of energy-intensive industries. He represents a steelmaking constituency, as do I. It is important that those industries get clarity from the Government about the package that was put in place in the autumn statement and do not miss out on opportunities in the green economy.

My hon. Friend the Member for Islwyn (Chris Evans) highlighted the importance of energy efficiency in stimulating the construction industry, although I suspect that the right hon. Member for Hitchin and Harpenden would disagree with him.

The motion highlights the need for the transition to a low-carbon economy. It outlines the opportunities and presses the Government to get the right strategy in place. If the Secretary of State wants to make his mark and to deliver change, rather than just to use the rhetoric of change, he should ensure that the Government bring forward an active industrial strategy, because that is what is needed to transform the opportunities into reality. I commend the motion to the House.

19:00

[The Minister of State, Department of Energy and Climate Change (Gregory Barker)]

This has been a great debate, with terrific contributions and thoughtful speeches by Back Benchers from all parts of the House. The level of expertise and knowledge on the green agenda across the Chamber never ceases to surprise and encourage me. I shall shortly address many of the points raised.

However, once again, the Labour Front Benchers were out of step with the mood of the House because of their desperate rush to score party political points at the expense of measured and informed argument. The fact is that the green economy, like the rest of the economy, faces a challenging time. There are real barriers and obstacles to growth to be navigated. The coalition is determined to tackle them with vigour, ambition and optimism. However, the green economy does not exist in a vacuum, and these are tough times.

There are no easy solutions for dealing with Labour’s legacy of debt and borrowing. In the real world, the green economy is confronted with the same financial challenges as every other industrial sector. Contrary to the gloomy, downbeat predictions from the Opposition, the green economy is rising to the challenge. It is bearing down on costs, introducing greater financial rigour and delivering better value for money for consumers and investors alike. Although there are no easy answers or quick fixes for Labour’s debt crisis, the green economy now has a Government who are genuinely on its side for the long term. Perhaps that is why Ernst and Young’s latest report upgraded the UK from the sixth to the fifth most attractive place in the world to invest in renewables, and why 80% of the 150 global investors in Credit Suisse’s recent survey voted for the UK as having the best regulatory environment for the next five years. After years of Labour’s stop-go policies, transparency, longevity and certainty are at the heart of our policy making.

Let me reassure the right hon. Member for Don Valley (Caroline Flint) that the coalition’s ambition to be the greenest Government ever has not withered; far from it. In 2012, our green agenda will move up a gear. This is the year in which the coalition will move from ambitious green rhetoric to bold deployment. On a range of iconic programmes, we are taking huge strides forwards. We are delivering the same level of ambition, but at a lower cost to the consumer. More green for less cost—that is the challenge for the low-carbon economy in 2012; that is “Green economics 2.0.” Many Government Members echoed that. We are happy to be judged on our record.

The plans to establish Europe’s first green investment bank are well under way. In the meantime, UK Green Investments will invest £775 million in the green economy. The green deal, our transformational new market for energy efficiency and the most ambitious home improvement programme since world war two will be launched in the fourth quarter of this year and will build momentum in 2013 and 2014. Europe’s first renewable heat incentive is already investing £860 million in British innovation.

The reforms to feed-in tariffs were challenging and difficult for many companies, but they were absolutely necessary. However, as a result of some difficult decisions that Labour shirked, we can afford to increase massively our ambition for solar and a range of other decentralised technologies. Thanks to the firm action to reduce the cost of FITs, we have a bigger scheme offering better value.

The year 2012 will be the one in which we finally shrug off the humiliation left by Labour of being the third worst country in Europe for renewable deployment. This year, we expect to install at least 4 GW of green energy—double the amount that we inherited from the Labour Government. We are also building for the long term, not only with our forthcoming electricity market reforms and their game-changing measures for energy efficiency and demand production, but with our ambitious plans for marine energy, which will harness wave and tidal power; a world-leading programme for carbon capture and storage; and the ambitious roll-out of a new nuclear fleet. That all means that we can face the 2020s with growing confidence.

The hon. Member for Sedgefield (Phil Wilson) spoke encouragingly of a range of renewable energy projects and initiatives in his constituency. I am happy to invite him to meet my officials to see how we can help to develop those programmes.

My hon. Friend the Member for Skipton and Ripon (Julian Smith) spoke with authority about CCS. He spoke up for the positive engagement that there now is between the industry and my Department.

[Ian Lavery]

Will the Minister give way?

[Gregory Barker]

I will give way if there is time a little later, but I want to respond to some more contributions.

The hon. Member for Vale of Clwyd (Chris Ruane) was right to flag up the extraordinary industrial innovation in the green sector, which is creating jobs in his constituency.

My right hon. Friend the Member for Bermondsey and Old Southwark (Simon Hughes) spoke with genuine passion. I understand his long-held views on nuclear power. Although he takes a different view from mine, I welcome his canter through the range of other coalition policies that he wholeheartedly endorses. I thank him for paying tribute to the right hon. Member for Eastleigh (Chris Huhne) for his contribution to the international climate negotiations at Cancun and especially at Durban, where he played an important role.

The hon. Member for Edinburgh North and Leith (Mark Lazarowicz) spoke strongly in favour of the green investment bank. I assure him that we are pressing ahead at full speed with that flagship coalition policy, which was announced in opposition and is being seen through in government by our reforming Chancellor.

My hon. Friend the Member for Great Yarmouth (Brandon Lewis) is a great champion for a range of renewables, especially offshore wind. His active support for a huge number of new green jobs in this area is very valuable. I assure him that we are determined to maximise the value to British business of the deployment of these new technologies, unlike Labour. In the last offshore wind farm to be constructed under Labour, 80% of the components were manufactured overseas and imported. That is a shameful record that the coalition is determined to turn around.

My hon. Friend the Member for Waveney (Peter Aldous) was right to point to the important role that East Anglia can play in the new green economy. I listened carefully to his thoughtful comments and suggestions. I was only sorry that my hon. Friend the Member for Suffolk Coastal (Dr Coffey) was cut off in her prime, rather like Adele at the Brits, when extolling the virtue of the East Anglian energy coast.

The hon. Member for Kingston upon Hull North (Diana Johnson) was right to celebrate the investment in her area by Siemens and to praise the many local individuals who worked hard to secure it. However, she is wrong to think that there was not a strong and concerted push from Downing street and my Department to bring that investment to her area.

My hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) was right to focus on the excitement on the Back Benches about a range of innovative new technologies that are coming forth and fuelling a green recovery, particularly the anaerobic digestion initiatives in her constituency.

My hon. Friend the Member for Sittingbourne and Sheppey (Gordon Henderson) made a great speech. He was right to point to the falling costs of wind energy and its future as a reliable source. He was also right to remind us that home-produced renewables not only help us to meet our carbon targets, but add to the UK’s energy security by reducing our exposure to fluctuating international fossil fuel prices.

The hon. Member for Scunthorpe (Nic Dakin) was right to point to the need for more skills. I think he will be pleased about further announcements that my Department will make shortly on that issue and on apprenticeships.

My right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) injected a degree of rigour back into the debate. I am afraid we do not always see eye to eye on these issues, and I have to say that the green investment bank will play a very powerful role, not least in leveraging in many times more money in private capital than from its own capitalisation. It will be a real lever for growth. I am now in a position to make a new announcement to the House about the location of the green investment bank: I can formally confirm that it will not be in Hitchin.

The hon. Member for Islwyn (Chris Evans) spoke about our use of natural resources and the need to install energy efficiency measures in homes, and I agreed with many of his points.

Despite the partisan note injected by Opposition Front Benchers, I believe that there is still much that unites Members throughout the House in their commitment to green investment and climate change. The real difference, however, is that Government Members believe in enterprise, the private sector, innovation and the genius of British business. The Labour party, I am afraid, is retreating to its left-wing comfort blanket of heavy-handed regulation, punitive taxation, fat Government subsidies for the chosen few and the dead hand of state planning. That is not our vision. We believe that the green economy can be an engine for growth, not a burden on taxpayers.

Globally, the clean energy sector continues to show dramatic growth, and we are determined for the UK to seize an increasing share of that valuable world market. Here at home, the Labour party had 13 years to deliver on the ground, but for all the big talk, its achievements were very modest. Come 2015, this historic coalition will be very happy indeed to be judged on its record of delivery.

Question put.

19:10

Division 482

Ayes: 218

---

Labour: 210
Scottish National Party: 5
Social Democratic & Labour Party: 1
Plaid Cymru: 1
Independent: 1

Noes: 275

---

Conservative: 230
Liberal Democrat: 43
Democratic Unionist Party: 1

Living Standards

Monday 5th March 2012 Commons Chamber

19:19

[Rachel Reeves (Leeds West) (Lab)]

I beg to move,

That this House believes that next month’s Budget should include a real plan for jobs and growth in order to boost the stalled economy, help hard-pressed families, pensioners and small businesses, bring down unemployment, and so ensure that the deficit is brought down and done so in a fair way; notes that while the banks are receiving a tax cut this year, the Institute for Fiscal Studies analysis shows that families with children will lose an average of £580 per year from tax and benefit changes coming into effect in 2012-13; further notes that up to 200,000 couples with children who work part-time face losing all their working tax credit of up to £3,870 per year from April 2012 if they cannot increase their working hours to 24 hours per week, further squeezing family living standards; further recognises that, in addition to ending the principle of universal child benefit, the Government’s unfair and ill-thought-through changes to child benefit will mean that a family with two earners each earning £40,000 would keep all its child benefit, but a single-earner family on £43,000 would lose it all, at a cost of £2,450 per year for a family with three children; and calls on the Chancellor to use extra revenue from tackling tax avoidance to cancel his changes to eligibility rules for working tax credits and announce in the Budget an immediate and urgent review of his changes to child benefit, to report before they come into effect in January 2013.

The Opposition have called this debate to draw attention to the injustice of ill-considered changes to benefits and tax credits, which are about to hit hard-pressed hard-working families across the country. We urge the Government to take this chance to review and rectify the pressure they are piling on families who are already under huge strain.

The debate takes place against the backdrop of the biggest squeeze in living standards in a generation, which is made all the more painful because of the Government’s failure to generate jobs and growth, and to deal with the deficit fairly. This year, they have chosen to take more from women and families with children than they are taking from the banks—they are refusing to repeat the tax on bank bonuses that the previous Labour Government introduced, with banks benefiting instead from a cut in corporation tax. At the same time, the average family with children faces a £580 cut in their annual income next month, according to the Institute for Fiscal Studies. Those families will get a Budget bombshell from the Chancellor this year.

Today the Opposition are calling attention to two ways in which the Government are clobbering families with children. The Government’s lack of competence or care when it comes to fairness for families includes a crude cut to child benefit planned for 2013, meaning that while two-earner families with incomes up to £84,000 will keep all their child benefit, a single-earner family with an income of more than £43,000 will lose all theirs. Families will be asking: “Is that fair?” We are also about to see a punitive withdrawal of working tax credits for couples with children, meaning that unless a family on £17,000 can increase their working hours from 16 to 24 by 1 April, they will see their income fall by almost £4,000. Families will be asking the Government: “Is that fair?” I look forward to the Minister’s answers.

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

Does my hon. Friend agree that it is appalling that in Liverpool, Riverside alone, more than 520 children from families who are working, but in low-paid jobs, will suffer as a direct result of that measure?

[Rachel Reeves]

I entirely agree with my hon. Friend, who makes the point about her constituents. All hon. Members will have heard at our surgeries from people who are beginning to realise that in just a few weeks’ time, they will lose all their working tax credit, despite the fact that they are working and doing the right thing.

[Mr Frank Field (Birkenhead) (Lab)]

Will my hon. Friend put it to those on the Treasury Bench that when child benefit came in, it replaced family allowances and child tax allowances, and therefore played a crucial part, because whatever level of income people with children were on, we in some way maintained equity with tax-free income? The Government are abolishing that for the sake of higher rate taxpayers. How can they maintain that the tax burden is being shared between single and childless people, and those with children, if they abolish child benefit?

[Rachel Reeves]

My right hon. Friend is entirely right. This country will be one of the few that does not support families with children across the income distribution. Having children is expensive, and it is right that when people bring up a family, and when they retire, the state is there to provide that bit of extra support when they need it. The Government’s changes go entirely in the wrong direction.

That is a shocking illustration of the Government’s failure to come to grips with the crisis that our country faces—the crisis that is putting families under strain is the crisis in jobs, incomes and living standards. The cost-of-living crisis does not hit the headlines like a banking crisis or a currency crisis perhaps because it is a crisis from which those with the loudest voices can too easily insulate themselves. For the vast majority of people, however, trying to keep going and keep their heads above water is one of the toughest challenges that they have ever faced. Every day is a battle in a long war of attrition.

[Helen Goodman (Bishop Auckland) (Lab)]

Does my hon. Friend agree that those at the top of the income scale do not mention the crisis because they are not facing a crisis? The RBS bonus pool was £785 million.

[Rachel Reeves]

My hon. Friend is right to say that those on the lowest incomes and modest and middle incomes are being hardest hit by the changes to taxes and benefits that the Government have instituted.

[George Freeman (Mid Norfolk) (Con)]

Does the hon. Lady acknowledge that the Government’s proposals to take more than 1.1 million people out of tax, through the personal allowances, represents a tax cut for more than 25 million people? On the motion, will she confirm that the Budget is this month, not next?

[Rachel Reeves]

The changes come into effect next month, but the Budget is in 16 days. [Interruption.] The hon. Member for Taunton Deane (Mr Browne), who is a Liberal Democrat, says that he was going to vote for the motion. Perhaps he was thinking of before the election, when he agreed with progressive policies.

Every day, families are struggling, while the Government demand more from them, and there is no end in sight, no light at the end of the tunnel, just the fear that one day, sooner or later, they will not be able to pay the mortgage, rent or gas bill. We have called this debate because the Government seem unaware of what is happening, unable to understand what people are going through, unwilling to do what it takes to get our economy growing and unemployment falling, and uninterested in taking the trouble to find out what impact their decisions are having.

The choices that the Government are making are hurting but not working. [Interruption.] The hon. Member for Taunton Deane says that we are wrong. It is the Government who are wrong because they are hitting hard-working families harder than anyone else, and giving the banks a tax cut while penalising families and young children trying to do the right thing and stay afloat. The choices that the Government are making are hurting but not working. They are penalising those trying to do the right thing. In response to the crisis in living standards hitting families, the Government are piling on the pressure with badly designed and badly targeted cuts to benefits and tax credits.

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

Although, of course, it is desirable to lift more people on low wages out of tax, is it not the case that this is not a particularly well-targeted measure in difficult times because it applies exactly the same tax advantage to higher paid people?

[Rachel Reeves]

My hon. Friend speaks with great knowledge, having formerly worked for the Child Poverty Action Group, and what she says should hold great sway with the House.

[Mr David Anderson (Blaydon) (Lab)]

In response to the question from the hon. Member for Mid Norfolk (George Freeman) about people being taken out of tax, will my hon. Friend agree that more people are being taken out of tax—and put on the dole? What is that costing us? Some 700,000 public sector workers have gone on the dole in this country. Not only will they not be paying tax but they will not be paying national insurance, which will make things even worse for this country.

[Rachel Reeves]

My hon. Friend is absolutely right. As we all know, unemployment is at a 17-year high and youth unemployment at an all-time high. That is taking more people out of tax and costing taxpayers more and more every day, as the bills of this failed economic policy add up.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will my hon. Friend consider the point that the people affected by the change to working tax credit who work 16 hours a week—probably on the minimum wage—already fall well below the tax threshold, so however desirable it is to raise the tax threshold, it will not help those people at all?

[Rachel Reeves]

My hon. Friend is absolutely right. The most by which someone affected by the changes to working tax credits could benefit from next month’s increase is £125. That pales into insignificance compared with the £3,800, which is the amount by which these families will be worse off because of these changes.

[Mr John Redwood (Wokingham) (Con)]

Having highlighted the anomaly with one and two-earner families regarding child benefit withdrawal, does the Labour party have a suggested solution to sort it out?

