House of Commons

Thursday 22nd March 2012 Commons Chamber

Thursday 22 March 2012

The House met at half-past Ten o’clock

Prayers

Thursday 22nd March 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 22nd March 2012 Commons Chamber

The Secretary of State for Culture, Olympics, Media and Sport was asked—

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

1. What progress he has made on his plans to extend superfast broadband to rural areas.

[Karen Lumley (Redditch) (Con)]

10. What progress he has made on his plans to extend superfast broadband to rural areas.

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

13. What progress he has made on his plans to extend superfast broadband to rural areas.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

May I apologise for the Secretary of State’s absence from questions today and thank you, Mr Speaker, for giving him leave of absence? The whole House will be aware of the happy reasons for that absence.

We anticipate that the broadband delivery framework contract will be signed with suppliers in mid-April, and we expect the first three projects to enter procurement using the framework immediately after. We have set a target for all broadband procurement to be completed by the end of 2012, so that delivery can be completed by 2015.

[Julian Smith]

I thank the Minister for that answer. Rural north Yorkshire is already benefiting from the Government’s investment in broadband, and after yesterday’s Budget cities will, too, but at higher speeds. How do we avoid a continued digital divide between rural and urban areas, but at higher speeds?

[Mr Vaizey]

My hon. Friend has been a doughty champion of his part of the world in securing superfast broadband. All the country will benefit from superfast broadband, but it is quite right that we continue to invest in higher speeds, particularly for cities, to maintain our global competitiveness.

[Karen Lumley]

Will the Minister congratulate Worcestershire county council, which has set aside £8.5 million in these difficult times to secure superfast broadband? In Redditch we have a £300,000 project to enable residents to stay at home and work instead of travelling into cities. What can the Government do in these times to help local authorities further?

[Mr Vaizey]

We continue to invest a substantial amount in broadband roll-out, and I am happy to join my hon. Friend in congratulating Worcestershire county council on investing alongside the Government. It is a great testament to the scheme that we have put in place that we have secured private funding and local government funding alongside central Government funding.

[Caroline Nokes]

What progress has been made to overcome the issues of state aid in unlocking the rural broadband fund, which will help in counties such as Hampshire?

[Mr Vaizey]

We have applied for a UK-wide scheme for state aid approval. We believe that we are close to approval, and we continue to work closely with the European Commission on the issue.

[Stephen Timms (East Ham) (Lab)]

The cumbersome and expensive Broadband Delivery UK process appears almost to have eliminated competition, which ought to have had a very important role in it. Ministers made a big strategic error in supporting superfast broadband at county level, rather than regionally. Does the Minister recognise that it will be a scandal if the outcome of the process is that, in the end, all the money is just handed over to BT?

[Mr Vaizey]

I am surprised that the right hon. Gentleman, as a former telecoms Minister, does not understand that, if we had had a national or a regional scheme, competition would have been even harder to secure. As it is, three major competitors remain in play in terms of broadband roll-out.

[Tony Lloyd (Manchester Central) (Lab)]

How, in rolling out broadband, will we ensure that the people who undertake installation in different regions—rural areas as well as urban—do not simply move from London and then take their skills back to London, and that a skill repository is left among the work force where broadband is installed?

[Mr Vaizey]

I cannot guarantee that the engineers who lay broadband will stay in the areas in which they work, but the key point about broadband roll-out is to ensure that all parts of the country benefit from the infrastructure so that we can base companies with high skills all over the country.

[Helen Goodman (Bishop Auckland) (Lab)]

Yesterday the Chancellor of the Exchequer found extra money to extend superfast broadband to small cities, but, as the hon. Member for Skipton and Ripon (Julian Smith) said, the real digital divide today is between those with broadband and those without. Peter Cochrane, former chief technical officer at BT, giving evidence in the other place, described access as “a fundamental human right”. Two million people, mainly in rural areas, are still without broadband, and Labour pledged to guarantee 2 megabits to almost every household by 2012, but this Government will not achieve that until after 2015. Why are Ministers so unfair in their treatment of rural Britain?

[Mr Vaizey]

I certainly reject the accusation that we have been unfair on rural Britain, and my glass, unlike the hon. Lady’s, is half full not half empty. I look forward to going on a tour with her to Belfast, Cardiff, Birmingham, Bristol, Manchester and so on and telling people that they are getting unfair treatment from the Government because we are investing in their broadband networks.

[Duncan Hames (Chippenham) (LD)]

Rural Britain, in the shape of the small town of Bradford on Avon in my constituency, welcomed the news this week that it is to have superfast broadband with the conversion of its exchange. [Interruption.] In the Budget yesterday the Government announced pilots, including one in Wiltshire, for rural growth networks to address the barriers to economic recovery. Will funding from those networks be available to increase the roll-out of superfast broadband in rural areas?

[Mr Vaizey]

I did not hear the entire question because of the continued carping from the Opposition at our support for our major and smaller cities. I will happily work with the hon. Gentleman to ensure that all broadband funding is used as effectively as possible in his area.

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

2. What progress he has made in improving access to superfast broadband.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

We have now approved the local broadband plans for Durham, Warwickshire, Northumberland and Staffordshire project areas, which means that 24 of the 45 plans received by the 29 February deadline have been approved; that is more than half. All submitted plans, including Greater Manchester’s, will be approved by the end of April 2012.

We anticipate that the contract for the broadband delivery framework will be signed with suppliers in mid-April and expect the first three projects to enter procurement using the framework immediately following the contract’s being signed. We have set a target for all broadband procurements to be completed by the end of 2012.

[Mr Nuttall]

Will there be any scope for transferring funds from the moneys announced for Greater Manchester —the city region—to fill in the gaps in rural broadband?

[Mr Vaizey]

I will happily discuss that issue with my hon. Friend. I take his point—unlike the Opposition, he welcomes the investment in Greater Manchester.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

The announcement last August also indicated a figure of almost £70 million to be used in Scotland. What contact, if any, does the Minister have with the Scottish Government about how services are being developed north of the border?

[Mr Vaizey]

I have regular contact with the Scottish Government, who have welcomed the funding and are putting in their own funding to support broadband roll-out in Scotland.

[Jake Berry (Rossendale and Darwen) (Con)]

It was once said that the entire empire hung by Lancashire’s thread. Will the Minister join me in congratulating Lancashire county council on prioritising superfast broadband? The entire county now hangs from its fibre optic cable.

[Mr Vaizey]

I am happy to join my hon. Friend in congratulating Lancashire on its superfast broadband. It is a very innovative and go-ahead authority, which has also been particularly pioneering in libraries.

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

3. What assessment he has made of the potential effects on local newspapers of the closure of the Press Complaints Commission.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

The Leveson inquiry was established by the Government last July and will make recommendations to my Department about reform for the system of press regulation. The closure of the Press Complaints Commission is a matter for the industry, but the new structure will apply to all newspapers, local or national.

[Jim Sheridan]

My local press are watching with interest to see what replaces the PCC. What measures are in place to defend or protect the general public when taking redress against, mainly, the national newspapers? Will the Minister share with the House how many meetings, if any, his Department has had with national newspaper editors or proprietors?

[Mr Vaizey]

I do not have the details of meetings with national editors, but I am happy to share them with the hon. Gentleman by way of a letter. The Press Complaints Commission mediation procedures will continue during the transit to a new arrangement.

[Chris Bryant (Rhondda) (Lab)]

I draw Members’ attention to my entry in the Register of Members’ Financial Interests. The Press Complaints Commission is engaging in a pretty ludicrous example of shenanigans at the moment; it is trying to bounce Leveson into some new plan that it is trying to put forward. Will the Minister make it absolutely clear that the only thing that the Government are interested in is what Leveson comes up with—not some shoddy deal struck by the editors?

[Mr Vaizey]

I am not sure that the hon. Gentleman is being entirely fair. My understanding is that although the final answer lies absolutely with Lord Leveson’s inquiry, Lord Leveson has made it clear that he wants the press to begin to make moves to get their house in order while he considers all the evidence.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

The harrowing evidence at the Leveson inquiry from victims of phone hacking and other abuse by the press means that we all want a new press complaints system, which must be independent of politicians and editors and able to enforce its rulings on all newspapers. Does the Minister recognise that the proposals being put forward by Lord Hunt, chair of the Press Complaints Commission, fail to meet either of those tests? Until they do, they will amount to nothing more than a change of name and business as usual. That will simply not be acceptable.

[Mr Vaizey]

Lord Hunt has put forward his proposals and I urge the right hon. and learned Lady to work with him if she thinks that they are not adequate.

[Lindsay Roy (Glenrothes) (Lab)]

4. What consideration he has given to the response from the Football Association, Premier League and Football League to the Government’s response to the report from the Culture, Media and Sport Committee on football governance; and if he will make a statement.

[The Minister for Sport and the Olympics (Hugh Robertson)]

Before I answer, I am sure that the whole House will want to join me in sending our best wishes to Fabrice Muamba for a full and speedy recovery.

In their response to the Culture, Media and Sport Committee inquiry, the football authorities have proposed plans for a smaller FA board, a club licensing system, the establishment of an FA regulatory authority and a closer working relationship between clubs and supporter groups. I welcome all those moves, and I would like football to implement them as soon as possible.

[Lindsay Roy]

May I, on behalf of the whole House, endorse the sentiments expressed by the Minister about Fabrice Muamba? I thank all the medical and club staff for their timely intervention in saving Fabrice’s life. The unity of support from fans across the country has been impressive and demonstrates the best of British values.

What action will the Minister take if the working parties recommend that further powers are needed to remove barriers to the co-operative status of football clubs?

[Hugh Robertson]

We have decided to pass the initial report generated by the DCMS Committee back to it for further consideration and ask for its recommendations. I would not want to give the hon. Gentleman a firm commitment before I have seen the Committee’s recommendations, but I am absolutely determined to ensure that supporters are better represented and have a more central role in the running of their clubs.

[Damian Collins (Folkestone and Hythe) (Con)]

Does the Minister agree that the proposed FA regulatory authority needs to have real teeth and that there should not just be a rebadging of rules that have failed, in some cases, to identify the ultimate owners of clubs or to protect communities from the impact of a club’s insolvency?

[Hugh Robertson]

Yes.

[Clive Efford (Eltham) (Lab)]

Fans’ organisations are concerned that the response from the governing bodies does not go far enough. We will have achieved nothing if we do not create greater opportunities for fans to become involved in the governance of the game. Football’s governing bodies have indicated that they are prepared to co-operate and work positively with the Government’s expert working groups. When does the Minister intend to set up those working groups and when does he intend to have them report back by?

[Hugh Robertson]

I think that the debate has moved on as a result of the football authorities’ response in terms of a licensing system and an explicit commitment to supporters’ liaison officers. There has been a very considerable movement as a result of the Select Committee’s work. As I said, I want to wait to see what the Committee has to say. We will absolutely take on board its recommendations and also look at means to incentivise club owners to make shares available to fans.

[David Wright (Telford) (Lab)]

14. The key issue is supporter ownership of clubs, which is absolutely crucial. At AFC Telford United, we have a superb model of club ownership by supporters. What more is the Minister’s Department going to do to model, with clubs and owners, new structures for supporter ownership of clubs?

[Hugh Robertson]

I pay tribute to the work done at AFC Telford, which is a model of that sort of scheme. This is not an entirely easy problem to grapple with, because no two club ownership models are the same. Unlike, for example, the Spanish model and many other European models, the models in English football are very different from club to club and from division to division. We have to find ways to incentivise owners to place their shares in public ownership.

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

6. What support his Department is providing to the creative industries.

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

8. What support his Department is providing to the creative industries.

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

9. What support his Department is providing to the creative industries.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

We have introduced the Creative Industries Council and maintained existing direct support for film through the national lottery and film tax relief. Building on this success, I am sure that the whole House will welcome yesterday’s announcement by the Chancellor of the introduction of similar tax reliefs for the video games, animation and high-end TV production sectors. The UK has some of the world’s most successful creative industries, and yesterday’s Budget will ensure that they can continue to grow and support jobs up and down the country. [Interruption.] The hon. Member for Rhondda (Chris Bryant) is almost as loud as his tie.

[Alun Cairns]

I am grateful to the Minister for his answer and welcome yesterday’s statement by the Chancellor in support of the creative industries. The advertising industry is one of the most creative and innovative in the UK economy, and it is worth £7.8 billion. Does the Minister accept, though, that constant threats of regulation and red tape can stymie that innovation and creativity, and that the pendulum might have swung too far and there could well be a need for a review of some of the regulations?

[Mr Vaizey]

I never lose an opportunity to praise the advertising industry in the UK, which is one of the most successful, or its regulatory system under the Advertising Standards Authority.

[Mary Macleod]

I welcome yesterday’s announcement from the Chancellor about games tax relief. Does my hon. Friend agree that it will benefit companies such as Sega in my constituency, establish the UK as a world-leading games maker, and stop the brain drain of talented games developers to overseas?

[Mr Vaizey]

I never lose an opportunity, when I drive over the flyover, to look at the huge headquarters of Sega in my hon. Friend’s constituency. Not only will that proposal stop the brain drain; it will create a brain import scheme.

[James Morris]

Birmingham and the black country have a very creative software and hardware development industry, but it often finds it difficult to recruit the skilled people it requires from the region. What support can the Minister give to local centres of excellence, such as the Aston and Wolverhampton science parks?

[Mr Vaizey]

We continue to focus on skills. The higher apprenticeships scheme will help to provide talent for the UK’s IT industry. May I take this opportunity to praise Ian Livingstone and Alex Hope for their “Next Gen.” report, which has led to a revolution in the computer science curriculum in schools?