[Rachel Reeves]

I am looking to the Government Front-Bench team for their solution, given the words that we have heard from Ministers over the past couple of days. The Labour party supports child benefit as a universal benefit. At the very least, the Government must iron out the anomaly that means that families earning £84,000 a year can still get child benefit, while a one-earner family on £43,000 cannot.

One month tomorrow, on Good Friday, 212,000 families stand to lose up to £4,000 because of changes to the working tax credit. The Government will say that people need only to increase the number of hours they work from 16 to 24. If they were in touch with working families and businesses, they would know that this is simply not an option for many people because the jobs are not there, and employers are laying people off and cutting hours, not increasing them.

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

The hon. Lady is demonstrating to the House that she is a very good Opposition politician. What exactly would she do to address the problem that she is highlighting?

[Rachel Reeves]

I thank the hon. Gentleman for saying that I am a good Opposition politician; I hope, in due course, to be a good Government politician, so that we can put into practice measures to help families, pensioners and businesses facing the squeeze. But it is this Government’s mistakes and wrong-headed policies, which are callous, incompetent and unfair, that are penalising families trying to do the right thing. As I said to the right hon. Member for Wokingham (Mr Redwood), I would like child benefit kept as a universal benefit to help all families with the cost of bringing up a family. At the very least, however, the Govt must address the anomaly.

[Nia Griffith (Llanelli) (Lab)]

Does my hon. Friend agree that this devastating cut in tax credits, which will take £800 million away from families in Wales alone, is not only a tragedy for each family but economic madness, because these are the very families who have to put the money immediately back into the local economy? That money will be sucked out of the local economy, resulting in fewer opportunities for growth and economic recovery.

[Rachel Reeves]

My hon. Friend is right. Government Members would do well to listen to her point. We also know that because of the changes to working tax credits, many families will be in the crazy situation whereby they would be better off on benefits than in work, as the Government’s own figures show.

[Richard Fuller (Bedford) (Con)]

The hon. Lady is moving on to some of the complexities of the benefits system. Does she support the coalition Government’s policies for a universal benefit as a way of simplifying this process? Did she vote for that?

[Rachel Reeves]

This has nothing to do with universal credit. Those changes take effect in about one and a half years. In the meantime, families will be £74 worse off a week because of what the Government are doing, and would be better off on benefits. That is totally inconsistent with what universal credit is supposed to do, which is to ensure that everyone is better off in work. This policy goes in totally the opposite direction.

[Fiona Mactaggart (Slough) (Lab)]

The hon. Member for Bedford (Richard Fuller) mentioned universal credit. That is designed to ensure that work pays in 18 months, but what would my hon. Friend say to my constituents, the parents of 1,700 children in Slough, who currently work between 16 and 24 hours and who will lose £3,800? That is in no way compensated for by the measly £200 resulting from raising the tax threshold.

[Rachel Reeves]

I will come to that very point. Hours are being cut at the moment, so many people working part time who will be hit by these changes to working tax credits are working part time because they cannot find full-time work. Numbers from the Office for National Statistics show that the number of people working part time because they cannot find full-time work is at a record high of 1.35 million—a 13% increase on a year ago. It is therefore not the case that families can simply increase their hours to keep their tax credits. They are being penalised, first because of the lack of economic recovery, and secondly because of this Government’s decision to cut working tax credits.

[Hugh Bayley (York Central) (Lab)]

Government Members keep asking what a Labour Government would do. I was a Social Security Minister when the Labour Government put together effective welfare-to-work policies. What is needed to make them effective is a macro-economic policy that creates jobs and allows people in part-time work to increase their hours. Under the Labour Government, the number of jobs in York increased from 40,000 to 57,000, many of them in retailing. It is precisely those people—1,600 in York—who look set to lose family income as a result of this Government’s policy.

[Rachel Reeves]

Like my hon. Friend, many of us will have spoken to constituents in jobs whose hours vary—for instance, those working in retail or call centres, or those working as cleaners. However, at the moment, their hours are varying in one direction: downwards, because employers are cutting hours and cutting staff.

In addition to the changes to working tax credits, next January more than 1.5 million families will lose every single penny of their child benefit. The Government are saying, “Well, we’re only cutting child benefit for rich families.” However, if they talked to working families, they would realise that many families are heavily reliant on a single earner, because there is only one parent or because one parent is staying at home to bring up the kids. Those families are being hard hit by the changes.

[Glyn Davies (Montgomeryshire) (Con)]

I am listening to the hon. Lady’s speech carefully, and she has made several references to the crises in various parts of our society. The greatest crisis facing the Government, I hope she would agree, is the debt crisis, a huge contribution to which was made by the previous Government. We would all appreciate it if the hon. Lady told us whether the response to the issue being raised today is simply to add to that debt crisis or to find some other way of dealing with it.

[Rachel Reeves]

I would like to know how the hon. Gentleman would explain to the 348 kids in his constituency who will be affected by the changes to working tax credits how it makes sense for their families to be better off on benefits than it is for their parents to be in work. That will surely add to the debt, not reduce it. It is this Government who are borrowing an extra £158 billion, because of the costs of their failed economic policies; it is they who are adding to the debt.

A Government who believe in fairness—a Government who say, “We’re all in this together”—are straining at the leash to cut tax for individuals with incomes over £150,000, while one-earner families on £43,000 stand to lose £2,500 of child benefit and families struggling on just £17,000 stand to lose around £4,000 because of changes to tax credits. Instead of worrying about the top 1%, this Government should start thinking about the other 99%.

[Anna Soubry (Broxtowe) (Con)]

The hon. Lady says that she cares about our children. Those of us on the Government Benches also care about our children and our grandchildren. Does she think it right to saddle them, generation on generation, with debt, racked up by the previous Administration?

[Rachel Reeves]

As for caring for children, the Government’s own figures show that child poverty will increase under this Administration. As I said in answer to an earlier question, there is nothing helpful about throwing more people out of work and on to benefits, either for those families or for taxpayers, who have to pick up the bill of extra benefits and lower tax revenue.

[Anna Soubry]

rose—

[Rachel Reeves]

The hon. Lady has had her chance; I will carry on.

When it comes to child benefits, a Government who say that they believe in rewarding work are creating a perverse and damaging incentive for people near the higher-rate tax threshold to limit their hours or pay, because of the crude cliff-edge effect that their policies will create. At the same time, changes to the rules for working tax credits will mean that some families could end up £728 better off on benefits than in work, according to a written answer from the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling).

[Helen Jones (Warrington North) (Lab)]

The Chancellor said when he took office that he did not intend to balance the books on the backs of the poor. Is that not now exactly what he is intending—and failing—to do? That is the real answer to the hon. Member for Broxtowe (Anna Soubry).

[Rachel Reeves]

It is even worse than that, because the Chancellor is not even balancing the books.

[Joan Walley (Stoke-on-Trent North) (Lab)]

Does my hon. Friend agree that the 1,200 people in Stoke-on-Trent earning just under £17,000 a year who will be worse off under these changes desperately need the Government to listen to this debate and do something in the Budget about the comprehensive spending review, so that they do not have to pay the price for these unacceptable changes?

[Rachel Reeves]

My hon. Friend is right when she sticks up for the people of Stoke, who, like many of our constituents, will be hard hit by the changes, which do nothing to encourage people to go back to work, and instead encourage people to stay on the dole, because they will be better off on benefits than in work.

[Toby Perkins (Chesterfield) (Lab)]

I hope I can add some weight to what my hon. Friend is saying. I was contacted by a local small business owner in my constituency—Keith Bannister, who runs Harley’s pub, which people in Staveley will all be aware of. He told me that three women on his payroll are threatened with the loss of their tax credits. They have told him that they will have to give up work if that happens, but he knows that if he increases the hours of two of them, he will have to lay off the third. It just does not make sense, does it?

[Rachel Reeves]

It would be better if he was advising the Treasury, rather than the people who are currently doing it, because that is absolutely right, and it gets to the heart of the problem.

Indeed, that seems symptomatic of a wider problem with this Government: rushing out announcements to generate headlines before the costs have been counted; dreaming up the next big idea, when they should be focusing on the impact of their policies in the real world. We heard over the weekend that the Prime Minister had lost his blue-skies thinker. However, it might not be such a bad thing, because in tough times such as these, our constituents need a Government with their feet on the ground, not with their head in the clouds. I hope that this debate gives the Government a much needed reality check, because it is not too late to change course and protect hard-pressed families from further hardship and strain, inflicted on them by this Government.

It is the job of this House to ensure that our constituents’ voices are heard and their struggles taken into account, and that the impact of Government policies on their lives is fully understood. Labour Members hear every day from our constituents, and from the people we talk to around the country, about how hard it is to make enough money to pay the bills, find work or keep businesses afloat. It is not too late for the Chancellor to correct the mistakes that he is making with child benefit and working tax credits. I urge the Government to commit now to an urgent review of the child benefit changes and to use the money from a crackdown on stamp duty avoidance to cancel the damaging cut to working tax credits.

There is still time to listen to the families who will be hit by the restrictions on working tax credits, 78% of whom said in a survey for USDAW—the Union of Shop, Distributive and Allied Workers—that they would be unable to find the additional hours needed to keep their tax credits. There is still time to listen to the many families hit by the change who cannot work extra hours because they have disabled children or other caring responsibilities. The Government have refused to exempt those families where one parent is a full-time carer. There is still time to listen to the Child Poverty Action Group, which warns that the change will

“cause a surge in child poverty of hundreds of thousands”.

There is still time to listen to the children’s charities and organisations speaking up for hard-pressed families—including Barnardo’s, Carers UK, Citizens Advice, the National Children’s Bureau and Working Families—which today wrote to the Prime Minister urging him to think again. There is still time to listen to one woman—Mary, from Belfast—who said:

“I can’t get my employer to give me the extra hours I need to qualify. There are people in my work who have had to take redundancy or cut their hours from 36…to 12 hours a week…Where does he think we are going to pluck the extra hours from? It’s a joke.”

Frankly, Mary is right.

On child benefit, there is still time to listen to the Institute for Fiscal Studies, which says that the Government’s proposals will

“create a bizarre and economically damaging set of incentives”.

There is still time to listen to the hon. Member for Christchurch (Mr Chope), who said that the Government’s plans would lead to

“a lot of unfairness and injustice”.

He is right. There is also still time to listen to the hon. Member for Peterborough (Mr Jackson), who said that the Government’s policy was “barmy, tokenistic and unfair”. He, too, is right. I look forward to both of them, and others on the Government Benches, joining us in the Lobby this evening to tell the Government what they think of their policies.

All day, we have been getting smoke signals and spin from the Government. The Deputy Prime Minister says that they are thinking again, yet the Secretary of State for Justice says that they are not. Who is right? I look forward to getting an answer on what the Government’s policy on tax credits and child benefit actually is. It is a shame that no member of the Cabinet is in the Chamber tonight to give that answer and to talk about Government policy.

With 16 days to go until the Budget, the families that are about to be hit by the changes need certainty and commitments. The motion gives Members on both sides of the House an opportunity to dispel any doubts about the seriousness of our commitment to families and to fairness, and to show that we have listened to our constituents and our consciences. We have an opportunity this evening to stand up for fairness in tough times and to vote to protect family incomes by supporting the motion.

19:50

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

After all the sound and fury that we have just heard, perhaps I may provide a little context for the benefit of the Opposition. When this Government came to power, we had the highest borrowing in our peacetime history. We were borrowing one in every four pounds that we were spending. It was clear then, and it has since become clearer, that countries that lack fiscal credibility pay the price in higher market interest rates, at a cost to mortgage holders and businesses throughout the country.

In order to reduce a structural deficit—that is, one that will not go away with growth—it is necessary to cut spending or raise taxes, or a combination of the two. Cutting spending and raising taxes will, unfortunately, have an impact on people’s living standards. We do not want that to happen—we did not go into politics to do that—but the impact on living standards is the inevitable consequence of the dire state of the public finances left by Labour and the recognition by the coalition parties that we could no longer continue to borrow in the same reckless way.

[Sheila Gilmore (Edinburgh East) (Lab)]

Does the Minister acknowledge that if some of the families that we are talking about give up their employment and claim other benefits—including, in some cases, help with their mortgages, to which they would then become entitled—the savings that he is trying to achieve would simply not be made?

[Mr Gauke]

I shall speak in greater detail about the reforms to the working tax credit in a moment, but there is a question that we all have to answer. As the hon. Lady knows, there is a threshold for claiming the credit. For lone parents, it is 16 hours a week. We think it entirely reasonable that the joint target for couples should be not 16 hours a week but 24; we believe that that incentive will be helpful. The principle of a threshold has been in the tax credit system since it was put in place.

[Helen Jones]

rose—

[Joan Walley]

rose—

[Mr Gauke]

Let me just make a little more progress.

We heard the hon. Member for Leeds West (Rachel Reeves) set out the challenges and pressures on living standards, but it takes some cheek for Labour Members to complain about the consequences of their own irresponsibility in power. Their position today in this motion relating to living standards is the equivalent of that of a man who sets his house on fire, then complains, after the fire brigade has extinguished the fire, that it has damaged his carpets. We accept that difficult decisions have to be taken, and we have taken them, but the British public know that we have had take them now because Labour failed to take them when it was in power.

[Ian Lucas (Wrexham) (Lab)]

The Minister is peddling the persistent Tory untruth that this economic situation existed only in Britain. Will he now accept that there was a worldwide banking crisis in 2008, and that the action that was taken to reflate the economy had contributed to the size of the deficit by 2010?

[Mr Gauke]

I will happily re-fight the 2010 general election with the hon. Gentleman any time. He will remember how well his party did on that occasion. The fact is that the UK had the worst deficit of any major economy.

[Priti Patel (Witham) (Con)]

This debate is about living standards, and central to good living standards in our country are job creation and economic growth. Does my hon. Friend agree that the role of the private sector is central to creating jobs, to make up for Labour’s failure to rebalance the economy and provide job creation?

[Mr Gauke]

My hon. Friend is absolutely right. The recovery that this country requires will be driven by the private sector. It cannot be driven by more borrowing and more debt, which is the policy of the Opposition.

[Helen Jones]

Given that the Chartered Institute of Personnel and Development says that one in five firms are cutting hours, rather than increasing them or creating new jobs, how are people who work 16 hours a week going to find the extra hours to qualify for working tax credit? Where are those hours going to come from?

[Mr Gauke]

The figures for the last quarter for which figures are available show that there were more than 1.1 million jobs—[Interruption.] That is not a net number; it is the gross number of people moving into employment. We are not going to do anything for employment in this country if we undermine credibility, or if we see our interest rates driven up because we lack credibility because our policies do not hang together. That is what Labour is advocating, but it would be bad news for private and public sector employees.

[Hugh Bayley]

Does the Minister not recall that, at the time the coalition came to power, interest rates were extremely low and had been for a long time? Our policy at the time of the banking crisis did not therefore create high interest rates. Will he also remind us what the national debt was at the time of the election? I think that it was between £700 billion and £800 billion, whereas it is now more than £1 trillion for the first time in our history, and that is because of this Government’s poor economic growth.

[Mr Gauke]

There is so much wrong with that that I do not know where to start. Perhaps I will begin by pointing out that, at the last general election, our interest rates were at more or less the same level as those of Italy and Spain, yet there is now an enormous difference between us. I am afraid that the hon. Gentleman is wrong.

[Ian Austin (Dudley North) (Lab)]

rose—

[Mr Gauke]

I am going to make a little progress.

We know, given the constraints that we face in the public finances, alongside high commodity prices and international uncertainty, that these are tough times for many families. That is why we have taken substantial steps to protect living standards, and to ensure that we support our poorest and most vulnerable families. Even as we cut the deficit, fairness has been at the very core of our spending plans. We will not let our poorest and most vulnerable families bear the consequences of the previous Government’s failures. That is why we have secured the largest ever cash rise in the basic state pension, and why we have uprated working-age benefits by 5.2% to protect the real incomes of the poorest.

[Anas Sarwar (Glasgow Central) (Lab)]

rose—

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

rose—

[Toby Perkins]

rose—

[Mr Gauke]

I want to make a bit more progress.