[Mr Ben Bradshaw (Exeter) (Lab)]

I welcome the Government’s U-turn on support for the creative industries, but I note that there is less talk today about this being a “Downton Abbey” Budget. I wonder why that is. Will the Minister explain the exact difference between the support that he has announced for the video games industry and the support that the Labour Government introduced two years ago, which his Government scrapped in their first Budget?

[Mr Vaizey]

The difference is that the new support includes help for television drama and animation. Fundamentally, the difference is between the ambition of the Government and the poverty of ambition of the Opposition.

[Pete Wishart (Perth and North Perthshire) (SNP)]

The Minister will know that the Hargreaves review of intellectual property and the Intellectual Property Office consultation continue to exercise and concern our creative industries. Does he believe that having the maximum number of exceptions to copyright helps or hinders our creative industries? Will he come and give evidence to the inquiry of the all-party parliamentary intellectual property group in the next few weeks?

[Mr Vaizey]

The hon. Gentleman has been a doughty champion for rights holders and the protection of intellectual property. As he knows, I ensure that rights holders’ views are expressed regularly during the Hargreaves consultation. I have not yet received an invitation to give evidence to the all-party parliamentary group, but I look forward to receiving it.

[Lilian Greenwood (Nottingham South) (Lab)]

The Government want philanthropy and corporate giving to replace public subsidy for the arts. However, the excellent Nottingham Playhouse tells me that sponsorship and donations are falling due to the flatlining economy. Does this funding black hole not threaten the future of our regional theatres?

[Mr Vaizey]

The hon. Lady is quite wrong. We do not want philanthropy to replace Government support for the arts; we want there to be a partnership between philanthropy and Government support for the arts, which is extraordinarily generous.

[Stephen Williams (Bristol West) (LD)]

Hundreds of my constituents who work for Aardman Animations, Europe’s largest animation company, were delighted by the reference to Wallace and Gromit in yesterday’s Budget. Does my hon. Friend agree that the extension of film tax credits to the TV and animation industries is important not only for maintaining British talent and ingenuity in Bristol and other places in our country, but so that children grow up watching programmes that are made in Britain and sound as though they are made in Britain?

[Mr Vaizey]

My hon. Friend is absolutely right. I was privileged to visit Aardman’s headquarters. I gather that it has just held the premiere of “The Pirates!”, its new film. Those in the House with young children may want to go and see it. He is right that the proposal is about keeping talent in this country.

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

7. Whether he plans to submit evidence to the Leveson inquiry on culture, practice and ethics of the press.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

Following a request from the inquiry, the Secretary of State will submit evidence as part of the elegantly named “module 3”, which is considering the relationship between the press and politicians. In addition, my Department is working constructively with the Leveson inquiry by providing background information where possible.

[John Cryer]

In that evidence, will the Minister at least say that the replacement for the Press Complaints Commission should be politically independent and independent of what used to be Fleet street?

[Mr Vaizey]

As is well known, the desire is to see independent self-regulation that is independent of the press and independent of the Government.

[Brandon Lewis (Great Yarmouth) (Con)]

11. What economic legacy his Department expects to result from the London 2012 Olympics.

[The Minister for Sport and the Olympics (Hugh Robertson)]

The new £130 million tourism campaign to showcase Great Britain in 2012 aims to deliver an additional 4.6 million visitors, £2.7 billion of extra spend and the creation of about 60,000 job opportunities. The UK is already benefiting from the games, with 98% of the £6 billion-worth of contracts for the “big build” and 90% of the £1 billion-worth of contracts for staging the games going to UK businesses. If we add to that the £1 billion boost to British business that is expected through trade and investment, it amounts to a strong economic legacy from the games right across the UK.

[Brandon Lewis]

Some of us will have already had the good fortune to see the fantastic work that has been done at the Olympic park, and millions of visitors to this country and British residents will see the work done by British companies, workers and engineers to develop and produce that fantastic park. What more can we and the Government do to ensure that we get the message out that it is British engineering and British construction workers who have delivered such a fantastic venue?

[Hugh Robertson]

The answer is the GREAT campaign, which targets our 10 major markets around the world. It goes out to them on the back of the success of the Olympic park and tells them to come this country, do business and drive our tourism industry.

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

After the Olympics and Paralympics, will the Department continue to play a role in the legacy arrangements, or will that pass to the Department for Communities and Local Government or the Mayor of London? What structure will there be for overseeing the continuing delivery of the Olympic project?

[Hugh Robertson]

That is a very good question and quite a difficult one to answer, because much of the park will of course pass to the mayoral development authority, so much of the area around the hon. Gentleman’s constituency will come under the ambit of the Greater London authority. The DCMS will continue to have overall responsibility, but each Department will have particular responsibilities for the part of the legacy related to its work.

[Mr Don Foster (Bath) (LD)]

Does the Minister agree that one economic legacy will be the tourism legacy? Does he see that there would be real benefit in allowing tourist information centres to have access to the footage made by the BBC of the torch relay, which will travel the length and breadth of the country, so that they can use it for future advertising? Will he work with me to ensure that the International Olympic Committee allows the BBC to make that footage available?

[Hugh Robertson]

Yes, of course we will. The Under-Secretary of State, my hon. Friend the Member for Weston-super-Mare (John Penrose), who is responsible for tourism, tells me that both VisitBritain and VisitEngland have access to a large number of images already, which we clearly want to promote on the back of London 2012. We will do all we can.

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

Nearly 1,500 businesses from across the UK have built the Olympic park and will equip the Olympics. That is a great British achievement. Does the Minister therefore share my concern that those businesses, which have done so well, are too tightly constrained by the marketing rights protocol, which prevents them from publicising the part that they have played? Would not every Member, including my hon. Friend the Member for Bishop Auckland (Helen Goodman), whose constituency hosts one of those businesses and who has talked to me about the issue, want to promote, praise and thank those businesses for their efforts?

Does the Minister agree with me, with the “Building 2012” campaign and now with Sir John Armitt, the chair of the Olympic Delivery Authority, that we should seek from the London Organising Committee of the Olympic Games and Paralympic Games and from the IOC the necessary concessions to ensure a national celebration of our great British businesses that built the Olympic park on budget and on time?

[Hugh Robertson]

The right hon. Lady makes an extremely good point. She knows, as I do, that those regulations date back to the London Olympic Games and Paralympic Games Act 2006 and were put in place to give us the best possible chance of raising as much sponsorship as possible from the private sector. The result, of course, was that the organising committee was extraordinarily successful in raising £700 million of sponsorship, which brings with it intellectual property issues.

That said, I absolutely recognise the issue that the right hon. Lady has itemised. Because the process has been such a success, we want the country and individual businesses to go out and tell that story. The regulations, of course, apply only until just after the games, and we will do all we can to ensure that they work.

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

12. What steps he is taking to promote the digital economy.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

My Department is delivering a number of programmes and initiatives that will support growth and innovation across the digital economy and the economy more generally. We are investing up to £830 million in digital communications infrastructure by 2015 and working with Ofcom to deliver the 4G spectrum auction this year, and we will shortly publish a Green Paper setting out proposals for a regulatory framework for the communications and media sectors aimed at providing a thriving environment for growth and innovation in the UK.

[Elizabeth Truss]

I was delighted to read earlier this week that Britain leads the world in e-commerce, with 10% of all business taking place online. However, I am concerned about getting more young people involved in the industry, given that the number of people studying computer science is lower now than it was a decade ago and the proportion of women doing computer science has gone down to only 14%. What are we going to do to get more young people involved in the industry?

[Mr Vaizey]

I thank my hon. Friend for that important question. As she is probably aware, e-Skills, the sector skills council, had a specific computing for girls scheme to encourage girls at school to study computing, but the Secretary of State for Education’s important speech on revolutionising the computer science curriculum in January shows that this Government are committed to ensuring that more people study computer science. We are working with industry to ensure that more children choose that option.

[Ian Lucas (Wrexham) (Lab)]

Why is superfast broadband being delivered in Morocco by 2013 and in Britain by 2015?

[Mr Vaizey]

Because Britain is bigger. [Laughter.]

[Mr Speaker]

Order. I am sure that that is an immensely amusing and informative reply and we are grateful, but the House will want to hear Mr Weatherley.

[Mike Weatherley (Hove) (Con)]

Will the Minister welcome with me and the digital economy in Hove the news yesterday that Hove will be included in the next round of superfast broadband bids?

[Mr Vaizey]

May I say, if you will indulge me, Mr Speaker, that I find it odd that Opposition Members have such distaste for Morocco? What is wrong with Morocco getting superfast broadband? Why is that seen as some kind of weird phenomenon? [Interruption.] Perhaps I am channelling my inner Boris.

May I congratulate my hon. Friend on how well he has campaigned for superfast broadband in his part of the world in Brighton and Hove? We will ensure that we work with him to ensure that the generous Government funding that is available supports his constituents.

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

16. What information the London Organising Committee of the Olympic Games has provided to his Department on ticketing arrangements for the London 2012 Olympics.

[The Minister for Sport and the Olympics (Hugh Robertson)]

Ticketing for the London 2012 Olympic and Paralympic games is a matter for the London Organising Committee of the Olympic Games and Paralympic Games, a private company independent of the Government. LOCOG, however, has made public a wide range of information about the sale of London 2012 tickets to guide those who wish to purchase them and will make public a full breakdown after the final tranche of tickets is sold.

[Dame Joan Ruddock]

Rachel, my constituent, purchased her family’s Olympic tickets last year. Subsequently, she found herself pregnant, and expects to have a few-week-old baby at the time of her events. When she contacted LOCOG, she was told to purchase an extra seat for the baby, but that the seat could not be guaranteed to be next to the parents. Given that airlines allow babes in arms at 35,000 ft, surely it is possible in a stadium. Will the Minister intervene? [Interruption.]

[Mr Speaker]

Order. We all want to hear this answer.

[Hugh Robertson]

I will not even attempt to defend that one. However, as a result of the campaign run by Mumsnet, the organising committee is considering that exact issue. The situation the right hon. Lady describes is clearly an absurdity and a solution will be found.

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

17. What plans he has for the London 2012 Olympics media centre after the games.

[The Minister for Sport and the Olympics (Hugh Robertson)]

The Olympic Park Legacy Company aims to create a thriving commercial district on the Queen Elizabeth Olympic park that will generate several thousand job and training opportunities. In January, it announced a shortlist of three organisations from the fashion, technology and leisure sectors as potential long-term tenants of the press and broadcast centres. It aims to appoint those tenants later this summer.

[Meg Hillier]

In reference to the Minister’s previous answer, I hope the Department retains an interest in this matter even though it falls under the legacy company, because my constituents and the many businesses in my constituency are keen to see incubator and creative business spaces. Given that two of the bidders may now join forces, leaving only two, I hope that the Department is vigilant to ensure that we get that creative business thread running through the new Olympic park.

[Hugh Robertson]

To correct the hon. Lady, the responsibility for this matter will pass to the mayoral development corporation when it comes into being. It will have responsibility, and she will therefore have direct access to it through local councillors elected to the Greater London authority.

[Mr Speaker]

The appetite has been exhausted.

[Kevin Brennan (Cardiff West) (Lab)]

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

[The Minister for Sport and the Olympics (Hugh Robertson)]

Yesterday the European Hockey Federation announced that London, and the new Queen Elizabeth Olympic park, had been selected as the venue for the 2015 European hockey championships, the first such event on the park. This is in addition to the Commonwealth games, the rugby league, rugby union and cricket world cups, a world athletics championship, world championships in triathlon, gymnastics and canoeing, and bids out for a youth Olympics, rowing, swimming and eventing championships. It is an extraordinary success story for British sport and a hugely positive legacy from London 2012.

[Kevin Brennan]

Google is failing to enforce privacy rulings online, dragging its feet when told to take down offending material and prioritising websites that carry illegal, unlicensed content at the top of its search results. When will Ministers act to ensure that Google prioritises legal sites over illegal sites?

[Hugh Robertson]

We have regular discussions with Google on all these issues. It is better than the hon. Gentleman suggests at taking down illegal material, and those discussions will continue.

[Mr Edward Leigh (Gainsborough) (Con)]

T2. We, the taxpayers, have spent £9 billion on the Olympics and we are very proud of them. But everybody I talk to, including myself—I occasionally talk to myself—[Laughter.] Calm down, calm down. Will the House come to order, please? Nobody has actually got a ticket, apart from a chap I was talking to last night who had applied for £8,000-worth of tickets. He is the only person I have met recently who has got a ticket. I have raised this before with the Minister and it is a serious point. The Minister has told me in the past that he has to satisfy the corporate people because they have put in hundreds of millions of pounds, but we have put in billions of pounds. What more will he do to get tickets to ordinary people so that this becomes a people’s games?

[Hugh Robertson]

The problem to which my hon. Friend alludes is caused by the simple fact that 6.5 million tickets were available and 26.5 million applications were made. The fact is that demand massively outstripped supply. Some 75% of those tickets have gone to the general public, and a full breakdown will be available as soon as the next tranche of ticketing is over. The advice to him and everyone else who wishes to apply for tickets is to apply in the next tranche, which will go exclusively to those who were involved in the process earlier.

[Dan Jarvis (Barnsley Central) (Lab)]

Given the recent presentation by the WI of a 70,000-signature petition against library closures, demonstrating the strength of public support, and with no vision, no strategy and no urgency from a Minister who is fast becoming the Dr Beeching of libraries, does he share my view that he has a responsibility to act as a champion for libraries across government? If so, how would he assess his performance to date?

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (Mr Edward Vaizey)]

The trouble is that the hon. Gentleman has no view. When I was in opposition I gave my view on Wirral. What is his view on Labour-controlled Brent closing libraries? Has he got a view? When he gets a view, he can start talking about libraries.

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

T4. All local authorities in England, bar one, and certainly the Conservative local authority in Wales, publish details of invoices in excess of £500. I raised the matter with the BBC as I believe it should do the same, and Mark Thompson rejected the idea on the basis of the benefits of confidentiality and competitive tension. Does the Minister agree that it is time that the BBC followed the example set by others?

[Mr Vaizey]

My view is that the BBC is quite rightly independent from Government, but my hon. Friend may wish to take that point up with Mr Thompson’s successor who should be appointed some time later this year.

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

T5. The Minister will not be surprised that I am delighted that a cross-party campaign has resulted in the announcement of £50 million for a competition for small cities, such as Brighton and Hove, for ultra-fast broadband. When will we get the bid information and what timetable does the Minister have in mind for the competition? So that we might welcome him for the second time and the Secretary of State for the first time to see first hand what Brighton and Hove’s digital cluster is already achieving, will they accept an invitation to come to Brighton’s digital festival in September?

[Mr Vaizey]

We will publish our consultation on this issue as soon as possible, and that will detail the chronology for awarding the £50 million. I am so pleased that the hon. Lady welcomes this funding, unlike the Opposition, who continue to carp about it. Of course I will come to Brighton, for the second time, for this wonderful digital festival.

[Graham Evans (Weaver Vale) (Con)]

T6. In north-west England, we have BBC Radio Merseyside, BBC Radio Manchester and BBC Radio Lancashire, but no BBC Radio Cheshire—it is an outrage. Furthermore, the community station, Cheshire FM, has recently closed down. What are the Government doing to encourage local stations and other local media to flourish and succeed?

[Mr Vaizey]

I could be here for hours talking about the success of local television, community radio, BBC local radio and commercial radio, but I will address the specific point about BBC Cheshire. The BBC is independent of Government and my hon. Friend may wish to take the matter up with the successor director-general when they are appointed later this year.

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

T3. I am sure that by now the Minister has seen the recent “Dispatches” programme “The Great Ticket Scandal”. If he and, in particular, the Secretary of State have not, they can have my DVD copy. It makes for good watching and I recommend that he watch it. As he knows, the programme provides the most damning proof yet that consumers are being ripped off—or at least priced out of cultural events —on an industrial scale. Will he now please commit to examining the secondary market again with a view to ensuring that we put fans first?

[Hugh Robertson]

The hon. Lady and I have debated this issue for many long hours in this Parliament. The matter raised in the programme to which she refers is now the subject of an investigation by the Office of Fair Trading, so I had better be careful. I simply say what I have said before: during the last Parliament, the Culture, Media and Sport Committee and the previous Government looked into the matter, and we have looked at it again. I think we are satisfied with the position as it currently sits, but should further evidence of criminal activity come forward, we will certainly reconsider the matter.

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

T8. Leaving aside the special rules relating to the Olympics, does the Minister agree that it is not the place of the state to interfere with the freedom of an individual or company to resell tickets for sporting or cultural events?

[Hugh Robertson]

The position at the moment is that we grant a ban on ticket touting for major events where it is a requirement of bidding for those events. That has become the settled position under successive Governments and as a result of the work of the Culture, Media and Sport Committee. Until there is evidence of widespread criminal activity, that will remain the position.

[Lilian Greenwood (Nottingham South) (Lab)]

T7. Last year, Arts Council funding was cut by £71 million, local authority funding was slashed and investment in the arts by private business fell by almost £10 million. Would the Minister like to have another go at providing a credible answer to Nottingham arts organisations about how to fill the funding gap that his Government have created?

[Mr Vaizey]

Overall funding for the Arts Council will be reduced by less than 5% because we have given it back the lottery money that the Labour party robbed from it to pay for the Olympics. The answer for Nottingham Playhouse is to have an MP who champions its work and talks it up, not down.

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

Would the Minister be surprised if I joined other Brighton Members in saying that Brighton and Hove would be an excellent place for ultra-fast broadband and that we look forward to bidding as soon as possible?

[Mr Vaizey]

Indeed, and I again congratulate the work of all the Brighton MPs, but particularly my hon. Friend the Member for Hove (Mike Weatherley), on their campaigning skills.

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

In Manchester, as in Morocco, a digital economy requires a digital infrastructure, but more than 2 million people are excluded from that because they live in rural areas. Will the Minister reassure the House that he recognises the importance of geography by reinstating Labour’s universal broadband pledge?

[Mr Vaizey]

The hon. Lady mentioned Morocco. It is an interesting fact that Morocco has less than half the population of the United Kingdom.

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

Now that BT has lost its challenge to the Digital Economy Act 2010, when will the Government publish the initial obligations code and statutory instrument?

[Mr Vaizey]

We will publish it as soon as possible.

[Mr David Lammy (Tottenham) (Lab)]

There has been lots of bombast this morning, but does the Minister appreciate that for working-class children, two to three libraries closing a week, the withdrawal of arts education in our schools and a £71 million cut to the Arts Council are significant? Does he understand the intrinsic value of the arts to young people in this country?

[Mr Vaizey]

Okay, the right hon. Gentleman has thrown down the gauntlet. Let me tell him a few facts. First, two or three libraries are not closing. Fewer than 100 libraries have “closed”, and many of those have been transferred to communities. More than 40 libraries are opening, but Labour does not talk about that. We have just published our cultural education plan, the first such plan this country has ever had. Overall arts funding will be reduced by less than 4% over the next four years, so the right hon. Gentleman should stop talking down what is happening in the arts and talk about the huge success we are having.

[Jo Swinson (East Dunbartonshire) (LD)]

The parents of young people suffering from eating disorders are often distressed to find a hoard of press and magazine articles with graphic images and details of low weights and tiny amounts of food eaten, which have been used as inspiration. The media are rightly very careful when reporting on suicide. In a similar way, will the Minister urge media outlets to take cognisance of the media guidelines created by the eating disorder charity B-eat, to avoid the sensationalism of this illness, which can be very damaging?

[Mr Vaizey]

My hon. Friend has campaigned vigorously on this important issue. Magazine editors take their responsibilities extremely seriously, but I would be happy to meet her to discuss her campaign and also to work with her to engage with magazine editors.

[Stephen Timms (East Ham) (Lab)]

The Minister said that competition is still in play for superfast broadband procurement, but as he knows, many of the projects have only one bidder, BT. As far as I know, only one other bidder in the whole country is still in the frame for those projects. Will he confirm that, and say why he thinks the exercise has been so unsuccessful in engaging the degree of competition that we would all have wanted?

[Mr Vaizey]

We engaged a great many companies, but we cannot invent competition. However, at least three organisations are still involved in the bidding, and I firmly believe that the way we went about it—ensuring that local government had a say and that the contracts were awarded across local government areas, rather than regionally or nationally—promoted competition and offered up the opportunity for community broadband providers, for example.

[Philip Davies (Shipley) (Con)]

How many jobs does the Minister expect to be created or lost in the gambling industry as a result of the changes in the Budget, how many online betting businesses that are currently offshore will come back onshore, and how many jobs will come back with them?

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)]

I am delighted to have a chance to answer at least one question. Unfortunately, the answer is that I do not know, because this is an issue for the Treasury.

[Chris Bryant (Rhondda) (Lab)]

None the less, could the Minister, who is responsible for tourism, please have a word with the Minister responsible for broadcasting and arts, the Under-Secretary, the hon. Member for Wantage (Mr Vaizey), and explain to him the geography of Morocco? It is twice the size of this country, and when it comes to expanding rural broadband, it is the size of the country that matters. Not very many people live in Blaenrhondda or Blaencwm, which are a long way from cities, but they are the people who really matter if we are to get our economy going.

[John Penrose]

I am enjoying busking this one. The short answer is that the population of Morocco, I am told by many people on the Benches behind me, is only half that of the UK—it is also economically smaller—and as I am sure everybody will appreciate, the density of population is also relevant when it comes to connecting people to broadband.

[Mr Speaker]

It sounds to me as though there is plenty of scope for an Adjournment debate on the matter.

[Chris Skidmore (Kingswood) (Con)]

Whitefield’s tabernacle is Kingswood’s only grade I listed building and has important religious significance in the history of non-conformism, yet it is in a severe state of disrepair, despite featuring on the TV programme “Restoration” several years ago. Will the Minister meet me to discuss how best to preserve this precious building?

[John Penrose]

The short answer to that one is yes.

The Leader of the House was asked—

[Mark Lancaster (Milton Keynes North) (Con)]

1. What plans he has for consultation with hon. Members on the Government’s proposal for a draft Bill on parliamentary privilege.

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

It is our intention to publish a Green Paper containing draft measures on parliamentary privilege before the end of the Session.

[Mark Lancaster]

Which particular aspect of the current system of privilege does the Minister feel is in most need of reform and why?

[Mr Heath]

I am going to have to say to the hon. Gentleman that he will need to read the paper that we are producing, because it will, I hope, be a comprehensive survey of everything that relates to privilege and ask some pertinent questions about whether reform is necessary and whether it would be helpful to Members of this House in going about their business. He will have to be patient and wait for the paper, which we hope to publish before the end of the Session.

[Chris Bryant (Rhondda) (Lab)]

I hope that whatever the Government produce will indeed be a “green” paper, because there is one key issue that has to be resolved before we move any further, and that is: should we be putting anything about parliamentary privilege into statute? The danger is that the courts would then choose to interpret our actions and proceedings in this House, which would rather undermine the Glorious Revolution.

[Mr Heath]

For once, I absolutely agree with the hon. Gentleman. The Green Paper will ask the specific question whether the case has been made for legislation. We have approached this issue with an open mind, and we want to seek the views of both Houses on whether legislating further on parliamentary privilege is either necessary or desirable.

[Duncan Hames (Chippenham) (LD)]

2. What criteria were used to determine the Government’s legislative programme for the next Session of Parliament.

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

The Government intend to introduce a legislative programme in the next Session to deliver deficit reduction, boost growth, support aspiration, reform public services and implement the priorities in the coalition agreement.

[Duncan Hames]

I thank my hon. Friend for that answer. That same coalition agreement described the introduction of a groceries code adjudicator as a “first step” in protecting the interests of consumers and farmers, not least those in the hard-pressed dairy industry. I do not know of any Member who represents as many dairy farmers as my hon. Friend the Member for Somerton and Frome (Mr Heath), so will he use his influence with the business managers to ensure that a Bill to introduce a groceries code adjudicator makes its way into the next Session?

[Mr Heath]

Obviously I cannot pre-empt what will be announced on 9 May, but the Government remain committed to introducing the Groceries Code Adjudicator Bill. I am pleased that the draft Bill has received pre-legislative scrutiny and that it has been warmly received across the House. As my hon. Friend rightly says, I have a clear constituency interest in the progress of that particular piece of legislation.

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

Will the Deputy Leader of the House confirm that the Committee stage of the House of Lords (Amendment) Bill will be taken on the Floor of the House? Will he also ensure that the Government will not ram the legislation through the Commons, as they did with the Parliamentary Voting System and Constituencies Act 2011, and that there will be sufficient time for debate?

[Mr Heath]

The House of Lords (Amendment) Bill is a constitutional Bill, and it is normal that the Committee stages of such Bills are taken on the Floor of the House. I have no reason to suppose that this Bill will be an exception. We will of course provide adequate time for debate.

[Philip Davies (Shipley) (Con)]

May I propose a change for the Government when they are considering their legislative programme for the next Session? Will they bear it in mind, just for a change, that they are in coalition with the Conservative party?

[Mr Heath]

I doubt that my right hon. Friend the Leader of the House ever forgets that fact.

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

3. What progress he has made on establishing a public reading stage for Government Bills.

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

The Government conducted an experiment with a public reading stage on the Protection of Freedoms Bill. Following an evaluation of the experiment, we intend to conduct trials in the second Session to determine the best ways for members of the public to comment on specific details of legislation. My right hon. Friend the Leader of the House and I will update the House on our detailed plans early in the next Session.

[Stephen Metcalfe]

I thank my hon. Friend for that answer. Will he tell the House from whom he will seek advice on how best to push this measure forward?

[Mr Heath]

It is very important that, before we undertake further pilots of public reading stages, we have an opportunity to reflect on any improvements that could be made to the technology and the processes involved. That will involve talking to many people. Hon. Members may have seen the recent announcement that Jimmy Wales, the founder of Wikipedia, has agreed to advise the Government on improving open government, and we will want that work to influence how we proceed with public reading stages.

[Jo Swinson (East Dunbartonshire) (LD)]

I welcome what my hon. Friend says about improving public engagement, particularly with regard to public reading stages. Does he agree that we need to make it easier for the public to follow Committee stages of Bills, too, once the public reading stage is over? Will he have discussions with Jimmy Wales and others, particularly those involved in social media and online engagement, on how we can demystify the legislative process in this country, so that more members of the public can contribute their views?

[Mr Heath]

My hon. Friend highlights the purpose of what we are trying to do, and she rightly says that we are trying to demystify the process. The more that members of the public can interact with the House and understand how we go about our business and how they can influence the progress of legislation, the better. I can certainly give her a commitment that we will be looking at that. We will be looking at a variety of innovative ways to help the public to understand the process of legislation and the legislation itself, when it is presented to the House and to the public.