That is also why we increased the child tax credit by £135, in line with inflation, which means that, by this April, it will have increased by £390 since May 2010. It is telling that the Opposition motion makes no mention of this Government’s plans to increase the personal allowance, no doubt because their last contribution to the debate on income tax for the low paid was the 10p debacle.

[Glenda Jackson]

Will the Minister tell us how his Government are helping the poorest in our society? Hundreds of families in my constituency are going to lose working family tax credit and will not be able to increase their hours. They are facing the possibility of losing their homes because of the cap on housing benefit, and of losing services because of the cuts to local authorities. The people who are most dependent on such services are inevitably the poorest in our society, yet his Government seem quite deliberately to be attacking them, perhaps because they believe that there are no votes in that part of the country.

[Mr Gauke]

We believe there are a lot of votes in the hon. Lady’s constituency.

I was going through the things we have done to help the poor, but let me continue. What we have done with the personal allowance is a big step—helping working people, ensuring that work pays and lifting living standards for those on low incomes. That is why this Government have made increasing the personal allowance one of our key priorities in supporting low and middle-income families across the UK. In April 2012, we will make a £630 increase in the personal allowance, taking it £8,105, which, taken with the £1,000 increase in April 2011, will benefit 25 million taxpayers, taking 1.1 million low-income individuals out of income tax altogether. We note that the shadow Chief Secretary to the Treasury expressed her opposition to that policy just a few minutes ago.

[Anas Sarwar]

Will the Minister explain how living standards are increasing for families in Glasgow when 2,000 couples and 4,000 children will lose up to £4,000 in working tax credits at the same time as VAT is going up, inflation is high and the cost of living is going up? How is that improving living standards for poor families in Glasgow?

[Mr Gauke]

I come back to the initial point: we face a huge deficit. People recognise we have to reduce it, but at the same time we are trying to do everything we can to protect the poorest. That is why we are running through the issues here.

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

When the previous Government introduced so much regulation into the child care market, did not the number of child minders fall from 100,000 to 50,000 placements while the cost of child care doubled? Was that not a shameful increase in the cost of living for some of the poorest families in our country?

[Mr Gauke]

My hon. Friend makes a good point. If we are to find practical ways of improving living standards, the work that she is undertaking is exactly what we need to be doing. We need to ensure that we have an effective environment in which parents can work and child care costs are manageable.

[Ian Austin]

Will the Minister point me to the bit of the Conservative manifesto that promised hard-working families that they would lose their tax credits and be better off out of work, and to the bit that promised other families that if they had a pay rise that took them into the 40p band they would lose their child benefit and be much worse off, too? Will not people who voted Conservative at the election feel utterly betrayed by the introduction of these anti-work and anti-aspiration policies?

[Mr Gauke]

The people who voted Conservative at the election, and indeed others, recognise that this Government are prepared to take difficult decisions to get the public finances on track to provide the long-term credibility that our public finances need and to ensure that our economy can grow strongly once again. By sticking its head in the sand and opposing every step taken to get the deficit under control, the Labour party does itself no favours.

[Chris Williamson (Derby North) (Lab)]

The Minister talks about putting the public finances in a sound state, yet are not the Government’s policies singularly failing because the Government are having to borrow an additional £158 billion? Surely that should tell the Minister that he is getting it wrong, that he needs to think again and put people back in employment to give them the opportunity to pay tax and contribute to society rather than wasting taxpayers’ money on keeping people idle on unemployment benefit.

[Mr Gauke]

For the hon. Gentleman’s information, borrowing is falling year on year, and we are not going to get borrowing down by borrowing more—however often the shadow Chancellor claims that that is the case.

[Heather Wheeler (South Derbyshire) (Con)]

Does my hon. Friend agree that if the Opposition really believed in looking after low-paid people, they would have voted for the welfare cap and not voted against it? My constituents do not understand why they did that.

[Mr Gauke]

My hon. Friend is right to raise that point, which reveals a lot about Labour’s priorities. It is for Labour Members to answer why they pursued that policy. I want to address the point about welfare reform.

[Several hon. Members]

rose—

[Mr Gauke]

Let me make a little more progress.

We want to target support where it is needed most. Tackling the deficit fairly requires us to ensure that tax credits are targeted at our poorest and most vulnerable families. We simply could not continue on the path that the previous Government took. From 2003-04 to 2010-11, spending on tax credits increased from £18 billion to an estimated £30 billion, with nine out of 10 families with children eligible for tax credits. In total, the previous Government had spent more than £150 billion on tax credits since 2003—a staggering sum, poorly targeted and an unsustainable level of spending. It is absolutely right and fair to reform the system to support those who need it most.

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

At Work and Pensions questions earlier, the Secretary of State made it clear that because of the support of Jobcentre Plus and other agencies, he did not expect anybody to opt out of work as a result of the changes. Does the Minister stand by that? If so, let me give him this challenge. If any family comes into my constituency office to tell me that it is no longer worth them going to work because of these changes, will he personally respond to their financial queries, which I will put in front of him? I suspect that other Members will be doing exactly the same to explain to their constituents why this Government have now made it no longer worth going to work. This seems to be a complete aberration and against his own policy—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Interventions need to be brief.

[Mr Gauke]

Given that we ask lone parents to work 16 hours a week before they are entitled to working tax credits, I would say that it is not right to have the same threshold for a couple. Asking and incentivising them to work 24 hours a week is perfectly reasonable. Under the universal credit that we are going to introduce shortly, every hour extra worked will be worth while, as there will not be the same threshold. Essentially, we are working within the system that we inherited from the previous Government.

[Yasmin Qureshi (Bolton South East) (Lab)]

The hon. Gentleman talks about the extra hours, but with more than 2 million people unemployed, where are those extra hours going to come from?

[Several hon. Members]

rose—

[Mr Gauke]

As I said earlier, over the last quarter for which figures are available, a further 1.1 million jobs were created, while today we have had announcements of 20,000 jobs created by Tesco. We are going to take steps to make it easier to create jobs in this country.

[Several hon. Members]

rose—

[Madam Deputy Speaker]

Order. Members know that they should not stand and point at the Minister; they should ask him to give way. If he declines to give way, it means that they have to sit down and try again later.

[Mr Gauke]

Thank you, Madam Deputy Speaker.

Increasing the working hour requirements for a couple is entirely fair. It is absolutely right that a couple with children should put in more hours than a lone parent before receiving working tax credits. This also creates a clear work incentive signal to potential second earners who could benefit from working tax credits if they moved into work or increased their hours.

[Toby Perkins]

The Minister referred to universal credit. Is not one of the most foolish parts of this policy the fact that it will be out of date within 18 months or so in any case? This will potentially mean a lot of people deciding to get out of work, but it will be superseded by the policy on universal credit. Why not just wait until universal credit comes in?

[Mr Gauke]

I come back to the point I made previously. With the difficult financial situation we inherited, we needed to take steps, and one of them was to increase the threshold for a couple from 16 to 24 hours. That seems perfectly reasonable and fair in the context of a 16-hour requirement for lone parents.

[Several hon. Members]

rose—

[Mr Gauke]

I want to make a bit of progress, because I know that many other Members wish to speak.

We are also right to reform child benefit to target the families who need it most. I fully understand that child benefit provides a vital boost in parental income for millions of families throughout the country, but it represents a substantial cost to the Exchequer. It makes up about 7% of total social security and tax credit spending each year, including child benefit payments of over £2 billion per year to higher-rate taxpayers. When we face such tight constraints on the public purse, it is right for us to refocus resources where we need them most.

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

The Minister mentioned the administrative cost of child benefit to the Exchequer. Can he tell us what is the estimated cost of all the extra form-filling that the change will require?

[Mr Gauke]

I was actually talking about the overall cost. We will give details of the cost of administering child benefit when we announce the details of the policy, which, as the hon. Lady will know, we will do shortly. However, as the Chancellor has said:

“We simply cannot ask those earning just £15,000 or £30,000 to go on paying the child benefit of those earning £50,000 or £100,000.”

It is simply not fair for working parents on low incomes to subsidise millionaires. If members of the Labour party believe in that, they can add it to their election literature along with their opposition to the benefit cap. By making these changes, we can continue to direct child benefit to where it is needed most, supporting millions of families and millions of children from birth until they leave full-time education at the age of 18 or even 19.

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

rose—

[Mr Gauke]

I will certainly give way to the shadow Chancellor.

[Ed Balls]

Can the Minister explain to Members on both sides of the House why he thinks it fair for a family with a joint income of £84,000 to keep all their child benefit, while a one-earner family will lose all their child benefit if the husband or wife stays at home and their income is just £43,000?

[Mr Gauke]

Let me explain the challenge that we face. Basing child benefit on household income means a full means-testing regime with all the complexities that that involves: all the form-filling, and all the administration problems. I do not know whether that is what the shadow Chancellor wants, or whether he supports the position taken by the shadow Chief Secretary, who would not touch child benefit at all; but if we do not pursue the policy that we have announced, we will incur an additional £2.5 billion of borrowing every year. That is what the Labour party is committing itself to.

[Ed Balls]

The Minister is right: the policy is very complicated. It is a pity that the Government did not work that out before they announced it 18 months ago. The Secretary of State for Justice wants to keep it, the Deputy Prime Minister wants to drop it, the Prime Minister also wants to drop it, and the Chancellor is confused. My advice to the Minister is this: sit down, finish the speech and let us see what happens in the Budget, because this is doing his career no good at all.

[Mr Gauke]

Treasury Ministers have taken advice from the right hon. Gentleman in the past, and it did not end well. In that context, I will continue my speech.

At the same time as refocusing child benefit, we are investing £7.2 billion in the fairness premium, including £2.5 billion in the pupil premium, to support the poorest in their early years and at every stage of their education. There are substantial reforms and tough decisions to make, but we have not shirked our responsibility to do so. We will not burden future generations with unsustainable debts that would mean higher taxes and diminished public services. We cannot keep building debt to fund spending on today’s generation at the expense of tomorrow’s.

[Several hon. Members]

rose—

[Mr Gauke]

I am going to make a little more progress.

We cannot ask our poorest and our most vulnerable to carry the burden; it is right and fair for those with the broadest shoulders to carry the heaviest burdens. Those who say that we are not asking the wealthy to pay their fair share are the very same people who are jumping up to oppose reform of child benefit, which will do exactly that.

Under the previous system, about nine out of 10 families with children were eligible to receive tax credits. Under our reforms, the proportion will fall to six out of 10. As is shown by our distributional analysis of the impact of the autumn statement and previous fiscal events, the top 20% of households will make the greatest contribution to reducing the deficit as a percentage of their incomes and benefits in kind from public services.

[Helen Goodman]

Strictly speaking, what the Minister has said is accurate, but he knows as well as we do that the only reason for the positive distributional effect is the measures taken by my right hon. Friend the Member for Edinburgh South West (Mr Darling) before the last general election. Surely the Minister can acknowledge that the measures taken by the coalition Government are massively regressive.

[Mr Gauke]

I am grateful to the hon. Lady for accepting and confirming that all the measures that will be put in place in 2012-13—which we could implement or not implement—are progressive.

[Rachel Reeves]

Can the Minister tell us whether the measures introduced by his party are progressive or regressive?

[Mr Gauke]

All the measures that will be put in place in 2012-13 are being implemented by this Government. That is the point. It is impossible to disaggregate those measures. They are all going to be put in place, and we are responsible for all of them. If we had wanted to reverse some of them, we could have done so, but we did not.

Of course, none of what we are doing ignores the fact that this will be a tough year for households across the board. We know that that is the case, and it is our reason for going even further to support families and businesses throughout the country.

[Chris Williamson]

Will the Minister give way?

[Mr Gauke]

I want to make some progress.

We are limiting the increase to Transport for London and regulated rail fares, funding South West Water to enable it to cut bills by £50 per year for households that currently face the highest water bills in the country, setting aside an extra £675 million for local authorities in England to freeze or reduce council tax in 2012-13, and providing real help for households that are feeling the squeeze. We are deferring the fuel duty increase that was due to take effect on 1 January to August this year, while also cancelling the further increase in August. As a result, tax on petrol will be a full 10p lower than it would have been, and families will have saved £144 on the cost of filling up the average family car by the end of next year.

[Ian Austin]

Will the hon. Gentleman give way?

[Mr Gauke]

No, I am going to make a bit more progress. I have already given way to the hon. Gentleman once, and I think that that was enough for all of us.

It is because of our decisions that we have secured record gilt yields, feeding through to record low and stable interest rates that make a real difference to families paying their mortgages and businesses refinancing loans throughout the country. If we are going to discuss a squeeze on living standards, let us discuss what an increase in market interest rates would mean for families throughout the United Kingdom. It would force taxpayers to find an extra £21 billion in debt interest payments, increase the cost of business loans by £7 billion, and add £10 billion to mortgage bills every year, an extra £1,000 for the average family—and that is just a 1% rise. Let me remind the House that when the Government came to office, our rates were tracking those of the likes of Spain and Italy, and that they are now close to those of Germany. It is because of the tough decisions that we have made to cut the deficit that the UK has broken ranks. In the last year alone, its rates have fallen by about 1.5%, whereas those of Italy and Spain have risen by almost 3%.

I know the shadow Chancellor considers that low interest rates are a sign of trouble, and that he would prefer higher interest rates, a bigger squeeze on families, and an even bigger fall in living standards, but the simple truth is that the Opposition have no credible response to the economic challenges that the country faces.

[Sheila Gilmore]

rose—

[Mr Gauke]

I look to the hon. Lady to rectify that.

[Sheila Gilmore]

I am wondering whether the Minister has been out of the country for the past few days, and therefore has not noticed that several banks are increasing their mortgage rates.

[Mr Gauke]

If we had pursued the policy advocated by the Opposition, our market rates and gilt yields would be going up and we would be facing a very significant problem. We have record low interest rates at present. That does not necessarily mean mortgage rates will remain at their current levels for ever across the board, but the fact is that the tough steps we have taken have ensured that interest rates are much lower than they would otherwise be, which is to the advantage of both mortgage holders and businesses looking for finance.

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

We have debated this question before, and it was clear that quantitative easing is what has led to the reduction in interest rates. The recent £50 billion of quantitative easing has, in effect, been an attack on pension funds; it has wiped out almost a quarter of private pension funds compared with the situation before the last general election. Will the Minister confirm that further credit easing will also affect private pension funds?

[Mr Gauke]

Credit easing will benefit businesses. I should also point out that the current low interest-rate trend was in place before the additional quantitative easing undertaken by the Bank of England.

The simple truth is that the Opposition have no credible response to the economic challenges we face. It took the coalition Government five days to come together in the national interest to forge a joint commitment and approach to tackle the deficit, yet 18 months later the Opposition remain confused and conflicted. Every now and again a member of the shadow Cabinet—even the shadow Chief Secretary—crops up to say they will be fiscally credible but, in practice, they oppose welfare reform, for instance, and say it affects the poorest, even when a household receives more than £26,000 a year. They also oppose reforming universal benefits, even though that protects the richest, and they oppose anything that affects the squeezed middle. Clearly, their economic plan involves more spending, more borrowing and more debt.

However many Opposition days they have, and however many economic policy relaunches they make, it is clear that Labour was irresponsible in government and is irrelevant in opposition. We are fixing the failures of the past and are repairing our economy. This Government are committed to supporting families across the country through difficult economic times.

It is, of course, a tough challenge to secure our economic stability and lay the foundations for sustainable growth, but we are determined to restore the UK’s prosperity, and we will put fairness at the heart of our recovery by protecting living standards for our poorest and most vulnerable families, by lifting millions out of tax, by taking steps to reduce the cost of living and by refocusing welfare on those who need it most. Yes, that means that those on the highest incomes will bear the heaviest burden as we pull together to tackle the deficit, but it is absolutely right that those who can contribute the most do so.

A fair and sustainable recovery demands leadership, and that is exactly what this Government are providing. It is this coalition Government alone who are determined to face up to today’s economic challenges, and to build tomorrow’s fair, prosperous and sustainable economy.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. There will be a seven-minute time limit on all Back-Bench contributions.

20:23

[Ian Lavery (Wansbeck) (Lab)]

I was amazed to hear the Minister claiming to be putting fairness at the heart of policy, when this Government are viciously attacking the most vulnerable and the lowest paid in the country.

As has continually been said, the forthcoming Budget must include measures for jobs and growth. Without jobs and growth, everything else in the economy fails and the cuts will continue indefinitely. The country is suffering greatly as a result of the coalition Government’s policies. I call on them to reconsider their intended changes to tax credits and child benefit, which will cost ordinary hard-working families up to £4,000 a year.

These proposals will impact heavily in my constituency. For the benefit of the Government Front-Bench team, I should point out that Wansbeck is in the north-east—not near Aberdeen, but in the north-east of England. We are being hit very hard already. Before the general election, the Prime Minister said he would hit the north-east the hardest, and, by goodness, that is one promise he has kept. Some 240 households in Wansbeck will be hit by the measures that are to be introduced, and 465 children in Wansbeck will suffer as a consequence. The situation is dire.

[Yasmin Qureshi]

I sympathise with my hon. Friend’s constituents. In my constituency, 880 households, which include 2,095 children, will be affected. Does my hon. Friend agree that these measures are disgraceful?

[Ian Lavery]

I entirely agree.

The dire situation in my constituency is compounded by the following fact. The Office for National Statistics stated last week that 55.4 people are applying for each vacancy advertised at the jobcentre—and there are only 48 unfilled jobs in Wansbeck—although two weeks ago the House of Commons Library said this figure was a little lower, with some 36.5 applicants per vacancy. The notion that there are plenty of job opportunities, and opportunities to take on extra hours at work and part-time employment, is a myth propagated by the Government.

I am very concerned. Today, I have written to the Prime Minister, the Business Secretary and the Employment Minister, the right hon. Member for Epsom and Ewell (Chris Grayling), calling for urgent discussions on the future of my area. The attacks on the disabled and the less well-off seem to have abated since the new welfare reforms passed through Parliament, but now the Government are beginning in earnest their attack on hard-working families with children.

The tax and benefit changes will hit women, children and single parents hardest. We must ask why that is the case. Why are the bankers not being attacked? Why do they get a tax cut? Why is there now talk about the rich people getting their 50p tax rate reduced, while at the same time the Government are continuing to attack those who are unable to support themselves? That is obscene, to say the least.

The average family with a child will lose up to £580 per annum. As many as 200,000 couples with children will face losing up to £4,000 in their income. Some 212,000 households and 470,000 children will be affected if people cannot secure extra hours in their workplace. We have got to ask ourselves: where will people get these hours from in their workplace? There is not enough employment in any case—if the Minister wishes to intervene, that would be great. He can tell people in Wansbeck, where there are 50-odd people after each job, how they will get extra hours in part-time employment. The fact of the matter is that they have absolutely no chance, so they are going to lose their money. In a recent Union of Shop, Distributive and Allied Workers survey, 78% of people said that there was absolutely no chance that they would get an extra hour in their workplace, and so they will be losing their tax credits.

[Yasmin Qureshi]

My hon. Friend rightly says that there are no jobs out there, with more than 2 million unemployed. So people will become unemployed and the state will then have to spend hundreds of pounds on keeping these families on benefits, as opposed to allowing them to work and contribute to the economy.

[Ian Lavery]

Again, I thank my hon. Friend for her intervention, as I could not have put it better myself.

We are talking about the same hard-working families who were used two or three weeks ago by the Government as shining examples of why people on benefits should lose them. We are talking about the people who are getting out of bed and going to work, even if it is for 14, 15 or perhaps 16 hours a week—these are the shining examples and look what has happened to them. A lot of people believed in what the Government had to say but, unfortunately, that has now gone out the window. These are not necessarily the squeezed middle, but the working poor, and they are very hard-working people. I must point out that £4,000 is a mortgage to lots of people involved in this issue, and people—hard-working families—will lose their homes as a result of these policies being introduced by the Government. Their figures suggest that some people will actually be better off not going to work. Only a few weeks ago, we heard a million and one times, “It doesn’t pay to be on benefits and nor should it.” So they attack the “scroungers” first and look what is happening now. The situation is an absolute disgrace, because under these new proposals someone can be better off on benefits than in work, possibly by as much as £728 per annum, as some have it. How is it that people can be better off on benefits?

The proposal on child benefit is the most bizarre and ridiculous, and it has to change, as I am sure everyone in this Chamber understands—it is that stupid and it involves a huge anomaly. How can it be fair that someone in a family earning £84,000 can keep their benefits, whereas someone in a family earning £43,000 can lose theirs? It is absolutely outrageous. I am sure that that will change—if it does not, God help us all. I hope that this glaring anomaly will be cleared up.

The Government cannot continue their unfair attack on those less well-off in society—it is mainly an attack on women, children and hard-working people. The hard-working people cannot continue to pay the highest price for this too fast, too far Government approach. Hard-working people cannot continue to pay the lion’s share in a failing economy, purely on the basis of ideology. Given an increase in fuel prices, the introduction of unfair welfare reforms, high unemployment—the highest in 17 years—huge energy prices, pay freezes and pension cuts, the burden must be shared. It must not be shared just by women, children and those hardest up who are willing to go to work—the hard-working people, as we have heard a million times. It is time that the coalition Government changed direction. Instead of flying into the abyss, they should look after the hard-working people in this country, and revisit their proposals on child benefit and tax credits.

20:33

[Stephen Williams (Bristol West) (LD)]

We have debated many Opposition motions on the economy and public finances in the past 20 months, and this one is little different from the many others that I have discussed—I have spoken in all these debates. We are asked to focus on the needs of hard-pressed families—we are hardly likely to disagree with that—and on pensioners, but the whole tenor of this motion, like all the others that have gone before it, is that the coalition Government should do more for some people and should reverse the planned changes that they have set in train. So despite the U-turns that the shadow Chancellor and the Leader of the Opposition have made in recent weeks on the need to cut the deficit, we are exactly where we have been before on all other Opposition days. We are back with uncosted proposals somehow to make us all believe that tackling the deficit can be a painless and, indeed, invisible process of fiscal rebalancing. It is as if public finances can be restored to health by magic, with no tax rises and no expenditure cuts—it simply is not credible.

[Toby Perkins]

The hon. Gentleman mentions the importance of tackling the deficit, but he will recognise that by 2013 this policy will be out of date because of the incoming universal credit. What is the point of putting 200,000 people through tremendous pain for the sake of 18 months? When the Government review their books in 2015 that figure will have entirely disappeared, so why not wait until the universal credit has come in and sort the system out at that point?

[Stephen Williams]

I thank the hon. Gentleman for his intervention and I think he made the same point to the Minister. The coalition Government have a five-year programme of reform, which includes cutting the deficit as well as long-lasting reform of our entire welfare state, which has evolved over a long period of time. Many of the reforms, whether they are on the universal credit, pensions or other parts of the welfare state, are designed to last for a generation whereas the deficit reduction measures are, of course, short-term measures, painful as they might sometimes be. I acknowledge that for many households and some families what this Government are having to do—not because we choose to do it, but because we have to do it—causes discomfort.

What matters most to all households is putting our public finances and our economy back on track. That gives our country fiscal credibility and allows our Government, businesses and households to borrow and invest at affordable rates.

[Helen Goodman]

The hon. Gentleman clearly has not read the motion, which makes it absolutely clear that our proposals on working tax credits will be matched by an increase in tax take on stamp duty from those people who have houses worth more than £1 million and who are offshoring. That would match the revenue needed for the working tax credit.

[Stephen Williams]

All I can say is that the hon. Lady must have been reading an earlier draft, because that is not what the motion says. I shall discuss tax avoidance later in my speech, as I am sure she will be pleased to hear.

Even in the tough fiscal environment that the Government face, it is right that we should do what we can to help low-income households. That is why the Government are absolutely determined that the budget will not be balanced on the backs of the poorest and those in work who have low earnings. The Government will not repeat the fiasco that happened in good times under the previous Government. The Chancellor who became Prime Minister, in his last Budget as Chancellor, abolished the 10p rate of income tax, raising income tax for the lowest paid in society and all his hon. Friends, who, at the time, sat on the Government Benches and waved their Order Papers with glee that a tax on the poorest in society was funding a tax cut for the rich.

[Meg Hillier]

rose—

[Stephen Williams]

I have given way twice and I am on a time limit, unlike some previous speakers. The hon. Lady will have her turn later.

That is why reducing the tax burden for the lowest paid is the No. 1 priority, as far as the Liberal Democrats are concerned, of this coalition Government. I and all my colleagues stood at the last election on a promise that the income tax threshold would be raised to £10,000 and the coalition Government’s first budget raised the threshold by £1,000 to £7,475 a year, taking 800,000 people out of income tax altogether and giving a £200 tax cut to every basic rate taxpayer. From next month, the threshold will be raised again to £8,105, cumulatively taking 1.1 million low-paid people out of income tax altogether with a cumulative income tax cut for every basic rate taxpayer of £330. That is £330 extra take-home pay, particularly for part-time workers, who are disproportionately women and young people, that they can spend immediately in their communities.

Two weeks ahead of the Budget—16 days, as the shadow Chief Secretary kept saying—the Liberal Democrats want the Chancellor to go further and faster in announcing a timetable to reach that £10,000 threshold in this Parliament. We want to know that when all our constituents go out to work, they will be able to take home £10,000 a year and not face the burden of income tax. That will send out a message that we are determined to make work pay and to reduce the tax burden for everyone on the basic rate of tax.

[Sheila Gilmore]

rose—

[Helen Jones]

rose—

[Stephen Williams]

I have already given way twice and I am on a time limit.

The same arguments apply as when the Government had to take tough decisions on whether to raise out-of-work benefits in the comprehensive spending review and the last autumn statement, and those benefits were raised by the high consumer prices index of 5.2%. Child tax credits have also been raised by 5.2%; that is £135 extra this year. As the Minister said earlier, there has been £390 extra cumulatively so far since the general election. Difficult decisions are being taken on the reform of tax credits. The Liberal Democrat manifesto explicitly said that we thought there was scope for the reform of poorly focused tax credits. In 2010, nine out of 10 families with children received tax credits and, even after the difficult reforms we are introducing in these tough fiscal times, six out of 10 families will still receive tax credits.

Child benefit is another area in which the Government have to make a tough choice. If the Labour party’s message is that it opposes even that tough choice of withdrawing child benefit from the richest families in the country, where on earth is it going to find the cuts? I look forward to hearing, in all the Labour speeches between now and 10 o’clock, what alternative cuts would be made to replace that cut in child benefit. The cliff edge of the higher rate tax threshold is difficult. We all acknowledge the anomaly that was expressed in the extreme by the hon. Member for Wansbeck (Ian Lavery) regarding the earnings of two people in a household. The Deputy Prime Minister confirmed this morning that we are looking for ways to smooth that withdrawal of benefit from those who are marginally over the threshold; we will have to wait until the Budget to see the outcome of those discussions.

The Government are introducing other measures to support families with children. This morning, I visited a secondary school in my constituency, St Mary Redcliffe, and on Friday I visited the City academy in my constituency as well. Both those schools and all the other schools in all our constituencies are benefiting from the introduction of the pupil premium. Parents who are working need support with child care, and the Government are introducing 130,000 extra places for two-year-olds.

At least this motion mentions pensioners. The last time we had an Opposition motion on living standards, it neglected to mention pensioners at all. That was hardly surprising because the Government had just announced the largest cash increase in the state pension since it was introduced by Lloyd George and Asquith in 1908. The Government have a triple lock in place to ensure that pensioners always receive an increase. We will not have the embarrassment of 75p pension rises in future.

The Government are taking action on tax avoidance. I note that the motion says that everything Labour wishes for, whether on child benefit, child tax credit or working tax credits, is somehow going to be paid for through tax avoidance measures that are unspecified in the motion. That would have more credibility if Labour had voted in favour of the tax avoidance measures introduced by the Government in the last Finance Act, rather than voting against them. I want to see more action on tax avoidance in the Budget, such as a general anti-avoidance rule, and I look forward to hearing what the Chancellor has to say—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

20:43

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

We have heard a lot of twaddle from Government Members today. I was shocked that the Minister seemed to agree with the hon. Member for South West Norfolk (Elizabeth Truss) about the need for unregulated child care, as though high-quality, regulated child care is a cost too high for working parents to pay. As a working parent who uses child care, and as someone who represents many young people in my constituency who face having to seek child care, I must say that having lower-quality child care is not the answer. Cost is an issue but lowering the quality is not the answer. I hope the Minister will pick up on that point in responding.

I represent half of a borough that has the unenviable record of being one of the country’s poorest. About 45% of children in my constituency live in out-of-work households or in in-work households that have an income below 60% of the national average. That compares with 22% in the UK as a whole according to 2009 figures.

One in five of my constituents is under 16, so the two changes that the Government are introducing have a very big impact on a very large number of people in my constituency—the youngest, the children who need the support, and their parents as well. Anything that hits children affects Hackney particularly hard. When we are talking about the impact on young people, their life chances and their opportunities, we should not forget the impact that that has on the wider population. It is my constituents who will be paying the pensions of the older population of the rest of the country in time to come. It is my constituents who will be creating the jobs that will pay for this country in time to come. We need to make sure that we give them a little more respect than the Government currently do.

The Government have form in this respect. About a third of my constituency is aged under 24. This group has already been hit massively by the loss of the education maintenance allowance, which had a high take-up in my constituency. For example, one young woman said to me, “By Thursday, when the electricity key was running out, I would pay that,” so she could do her homework and the house would be warm. It paid for basics like that in my constituency. I will not revisit the pain of tuition fees, on which the Liberal Democrats have shown their true colours.

I turn to working tax credits. In my constituency 12,000 families receive tax credits overall. Of those, 4,500 families, which include 8,600 children, are in work and receive both child tax credits and working tax credits. Of the total 12,000 families, 1,100 families receive working tax credit only. Those figures are from December last year, and they hide real people, such as the woman who came to see me on Friday and wept as she said to me, “I’m working 16 hours a week. I want to work more but I cannot find the hours.” She will lose more than £300 a month as a result of the Government’s changes. She has one month to find eight hours of extra work. Where is she going to find that at her level of income?

A related issue, which I am digging into, is school support staff. I have had a number of reports from primary schools in my constituency where low grade staff working 10 or 11 hours a week have been told by the jobcentre that they need to increase their hours to 16, because that gets them off some statistic that the Department is gathering about part-time work. When they went back to the school to ask for extra hours, one head teacher had the wit to go to Jobcentre Plus and say, “Give me this in writing. Tell me who is directing this.” No information was forthcoming.

Those people were being encouraged to give up a good job of 10 or 11 hours a week to find some job somewhere that might be 16 hours a week, but as many of the jobs in low level retail are on zero hours contracts, it is difficult to be guaranteed the 16 hours, let alone the 24 hours. They may get 16 hours now in a good week but not in a bad week, but going up to 24 hours will be increasingly challenging. I talk about my constituency, but as we have heard, up to 200,000 working parents will lose almost £4,000 a year in working tax credit as a result of the changes, which are about three weeks away.

I move on to child benefit. We know that in London child care costs are very high and many of my constituents on good incomes find it unaffordable to work. Their child care would cost more than quite generous full-time earnings, so many have made the understandable decision to opt for one of the couple to stay at home and look after the child. The Minister’s answer was, “Unregulate the child care and make it cheaper”, but that is a retrograde step.

The Government talk about being family-friendly and wanting to support the family unit of two parents with children. The reward for those families for doing what the Government profess to want is a cut in child benefit. What does that mean? If one of the couple is earning £43,000 but the other is not earning and they have three children, they lose £188 a month in child benefit.

[Ian Lavery]

I shall be brief. The hon. Member for Bristol West (Stephen Williams) commented that that is an extreme example. Does my hon. Friend agree that it is not extreme; it is absolutely accurate?

[Meg Hillier]

I completely agree with my hon. Friend. It is rich for the Liberal Democrats to speak sanctimoniously today, when we know what they were saying on the campaign trail just over two years ago.

A family with two incomes totalling £84,000 a year and three children loses nothing in child benefit. The policy is bonkers. It was not even written on the back of an envelope. It must have been written late at night in the bar, because it does not make sense in any way, and the Minister was unable to answer my question about how much it would cost administratively for individuals to collect the paperwork to find people who are on those incomes, in order to take their child benefit away.