[Brandon Lewis (Great Yarmouth) (Con)]

4. What steps he is taking to improve the effectiveness of scrutiny of legislation.

[Mark Menzies (Fylde) (Con)]

6. What steps he is taking to improve the effectiveness of scrutiny of legislation.

[Andrew Stephenson (Pendle) (Con)]

7. What steps he is taking to improve the effectiveness of scrutiny of legislation.

[Henry Smith (Crawley) (Con)]

8. What steps he is taking to improve the effectiveness of scrutiny of legislation.

[Graham Evans (Weaver Vale) (Con)]

9. What steps he is taking to improve the effectiveness of scrutiny of legislation.

[The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath)]

The Government recognise the value of parliamentary scrutiny of legislation. We have ensured that Bills have adequate time for proper scrutiny in the House. The Government are also committed to publishing more legislation in draft to enable pre-legislative scrutiny.

[Brandon Lewis]

For how many Bills have the Government allowed two days on Report ?

[Mr Heath]

In this Session, five Bills have had a Report stage taken over two days. Indeed, both the Legal Aid, Sentencing and Punishment of Offenders Bill and the Finance (No. 3) Bill were considered over three days. This is more than in any Session of the previous Parliament, when there were none whatever in the first and last Sessions.

[Mark Menzies]

How many Bills had pre-legislative scrutiny in the last Session, and how did that compare with this Session? Will the Deputy Leader of the House make a statement on plans for the future?

[Mr Heath]

The Government have published nine draft measures this Session, and are committed to publishing more measures in draft in the next Session, with a view to pre-legislative scrutiny. Further specific announcements will be made at the start of the new Session. In the last Session under the previous Government, two Bills—just two—were published in draft.

[Andrew Stephenson]

Will the Deputy Leader of the House say more about the Government’s plans for post-legislative scrutiny?

[Mr Heath]

Like their predecessor, the Government are committed to reviewing every Act of Parliament three to five years after it has passed. Government Departments publish Command Papers, allowing Commons Committees to decide whether or not to conduct further post-legislative scrutiny of each Act, when it is appropriate to do so. Forty-four of these memorandums have been published since this system was introduced in 2008. We welcome the work undertaken so far by Select Committees to examine such memorandums, but it is up to the Select Committees to decide whether they wish to do more.

[Henry Smith]

I am a member of the European Scrutiny Committee which receives a thick bundle of policies and proposals from the European Union each week. What measures can be taken to ensure that more of these can go before departmental Select Committees, as they cover the whole vast area of UK national policy?

[Mr Heath]

Of course I understand the hon. Gentleman’s concerns. The Government are keen to explore possible ways further to improve the effectiveness with which this House deals with European legislation. My right hon. Friend the Minister for Europe is in discussions with Select Committees and others about possible changes.

[Graham Evans]

The effectiveness of scrutiny of legislation is important, and so is the cost of the effectiveness of such scrutiny. One mechanism that arguably assists with that scrutiny is that of early-day motions. I congratulate the Government on reducing the annual cost of early-day motions by 38% since 2010, but I hope my hon. Friend will join me in welcoming the Procedure Committee’s announcement that it will carry out a fresh review of early-day motions in the near future.

[Mr Heath]

I welcome the hon. Gentleman’s remarks and the fact that he recognises that the House of Commons Commission is looking across the House to establish where savings can be made. The interest of Members in the hon. Gentleman’s recent Adjournment debate, to which I responded, highlighted the variety of views on this issue. It is quite right that, if there is a swell of opinion for further reform in this area, it would be appropriate for the Procedure Committee to consider the issue of early-day motions.

[Kelvin Hopkins (Luton North) (Lab)]

Further to the question put by the hon. Member for Crawley (Henry Smith), will the Leader of the House look again at establishing permanent membership of European Standing Committees? The ad hoc approach, frankly, does not work.

[Mr Heath]

Again, I understand the hon. Gentleman’s concern. The Government are continuing to explore ways to improve scrutiny, and there remain areas that we need to explore. One issue to bear in mind is whether hon. Members would be willing to serve on such a Committee. If that is the case and if we can make satisfactory arrangements, we will of course bring them to the House.

[Paul Flynn (Newport West) (Lab)]

If there is a new look at early-day motions, will the Deputy Leader of the House ensure that Members will not be deprived of one of the rare opportunities to criticise parliamentary answers? A recent EDM suggested that the Under-Secretary of State for Justice, the hon. Member for Reigate (Mr Blunt), gave a parliamentary answer that reached a new low “in evasiveness and vacuity”, and recommends that in future Ministers should read the question before answering parliamentary questions.

[Mr Speaker]

Order. I am sure we are talking about these matters with reference to the scrutiny of legislation.

[Mr Heath]

Yes, and I am sure that the hon. Gentleman’s question was about the scrutiny of legislation. I have already set out our position on EDMs. We recognise that they have value, but sometimes some can, shall we say, come close to an abuse of the House in terms of their cost compared with their benefit. On the subject of questions to Ministers, the hon. Gentleman knows that if there are deficiencies in the responses Members receive, I and my right hon. Friend the Leader of the House are always happy to take that up with the Departments and Ministers concerned.

[David Wright (Telford) (Lab)]

What plans does the hon. Gentleman have to extend the time available for the consideration of Bills on Second Reading? It has become traditional for Second Reading debates to be considered on a single day. May we extend the time available, as many Members, especially Back Benchers, want to contribute on Second Reading?

[Mr Heath]

First, let me make the important point that the scrutiny of legislation is an essential part of the business of this House. People often talk about Government time as if it were unrelated to the business of the House when, in fact, it is Parliament’s time in order to scrutinise legislation. I merely make the observation that the more time that is eroded from so-called Government time by consideration of other matters that are no doubt of enormous importance—such as urgent questions and emergency debates—the less time is available to the House to scrutinise legislation properly.

[Harriett Baldwin (West Worcestershire) (Con)]

5. Whether he plans to submit evidence to the commission on the consequences of devolution for the House of Commons.

[The Leader of the House of Commons (Sir George Young)]

I welcome the announcement by the Minister for political and constitutional reform, my hon. Friend the Member for Forest of Dean (Mr Harper), of the terms of membership for the commission, and I will be following its work closely. Although I have no plans to submit evidence to the commission myself, it will no doubt wish to take account of the authoritative works and voices on this issue, and I hope that my hon. Friend will be among them.

[Harriett Baldwin]

When in opposition, the Leader of the House produced a distinguished pamphlet on the topic that the McKay commission will be studying. Does he propose to send that work to the commission? Also, does the commission intend to take written evidence, and to meet in public to take oral evidence?

[Sir George Young]

The commission will be meeting in public and it has asked for evidence. My hon. Friend is too kind about the work of the democracy taskforce to which I contributed when I was on the Back Benches, but I am sure this exchange will have drawn the commission’s attention to the existence of that important work.

[Pete Wishart (Perth and North Perthshire) (SNP)]

Is not the easiest and most elegant solution to the West Lothian question for Scotland to become a normal, independent, self-governing nation?

[Sir George Young]

“Bring it on” is what we on the Government Benches would say. That particular issue is beyond the remit of the commission, but I hope the hon. Gentleman will do what he can to bring forward the date when we can resolve it once and for all.

Petition

Thursday 22nd March 2012 Commons Chamber

Mr Tobias Ellwood (Bournemouth East) (Con)

- Hansard - - Excerpts

I should like to present a petition, a copy of which has already been presented to No. 10 Downing street, from more than 1,000 residents of Bournemouth East who seek the protection of precious green belt land in the wards of Strouden, Throop and Muscliff from the proposed development of three Traveller sites. Residents believe that Bournemouth is already affected by overdevelopment, and that this would be an inappropriate use of much treasured green belt land and open space.

The petition states:

The Petition of residents of Bournemouth,

Declares that the Petitioners are opposed to the proposed development of three permanent sites for gypsies and travellers in Strouden, Throop and Muscliff; that the Petitioners believe that Bournemouth has already more than adequately contributed to Dorset’s housing numbers; and that this would be an inappropriate use of much treasured greenbelt land and open space.

The Petitioners therefore request that the House of Commons urges the Government to bring forward legislation to strengthen the powers of local Councils to allow them to prevent residential developments from being built on the greenbelt.

And the Petitioners remain, etc.

[P001014]

Budget Leak Inquiry

Thursday 22nd March 2012 Commons Chamber

11:35

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

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on whether he will instigate a Budget leak inquiry, in view of the accurate pre-reporting of a number of the detailed proposals in his Budget statement, including one of the matters that was agreed under the Provisional Collection of Taxes Act.

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

As with every Budget, we have seen a vast amount of speculation, and, as ever, a vast amount of it has proven to be unfounded. As the Chancellor has said, a Budget produced within a coalition is different. The days of the Chancellor coming up with a Budget in secret are gone. This was not a Conservative or a Liberal Democrat Budget; it was a coalition Budget. In the course of coalition Budget negotiations, various proposals were raised, discussed and debated. That occurred more widely than in the past, when the Chancellor told the Prime Minister what was in the Budget the day before or, as in even more recent days, when the Prime Minister told the Chancellor what should be in the Budget the night before. The Treasury does make announcements throughout the year. For my own part, people will have seen the work on tax transparency and personal tax statements, which was in response to a consultation on this very issue laid before the House in November and subject to a ten-minute rule Bill from my hon. Friend the Member for Ipswich (Ben Gummer).

On the specific question, it is a long-established practice of the Treasury not to comment either on whether a leak inquiry has been established, or on its conduct or outcome. There will be ample opportunity to debate the Budget over the coming days. Today is the second of four days of debate on the Budget. It is perhaps an unfortunate consequence of this urgent question that this is being delayed, and so is delaying the shadow Chancellor, from whom I am sure the House is eager to hear.

[Chris Leslie]

Coalition government is absolutely no fig leaf for these very serious breaches of the ministerial code—[Interruption.] Government Members may wish to listen. Paragraph 9.1 of the code states:

“When Parliament is in session, the most important announcements of Government policy should be made in the first instance, in Parliament.”

There have been clear and flagrant violations of this crucial principle. It is a significant insult to the primacy of Parliament and this House of Commons, to whom the Chancellor should be accountable. It is a shame he was not able to come here to answer for himself on this matter.

Our constituents expect that Members of Parliament should be the first to hear and question policy announcements from the Chancellor, and hold him directly to account. The Chancellor is treating Parliament as a peripheral afterthought, and that is totally unacceptable. But this is not just about the sovereignty of Parliament; if the Chancellor and his acolytes are prepared to pre-brief and leak key information about very sensitive tax changes, that risks handing privileged information to those who can take advantage of any advance knowledge.

The ministerial code is enforced by the Prime Minister, who should instigate a leak inquiry if the Exchequer Secretary refuses to do so. He did not say whether he was or was not going to have an inquiry—at least he could leak that little bit of information for us today. It is also necessary, of course, to include an investigation of conversations between the Chancellor’s special advisers and the civil service and the media. Of course, civil servants are guided by the civil service code. It is unlikely that newspapers will reveal their sources, but Ministers and special advisers should be interviewed and asked who they spoke to, when the conversations occurred and who sanctioned those conversations. If information was released pre-Budget without approval from the Chancellor and was leaked, it is a very serious breach of security and of the civil service code.

Yesterday’s Budget was described by The Economist as

“more of a newspaper review than a Budget”.

Another view was that

“the Budget has had all the leak-free qualities of a teabag in a sieve.”

It might be quicker to list what the papers did not publish before the Budget, but for the benefit of the House I shall list some of those measures that did come out: the reduction in the 50p rate appeared in The Guardian last week and in the Financial Times; the changes to the personal income tax allowance appeared on ITV News on Tuesday night, when the exact figure was given; the stamp duty land tax changes appeared very precisely in the Financial Times and in basically all the newspapers on Wednesday morning; the changes to stamp duty land tax on residential property associated with capital gains tax changes appeared on the “Andrew Marr Show” at the weekend; and the North sea oil and gas commissioning certainties appeared in the Herald Scotland on Saturday 17.

The one Budget change that was not leaked was the £3 billion raid on pensioners, now dubbed the “granny tax”. Some 4.5 million pensioners are to lose an average of £83 next year. In times gone by, Chancellors did the honourable thing when it was revealed that their Budgets had leaked. In contrast, when asked about the Budget leaks on this morning’s “Today” programme, the Chancellor said:

“inevitably the days when the Chancellor dreamt this all up in secret, shared it with the PM 48 hours before he delivered his speech...are gone”.

Well times are not so different that they give licence to the Chancellor to fling around the contents of the Budget red box to any passing journalist, regardless of the consequences. Mr Speaker, we have heard the usual dismissive indifference from the Minister to these serious concerns, so perhaps I need to ask you, as a point of order, for general guidance about how the rights of this House, and the public’s expectations of orderly policy announcements, can be protected? Can you take steps to ensure that the Chancellor does not treat Parliament and the wider public with such utter contempt in the future?

[Mr Gauke]

I was not entirely sure whether that was a question or a point of order, Mr Speaker, and at one point I was not entirely sure whether the hon. Gentleman was complaining about measures not being briefed in advance or being briefed in advance. He referred specifically to the 50p tax rate. In the days running up to the Budget there were various reports about the 50p rate and it was public knowledge that the Chancellor had commissioned HMRC to undertake a report on the 50p rate and how much that tax was raising—an issue that I am sure the hon. Gentleman does not want to debate for very long. In that time, it was very clear that the Chancellor was going to make a statement, but what did we see in the press? We saw stories that it was going to stay at 50p, be cut to 45p or be cut to 40p. We saw press reports that it was going to happen this year or next year. There were at least five different versions of what was going to happen on the 50p rate, so it is not surprising that one of them turned out to be correct. However, it is also the case that four of them turned out to be incorrect.