We will have the Budget in a fortnight’s time, but my constituents are already being hit. Working tax credit is being taken away from the lowest-paid. There are the cuts to child benefits. We hear from The Daily Telegraph that there might be some changes, but we have heard nothing today from the Minister at the Dispatch Box. VAT has been increased to 20%, affecting the cost of day-to-day purchases for all my constituents. We read of the threat of mortgage interest rates going up. Rents for new social housing will now have to be 80% of private rents, which in my constituency will make it unaffordable for most people—and we can add to that the housing benefit cap, which would affect two thirds of my constituents renting in the private sector, the fact that private rents are increasing exponentially all the time, that energy bills and food prices are going up, that unemployment is increasing, and the loss of the education maintenance allowance.

Many of my constituents may be poor, but there is no poverty of aspiration in my constituency. These policies, layered on month after month and year after year under this wretched Government, are a real kick in the teeth for my constituents, many of whom have come from other countries to do well and to put time and effort into education and training in order to improve their lot. As they are struggling up the ladder of ambition and trying to improve their lot and support their families, the Government are pulling the rug out from under their feet and taking away the lower rungs of the ladder. It is shameful.

20:51

[Mr John Redwood (Wokingham) (Con)]

I am grateful to the Labour party for choosing this important subject for this evening’s debate, because it is right that we should debate living standards. It is quite brave of the Labour party to choose this topic, because there was a sharp decline in living standards in the last years of the Labour Administration, but it is also true that there has been a further decline in the first 18 months of the coalition Government. It takes time to turn these things around. The main reason why living standards have continued to fall in the past 18 months is that inflation has been too high. If time permits, I wish to suggest some things Ministers could do in the drive against rising prices so that we can relieve some of the pressure on our constituents.

I agree with Labour and colleagues on the Government Benches that we are here above all to ensure the better prosperity of the people we represent. None of us wishes to see their constituents’ livings standards fall, and it is right that today we should consider, on an Opposition motion, how we might strengthen and improve living standards. I also agree with Labour that we need to debate jobs and growth and am delighted that the motion starts off with that. I am sure that Ministers on the Treasury Bench are well aware that, although they have introduced some measures, they have not yet done enough to ensure a rapid, strong and continuing recovery. We all look forward to my right hon. Friend the Chancellor adding to the range of policies and instruments that he can adopt to improve the chances of more rapid and sustained growth.

Again, it is a matter of common agreement across the Chamber that growth is a good thing, that it will mean more jobs, rising living standards and higher incomes and that it will bring with it more tax revenue. More tax revenue is much needed, because the Chancellor and his Front-Bench colleagues have decided to increase public spending in cash terms every year of the five-year period, which will not be easy to finance, given the very large running deficit and accumulated debt they inherited. Contrary to what some people in the media have said, the debt is still rising day by day because we are still running a large deficit.

I was hoping to say something good about the parts of the motion where Labour highlighted one of the problems people have with one of the Chancellor’s proposals. As many Labour Members and others have pointed out, with the wish to make richer people pay a little more by withdrawing child benefit there is the problem that those who are better off might in some cases get a better deal than those who are worse off. None of us likes that, and I think that there is common ground on that across the House. It is not a new discovery that Labour has highlighted today. I was hoping that it might have a contribution or a solution, because we know that the Treasury is thinking about whether the problem can be dealt with, but when I asked, thinking that I might find something I could support, answer came there none.

[Ian Austin]

What advice would the right hon. Gentleman give to a constituent of his, earning perhaps £42,000 or £42,500, who has three children, is working hard, getting on in life and wants to do better, but who is offered a pay rise that would take them into the 40p tax band? They would then face the difficult choice between taking a promotion that they have worked hard to get and losing thousands of pounds in child benefit. What would he advise them to do?

[Mr Redwood]

That is a very good example of the problem one can get into, and that is why I wish my right hon. Friends on the Treasury Bench every success in dealing with what we can all see is a problem, but I am not recommending to them that they give up and say that somebody on £200,000 a year should still be able to get full child benefit. That is not the right answer, and I should hope that Labour might sympathise with that proposition and agree, but I am grateful that some Opposition Members are now coming round to my view that high marginal rates of tax and of benefit withdrawal, at all levels of income, are a disincentive.

Just as Government Front Benchers are rightly trying to tackle the very serious problem at the lower end, perhaps with some support from Labour, they should have some sympathy for people in the middle of the income scale, where the situation can be equally unpleasant and difficult for families struggling to meet their bills. Sometimes Opposition Members forget that, although people in my constituency tend to have a higher average income than many of the average incomes in their constituencies, my constituents’ housing costs, their travel costs and other factors in their cost of living mean that they need higher incomes in order to have the same living standard as those whose houses are half the price or less, because housing is a very big component.

The Labour party has rightly said that it would be wonderful if we could tax the banks more, and I again find myself in agreement with that. It is an immediately attractive proposition. We all know that banks are pretty unpopular, and we like to think of them as very rich, so it would be good if we could tax them more. Unfortunately, Labour is wrong to suggest that the Government have just offered another tax break to some banks by cutting the marginal rate of corporation tax. The reason we are getting so little tax out of them is nothing to do with a small drop in the corporation tax rate; it is that two of the biggest banks, Royal Bank of Scotland and Lloyds HBOS, are loss-making, so it does not matter what corporation tax rate we set, because they are not going to pay a penny of it. That is a disgrace, but it is where we have got to because of the disasters and problems in bank management over recent years.

Worse still, we are in the position whereby, if those banks do start to make money—it is true that the losses have been much reduced in the past year and they might start to make money—they will not be about to pay any tax, because they have such huge inherited losses from the period under Labour when they plunged into massive deficit and got into a disastrous position.

[Richard Fuller]

My right hon. Friend is making very good points about the importance of companies being profitable so that they can pay tax, but when it comes to bankers and high earners paying taxes does he think that it is more important that the tax take is as high as it can be, or that we have a headline-grabbing marginal tax rate? Which is more important: the take or the rate?

[Mr Redwood]

I am very much of the view that we want a higher tax take, and I favour taking the tax from the people with the money, the rich, and from the companies with the money, rather than from the people who do not have it. That is what I believe, and I would hope that that again was common ground. The way we do so is by charging a rate that people are prepared to stay and pay, because the danger is that if we set the rates too high, people do not stay or they do not pay; they find clever accountants and lawyers, do less, invest less, risk less or go. It is the same with banks: if we get the rate wrong for banks, instead of getting more money out of them, we get less.

In 1979 when Labour had had a strongly socialist Government, they left office with a marginal income tax rate—in which some current Opposition Members would take pride—of 83p in the pound. In those days the top 1% of income tax payers contributed just 11% of the total income tax take, because the rich had either gone or had clever arrangements to avoid paying tax. When the Conservatives brought the rate down to 40%, not only did the amount of money paid by the rich go up, and the real amount that they paid go up significantly, but the proportion of total income tax that they paid more than doubled. Surely that is a desirable outcome, and it is the same with banks: we need to find a way of taxing them.

My first recommendation to the Chancellor for his Budget is to sort out the banks. We need to create some working banks out of the RBS framework, get them out there in the market, sell them off, get them into a profitable state without all the back history of tax losses, and create new entities that can trade properly and lend money for the recovery, and then we can get some tax revenue out of them. I hope that Labour Members might agree with that proposition. We then need to tackle the problem of inflation, which has been rising too rapidly.

I am glad that those on the Front Bench have done something about council tax bills—I hope that Labour councils will join Conservative councils in keeping those bills down, because they are very difficult for many people to afford—and have started to do some work on fuel prices, although they are still extremely high. We could do more to get water and energy bills down. I recommend that we allow more competition in those industries, particularly water. In the energy industries, we need more private sector-led investment, with an emphasis on cheaper power, which is needed to tackle fuel poverty and inflation and to secure an industrial recovery. The Government need to recognise that energy is now usually the biggest cost in many industries and, instead of favouring dear power, follow competition and private investment policies that will promote cheaper energy.

21:01

[Sheila Gilmore (Edinburgh East) (Lab)]

If I showed some hesitancy in rising, Madam Deputy Speaker, it is because I tend to find that I am called at the very end of debates, so I am extremely grateful to you for calling me at this stage.

Sometimes Government get things wrong and must have the grace to say so. The change in working tax credit proposed for this April is one of those occasions. Interestingly, it was announced in October 2010, before the Government’s proposals on welfare reform were fully announced and explained. There is an obvious dichotomy between what the Treasury is saying and what the Department for Work and Pensions is saying. It is unfortunate that DWP Ministers have not been present in the debate to give their point of view. Those of us who served on the Welfare Reform Bill Committee had hours of Ministers and Government Back Benchers telling us that any job and any hours of work were better than none, and how important it was that we should be encouraging the mini-jobs that we were hearing so much about. The DWP is very clear that it is important that people should be supported in working, even for relatively short hours, whereas the Treasury Minister who opened the debate told us that it is very important that a couple should work more hours, and that if they do not the Government are going to take their working tax credit from them. Those two positions are irreconcilable. It is not good enough to say that it will all come right next year when the universal credit comes into being, because people will soon be suffering from this change, which is the complete and direct opposite of what the Secretary of State for Work and Pensions has been telling us he is going to do.

Is it really the Government’s position that they want people to stop work, as some people will in this situation because it is more attractive to do so? If the family who cannot find the extra eight hours’ work give up work altogether, then without the working tax credit they will get benefits paid at a higher rate than they would otherwise have received. In addition, if they are home buyers they will qualify for other things such as help with the mortgage, which they do not get if they are working. At that point, they may well conclude that it is not worth their while to continue with their jobs. They may continue to think like that in the future. We hear a lot from the Government, particularly from the Department for Work and Pensions, about how benefits policy should drive behavioural change. This policy will drive behavioural change, but in precisely the wrong direction.

[Meg Hillier]

Does my hon. Friend agree that one of the best things parents can do for their children is to embed the work ethic early on? By working, parents not only bring in an income for their children, but set an example for them and bring future benefit.

[Sheila Gilmore]

There is a long-term benefit in people learning from their parents what it is to work.

We used to hear so much about the couples penalty from the Conservative party. It used to say that there should no longer be a couples penalty and to talk about how unfair it was. However, this provision creates just such a couples penalty. A couple who lose their working tax credit might look at their neighbour, who is a single parent, and think, “She’s not losing her working tax credit. That doesn’t seem fair.” Why, when we have heard so much about that, are the Government creating a new penalty for the sake of just 18 months or two years?

That all comes on top of the decision not to increase working tax credit in line with inflation. We have heard a lot, particularly from the hon. Member for Bristol West (Stephen Williams), about how wonderful it is that benefits will rise by 5.2% in the coming year, as if it is some unique act of generosity. In fact, people are simply being given the rate of inflation.

[Stephen Williams]

There were, of course, other choices that the Government could have made. There were voices —I will not say who they were—telling the Government not to raise benefits by that historically high rate of inflation. The previous Government used the lowest possible rate when they raised pensions by 75p. This Government took a different view.

[Sheila Gilmore]

I think that the hon. Gentleman would accept that the 75p increase followed the rate of inflation. I might not have made that decision if I had been the Chancellor of the Exchequer, but that is the decision that was made.

I am pleased that the hon. Member for Bristol West and his colleagues, who are remarkably absent from this debate, managed to persuade the Government that out-of-work benefits should increase by the full amount. I support that. What I find strange is that a Government who wish to support work did not take the same view about working tax credit. I am not talking about levelling down the increase for out-of-work benefits. I am talking about a decision that increases the degree to which work does not pay, when the Conservative party says that it wants work to pay. If all these things are taken together, one begins to wonder where the Government are going.

People are sceptical about universal credit and anxious about what will happen. Let us consider something else that will happen under universal credit. Somebody who is working and who qualifies for universal credit will have their universal credit reduced if they have savings of more than £6,000 and eliminated if they have savings of more than £16,000. People who have managed to save, perhaps towards buying a house or towards their retirement, will be told, “You don’t need support, so we’re going to take it away from you.” Despite all the Government’s warm words about how much they want to support hard-working people and people who save, this is another example of how their policies will not do that in practice.

I say one last time to the Minister: change now. You —the Government, not you, Madam Deputy Speaker—know it makes sense.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. We are running out of time in this debate. I am taking the time limit down to four minutes, so we might get most Members in, but we will not get all of them in.

21:09

[Priti Patel (Witham) (Con)]

I welcome the opportunity to speak in this debate, because from what I have heard thus far it seems to be a chance to draw a contrast between the policies that this Government are pursuing to support jobs, growth and living standards and the record of economic failure that hangs like a millstone around the necks of Labour Members. Few things would be more damaging to the living standards of all our constituents than the introduction of the Labour party’s discredited policies.

I should like to focus on three areas in which the Government are making a real, positive difference to living standards despite the challenging economic circumstances and the appalling state of the public finances inherited from the previous Government. The first is business and growth.

Supporting jobs and growth is essential to maintaining good living standards, and the Government are putting Britain on the right track. The commitment to a lower main rate of corporation tax of 23% will boost Britain’s competitiveness, and I emphasise that that will mean more jobs being created and better living standards for all our constituents. Importantly, that pledge rules out a financial transaction tax and gives great stability to the City of London and the financial markets, which are key to the triple A rating that provides the financial stability underpinning our economy.

The Government have also cut the small profits rate to 20%, which is a welcome step forward to support growth. That, of course, helps to stimulate economic activity, particularly among small businesses. In my constituency, 83% of jobs depend on small businesses, compared with the national average of 68%. Few things would have been more damaging to business men, entrepreneurs and wealth creators looking to invest more and create jobs than the previous Government’s plan to increase the small profits rate to 22%. Jobs and growth are fundamental to our living standards, and it is a shame that the previous Prime Minister, who did so much to damage our economy and undermine our triple A credit rating, is not in the Chamber today to listen to the debate and account for the previous Government’s failures.

I should also like to touch on support for pensioners, which is central to living standards. The Government deserve great praise for the action that is being taken to support our pensioners. Council tax freezes in particular are a welcome way to keep more money in the pockets of all our constituents, including pensioners, whereas the Labour party doubled council tax when it was in government. That hit pensioners the hardest. We have also protected the winter fuel allowance and made cold weather payments permanent. The triple lock on pensions, which has been mentioned, has led to a record increase of £5.30 in the state pension, which will benefit about 13 million people and of course have an impact on living standards.

In the time that I have left I wish to refer to the reform of public services. Only last week, we learned that 17 million adults—about half the working-age population—have the numeracy skills of primary school pupils. Having a work force unable to do the basics in maths and arithmetic is naturally detrimental to our living standards. The Labour Government have much to account for on that front, as well.

The Government are investing a great deal in education and reforming public services. Frankly, after the previous Government left the country with an unprecedented scale of economic and social problems—

[Madam Deputy Speaker (Dawn Primarolo)]

Order.

21:13

[Mr Iain McKenzie (Inverclyde) (Lab)]

It is now painfully obvious that our economy has stalled. That is evident in the soaring increase in unemployment and the even more alarming increase in youth unemployment. There is now a demand, clearly expressed by families up and down Britain, for a real plan for jobs and growth in next month’s Budget.

We also need the Government to make different choices to help families who are feeling increasingly squeezed in these tough times. If we are indeed in this together, why have the Prime Minister and the Chancellor chosen to hit hard-working families with children, who will lose an average of £4,000 a year from policies coming into effect this April? If we add to that the high cost of food, fuel, rents and so on, it seems that some are more in it than others. My constituents in Inverclyde need a Budget for jobs and growth to boost the economy—a fair Budget to ensure that families on low and middle incomes do not bear the heaviest burden in these difficult times.

I shall focus on two aspects. First, the proposed changes to eligibility for working tax credits will hit hardest many parents in part-time work. People who are responsible for at least one child and working at least 16 hours a week can get working tax credit, but from 6 April the rules for couples with at least one child change. In most cases, to qualify for working tax credit, they will need to work at least 24 hours a week jointly, with one working at least 16 hours a week. If only one of the couple works, they must work at least 24 hours a week. Working tax credit for couples to whom neither situation applies will stop from 6 April.