The hon. Gentleman asked about sensitive numbers. I can assure him that the numbers on the stamp duty land tax—the increase to 7%—which I am sure he welcomes, certainly did not come from the Treasury, and neither did the exact number regarding the personal allowance as far as I am aware. We also heard from the hon. Gentleman that in days past these things did not happen. May I remind him what happened when he was last a Government Minister? In the 2005 Budget there was a leak about tax credit increases that turned out to be correct, a leak about alcohol duties that turned out to be correct, a leak about fuel duty that turned out to be correct, a leak about inheritance tax that turned out to be correct and a leak about stamp duty that turned out to be correct. There were also leaks about council tax refunds and the winter fuel allowance, all of which were entirely correct.

I could look at more recent announcements such as those about VAT in 2008, about the green bank, the youth jobs package, fuel duty and schools, all of which turned out to be accurate. I am sure that Government Ministers would then have said that that was speculation and I am sure that in many cases they were absolutely correct. It is difficult to give full credit to the hon. Gentleman given that detailed information about Budgets has been put into the public domain by previous Governments for many years, but he has only now suddenly become very upset. I am not surprised that the Labour party wants to focus on an issue of process rather than on the substance because this Budget is going to get the country growing again and is reforming the tax system in a sensible and growth-friendly way.

[Several hon. Members]

rose—

[Mr Speaker]

Order. There is extensive interest in this subject, which I am keen to accommodate, but that requires brevity, a great example of which can now be provided by Mr Jacob Rees-Mogg.

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

I wonder whether my hon. Friend notices the incongruity of those who oppose openness in the Budget but were all in favour of it in terms of risk registers. Does he agree that the criticism is either muddled or synthetic?

[Mr Gauke]

In the interests of brevity, Mr Speaker, I agree.

[Mr Ben Bradshaw (Exeter) (Lab)]

Given the failure of Ministers to admit whether they will benefit from the cut in the top rate of tax and the description by the Chancellor of tax avoidance as “morally repugnant”, will the Exchequer Secretary now ensure that all Ministers’ tax arrangements are published?

[Mr Gauke]

We do not have a tradition of politicians publishing their tax affairs, but I have to say that for a Labour politician to say that in the context of the current mayoral election takes some nerve.

[Several hon. Members]

rose—

[Mr Speaker]

Order. May I remind the House that this is a narrowly focused urgent question seeking a leak inquiry? It is a matter of great importance, but it is on that matter that exchanges should be focused. This is not a rerun of the Budget debate, which will be continued, but is about the subject of the urgent question.

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

Does my hon. Friend agree that there will obviously be wild speculation before any Budget, much of which turns out to be wrong, and that we do not need any lectures from Opposition Members, who leaked everything all the time when they were in government?

[Mr Gauke]

I do not think that we can draw a conclusion that there has been a decline in the standards of journalism just from the fact that in 2005 the predictions of what was in the Budget were more consistently accurate than in 2012.

[Barry Gardiner (Brent North) (Lab)]

Surely a leak is an unauthorised or inadvertent publication of restricted and confidential information. On that basis, this could not have been a leak, because it was clearly not inadvertent and it was clearly authorised. It was none the less in severe conflict with the ministerial code, and that surely is what the Prime Minister should investigate.

[Mr Gauke]

I am not sure that there was a question there, but I thank the hon. Gentleman for his views. The Government clearly authorised some information to be put out in advance of the Budget. For example, there was a speech by the Prime Minister. The Prime Minister makes speeches from time to time; I am not sure that people should be getting upset about that.

[Lorely Burt (Solihull) (LD)]

Does my hon. Friend agree that it is rank hypocrisy on the part of Opposition Members to accuse this Government of leaking? Can my hon. Friend remember how many times the Labour Government held inquiries into leaks about their Budgets?

[Mr Speaker]

Order. Let us be absolutely clear about this. The hon. Lady can make a general charge. She cannot and will not make a personal charge against an individual Member in any part of the House. I trust that the hon. Lady is not accusing the hon. Member for Nottingham East (Chris Leslie) on the Opposition Front Bench of hypocrisy.

[Lorely Burt]

indicated dissent.

[Mr Gauke]

I, too, want to be very careful and not accuse the hon. Gentleman of hypocrisy, but there are dangers of inconsistency.

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

On Monday the Home Secretary came to the House and confirmed that there would be a leak inquiry into the Hillsborough media reports. Why is it that the Home Secretary has that grace, but the Minister does not?

[Mr Gauke]

Let me repeat what I said earlier. It is a long-established practice of the Treasury not to comment on whether a leak inquiry has been established or on its conduct or outcome.

[Christopher Pincher (Tamworth) (Con)]

Is my hon. Friend aware that Labour’s record of leaking is as long as its record in office. Not only did the last Govt leak like a sieve but Hugh Dalton, a previous Labour Chancellor, was forced to resign for leaking Budget secrets—

[Mr Speaker]

Order. The hon. Gentleman will resume his seat. I made the position clear. This is a set of exchanges about a specific and narrowly crafted urgent question. It may be about many things within that context, but it is not about 1947. We will leave it there.

[Henry Smith (Crawley) (Con)]

The previous Labour Government leaked worse than the Titanic. Does my hon. Friend agree that, whatever the Labour party’s budgetary policies may be—we are not quite sure—they would be an equal disaster?

[Mr Gauke]

Within the constraints of the question, I will just say yes.

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

Will the Minister concede that the Chancellor has shot himself in the foot with such widespread leaks, because all that he had to announce yesterday was the tax grab on grannies, which he hoped people would not notice? Will he concede that the leak inquiry that may or may not be going on now in the Treasury should consider the leaks of Office for Budget Responsibility judgments, and that now is the time to put the OBR on a proper independent basis similar to that of the Office for National Statistics?

[Mr Gauke]

Of course the OBR is independent, and that may be some irritation to Opposition Members, given its conclusions about the failure of the 50p rate.

[George Freeman (Mid Norfolk) (Con)]

Does my hon. Friend agree that the only possible explanation for the general hypocrisy on the Opposition Benches, given their own leaking of this urgent question before the Speaker’s Office announced it, is their desire to avoid the good news of GlaxoSmithKline’s investment announced this morning?

[Mr Gauke]

I am interested to learn that this story was apparently briefed before any decision emerged. [Interruption.] I understand that that is incorrect and that it was not announced on Twitter before your decision, Mr Speaker. If it was, I am sure that there will be an internal Labour party inquiry.

[Clive Efford (Eltham) (Lab)]

The reference to Hugh Dalton in 1947 is of course wrong, because he resigned and the leak had been reported in an evening newspaper before he sat down. What we are talking about now is the ministerial code and the accurate and extensive reporting of what was in the Budget across the media the morning before the Budget statement. That is the difference, and that is what we want to be investigated. Are we going to have an investigation or not?

[Mr Gauke]

I have answered the hon. Gentleman’s first point. I should also reiterate that we have a coalition, which means that there are negotiations and discussions involving both sides. It also means that the Budget tends to be finalised some days in advance of the Budget speech. That is quite a contrast to previous years, when revisions were made, documents pulped and decisions taken at the last minute. I think that we have a much better process, thanks to the discussions within the coalition and the involvement of the Office for Budget Responsibility.

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

Does the Minister believe that the Opposition would improve by getting some consistency on whether information should or should not be released?

[Mr Gauke]

We can hope for consistency, but I am not an optimist on that front.

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

Leeks are normally very popular in Wales, but given that only 4,000 people in Wales pay the 50p rate of tax, compared with 94,000 in London, taken alongside the regional pay leak, this represents a massive transfer from poorer people in Wales to richer people in London. Does the Minister not agree that spreading that sort of fear through leaks ahead of the Budget announcement is disgraceful, and has he not admitted that he has given leaks by referring to our alleged leaks?

[Mr Gauke]

I am afraid that the hon. Gentleman’s analysis is wrong, because the rich will of course be paying five times the amount as a consequence of the Budget measures. I am afraid that his analysis is no better than his jokes.

[David Tredinnick (Bosworth) (Con)]

Will my hon. Friend accept that he made a mistake in saying that part of the Budget was leaked by the Labour Government in 2005? In fact, the whole Budget was leaked to the Evening Standard.

[Mr Gauke]

I suspect that my hon. Friend is right and apologise to the House for getting that wrong.

[Helen Goodman (Bishop Auckland) (Lab)]

One of the reasons why Budget leaks are particularly serious is that they facilitate tax avoidance. When the Budget speech was leaked in 1984, Lord Howe instituted a police inquiry and everybody working on the Budget was interviewed by the police. Why does the Chancellor of the Exchequer not do the same?

[Mr Gauke]

I know that the hon. Lady speaks with great knowledge on this issue. I agree that it is very important that sensitive information is protected and can assure her that, on the one potentially sensitive area of stamp duty, the Treasury was not involved. If something is announced in the morning, even if it comes into effect at midnight, people still have the opportunity to exchange contracts in the interim period, as indeed was the case when previous Governments raised stamp duty.

[Margot James (Stourbridge) (Con)]

I was an avid reader of pre-Budget commentary in the newspapers and found that there was plenty of new content in the Chancellor’s presentation yesterday that had not been covered at all and plenty that the media had got wrong. Is this not a complete waste of parliamentary time, and will my hon. Friend ensure that none of his official time is wasted in the pursuit of this phantom leak?

[Mr Gauke]

If the intention is to keep the shadow Chancellor’s speech off the lunchtime bulletins, I suspect that it will succeed, and who would blame the hon. Member for Nottingham East (Chris Leslie) for wanting to do that?

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

Would the Minister describe it as a coincidence that the £3 million stealth tax on pensioners was one thing that was not leaked?

[Mr Gauke]

I am not sure whether we are now getting complaints that we are briefing too much, or too little.

[Bob Blackman (Harrow East) (Con)]

Clearly, the most difficult job in Parliament is to respond to the Budget speech. If everything was leaked in advance, why did the Leader of the Opposition get it so spectacularly wrong?

[Mr Gauke]

There is a theory that we might have wanted to help him, but I can assure my hon. Friend that that is not the case, although I can see the argument why the Leader of the Opposition might have wanted that help.

[Kevin Brennan (Cardiff West) (Lab)]

By describing the systematic and orchestrated leaks as somehow an accident, does the Minister not realise that he and the Chancellor remind people of Captain Renault in “Casablanca” when he goes into Rick’s place and is shocked to discover gambling going on, even as he collects his own winnings? Is this approach not simply amoral, and should Ministers not have a higher standard around the Budget?

[Mr Gauke]

I am afraid that if we were looking at the previous Government we could round up the usual suspects there, because there was plenty of leaking under them, but we heard none of the synthetic outrage from the Labour party then.

[Nigel Mills (Amber Valley) (Con)]

I have a dream in which the Budget is merely the confirmation of ideas that have been fully consulted on and people can actually understand what the tax regime will be in advance. I commend the Minister for his work in trying that, rather than worrying about this flim-flam.

[Mr Gauke]

My hon. Friend makes a good point about our more deliberative and consultative process for tax policy making, and some of the announcements in the Budget yesterday were the culmination of a long process of consultation, for example the reforms of controlled foreign companies, which have been widely welcomed. As a corporate tax regime, ours is increasingly recognised around the world, and I am delighted that, as my hon. Friend the Member for Mid Norfolk (George Freeman) pointed out earlier, we had the announcement from GlaxoSmithKline this morning.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

How does the Minister explain the headline on Wednesday morning in the Financial Times—it could have been any of the major newspapers—which stated: “Osborne in tax grab on top-end property”? The article went on confidently to assert that the duty would be 7% on properties priced at £2 million and above. Surely that was a leak. If it was not, what was it and what will he do about it?

[Mr Gauke]

I do not believe that the figure of 7% came from the Treasury, but we also ought to recognise that in last year’s Budget the Chancellor made it clear that we were looking at getting more money from those owning high-end properties, so it should not have come as a complete surprise that there was an announcement along those lines in the Budget yesterday.

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

It was widely reported in the press before the Budget, and in fact before Monday, that on Monday morning the quad would meet for a final sign-off of the Budget. Surely anything that was in the papers about the Budget before that point would have been complete speculation?

[Mr Gauke]

There is a lot of speculation, but one of the aspects of Budget policy making under this Government is that it is much more orderly and systematic and decisions are reached in a proper way, unlike the chaos that reigned under the previous Government.

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

The Liberal Democrats were briefing extensively in the past few days, and I just wonder whether the Minister would like to investigate why they seem to have preferential access to information before Parliament does.

[Mr Gauke]

It is only to be expected that coalition parties will want to make their arguments and to set out their case, and we do have a Budget that is formed by a coalition, but it is a Budget that is good for the country.

[Brandon Lewis (Great Yarmouth) (Con)]

My hon. Friend mentions the consultation work that the Treasury does in order to reach final positions on the Budget. One of those was shown yesterday, with the new regime for oil and gas and decommissioning—something that the industry very much welcomes and which will provide a great boost. Does my hon. Friend agree that such consultations lead to speculation but are vital in terms of getting into the Budget the right result for people?

[Mr Gauke]

My hon. Friend is absolutely right, and our progress on oil and gas will be welcomed throughout the country and, especially, in Great Yarmouth.

[Ian Lucas (Wrexham) (Lab)]

On stamp duty specifically, will the Minister implement an inquiry into how many transactions of more than £2 million took place between the time that such reports were in the newspapers and the Budget announcement, and into how much that cost the hard-pressed British taxpayer and pensioners who are having to pay the granny tax?