In my constituency, 185 households containing 365 children stand to lose out from that proposal, which will penalise parents who are working and trying to do the right thing, but who cannot increase their working hours at a time when the economy is flatlining and unemployment is rising. Few employers are currently offering an increase in part-time work hours. The change to tax credit is unfair and damaging and should be cancelled before it makes matters even worse for those hard-working parents. The Chancellor could use the hundreds of millions of pounds that the Government have said could be raised by closing a stamp duty tax avoidance loophole on properties worth more than £1 million. That would resonate as fair with my constituents and go some way to convincing them that we are in this together and paying for it equally together.

Secondly, the Government need urgently to review the planned changes to child benefit, as a result of which around 1.5 million families will effectively lose their child benefit. Surely it cannot be fair that a two-earner family on £42,000 each—a total of £84,000—will keep their child benefit, but a single-earner family on £43,000 will lose out. The Opposition support the principle of universal child benefit, but if the Government are determined to make changes, can they not be made more fairly and in a better and more workable way?

Hitting families with the two changes I have outlined will unfairly reduce their living standards. The changes were rashly and hurriedly announced last year. The feeling is that Ministers have clearly not thought through the consequences. Many thousands of parents on low and middle incomes face losing a huge proportion of that income at a time when every penny counts. Bizarrely, far from the Government making work pay, many parents could find that they are better off on benefit. That makes no economic sense at all.

21:17

[George Freeman (Mid Norfolk) (Con)]

We are tonight invited by the Opposition to join them in sympathising with the squeezed middle. Of course, that is Labour’s cynical project to identify itself with the people hardest hit by the crisis with which it left us. It seems to be the Opposition’s only policy. In the absence of any serious consideration of the crisis for which they are responsible, they now posture as the only people who feel the public’s pain. That is utterly cynical, and we have seen and heard tonight how little truck the House has with that view.

The truth is that we are all being squeezed, but not for the reasons the Opposition set out. The shadow Chief Secretary, in hysterical tones, accused Government Members of indulging in reckless and heartless cuts. We are being squeezed by the actions of a responsible coalition, which was invited by the country to tackle a national emergency. We need to remember the scale of the crisis we inherited, the effect on living standards, which we are all feeling, and the steps the Government have taken.

[Brandon Lewis (Great Yarmouth) (Con)]

Does my hon. Friend agree that one of the best ways the Government could help to improve living standards is by creating an environment in which private sector businesses can grow, employ more people and, potentially, give them pay rises when they do well?

[George Freeman]

My hon. Friend makes an excellent point. I could not agree more. We need to rebalance the economy and realise that every pound spent here is a pound that has to be earned by businesses and the people who work for them.

The truth is that we inherited £1 trillion of debt—£25,000 for every man, woman and child in the country—and a situation in which £1 out of every £4 of Government expenditure had to be borrowed. We had debt interest payments of £120 million a day, and debt interest would have risen to £76 billion per annum over the Parliament had we not tackled the deficit. Yes, there was an international credit crunch, but it was the actions of the Labour Government that led us into a position of extreme vulnerability. They inherited a golden legacy in 1997 after the previous Conservative Government had had to put the country through a painful and difficult period. It was a golden legacy that, after two years, they set about—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The hon. Gentleman has a minute less than the clock is showing before I interrupt him. There is a problem with the clocks.

[George Freeman]

After two years of sticking to the previous Administration’s prudence, the Labour Government set about the biggest spending spree in peacetime history, but because of their cynical promise to the electorate not to increase income tax, they set about a series of other measures: they sold the gold at the bottom of the market; they launched an unprecedented programme of indirect stealth taxes, which we are still feeling today; they bungled the regulation of the Bank of England—apparently planned in the back of a taxi by the former Prime Minister—which led to an explosion of cheap credit and the very crony capitalism that they accuse us of; they created an out-of-control boom that led to the very bust they promised to prevent for ever; and they set about, quite deliberately, a massive public sector expansion without the necessary structural reforms to make it sustainable. Unless we had tackled the deficit, we would have left the country facing the possibility of rising interest rates, triggering a massive and serious depression.

In truth, the squeeze is being felt not just by the middle but by the young and old in this country. Every child has £25,000 of debt and a mountain to climb. Every middle-income family—in more and more of them, every man and woman has to work to pay their way—will face a tidal wave of taxes, a rising cost of living and the ticking time bomb of inflation if we do not keep the deficit under control. Our elderly have been let down by the previous Government, who promised so much and delivered so little. They are now facing an NHS structurally unable to meet the challenges of the ageing population that depends on it.

The coalition Government have set out to tackle this legacy fairly, with great rigor and in a way that is progressive—meaning with the intention of driving social mobility and helping people to break out of Labour’s dependency culture through serious reforms to welfare and education. I want to cite several things that have been done that future generations will look back on kindly: the targeting of child benefit on the most needy; the raising of personal allowances, taking 1 million people out of tax and handing money back to 25 million of our poorest families; the freezing of council tax; the uprating of pensions and the triple lock, which will be worth £15,000 to the average pensioner family; and the protection of cold weather payments. The Labour party should hang its head in shame for coming here and posturing on behalf of the people who are paying the price of their irresponsibility.

21:23

[Sammy Wilson (East Antrim) (DUP)]

There is a general acceptance in the House that if we are to increase living standards, it has to be done through economic growth. Apart, perhaps, from the Green party, which appears not to consider economic growth desirable, there is a recognition that it is the way forward, although there is considerable debate about how we do that.

I say to the Government Front-Bench team that I cannot understand why our triple A rating will not be affected by huge borrowing to pay for the unemployed, but would be affected if we borrowed for projects that showed an economic return—for some reason financial markets would apparently take a dim view of that. When we consider how to get out of the current problem, we must think about growth, spending and borrowing in those terms.

If we consider the sources of the increase in living standards over the past years—the Institute for Fiscal Studies has looked at the past 40 years—we see that the biggest contribution has come from the increase in economic activity rates, particularly those increases resulting from bringing women into the workplace and work force. If we are going to increase economic activity rates, including among young people in Northern Ireland, 44% of whom are not economically active—there are various reasons for that, one of them being the huge rise in youth unemployment—there has to be economic growth to create jobs and attract people from inactivity into economic activity. There is an important message for Labour Members from that, because it will mean having to implement some of the welfare reforms that the Government are introducing. Those reforms are good, because they give people the incentive to work. However, there is no point introducing such reforms if there are no opportunities open for people, which is why economic growth and job creation are so important.

The second thing that the Institute for Fiscal Studies identified as being associated with rising living standards over recent years is tax credits. The point has been expressed well this evening, so I will not dwell on it, but if tax credits are so important, I have to say that I find it very odd that, at a time when jobs are short and hours are being cut, the Government should think that it is a step forward to take tax credits away from people who cannot find extra hours in the week to work, even though they want to, or that this will help with current living standards.

The last point I want to make is this. One of the big things that has affected people’s living standards is increasing energy bills. Indeed, it is a bit bizarre that we should be debating this motion after the previous one. We have been encouraging the Government to pursue and invest further in the most expensive form of energy available, namely wind power. Those high-cost energy sources have already added 20% to energy bills, and the previous Government’s predictions, as well as the current Government’s predictions, are that by 2020 they will add 43%, thus increasing costs and reducing living standards.

21:27

[Richard Fuller (Bedford) (Con)]

Sitting in this debate on living standards has taken me back to the campaign trail in 2010, when I was explaining to my constituents—as I am sure many of us were—that the problems that we would be inheriting from the then Government were long-term problems, and unfortunately there were no short-term solutions to those problems.

I represent a constituency where unemployment was above the national average even in the so-called boom period of the last Labour Government. Unemployment has gone up, and I am sure that both the Government’s proposed changes highlighted in the motion will impact on many people in my constituency. What guides me and this coalition Government, and what enables us to look the British people in the eye, is that we are taking steps that will be better for our country’s future generations. They are steps that will alleviate the burden on the next generation of children and on our grandchildren. We do not think that it is appropriate to pass on debts to cascade down the generations; we think it is right to cascade down opportunity, which is something that the last Government failed to do.

There are two things that I would like my hon. Friend the Minister to comment on when she sums up. First, when it comes to the long-term solutions, I hope that she will maintain a commitment to ensure that work must pay. That is incredibly important—in reality, the cultural idea that it is easier to live off benefits arose under the last Government. As with the benefit cap and their work on tax thresholds, this Government have to demonstrate that they are committed to the notion that everyone, given the opportunity to work, will always be better off working than on benefits.

The second thing that is important to living standards, but which we have not really touched on—my right hon. Friend the Member for Wokingham (Mr Redwood) mentioned it briefly—is the importance for this Government of keeping inflation low. We heard some Opposition Members say that inflation is continuing to rise, but we have not yet confronted the question of what will happen when this period of quantitative easing comes to an end. When that happens, there will be a corresponding rise in interest rates, which will put further pressure on living standards. I should say to my hon. Friend the Minister that in three or four years’ time, it is unlikely that the private or public sector will be able to pay working people pay increases. We therefore have to ensure that when we unwind quantitative easing, we do it in a way that is not inflationary, or that at least minimises the inflationary impact.

One way of doing that is to look at quantitative easing not as a way of providing short-term stimulus—many Government Members are sceptical about the Government’s ability to stimulate the economy in the short term—but as a means of long-term infrastructure investment. We have that opportunity, but we can do that only if we take our understanding of our debt obligations to embrace not only the treaty debt but the debt obligations of our public pensions liabilities. Those are long-term liabilities, and there is an opportunity for the Government to use quantitative easing for investment, if they can match their investment in long-term assets with reductions in those long-term liabilities.

The only other option for a short-term stimulus—to invest to improve living standards in the short term—would involve significant tax cuts, matched or exceeded by further cuts in public expenditure to pay for them. I doubt that the Opposition intended that to form part of the debate today, but it is one option that they could look into in the short term. My main messages to those on my Front Bench are that they should keep their focus on the fact that long-term problems require long-term solutions, and that they should ignore the representations from the Opposition.

21:30

[Toby Perkins (Chesterfield) (Lab)]

This debate is an example of how the Government’s thirst for cuts—any cuts—has blinded them to the basic foolishness of the policies that they are pursuing. Even when their cuts are demonstrably ineffective, counter-productive and unfair, they plough ahead with them because they cannot countenance any alternative. The hon. Member for Bedford (Richard Fuller) has just said that it would be unfair to pass on the deficit to future generations, but the Government are, by their own admission, borrowing £158 billion more because of their failure to get growth into our economy. The question is not whether we have a deficit; it is about the best way to pay it off.

Anyone who understands anything about this Government will recognise that deficit reduction is their primary priority. However, their proposed changes to working tax credit will not move them one penny piece closer to that objective. There are 335 Chesterfield families, and 635 children, who will lose up to £4,000. There are 1,305 people in my constituency alone—working families who are trying to play by the rules and do their bit—who are having the rug pulled out from under their feet. Yet this policy, which will have a huge impact on working families across Britain, will be defunct by 2013, when universal credit comes in. It will therefore not move the Government any nearer to their target of eradicating the deficit by 2016, or 2017—whatever the moving goalpost.

More working people will be forced to give up work and to rely on benefit, which is the polar opposite of what the Minister wants to achieve. These changes will lead to parents being £728 a year better off out of work than staying in work without the tax credits. Why would a Government who support marriage and the family introduce harsh fiscal measures that are likely to put more pressure on those families who stay together? The Union of Shop, Distributive and Allied Workers has stated that 78% of its 410,000 members working in retail cannot get extra hours at work.

The Government’s policy of cutting child benefit for higher rate taxpayers is entirely chaotic, as has been exposed by several Members. If two members of the same family earn £42,000 each, that family will keep its child benefit, but a single parent on £43,000 will lose theirs. About 170,000 families could increase their net income if an individual in the family managed to lower their pre-tax income to just below the higher rate tax threshold. The policy creates a perverse disincentive to success, and it is wholly anti-aspirational. It is unbelievable that a Conservative Government should introduce such a policy.

In the few moments that I have left, I should also like to make the case for the principle of universality in the system. Beveridge’s principle for the welfare state was that it should be a contributory system. Of course, some will receive more than others, based on their need. That is absolutely right, but the idea that we are all entitled to basic support such as child benefit, the state pension and the winter fuel allowance is a good one. At a time of ever-increasing resentment from those who pay taxes towards those who get benefits, stoked up by the Government and some of their friends in the right-wing media, we should all be fighting hard to protect the universal principle.

The Chancellor recognises that people on £43,000 a year earn more than the average, and he therefore thinks that people will perceive them to be loaded. Let me tell him that someone on that income with three children and living in a four-bedroom house is not loaded. They have to watch what they spend. They worry about the cost of fuel and about their energy bills. They see prices going up while their income stagnates. The Chancellor is making a huge mistake if he does not recognise that. We are debating the policies of a Government who have failed to get growth back into the economy and who are bringing forward illogical proposals that will make the situation worse.

21:35

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

It would be fair to say that the Government have had to make a number of very tough choices as a result of the economic and financial situation they inherited from the previous Government. As my hon. Friend the Member for Mid Norfolk (George Freeman) pointed out, this is not a question of the squeezed middle: we are all facing difficult times as a result of the difficult financial situation to which the Government have to face up—and they are facing up to it clearly. At the same time, they are making an effort to balance those tough decisions with decisions that are focused on fairness.

As other hon. Members have pointed out, the decision to provide the means for local authorities to freeze council tax is a measure that assists fairness and helps people on middle incomes who are struggling to keep control of one of the most important taxes they have to pay. Local authorities up and down the country—Conservative and Labour authorities—should accept the council tax freeze as an important component of their budgetary decisions.

As a result of other coalition Government decisions, we are able to live in a low interest rate environment, which is keeping mortgage rates low and allowing householders to continue to function and to continue to live in their homes without fear of repossession. That is a crucial achievement of the Government.

It is right, too, that the coalition Government have the ambition to take people on low incomes out of tax altogether. The Chancellor has taken significant steps in that direction in the recent Budget, and I urge the Front-Bench team to take further steps to take people out of tax altogether.

Although Labour Members seldom mention it, we have seen a substantial increase in the state pension as a result of decisions taken by the coalition Government. The triple lock—as I say, not much mentioned by Labour —guarantees a substantial increase in the state pension, which is relieving pressure on pensioners across Britain. That is something to be applauded.

Let me deal with the broad subject of tax credits. I see the shadow Chancellor in his place and he was one of the key architects of the previous Government’s tax credit policy. I know that tax credits have a role to play in certain areas, but one of the downsides of the policy is that it tends to focus on poverty alleviation as being something to do with income transfer. Clearly, that is important, but the coalition Government are doing something else, which is also significant. In his recent review of poverty, the right hon. Member for Birkenhead (Mr Field), who is not in his place said that we need to tackle some of the underlying causes of poverty, which goes beyond income transfer. What the Government have done with the pupil premium, for example, is fundamental to getting under some of the issues that cause low aspiration and create generational poverty in Britain.

Under the previous Government, we saw a rise in absolute poverty, despite the complex tax credit system put in place by the shadow Chancellor. So I think the coalition—

[Mr Speaker]

Order.

21:39

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

I have been a Member of Parliament for just over a year now, during which time I have seen the significant impact of this Government’s devastating and detrimental economic policies in my constituency. The flatlining economy has led to a 15-year high in unemployment in Oldham with over 8,000 people out of work across the borough and 12 people chasing every job. The number of women out of work is the highest since 1995, and youth unemployment is well above the regional and national averages.

Young people at Oldham sixth-form college, which I visited on Friday, are devastated about their future. The cut in education maintenance allowance is preventing many of them from taking college courses, and because of the trebling of tuition fees, they do not know whether they can go on to university. Given the lack of available jobs, things are looking dire for them.

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

I congratulate the hon. Lady on her first year in Parliament. In my view, the unemployment figure is the key statistic. Today the British Chambers of Commerce announced that it was likely to reach 3 million by the end of the year. Will that not have a hugely detrimental effect on living standards?

[Debbie Abrahams]

It will indeed. I thank the hon. Gentleman for his comments.

It is not just our young people who are suffering as a result of the Government’s economic mismanagement. Last month, Oldham’s first borough-wide food bank was set up to help struggling residents who are finding themselves in desperate economic conditions—not just homeless people, but people in work.

My constituents are being squeezed every which way, experiencing increases in outgoings as a result of higher energy costs and food prices while the incomes of most people—unless they are bankers—remain the same. As we have heard, the Halifax and Royal Bank of Scotland are raising their standard variable mortgage rates, which will mean increasing problems with repossessions. We have already discussed the working tax credit changes that will affect 650 families and 1,500 children in my constituency.

These are ideologically driven cuts that reflect the Government’s desire for a United States-style welfare system. Health care is not the only welfare pillar under threat. The Government’s skilful media machine hoped that using the language of the blitz—a time when people were literally “all in it together”, accepting rationing of food and fuel regardless of where they were on the social spectrum—would whip up nostalgia and reassure people that the protective safety net in which we all invest through our taxes and national insurance, and to which we all have access if we need it, would keep them safe. Well, it is not doing so.

21:42

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

Let me begin by thanking everyone who has taken part in the debate. It is clear from the level of interest that has been shown, the number of Members who have spoken, and the number who were not able to do so that we were right to raise these issues in the House today.

We heard passionate speeches on behalf of constituents from my hon. Friend the Member for Wansbeck (Ian Lavery), the hon. Member for East Antrim (Sammy Wilson) and my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier). We also heard thoughtful contributions from my hon. Friends the Members for Edinburgh East (Sheila Gilmore), for Chesterfield (Toby Perkins), for Inverclyde (Mr McKenzie) and for Oldham East and Saddleworth (Debbie Abrahams)—and, indeed, from the right hon. Member for Wokingham (Mr Redwood), although I began to be worried about the number of occasions on which he seemed to be agreeing with the Labour party. Unfortunately, we also heard some of the same old rhetoric from, predominantly, Tory Members. It is time that the Government took responsibility for what is happening on their watch.

We heard from Members what their constituents tell them. We heard, for instance, that it is not simply a case of being able to secure an extra few hours for those who are on 16-hour contracts. We did not hear from Ministers where those extra hours were to come from, although they were pressed on the issue. We heard the views of charities such as the Child Poverty Action Group and organisations such as the Institute for Fiscal Studies, and those of trade unions, particularly the Union of Shop, Distributive and Allied Workers. We heard about the difficulties experienced by people who are already on low incomes and are trying to make ends meet, while fearing what will happen when their working tax credit is cut.

It is sad that we heard that same tired, out-of-touch rhetoric from many Government Members. It just shows that they do not understand what it is like for families who are trying to make ends meet while facing problems such as ever-rising prices. Some Government Members are shaking their heads. Let me deal with a few of the points made by the Exchequer Secretary in his opening speech. He seemed to suggest that it was reasonable for couples to work 24 hours rather than single parents working 16 hours, but, as I said earlier, he did not give us any indication of where those extra hours were to come from. In response to an intervention, it was suggested that people could simply change jobs and that there are always jobs out there. We Opposition Members are concerned about unemployment, and we would like to know where those jobs are now, and where they are going to come from—and I suggest that Government Members should try explaining that to the millions of people who are already out of work.

It was also suggested that the raising of the personal allowance was going to make a big difference. I gently say to those who made that point that people who are working 24 hours or fewer on the minimum wage will not benefit from that, and that this measure does not serve as an argument for cutting the working tax credits of people on low incomes.

The Exchequer Secretary and others used the word “fairness”; indeed, he suggested that it was at the heart of everything he did—and he said that with a straight face, which I found astonishing given what the Government are doing. Far from everyone being in this together, people cannot understand why David Cameron and George Osborne have chosen to give the banks a tax cut at the same time as their Budget measures are hitting women harder than men and are pushing up child poverty.

We heard during the course of the debate that families with children are set to lose an average of £580 a year from policies coming into effect this April alone. Some Government Members may think that £580 is not much money, as for them it may merely mean cutting back on a few luxuries, but for ordinary families in ordinary houses in ordinary streets in the cities, towns and villages Opposition Members represent, £580 may well make the difference between those families being able or not being able to pay their electricity or gas bill, or buy shoes for their children, or ensure that they can go on the school trip. That sum may be what enables them to provide a decent standard of living—not luxuries, but the necessities of family life.

Next month’s Budget must pass two tests: on jobs and growth, it must boost our economy and put in place the long-term reforms that we need; and on fairness, it must ensure that families on low and middle incomes do not bear the heaviest burden. The Government have not explained how it can be fair that working families on the lowest incomes who are trying to do the right thing are going to lose out.

I repeat our call for a plan for jobs and growth in the Budget, and I look the Economic Secretary in the eye and ask her whether she will press the Chancellor to think again on the changes to tax credits and child benefit, which will cost families with children up to £4,000 per year. Will she urge him to abandon the changes in eligibility for working tax credits that are set to hammer hundreds of thousands of parents in part-time work by up to £74 per week and put them in a situation where work will not pay? Will she say to both her constituents and mine that the Government will pull back from the plan under which, from April, couples who have children and who are earning less than about £17,700 will need to increase the number of hours they work from a minimum of 16 hours to 24 hours per week, or they will lose all their working tax credits? Will she say how she will create the fairness that her colleague, the Exchequer Secretary, talked about? If she believes people should be better off in work, how can she support a change that will penalise about 275 families in her constituency who are working and trying to do the right thing, but who cannot increase their working hours at a time when the economy is flatlining and unemployment is rising? Does she agree that this unfair and damaging change could, and should, be cancelled? We want a straight answer to that question from her.

I also press the Economic Secretary again on whether she has asked David Cameron and George Osborne to review urgently—

[Mr Speaker]

Order. May I gently say to the hon. Lady that she should refer to Members of the House not by name, but by their title?

[Cathy Jamieson]

I apologise, Mr Speaker. I am afraid I got carried away in the heat of the moment. I should have asked whether the Economic Secretary will press the Prime Minister and the Chancellor to review urgently their planned changes to child benefit, which are unfair, unworkable and ill thought through.

As we have heard time and again in this debate, it cannot be right that a two-earner family each earning £42,000—a total of £84,000—would keep all their child benefit, but a single-earner family on £43,000 would lose it all at a stroke. When the Exchequer Secretary was asked to explain that, he seemed to indicate that it was a bit of a challenge, but he did not say how he was going to solve it and how he would remove that burden from the poorest. The Government should put the implementation of their child benefit cuts on hold and conduct an urgent review that will report before their changes come into effect next January.

Labour Members did not come into this debate only to score political points in this Chamber, notwithstanding what some Government Members have said, or only to put this Government under pressure, although we have done both those things; we did so because we want the Government to listen. We want them to stop what they are doing, to re-examine the issues and to come back with a fairer alternative. There now seems to be some dispute at the heart of the Government; I listened to what was said in questions earlier today, when I heard the Secretary of State for Work and Pensions seem to blame the Treasury, and reports tonight suggest that No. 10 and the Treasury are at odds over this. The Government’s own internal brief is for them to sort out, but either way the problem is of their own making. Perhaps they thought they would get away with it —although, again, we are hearing reports tonight that perhaps the Chancellor never really intended to implement these changes but the problems in the economy mean he is now not able to back away from them. If the Government do not listen today and they fail to act, they will be confirming that they are out of touch and that they have no understanding of the realities of life for families. There are families up and down the country who simply will not forgive them.

21:51

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

I thank hon. Members for their contributions to what has, on the whole, been an insightful debate. We have heard from the hon. Member for Bristol West (Stephen Williams), my right hon. Friend the Member for Wokingham (Mr Redwood), my hon. Friends the Members for Witham (Priti Patel), for Mid Norfolk (George Freeman) and for Halesowen and Rowley Regis (James Morris), the hon. Member for East Antrim (Sammy Wilson) and, indeed, my fellow by-election winners, the hon. Members for Oldham East and Saddleworth (Debbie Abrahams) and for Inverclyde (Mr McKenzie), whom I very much welcome to this House.

I note that today’s motion is deficient, in that it gives the wrong date for the Budget—I wonder whether that reflects the Opposition’s grasp of detail when they want to spend and borrow an extra £12 billion. It is no surprise that they do not wish to talk about how to bring the deficit “down”, as mentioned in the third line of their motion. They also said nothing about lone parents. Do they not care about the single mums and dads? No, there was not a word for them and the fairness of their already having to work 16 hours a week.

As the House is well aware, we all face tough economic conditions as we recover from the disastrous economic legacy left to us by the previous Government.

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

Will the Minister give way?

[Miss Smith]

No, I shall not, because we have had plenty of time to hear from Labour Members. I must press on. We all know that, in these tough times, families across the UK are tightening their belts, managing pay freezes or worse, and coping with ongoing economic uncertainty. Many families are confronting falling living standards because of the dire economic situation we inherited. The Opposition want to keep on spending and keep piling on the debt, but we refuse to burden our children and mortgage the country’s future with their profligacy.

Tackling the deficit is the vital precondition for a sustainable recovery, underpinning private sector confidence to support growth and job creation. It is right and fair that we tackle the deficit now, as a foundation for prosperity. It is because of our decisiveness that we have secured record low gilt yields, which feeds through to record low and stable interest rates that make a real difference to families paying their mortgages and to refinancing business loans right across the country.

If we are going to discuss a squeeze on living standards, let us talk about what a rise in market interest rates would mean for families across the UK. It would force taxpayers to find an extra £21 billion in debt interest payments; it would increase the cost of business loans by £7 billion; and it would add £10 billion to mortgage bills every year, or an extra £1,000 for the average family—and that with just a 1% rise. Let me remind the House that when we took office, our rates were tracking those of the likes of Spain and Italy, but now they are close to those of Germany. That is because of the tough decisions we have taken.

[Karl Turner]

Will the Minister give way?

[Miss Smith]

No, I shall not, as I have already said.

According to the shadow Chancellor, who, as ever, cannot be quiet, low interest rates are a sign of trouble. He would rather have higher interest rates, a bigger squeeze on families and an even bigger fall in living standards.

The simple truth is that the Opposition have no credible response to the economic challenges that this country faces, which is why we must never return the keys to those who crashed the car. It is we who have the answers to tackling the deficit and securing our prosperity. I know that for many families, however, these are tough times. That is why we have taken substantial steps to protect living standards and to ensure we support our poorest and most vulnerable families. That is why we secured the largest ever cash rise in the basic pension and why we uprated working age benefits by 5.2%, protecting the real incomes of the poorest. We are taking the same approach as we reform our welfare system, targeting support where it is needed most.

Tackling the deficit in a fair way means that we have to ensure that tax credits are targeted at our poorest and most vulnerable families, unlike the path taken by the previous Government, who spent more than £150 billion on tax credits and let nine out of 10 families be eligible for them. That is a staggering, untargeted and unsustainable level of spending and it is right and fair that we should reform it.

Let me turn to the working tax credit. It is not fair that a couple with children can claim the credit if one partner works 16 hours, whereas a lone parent has to pull in the same time on their own. Increasing the working hour requirements for a couple is entirely fair. It is right that they should put in more hours than a lone parent before receiving the working tax credit. That also creates a clear work incentive signal, which many Members have sought in this debate, to potential second earners who could benefit from tax credits if they moved into work or increased their hours—and hours are available. Let me answer this one. In the quarter to January, there were 11,000 vacancies across the economy, meaning that 1 million people moved into work. That paves the way for the principles of universal credit because work must pay.[Official Report, 6 March 2012, Vol. 541, c. 9MC.]

At the same time, we are right to reform child benefit to target it towards those families who need it the most, rather than millionaires. I fully understand that it is a vital income boost, but it comes at a substantial cost to the Exchequer, including more than £2 billion a year in payments to higher rate taxpayers. It is right that we should refocus resources where we need them most, and that means taking the tough decision to withdraw child benefit from families with a higher rate taxpayer, because it is simply not fair that working parents on low incomes should subsidise child benefit for millionaires.

None of these points ignores the fact that across the board, we know that this will be a tough year for households. That is why we have gone even further to support families and businesses across the country, limiting the increases to Transport for London and regulated rail fares and funding South West Water to enable it to cut bills by £50 a year for households that face the highest water bills in the country. We are helping pensioners, setting aside an extra £675 million for local authorities in England that freeze or reduce their council tax, deferring the fuel duty increase that was due to take effect on 1 January to August this year and cancelling the further increase for August. As a result, tax on petrol will be a full 10p lower than it would have been under the shadow Chancellor’s plans, meaning families with the average family car will save £144.

As we fix the failures of the past and repair our economy, we are committed to supporting families across the country. It is a tough challenge to ensure and secure our economic stability and to lay the foundations for sustainable growth, but in our determination to do so and to restore the economic prosperity of this country, we will put fairness at the heart of our recovery. We are protecting living standards for the poorest and most vulnerable families by lifting millions out of tax, taking steps to reduce the cost of living and refocusing welfare on those who need it most. Yes, that means that those on the highest income will bear the heaviest burden as we pull together to tackle the deficit, but it is right that those who can contribute the most should do so. A fair and sustainable recovery demands leadership, and that is what this Government are providing.

Question put.

21:59

Division 483

Ayes: 220

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Labour: 209
Scottish National Party: 5
Democratic Unionist Party: 3
Social Democratic & Labour Party: 1
Plaid Cymru: 1
Independent: 1

Noes: 284

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Conservative: 236
Liberal Democrat: 47

Business without Debate

Monday 5th March 2012 Commons Chamber

Water Industry (Financial Assistance) Bill (Allocation of Time)

Monday 5th March 2012 Commons Chamber

Ordered,

That, at the sitting on Tuesday 6 March, proceedings on the adjourned debate on Second Reading of the Water Industry (Financial Assistance) Bill shall (so far as not previously concluded) be brought to a conclusion two hours after their commencement at that day’s sitting.—(Jeremy Wright.)

Business of the House (7 March)

Monday 5th March 2012 Commons Chamber

Ordered,

That, at the sitting on Wednesday 7 March, paragraph (2) of Standing Order No. 31 (Questions on amendments) shall apply to the Motion in the name of Mr Nigel Dodds as if the day were an Opposition Day; proceedings on the Motion may continue, though opposed, for three hours and shall then lapse if not previously disposed of; and Standing Order No. 41A (Deferred divisions) shall not apply.—(Jeremy Wright.)

Sittings of the House (20 March)

Monday 5th March 2012 Commons Chamber

Ordered,

That on Tuesday 20 March the House shall meet at a quarter to Ten o’clock and no committees shall meet earlier than half past Three o’clock.—(Jeremy Wright.)

Livingston New Town

Monday 5th March 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Jeremy Wright.)

22:14

[Graeme Morrice (Livingston) (Lab)]

I am absolutely delighted to have secured this debate just a few weeks before Livingston’s official golden anniversary on 16 April. You, Mr Speaker, may recall that my previous Adjournment debate in the Chamber, on youth unemployment in my constituency, took place at 2 o’clock in the morning, so I am pleased that at least this evening we can expect to go to bed on the same day as we got up.

I am delighted also that the Minister replying to my address is the Under-Secretary of State for Scotland, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), who I am sure will respond in sympathetic terms, as I do not intend to be in any way partisan during my speech.

It is a great honour and privilege to represent the Livingston constituency, and, although I always remind people that the constituency consists of many more communities than just Livingston new town, I must say there is no doubt that Livingston, which is also where I live, is very much at its centre.

I want to use this evening’s debate to say a little about the history of the town and some of the major developments and milestones in its first 50 years, but I want mostly to pay tribute to some of the many individuals and groups that have contributed to Livingston’s remarkable success story.

Livingston is West Lothian’s largest town and, in the main, has become the political, industrial, social, educational and cultural hub of the whole county. Livingston is also the second-largest urban area in the Lothians, after Edinburgh, with a population of 55,000, making it the seventh largest town or city in Scotland. Yet only 50 years ago it consisted of just three tiny villages: Livingston Village, Livingston Station and Bellsquarry.