[Mr Gauke]

On the general point about leak inquiries, I have said what I have to say on that, but we have to bear in mind that identifying a property of more than £2 million, reaching a conclusion on negotiations and exchanging in the course of one morning is somewhat ambitious.

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

If the Minister is ever tempted to go down the route of a leak inquiry, will he at least commit to backdating it to 1997?

[Mr Gauke]

My hon. Friend makes an excellent point. Presumably, the Labour party would be very supportive of, and co-operative in, any such venture.

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

The Minister has said three times now in his responses that the Treasury was not responsible for leaking the stamp duty changes. The first time that he said so, he added, “as far as I know.” Is not the point that he should know and, therefore at least on that point, that a leak inquiry should be instituted immediately?

[Mr Gauke]

I have absolutely no evidence that the Treasury briefed on the 7% stamp duty announcement, but none the less an announcement was made in the morning, and the measure came into effect at midnight last night. We also ought to make the point that that measure, on stamp duty land tax, is going to get more money out of the wealthy, and much more successfully, than the Labour party managed with its failed 50p rate.

[Penny Mordaunt (Portsmouth North) (Con)]

Does the Minister agree that the fact that the Opposition have tabled an urgent question today on media management is further evidence that the Budget was a good Budget and Labour has nothing to say on growth or jobs?

[Mr Gauke]

I agree. The focus on process not substance is very revealing.

[Derek Twigg (Halton) (Lab)]

I congratulate the Minister on some excellent press management this morning, and on the headlines, which have been very helpful to us. But I want to be helpful, so that he can be specific about the area of suspicion. Can he now say that no Treasury Minister directly, or special adviser indirectly on their behalf, gave information to the press about any Budget measures prior to the Budget yesterday?

[Mr Gauke]

Just to be clear, I will give the hon. Gentleman a Budget measure that was confirmed yesterday: personal tax statements. Ministers were aware that we were going to inform the press about personal tax statements, so the question he asks is extremely broad. There were measures announced yesterday in which Ministers were involved, but I am not aware of any Minister being aware of the briefing of market-sensitive information.

[David Rutley (Macclesfield) (Con)]

Does my hon. Friend agree that it is a bit rich to be asking this question today—[Hon. Members: “A bit rich!”] Does he agree that it is more than unfortunate to ask the question today, when articles such as the one I have with me, from The Guardian on 11 March 2008, state:

“Alastair Darling is set to deliver his first budget to the House of Commons tomorrow…but in reality, much of it has already been trailed”?

[Mr Gauke]

Some things are not entirely new. The Labour party really does have to think back to its time in government and to the behaviour undertaken then. What is remarkable is that Opposition Members managed to brief some of their announcements, given that most were decided only at the very last minute.

[Sheila Gilmore (Edinburgh East) (Lab)]

Will the Minister clarify whether he expounds the virtues of advance notification and discussion because we have a coalition, or whether he thinks that it is a bad thing to leak? Was the one thing that he did not share with his coalition partners perhaps the granny tax?

[Mr Gauke]

All Budget decisions were agreed by the Government as a whole, and the quad was heavily involved at all stages in that. People in a coalition will always make their arguments and set out their case, and some of that will be done in private, some of it in public, but it is a far more orderly process of Budget policy making than we have seen for many years.

[Glyn Davies (Montgomeryshire) (Con)]

In the context of coalition government, there will inevitably be much pre-Budget discussion and much greater media coverage. Does my hon. Friend agree that such coverage is bound sometimes to be right, and that it is ridiculous to interpret it as leaks?

[Mr Gauke]

I refer my hon. Friend to, for example, the 50p debate, which the hon. Member for Nottingham East (Chris Leslie) mentioned. In the days before the Budget there were five different versions of what was going to happen. One turned out to be correct and four turned out to be incorrect.

[Ian Lavery (Wansbeck) (Lab)]

We heard almost more information and detail on the Budget on Tuesday evening than we did on Wednesday evening. Was that due to the Liberal Democrats, was it due to the Conservatives, or were they simply all in it together?

[Mr Gauke]

My right hon. Friend the Chancellor set out yesterday a Budget for growth and for working people. There was an awful lot of information in it. It was an ambitious Budget, and one of which this Government are very proud.

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

Does my hon. Friend agree that Budget leaks are to be deplored, as indeed is the alleged break-in at the Leader of the Opposition’s office, purportedly to find his Budget policies? I can inform the House that the would-be thief left empty-handed.

[Mr Gauke]

It would be a very foolish thief whose motivation was to find policies from the Leader of the Opposition.

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

Does the Minister agree that, if any profiteering took place due to leaking the announcement on stamp duty land tax, it would be morally repugnant? What action will he take if his secret leak inquiry finds evidence that it took place?

[Mr Gauke]

We ought to put the matter into proportion. The idea that someone would be able to identify a property and exchange contracts in the course of a morning is highly unlikely. As I have said, I have no reason to believe that the Treasury was in any way involved in briefing that particular item, but there was a lot of speculation that there would be something on properties, and that speculation turned out to be correct.

[Charlie Elphicke (Dover) (Con)]

Does the Minister agree that such discussion as that which took place between the coalition parties leading up to the Budget is more healthy—more open and transparent—for our democracy than leaving things all in the hands of one, lone control freak?

[Mr Gauke]

I certainly agree that we do not want to return to the days when a Chancellor, in close co-operation with his special adviser, worked in a sort of secret bunker, not sharing any information with anyone, including the Prime Minister. That is not healthy, and, as we saw, it did not result in sensible tax policy making.

[Paul Flynn (Newport West) (Lab)]

Is not the most serious aspect of leaks the further degradation of ministerial code reform? The Public Administration Committee has been told by the previous independent adviser on the code that the Prime Minister himself is in breach of the code. If the Committee decides unanimously that the present adviser on the code is not fit to hold office, should Sir Alex Allan resign?

[Mr Gauke]

That is clearly not an issue for the Treasury. The Government will respond to the points that the hon. Gentleman has raised in due course.

[Richard Graham (Gloucester) (Con)]

I would not dream of accusing anybody on the Opposition Benches of hypocrisy, but the last time I saw more assembled piety than there is on those Benches today was when I visited a Catholic convent in the southern Philippines in 1985. Has it occurred to the Minister, as it has occurred to me, that this urgent question is simply a distraction from the debate on a Budget for jobs and growth that helps working people? That is what my constituents in Gloucester want to hear us debate today.

[Mr Gauke]

I understand concerns about there being a debate before the Budget, but now Opposition Members do not seem to want a debate on Government measures after the Budget. I think we should have that debate.

[Harriett Baldwin (West Worcestershire) (Con)]

Given that the centrepiece of the Chancellor’s Budget yesterday was an increase in the personal tax allowance that gives a tax break to 24 million people on low and middle incomes, and given that that was in the coalition agreement, does the Minister agree that a journalist would not need to be Sherlock Holmes to speculate that that increase would be in the Budget?

[Mr Gauke]

My hon. Friend is absolutely right; that is in the coalition agreement. We have always said that we wanted to make progress on that, and I am delighted that we did yesterday.

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

Does the Minister agree that it is typical of Labour Members to be obsessed by media headlines and spin when they ought to be doing what we do on the Government side of the House—make good policy?

[Mr Gauke]

My hon. Friend is absolutely right. Yesterday’s was a Budget of substance, this is a Government of substance and we will continue to get the country out of the mess that we inherited.

[Matthew Hancock (West Suffolk) (Con)]

The hon. Member for Nottingham East (Chris Leslie) based his case on different speculation in the newspapers about the future of the 50p rate. Does the Minister not recall that when the 50p rate was introduced by the previous Government, the first news of it came from a newspaper, not the Dispatch Box?

[Mr Gauke]

I am sure that my hon. Friend is absolutely right. My only query is that I thought it might have been on the television; but if he says it was in a newspaper, I am sure that he is right.

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

In 2005, the Evening Standard covered details of the entire Budget; in 2008, the Daily Mail covered the details of VAT and The Daily Telegraph had details on fuel; in 2009, The Observer covered details on youth jobs; in 2010, there were details on the green investment bank. Would my hon. Friend welcome at least some consistency in policy and practice rather than the lack of constructive opposition that comes from Labour Members?

[Mr Gauke]

I would welcome that consistency, but I do not expect it.

[Chris Skidmore (Kingswood) (Con)]

Before 10 o’clock this morning, the Labour party press office announced on Twitter:

“Urgent Question in the House this morning @ChrisLeslieMP calling for a Budget leak inquiry”.

Yet I understand from your office, Mr Speaker, that the urgent question was not officially announced to the House until exactly 10 o’clock. Will the hon. Member for Nottingham East (Chris Leslie) now call for a leak inquiry on that urgent matter?

[Mr Gauke]

Earlier this morning, the hon. Gentleman denied it. [Interruption.] He is shaking his head now, so he is clearly denying that that is the case. Presumably, it is reasonably easy to work out what time a Twitter post was made and to know what time the urgent question was announced. But it is not for me to lecture the Opposition; I am sure that they would be very concerned if there had been such a leak and they would be cracking down on it straight away.

[Mr Speaker]

It is not really a matter for the Minister. These matters are dealt with in a very specific and orderly fashion—the submission of a request, the consideration of the matter at the appropriate time of the day by my colleagues and me, and the disclosure of the result of the request to the interested parties. All was done—I know the hon. Member for Kingswood (Chris Skidmore) will be satisfied that it was—in an absolutely orderly way on this occasion as it is on every other.

[Duncan Hames (Chippenham) (LD)]

Has the Minister discussed this matter with his colleague the Chief Secretary to the Treasury? I have found the earliest published source of information on the Budget. It was written by my right hon. Friend the Chief Secretary—on the front page of the Liberal Democrat election manifesto nearly two years ago.

[Mr Gauke]

And it was all going so well. I confess that I have not spoken to my right hon. Friend the Chief Secretary this morning and that I have not read all that manifesto. But I would say that the Budget has Liberal Democrat policies and Conservative policies. It is a coalition Budget that is good for the whole country.

Business of the House

Thursday 22nd March 2012 Commons Chamber

12:15

[Ms Angela Eagle (Wallasey) (Lab)]

Will the Leader of the House please give us next week’s business?

[The Leader of the House of Commons (Sir George Young)]

The business for next week will be:

Monday 26 March—Conclusion of the Budget debate.

Tuesday 27 March—Motion relating to assisted suicide. The subject for this debate has been nominated by the Backbench Business Committee. Colleagues should be reminded that the House will meet at 11.30 am on Tuesday.



The business for the week commencing 16 April will be:

Monday 16 April—Second Reading of the Finance (No. 4) Bill.

Tuesday 17 April—Consideration of Lords amendments to the Legal Aid, Sentencing and Punishment of Offenders Bill.

Wednesday 18 April—Consideration in Committee of the Finance (No. 4) Bill (day 1).



Thursday 19 April— Consideration in Committee of the Finance (No. 4) Bill (day 2).

The provisional business for the week commencing 23 April will include:



Monday 23 April—Remaining stages of the Financial Services Bill (day 1).

[Ms Eagle]

I thank the Leader of the House for his statement.

Last week, I recommended to the Cabinet horses that they could back at the Cheltenham festival. Well, the verdict is in, and I have to announce that I will not be giving up the day job. Palace Jester, the horse that I recommended for the Deputy Prime Minister, was much talked about before the race and entered the field with high expectations, but it failed to live up to its overblown hype—it wilted at the first sign of pressure and ended up nowhere. That just proves that Palace Jester was exactly the right horse for the Deputy Prime Minister.

I have been forced to conclude that I am about as successful at tipping horses as the Chancellor is at managing the economy. Yesterday, the Chancellor made a rare appearance in the House to present his millionaires’ Budget. Although an appearance from him at the Dispatch Box is always a pleasant surprise, the content of the Budget certainly was not.

In future, the Government could dispense with the Budget Red Book altogether and just publish a collection of newspaper clippings; instead of delivering a Budget speech from the Dispatch Box, the Chancellor could just review last week’s papers. Will the Leader of the House undertake to update the House at next business questions on how the leak inquiry is going?

This time last year, the Chancellor said his budget would

“put fuel into the tank of the British economy.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]

Since then, the economy has stalled, unemployment has risen and he is borrowing £150 billion more than he planned. What fuel has the Chancellor been using? After the lamentable record on growth, what was needed yesterday from the Chancellor was a Budget for jobs. Instead, we got a Budget that will be remembered for giving a huge tax cut to the richest 1%.

We were all astonished to learn from the Chancellor this morning that he was not a top rate taxpayer. The hunt is now on for the name of his accountant, who will surely find himself in spectacular demand. Given that the Chancellor has answered the question, surely the rest of the Cabinet should now do so too. Will the Leader of the House arrange for a note to be placed in the House of Commons Library listing which members of the Cabinet have benefited from the cut in the 50p rate?

Yesterday’s ideological Budget gave a £40,000 tax cut to the richest 14,000 people—wrong choice. Yesterday’s Budget introduced a stealth tax on pensioners to pay for that—wrong choice. Cuts to tax credits in April mean that 200,000 households will now be better off on the dole than in work—wrong choice. With VAT increased, fuel duty going up and child benefit cut, this is a Budget that leaves families £253 a year worse off—wrong choice.

It is not just the Government’s choices that are wrong; their entire philosophy is wrong. We now have a Government who believe that the top 1% will work harder if they are given a tax cut while everyone else can be made to work harder only by having their income cut. Will the Leader of the House find time for a debate on that notorious phrase, “We’re all in this together”? I have been trying to understand what the Chancellor could possibly have meant by it, so I looked up the word “all” in the Oxford English Dictionary, which said:

“All (noun): the entire number of; the individual components of, without exception.”

Having scoured the dictionary, I have to report to the House that I could not find a definition that excluded the top 1%, so will the Government be writing to the Oxford English Dictionary to ask it to correct its definition?

Were the Leader of the House to find time for a debate on the phrase, “We’re all in this together”, the Deputy Prime Minister could lead it, because he has claimed that this was a “Robin Hood” Budget. The Deputy Prime Minister had a very expensive education at Westminster school; what did they actually teach him? In my more modest school, we were told that Robin Hood took money from the rich and gave it to the poor, not the other way round. Every time I have asked the Leader of the House to find time for a debate on fairness, he has ignored my request, and now we know why. This was a Budget that was neither fair nor progressive and built unfairness on top of economic policies that have failed. Will the Leader of the House finally find time for a debate on fairness?

This week, Government Members waved their Order Papers for tax cuts for the richest 1% and the Cabinet banged the table when the Health and Social Care Bill was passed. Wrong choices; wrong philosophy; wrong ideology: same old Tories.

[Sir George Young]

It is perhaps unfortunate that the hon. Member for Wallasey (Ms Eagle) began by apologising for her tips on horses and then accused us of making all the wrong choices—not a good start. She apologised for her tips; I think she is going to have to start apologising for some of her jokes.

The hon. Lady asked a whole series of questions about the Budget. We have four days’ debate on the Budget. When we come back after the Easter recess, we will have a debate on the Floor of the House on the Finance Bill, and then two more days’ debate on the Finance Bill, as well as a debate on the Financial Services Bill. She asks me for time to debate these issues, but it seems that we are debating very little else over the next week or so. She and her hon. Friends have criticised us for taking a gamble with the Budget, but they took the gamble when they were in government by spending money they did not have and racking up debts that could not be paid.

On the hon. Lady’s comments about fairness, what was fair about selling off the nation’s gold at a record low price? What was fair about giving pensioners an insulting 75p a week increase in the state pension? What was fair about abolishing the 10p tax rate? What was fair about leaving this country with the biggest budget deficit in our history? Labour set back fairness in this country, not the coalition.

[Jessica Lee (Erewash) (Con)]

Will the Leader of the House kindly consider making time available for a debate on the Olympic legacy, with particular regard to the regions outside London and the south-east? In Erewash, Long Eaton United football club has recently been awarded £50,000 by Sport England—a very exciting investment that demonstrates how we must continue to provide support all round the country.

[Sir George Young]

My hon. Friend rightly draws attention to the benefits throughout the country of our hosting the Olympics. A firm in my own constituency is making tents for some of the Olympic sites. There is not only the spin-off impact of the purchasing but, as she says, the money that is being distributed by Sport England via the national lottery to promote sporting organisations in all our constituencies. Only last week, I was at two events where cheques for £50,000 were handed out to clubs in North West Hampshire; that is part of the Olympic legacy.

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

Given the number of occasions on which the House has discussed the situation in Sudan, does the right hon. Gentleman agree that it was a great pity that it took George Clooney to remind the international community that the situation there is getting worse and worse, day by day? May we have another debate of the whole House so that the Prime Minister can explain what actions he has taken, including whether he raised the matter with President Obama during his recent visit to America?

[Sir George Young]

The right hon. Gentleman rightly draws attention to the problems in Sudan. I commend the publicity that was generated last week in the United States. I cannot promise a debate in the near future, with the House rising next Tuesday for the Easter recess, but the right hon. Gentleman might like to apply to you, Mr Speaker, for a debate in Westminster Hall or on the Adjournment so that we can address this urgent matter when we return.

[David Mowat (Warrington South) (Con)]

The Leader of the House will recall the “Newsnight” revelations before Christmas that the head of the Student Loans Company was not having tax deducted at source. The Government subsequently initiated an inquiry across all areas of the civil service, but that did not include the BBC. Having submitted a freedom of information request to the BBC, this week I received a reply indicating that 41 non-talent-based members of its staff are being paid over £100,000 a year and are not having tax or national insurance deducted at source. Will the Government find time for a debate on the abuse of tax regulations in the public sector?

[Sir George Young]

I am grateful to my hon. Friend. The Government have made the position clear in so far as the civil service is concerned. As he will know, the BBC is an independent organisation, but I am sure that his question will have been heard by those at the BBC and that they will want to respond to the points that he made in the light of the FOI request that he has recently had answered.

[Ian Murray (Edinburgh South) (Lab)]

My constituents in Bruntsfield and Morningside are becoming increasingly concerned about the proliferation of mini-supermarkets, which are having a significant impact on local traders. May we have time allocated for a debate on the number of mini-supermarkets in our local communities and the detrimental effect that that is having on local traders?

[Sir George Young]

I am grateful to the hon. Gentleman for raising a key issue. I think that the Backbench Business Committee held a debate in January on the subject of the future of the high street and the Mary Portas inquiry. The Government have said that they will respond to that inquiry in the spring. I hope that it might be possible, perhaps with the assistance of the Backbench Business Committee, then to revisit this issue to see whether we can get the balance right between the supermarkets and the imperative to have a flourishing high street full of smaller shops.

[David Tredinnick (Bosworth) (Con)]

Will my right hon. Friend tell the House when he expects the remaining demonstrators to leave Parliament square and when he expects the road works outside Derby Gate to be completed, as apparently it has taken three months for two valves to be put on to a defective water main there?

[Sir George Young]

I will make inquiries about the last matter. I commend my hon. Friend’s work over many years in campaigning for Parliament square to be restored to its traditional glory. He will know that all but one of the encampments have been removed. I believe that the last remaining encampment is subject to an injunction that is to be heard quite soon. On the works on Parliament street, he will know that that is a matter for Westminster council, and I will raise it with the council. I am grateful to him for his initiative in ensuring that the road surface opposite the House of Lords is now much flatter, which is of great assistance to those of us who go on two wheels.

[Phil Wilson (Sedgefield) (Lab)]

May we have a debate in Government time to congratulate the previous Labour Government on their ability to attract inward investment? The announcement on GlaxoSmithKline that was made in the Budget yesterday is a result of what we introduced in 2009. Similarly, the Hitachi train-building factory which, as announced last year, is going to be built in my constituency comes as a direct result of Labour’s growth strategy. Does the Leader of the House think that we should have that debate, given that the only aspect of yesterday’s Budget that referred to growth was the result of Labour policy?

[Sir George Young]

I have seen the Glaxo press notice and, like the hon. Gentleman, I welcome the creation of new jobs. The press notice mentioned the confirmation in yesterday’s Budget of a specific regime for patents. I am not sure that the hon. Gentleman is entirely correct in claiming the credit for the company’s decision. I think that Government Members can share in the glory.

[Mark Garnier (Wyre Forest) (Con)]

Next week, I am holding a jobs fair in Kidderminster to provide practical support not just for the unemployed, but for local businesses that are seeking to expand. Will my right hon. Friend find time for a debate on how the Government can support local initiatives, such as my jobs fair, to stimulate the economy at a grass-roots level?

[Sir George Young]

I commend my hon. Friend’s initiative in Kidderminster to bring together employers and those looking for work. He may have an opportunity during the debate on the Budget to develop his point further. With the Work programme, which is helping more than 3 million people, the more than 400,000 apprenticeships this year, the youth contract and the work experience programme, there are a lot of initiatives that the Government are taking. It is up to each Member of Parliament to ensure that the benefits of those programmes filter through to their constituency. I commend him for the initiative that he has taken.

[Ann Coffey (Stockport) (Lab)]

The Chancellor announced yesterday that the Government plan to legislate to suspend the Sunday Trading Act 1994 for eight Sundays to coincide with the Olympics. There is concern that that is less to do with the Olympics than with testing the water for a permanent repeal of the Act. Will the Leader of the House confirm that it will be limited legislation, as announced by the Chancellor yesterday?

[Sir George Young]

I confirm exactly what the hon. Lady has said. Any legislation will have to pass through both Houses and will be subject to discussion through the usual channels. It will apply only to the Sundays during the Olympics and Paralympics, so it will be strictly confined to that period. It is not our intention at this stage to go for the wider reform to which she referred.

[Mr Julian Brazier (Canterbury) (Con)]

May I urge my right hon. Friend to grant a debate on the European arrest warrant? My constituent, Graham Mitchell, was acquitted 18 years ago of attempted murder in Portugal, after being held in prison for more than a year. The prosecutor fell asleep during the course of the trial and the assailant did not identify Mr Mitchell as his attacker. Eighteen years on, a new application has been made to take him to Portugal on a charge of murder, when the victim is alive and well and playing golf, I believe, in Germany.

[Sir George Young]

I commend my hon. Friend for championing the cause of his constituent. The case has received some publicity recently. He will know that I cannot comment on an individual case. I gather that it has been adjourned until 28 March. My right hon. Friend the Home Secretary is looking at the Scott Baker report and hopes to make her conclusions available shortly. In the meantime, we are asking EU countries to observe the principle of proportionality in considering whether such an arrest warrant is appropriate.

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

I have received a letter from the Department of Health explaining that it is not yet in a position to respond to the report of the Select Committee on Science and Technology on alcohol. Yesterday in the Budget, at column 803 of Hansard, the Chancellor said that the Government would make an announcement on the subject shortly. Will the Leader of the House ensure that the Select Committee receives a proper reply from the Government ahead of that statement, in time for us to have a proper discussion and respond to the Government’s response?

[Sir George Young]

I commend the work done by the Select Committee. I will make inquiries, but I cannot give a categorical undertaking that we will respond in what will probably be a short time scale, given that we want to make progress with our alcohol strategy. However, I will make inquiries and write to the hon. Gentleman.

[Andrew Stephenson (Pendle) (Con)]

The Leader of the House may be aware that last year I tabled early-day motion 1518, following the assassination of the Pakistani Minister for Minorities, Shahbaz Bhatti.

[That this House condemns the assassination of Shahbaz Bhatti, the Pakistani Minister for Minorities, who was the only Christian in the cabinet; notes that this comes only days after the government of Pakistan’s retention of a minorities representative in the new cabinet and the Ministry for Minorities Affairs as an independent ministry; recognises the significant advances made in the interests of minority rights and interfaith dialogue by the Federal Minister Shahbaz Bhatti through this ministry; expresses concern at the ongoing misuse of the provisions of section 295 of the Pakistan Penal Code, known as the blasphemy laws, and the threats posed to all who challenge this legislation; and urges the government of Pakistan to reconsider reviewing the blasphemy laws as a matter of urgency.]

After speaking with the British Pakistani Christian Association earlier this month, I tabled early-day motion 2807 to mark the anniversary of Mr Bhatti’s death and to continue to raise awareness of the plight of minority communities in Pakistan. Will the Leader of the House find time for a debate on that important issue?

[Sir George Young]

My hon. Friend refers to an appalling and cowardly assassination, which struck at the heart of democracy and freedom of expression in Pakistan. Alongside our European partners, we will continue to intervene on human rights issues in Pakistan, where we believe we can make a positive difference. We engage regularly with the Government of Pakistan on this particular matter, along with broader matters that raise the same issues.

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

Following the written statement on military afloat reach and sustainability—MARS—ships that was sneaked through Parliament and my debate on the matter on Monday night, may I ask the Leader of the House for a statement or a debate on the Floor of the House so that we can discuss grey ships and warlike ships and the Government’s policy on protecting the jobs of maritime workers?

[Sir George Young]

I know that the hon. Gentleman had an Adjournment debate earlier this week. If we had another debate, I am not sure whether the Government would be able to add to what the Minister of State, Department for Business, Innovation and Skills, my hon. Friend the Member for Hertford and Stortford (Mr Prisk) said in response to the hon. Gentleman. I will raise his concerns again with my hon. Friend and see whether there is anything that he can add to what he said earlier this week.

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

Work has started on a building project to create a new cancer care centre at Harrogate district hospital. It will be called the Sir Robert Ogden Macmillan centre and is named after a generous benefactor. Further funding has come from Macmillan Cancer Support and the local foundation trust. It will be a welcome addition to patient support in the area. May we have a debate on improving cancer care across our NHS?

[Sir George Young]

I applaud the generosity of Sir Robert Ogden in making those funds available. It is right that the building should be named after him. My hon. Friend will have read “Improving Outcomes: A Strategy for Cancer”, which was published in January last year. It outlines our commitment to improve outcomes for cancer patients and to save 5,000 additional lives every year by 2014-15. I understand that the new centre to which my hon. Friend referred is being funded jointly by Macmillan Cancer Support, the local NHS foundation trust and the donation. That is exactly the sort of progress that we want to see to enable us to hit our cancer targets.

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

My constituents in Cumbernauld, Kilsyth and Kirkintilloch were delighted to learn this week that the Olympic torch will be relayed through Cumbernauld on 13 June. That is particularly appropriate given that the British female handball captain hails from Cumbernauld. May we have a further debate on how we can ensure that everyone in the United Kingdom can get involved in these great Olympics? That is very important for the good of the country.

[Sir George Young]

We have just had questions to my colleagues at the Department for Culture, Media and Sport. I am not sure whether the hon. Gentleman was able to intervene in those exchanges. The issue of how we will ensure that the benefits of the Olympics are broadly shared throughout the country has been debated in recent exchanges and debates involving DCMS. I will see whether there is anything that we can say to the hon. Gentleman that impacts directly on his constituency. I hope that the handball captain leads her team to success.