The transformation began when Livingston, on the banks of the River Almond, with its beautiful scenery including the Pentlands hills to the south and the Bathgate hills to the north, was identified as the fourth of Scotland’s five new towns, under the post-war Labour Government’s New Towns Act 1946, in large part to help ease overcrowding in Glasgow.

Livingston was officially designated a new town on 17 April 1962, and work began immediately to build the new community. The driving force behind the town’s development was the Livingston Development Corporation, more commonly known as the LDC, which was responsible for all aspects of planning and regulating the town’s growth. The LDC guided Livingston until the corporation’s mandate expired on 22 March 1997 and the town’s functions and assets transferred to the new unitary West Lothian council.

The LDC’s plan to expand the town dictated that it should grow in an orderly fashion from east to west, so, while the first new town residents were housed in the existing village of Livingston Station, the initial major housing development was built on the sloping hillside of Craigshill.

The first residents of the new scheme in Craigshill, Mr and Mrs James Gilchrist and their son Robert, moved in on schedule in April 1966 to 39 Broom Walk. Craigshill’s covered shopping centre, known as The Mall, was developed, and the new town’s first primary and secondary schools, Riverside primary and Craigshill high, were also built in Craigshill. Several more new developments followed in quick succession, with Howden, Ladywell, Knightsridge, Dedridge, Eliburn, Deans, Carmondean, Bankton and Murieston all becoming well known Livingston new town communities.

A key element of the LDC’s town planning and construction involved the new development being based around those neighbourhoods, each with its own schools, shops, health services and other amenities. Indeed, one of the significant, if not unique, characteristics of Livingston is its extensive segregated path network, its greenways, open spaces and tree belts, which are always well maintained and provide a rural feel to urban living. This careful planning, providing communities with the resources they needed to flourish from the outset, has been critical to Livingston’s successful growth over the years.

An early means of support for the new rapidly growing communities of Livingston were the various churches that were built to accommodate the spiritual needs of the population. Uniquely in Scotland, Livingston was, from the start, designated an ecumenical parish in a joint initiative by the Church of Scotland, the Scottish Episcopal Church, the Methodist Church in Great Britain and the Congregational Union of Scotland. The ecumenical parish has six places of worship. Of course, there are also churches of other denominations, notably the Catholic Church, the Baptist Church and the Free Church. More recently, Livingston mosque was established to serve the community’s growing Muslim population.

As the population grew, an ambition for further education opportunities to be provided closer to home arose, and in July 2001 the new state-of-the-art West Lothian college was opened—the first new purpose-built college in Scotland for 25 years. West Lothian college, under the current leadership of its principal Mhairi Laughlin, has an excellent academic reputation and provides thousands of residents with the opportunity to study locally rather than having to travel to Edinburgh or Glasgow. The college’s story sums up the speed of progress that was made in developing the town and just how quickly things have changed over these five decades.

Over recent years, Livingston has become synonymous with shopping, with its vast retail centre at Almondvale. Consisting of 1 million square feet of retail space and attracting 13 million shoppers each year, it is the largest regional retail centre in Scotland.

Turning to sport and culture, Livingston boasts the Lothians’ only senior football club outside the capital, following the establishment in 1995 of Livingston FC out of the old Meadowbank Thistle team. Within just seven years of moving to the purpose-built Almondvale stadium, the club had achieved third place in the Scottish premier league and qualified for the UEFA Cup. Livi, as the team is referred to by its fans, also won the 2004 League Cup, beating Hibernian at Hampden Park. People in Livingston have also shown commitment to many other sports, with Livingston rugby club, based at Almond park, being one of the first clubs established in the new town; Livingston cricket club, located at Murieston; and a plethora of other clubs accommodating almost every sport in existence.

Livingston’s cultural heart is Howden Park Centre, which hosts a range of performances and exhibitions. Reopened following extensive refurbishment in July 2009, the venue won the prestigious Edinburgh Architectural Association “Building of the Year” award in 2010. The town also has a thriving network of cultural groups and organisations, including, to name but a few, Livingston Art Association, the Livingston Fiddlers, and the New Town Entertainers. Many older residents will remember the Livingston festival, which was initiated on the town’s 10th anniversary in 1972 and by 1981 had become the largest community festival in Scotland. This has since been replaced by local communities in the town having their own gala days.

Livingston has been fortunate in having a wide array of voluntary and charitable groups that give vital community input and that, again, are unfortunately too numerous to mention in the time available, although I put on record my appreciation for the work undertaken by the local neighbourhood networks in the town.

At the same time as the housing went up, new communities moved in and social institutions grew, industry and businesses started locating in Livingston in substantial numbers, bringing jobs and economic security to the area. The LDC prioritised attracting big employers to the town, running a simple but effective advertising slogan, “Make it in Livingston”, and emphasising the excellent transport links, highly skilled work force and good local services. Indeed, Livingston benefits significantly from its location between Edinburgh and Glasgow, with its east-west motorway and rail links, and its proximity to Edinburgh airport and the Forth bridges.

Large investments have been made in the area by local and national government, and by companies from the UK and overseas. The technology industry was one of the largest growth areas and Livingston quickly became the capital of Scotland’s silicon glen. The LDC developed Kirkton campus, a technology park, at a time when many advanced technology companies from the US and Japan were seeking an appropriate location for their European operations. Over the years, Mitsubishi Electric, Cameron Iron, which is now Wyman-Gordon, BSkyB, Gore-Tex, Schuh, NEC and Motorola, to name but a few, have chosen to locate in Livingston. Some of those major employers have unfortunately been lost over the years, particularly after the decline of the silicon glen in the early and mid-1990s, but Livingston remains a popular business destination.

What of Livingston’s most valuable resource, its people? A key characteristic of the new town’s population is the diversity of the backgrounds and experience that people have brought to Livingston. Although many of those who first moved to Livingston came from overcrowded communities in Glasgow, over the years others have been attracted from the more traditional West Lothian communities, other parts of the Lothians and even much further afield, with people seeking a new start in a new town. More recently, that has included immigrants from the Indian subcontinent and eastern Europe. Their integration has been another positive milestone in the town’s development.

Although time does not allow me to mention the many individuals who have contributed to the success of Livingston over the last 50 years, I will highlight a few notable names, including my predecessors in the constituency, all of whom have played an important part in the town’s history. When the town was founded in 1962, it was split between the two parliamentary constituencies of West Lothian in the north, which was represented by my good friend Tam Dalyell, and Midlothian in the south, which was represented by the late Alex Eadie. Tam and Alex played a vital role in Livingston’s early development, working closely with the LDC and the local authorities, until 1983 when, following boundary changes, the new Livingston constituency was created, encompassing the whole of the new town and the surrounding areas.

It was then that Robin Cook became the MP. He remained the local representative until his untimely death 22 years later in August 2005. The story of Robin Cook is well known to the House and I have paid tribute to him in the past. Robin was a strong advocate and defender of Livingston. Perhaps his greatest achievement locally was to persuade the Government to provide a new district general hospital in the town. In 1989, St John’s hospital was opened.

With the advent of the Scottish Parliament in 1999, Livingston’s first MSP was Bristow Muldoon, who held the seat until 2007. I believe that the Minister knows Bristow very well indeed.

Moving on to others who deserve to be recognised for their service, I pay tribute to the lifelong Livingston Station resident, Willie Pender. After a lifetime of public service in West Lothian, Willie sadly passed away recently. He played a significant part in Livingston’s development as a member of the LDC, a long-standing Labour councillor, a member of the Lothian health board and a justice of the peace. He was also a war hero, having served in the Navy during world war two as part of the Arctic convoys and in the defence of Malta. No one is better placed to pay tribute to Willie than his close friend Tam Dalyell, who described Willie as

“having made a massive contribution in the 1960s to the 1980s to the important decisions of West Lothian Council, affecting education and every other aspect of local government”.

Willie was truly one of the great figures in the 50-year history of the town and will be missed greatly by his family and friends.

Another man who has made a lasting contribution to the development of Livingston is Sandy Pirie. He was the head teacher of the town’s first secondary school, Craigshill high school. He was largely responsible for establishing the school as the hub of the community, making it effectively a community school long before the concept and title were conceived formally. In addition to his pioneering educational contribution, Sandy played a prominent role in the promotion of the ecumenical, cultural and charitable life of the new town. I was fortunate enough to serve with him on the West Lothian council education services committee from 1996 to 1999, when I was council leader and he was a co-opted religious representative. We also served together on the West Lothian Educational Trust.

I want to mention a few other significant individuals—fairly briefly, unfortunately, given that time is now against me. Rev. Dr James Maitland, a Church of Scotland minister, was a strong proponent of bringing the churches closer together and a leading light in the Livingston justice and peace group. He died in 1996, and the Maitland nursery at Williamston primary school in the town is named after him.

Raymond Birrell, also sadly now deceased, was an engineer with the LDC but also a prominent community activist, who in particular gave of his time to encourage young people to pursue an interest in music. Birrell gardens in Murieston is named in his memory. John Hoey, my good friend, was the driving force behind the development of the Craigsfarm community complex, the first free-standing community facility in the new town, and also served as a local government councillor for the area for several years.

Wilma Shearer and Roley Walton created Dedridge environment ecology project in 2007, to improve the Dedridge burn plantation and make it more accessible for community members. They have done a remarkable amount of work to improve the area over the past five years.

Manus McGuire raised his family in Livingston. He started life as a social worker, switched to law, became a partner in Thompson’s solicitors and subsequently became chairman of industrial tribunals for Scotland. David Duncan was building manager for the LDC and oversaw much of the building of the infrastructure and housing estates in the town. Jim Wyllie is the surviving member of the town’s oldest industry, the mill on the River Almond. Jim Keegan was the first solicitor advocate under the scheme that set them up and was recently appointed Queen’s counsel, and Jim Hamilton, now deceased, was a head teacher at Bellsquarry primary school and manager of the Scottish badminton team that participated at the Commonwealth games in Edinburgh and New Zealand. The public square by Murieston medical practice is named after him.

Plans are well advanced locally to celebrate Livingston’s golden anniversary. That will rightly involve the local community and its schools and voluntary groups, and I am pleased to have had the opportunity to share in the celebrations, albeit prematurely, with this Adjournment debate tonight.

Although the new town is only 50 years old, few could disagree that it has been a remarkably successful, vibrant and productive 50 years. Looking to the future, I am quite sure that the strong community spirit, great endeavour and decency of Livingston’s people, coupled with its beautiful and central location, guarantee it many more years of success. I am sure that the next 50 years will be just as fruitful as the first 50 have been.

22:32

[The Parliamentary Under-Secretary of State for Scotland (David Mundell)]

I congratulate the hon. Member for Livingston (Graeme Morrice) on securing the debate, which marks a significant year in the history of the community of Livingston. He mentioned my constituency, which is one of the largest in Scotland and borders his, as it does many others. He also mentioned Bristow Muldoon, under whose convenorship of the Local Government and Transport Committee I was happy to serve when I had the privilege of being a Member of the Scottish Parliament.

The hon. Gentleman will be aware that it was a Conservative Secretary of State for Scotland, John Maclay, who backed the plans for the development of Livingston back in the early 1960s. Livingston was designated under the New Towns Act 1946 and the Local Government (Scotland) Act 1947 as one of the new towns to be built, as the hon. Gentleman said, to relieve overcrowding in Glasgow and other areas.

Scotland’s five new towns—East Kilbride, Glenrothes, Cumbernauld, Livingston and Irvine—have added much to the fabric of our country. Their development corporations may have come and gone, with their functions transferred to local authorities, but the towns themselves have put down enduring roots. They have proved to be pacesetters in Scotland’s economic transformation in recent decades, and that has most certainly been the story of Livingston.

The hon. Gentleman has enabled us to celebrate Livingston at 50. Like many of us, Scotland’s fourth new town has moved into middle age. However, it has a lot to celebrate and even more to look forward to. It has been an eventful half century, packed full of highs and a few lows, but freshly forged spirit and community have combined to drive the town onwards and upwards. The result is that, in 2012, Livingston is firmly fixed on the national and international map as a centre for business, innovation, education, health care and sport.

Livingston was also purposely planned, which brings me to a subject that the hon. Gentleman did not mention: roundabouts. Only after the winding up of the Livingston Development Corporation in 1997 did Livingston get its first traffic lights. Roundabouts have become synonymous with new towns both north and south of the border. Residents of Livingston have referred to their town as “Roundabout City”, but roundabouts in Livingston are a bit special. Landmark sculptures designed by David Wilson in the 1990s adorn the four major roundabouts. Built from reclaimed dyking stone, NORgate, Compass, Dyke Swarm and Chrysalis have been local landmarks in their own right for more than a decade.

Over five decades, Livingston has moved and progressed on many fronts. It has grown into a community of more than 50,000 residents and enhanced its connectivity to Scotland’s road and motorway network. Its proximity to Edinburgh airport is an added attraction for businesses seeking to locate or invest in the town. It is better connected with the two railway stations—Livingston South and Livingston North were established in the 1980s, offering direct links into Edinburgh and Glasgow.

Sport has also brought success and attention to the town. As the hon. Gentleman said, the 1990s witnessed the arrival of Livingston FC and the building of Almondvale stadium, home to a team that played in European competition and won the league cup in 2004. Of course, darker days followed with the club going into liquidation, but happily for the hon. Gentleman, Livingston FC is on the up again in the first division.

Livingston has always been a leader in business. For half a century, Livingston has been at the cutting edge of innovation and technology. High-tech and pharmaceutical firms were in the vanguard of the wave of light industry attracted to Livingston from the 1960s. Some of us remember the slogans—“Make it in Livingston” and “Build it in Livingston”—of the now-departed Livingston Development Corporation, to which the hon. Gentleman referred. Those slogans have become a reality down the years.

In the 1990s, Livingston was an important hub in Scotland’s silicon glen. While some companies such as Motorola and NEC have come and gone, an abundance of new businesses have arrived in their place. As well as multinational companies maintaining factories in the town, BSkyB’s main call centre is the largest private sector employer in West Lothian.

Livingston is equipped with a modern and diverse economy. Retail and business services co-exist alongside modern manufacturing. Livingston attracts people from across central Scotland to shop, with an array of established names operating out of state-of-the-art shopping centres, which the hon. Gentleman described in detail. Livingston is also a centre for significant public sector employment. The civic centre, West Lothian college of further education and St John’s hospital illustrate the town’s importance for public administration, education and health care.

We must today wrestle with the challenge of giving a new life to a mature new town. Livingston faces the same employment challenges that confront similar communities throughout Scotland, the UK and the western world, although as the hon. Gentleman will know, the jobseeker’s allowance claimant rate is below the national average. In a fiercely competitive global marketplace, Livingston is blessed with real advantages as it seeks to secure new investment and jobs.

The town’s location, transport links and highly skilled work force are beacons for business. Livingston is still at the cutting edge of Scotland’s future. It is equipped with a modern and diverse economy, including some of the most innovative businesses in Scotland. I would like to highlight the superb example of Cyberhawk Innovations, a Livingston company that has developed unmanned helicopters that allow engineers to inspect the inner workings of tall and inaccessible structures such as oil installations. Founded less than four years ago, it is now expanding and exporting overseas. It is a marvellous illustration of commercialisation from Scottish engineering excellence and inventiveness. Similarly, there is Touch Bionics, a spin-out from the NHS and a world-class leader in the design and manufacture of prosthetic limbs. That is why it is showcased in the UK Government GREAT campaign to promote investment in the UK during this diamond jubilee and Olympic year.

I know that Livingston is planning to mark its golden anniversary with style. The hon. Gentleman’s debate will be a significant part of that celebration. As well as a new logo designed by schoolchildren and new trees, plenty of events, exhibitions and activities are planned around the anniversary on 17 April. It is great to see that this anniversary will be marked with specials events, with arts, music and dance the centrepieces of the celebrations next month. As Livingston reaches its golden jubilee, it can reflect on a successful past. Officially, it has not been a new town for 15 years. It has matured into an established feature of the Scottish landscape. I hope that it can look forward to a great future as a significant centre at the forefront of the Scottish and UK economies. On behalf of the UK Government, I wish Livingston all the best for its second half century.

Question put and agreed to.

22:41

House adjourned.