[Jake Berry (Rossendale and Darwen) (Con)]

May I start by saying that I have given notice to the right hon. Gentleman to whom I will refer in this question? I join my hon. Friend the Member for Warrington South (David Mowat) in calling for a debate on the morally repugnant use of service companies by those in public life to avoid paying their fair share of tax. In that debate, can we look in particular at the tax arrangements of the Labour candidate for Mayor of London and the recent publication of the accounts for the Office of Gordon and Sarah Brown Ltd?

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

On a point of order, Mr Speaker.

[Mr Speaker]

The point of order will come after the business question. The hon. Gentleman should hold his horses. I am sure that he will.

[Sir George Young]

I hear what my hon. Friend says. We are, of course, having a debate on the Budget. My right hon. Friend the Chancellor made clear his views on tax evasion and what he called “aggressive tax avoidance”. I am sure that it would be in order to talk about the tax loopholes that are being closed by the Government during the Budget debate, as long as one remains within order.

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

May we have a Government statement to clear up the confusion about the cut to the top rate of income tax? A study published during the Budget suggests that it will cost the country billions of pounds if the Government’s assumptions are incorrect. If we are going to clear that up, perhaps the Leader of the House will also accept the suggestion of the shadow Leader of the House that he may wish to put in the Library a list of the Cabinet members who will benefit personally from this give-away, so that we can see from where the motivation for it might have come.

[Sir George Young]

This country has never adopted the practice that they have in the United States, whereby all those who stand for public office have to file their tax returns. If that is the hon. Gentleman’s proposition, I am sure that he can make the case during the Budget debate, but it is not our intention to introduce it. On the 50p tax rate, I just make the case that for 13 years, the Labour party did not introduce a 50p rate of tax. It left it to us, along with a letter saying that no money was left in the Treasury.

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

The Chancellor made the excellent announcement yesterday that Cardiff was to be included in the urban broadband fund. May we have a statement by the Secretary of State for Culture, Media and Sport on the details of the procurement and roll-out of that fund, to see whether neighbouring authorities can benefit from the investment in that area?

[Sir George Young]

There has just been an exchange on the Government’s broadband policy in Culture, Media and Sport questions, but I will follow up my hon. Friend’s question by asking the appropriate Minister to write to him to see to what extent companies and people outside the immediate area can benefit from the roll-out of broadband in Cardiff.

[Kevin Brennan (Cardiff West) (Lab)]

Further to the question asked by my hon. Friend the Member for Stalybridge and Hyde (Jonathan Reynolds), can we have a statement on the Cabinet and the higher rate of tax? The Twitter account of The Sun is reporting that friends of the Prime Minister say he pays the higher rate of taxation. We have not heard anything from friends of the Chancellor—or does he not have any left after mugging the nation’s grannies yesterday?

[Sir George Young]

Why should this outbreak of openness be confined to Members on the Government Benches? I hope that the hon. Gentleman will try to persuade all his friends in his party to be as open and transparent as he apparently wants us to be.

[Neil Carmichael (Stroud) (Con)]

Many constituencies such as mine have a large number of houses that are vulnerable to flooding. Can we find a way of ensuring that flood maps demonstrate and clearly indicate the impact of flood defences and natural defences when flooding risk assessments are made, so that home owners and insurers can make sensible judgments?

[Sir George Young]

My hon. Friend raises an important issue. Those maps can have a devastating effect on people who are trying to sell their houses, and it is important that they are up to date. He will know that the Government and the Association of British Insurers are committed to ensuring that flood insurance is available to everyone who needs it, and there is an ongoing programme of discussions with the insurers to ensure that we can achieve that objective. I will draw the issue of flood maps to the attention of my hon. Friends at the Department for Environment, Food and Rural Affairs, to ensure that the maps that are used are as accurate as possible and there is no collateral damage to people whose properties are not really at risk of being flooded.

[Ian Lavery (Wansbeck) (Lab)]

I have written to the Secretary of State for Business, Innovation and Skills and the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling), with regard to the urgent situation of the alarming unemployment statistics in my constituency. I asked for an urgent meeting, and one refused and the other said I would have to wait in excess of 30 days for a reply. Due to the urgency of the matter, will the Leader of the House make time to discuss unemployment rates in the north-east, and particularly in my constituency?

[Sir George Young]

The hon. Gentleman does a first-class job of championing the cause of those in his constituency who are out of work. Of course he is entitled to a response to the letter or questions that he sent to my colleagues, and I will do what I can to chase that up and ensure that he gets a prompt reply.

[Bob Blackman (Harrow East) (Con)]

Among the excellent measures announced in the Budget yesterday was £70 million of additional funding for London for the Growing Places fund, which will help Mayor Boris Johnson produce 200,000 new jobs over the next four years. That brings into sharp contrast the choices before Londoners on 3 May. May we have an urgent debate on those choices?

[Sir George Young]

I would welcome such a debate, but I am not sure I can find time for it out of the Government’s allocation in the remainder of this Session. We will be debating the Budget from now until Monday evening, and it would be perfectly in order for my hon. Friend to raise the matter at greater length in the debate and get a response about the £770 million of funding for the Growing Places fund, some of which has been allocated to London. The Mayor of London will complement that with his own resources, to give new opportunities to those who live in London who are looking for a job.

[Several hon. Members]

rose—

[Mr Speaker]

As usual, there is a lot of interest. I am keen to accommodate that interest, but we do now require extreme brevity—not preamble, but short, single-sentence questions, please.

[Paul Flynn (Newport West) (Lab)]

As the person who perpetrated the terrible atrocities in Toulouse claims to be a former al-Qaeda bomber who escaped with 500 others from Kandahar prison with the collusion of Karzai and his army and jailers, may we now debate why we tell our brave soldiers to dismantle bombs? The only reason is so that the perpetrators can be identified and jailed. As that is now a futile occupation, because the perpetrators escape almost at will, should we not debate the issue now and allow our soldiers to destroy bombs at distance?

[Mr Speaker]

I think that sentence contained a lot of commas and semi-colons, but I do not recommend that it be imitated by other colleagues.

[Sir George Young]

I say to the hon. Gentleman, who has pursued this issue with dogged ferocity, that there will be questions to my right hon. Friend the Secretary of State for Defence on Monday, which might provide him with an opportunity to pursue it with Ministers who have the answers at their fingertips.

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

May we have a statement or a debate on the Government’s plans for gift aid? A number of charities are finding it difficult to access the gift aid that they are due.

[Sir George Young]

I commend my hon. Friend for the question that he asked, I think, yesterday, and I commend the work of the air ambulances. We are committed to an online filing system for charities to claim gift aid, which will come online in 2012-13. I hope that will make it easier for charities to reclaim the money that they are owed and drive up the resources available for the causes that they promote in his constituency and others.

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

Can we please have a debate on the Government’s plans to introduce VAT on holiday caravans? Their impact assessment states that that will probably result in a 30% reduction in demand for holiday caravans, which will have a particular impact in Hull, where we manufacture a lot of caravans. It will also have an impact on families who want to go on holiday and spend a week in a rented caravan, because hire prices will go up.

[Sir George Young]

If such a measure requires legislation, the Finance Bill has its Second Reading when we come back and there may be an opportunity for the hon. Lady to raise the matter.

[Jeremy Lefroy (Stafford) (Con)]

May we have a debate on the importance of the teaching of foreign languages to export performance, so that we can ensure that young people such as those who participate in the excellent Stafford and Stone young enterprise programme can spearhead the UK’s export growth in future?

[Sir George Young]

I very much hope that schools and colleges give priority to foreign languages that will help us win exports in competitive world markets. I commend the work in my hon. Friend’s constituency, where that is clearly seen as a priority.

[Valerie Vaz (Walsall South) (Lab)]

May we have an urgent debate on how we can extend the Freedom of Information Act to commissioning support groups? Under the Health and Social Care Bill they will not be statutory bodies, so no one will be able to get access to the information that they have, and they are set to be privatised by 2016. How will the public find out information that was previously available from primary care trusts but will not be available from commissioning support groups?

[Sir George Young]

The hon. Lady raises a good question. There will be Health questions on Tuesday, when there may be opportunity for her to ask it, but I will in any event raise it with the Secretary of State for Health and ask him to write to her, to ensure that information that should be in the public domain remains so.

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

Many of my younger constituents will be delighted with the news about the enterprise loans announced in yesterday’s Budget, which will help them set up their own businesses. May we have a debate on how we can build on such measures to help our young entrepreneurs?

[Sir George Young]

We can indeed have such a debate, and it will commence when business questions finish. I am delighted to hear that the enterprise loans scheme is alive and well in my hon. Friend’s constituency, with which I have some acquaintance. We all have a role to play in making information about it available in our constituencies, so that young people can get access to those loans, build their own businesses and help build a thriving community in west London.

[Matthew Hancock (West Suffolk) (Con)]

We on the Government Benches care deeply about tackling tax avoidance, so when will the legislation come in to tackle the offshore gambling tax loophole? That was announced in the Budget yesterday and is vital for many of my constituents.

[Sir George Young]

I cannot anticipate what may or may not be in the Queen’s Speech on 9 May, but my hon. Friend is right that measures were announced that need legislation. As Leader of the House, I can say that they are on my radar.

[Stephen Hammond (Wimbledon) (Con)]

In the Budget yesterday, £130 million extra for London’s infrastructure was announced. May we have a debate on the coalition’s continuing commitment, combined with that of the Mayor of London, to the continual improvement of London’s infrastructure?

[Sir George Young]

As my hon. Friend knows, Crossrail is under way, and it would be wholly in order for him to develop that point at greater length in the Budget debate—perhaps tomorrow, if he is around. The Minister who replies to that debate will set out the coalition Government’s view on infrastructure. My hon. Friend will also have seen what the Prime Minister said in his speech on Monday about developing new models for financing infrastructure in this country.

[Chris Williamson (Derby North) (Lab)]

Can we have an urgent debate on the implications of the Government’s decision to cut the Environment Agency’s budget for flood defence work, because that is having a significant impact on my constituents in Darley Abbey and Chester Green, who are potentially exposed to devastating flooding and escalating—indeed, rocketing—home insurance bills?

[Sir George Young]

As the hon. Gentleman will know, the Government have had to take difficult decisions in order to get expenditure back under control, but I will pursue the issue he raises through the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Newbury (Richard Benyon), and see whether the Environment Agency, which might be the funding body, has resources available to tackle it.

[Karen Bradley (Staffordshire Moorlands) (Con)]

The town of Leek—spelled with two Es rather than an E and an A—has been at the forefront of the arts and crafts movement and was a centre for silk printing for more than 100 years. However, sadly, that silk industry died out about 20 years ago. I am therefore delighted to learn that British clothes maker, Bonsoir of London, has started printing silk in Leek again. Will the Leader of the House find time for a debate on how we promote economic growth and prosperity by reviving traditional trades such as silk printing in Leek?

[Sir George Young]

I am delighted to hear of the revival of that industry in my hon. Friend’s constituency. It will be possible to raise that during the Budget debate. The Government have launched a number of programmes to assist manufacturing, including a £75 million programme to help small and medium-sized enterprises to take on apprenticeships. We have also set up the launch of a series of high-value manufacturing technology centres and a programme of manufacturing fellowships, and, of course, we have the regional growth fund and other initiatives. The Government recognise the challenge to which my hon. Friend refers, and a number of funding sources are available to promote progress.

[Glyn Davies (Montgomeryshire) (Con)]

We all depend on the regional media to spread public understanding of serious politics and activities in the House, and we must all be concerned when a reduction in regional media coverage is threatened. In Wales, we are particularly dependent on BBC Wales. Will the Leader of the House arrange an early debate on the plans of our regional media in the nations and regions of the UK to ensure that we have proper, serious coverage of politics?

[Sir George Young]

I agree entirely with what my hon. Friend says on the importance of regional media. We have just had Department for Culture, Media and Sport questions, when there might have been an opportunity to raise that. We have put the BBC’s funding on a more stable basis for the foreseeable future, and I will ensure that the BBC hears what my hon. Friend says and see whether appropriate resources are being allocated to the regional media that cover his constituency.

[Mr Speaker]

Just before we move to the next business, there is one matter with which I should like to deal. In the course of business questions, the hon. Member for Rossendale and Darwen (Jake Berry) prefaced his question by indicating that he had notified the right hon. Member to whom he was about to refer in advance of coming to the Chamber. I simply want to say this to the hon. Gentleman and the House: advance notification to a Member of an intention to refer to that Member is, of itself, not sufficient; much depends on what is then said. I say for the benefit of the hon. Gentleman and the House that where an accusation or implication of possible improper conduct is made, that must be done either by a reference to the Parliamentary Commissioner for Standards or upon a substantive motion. It should not be done in the course of a question. That was wrong, and a discourtesy—unintentional, I am sure—to the House. Therefore, I invite the hon. Member for Rossendale and Darwen to apologise to the House for that discourtesy. He should now rise from his seat and apologise for that discourtesy, which I accept and am sure was unintentional.

[Jake Berry]

Mr Speaker, I apologise for an unintentional discourtesy to the House.

[Mr Speaker]

I am grateful to the hon. Gentleman for his apology. I think that deals with the matter.

Ways and Means

Thursday 22nd March 2012 Commons Chamber

Budget Resolutions and Economic Situation

Thursday 22nd March 2012 Commons Chamber

Amendment of the Law

Thursday 22nd March 2012 Commons Chamber

Debate resumed (Order, 21 March).

Question again proposed,

(1) That it is expedient to amend the law with respect to the National Debt and the

public revenue and to make further provision in connection with finance.

(2) This Resolution does not extend to the making of any amendment with respect

to value added tax so as to provide—

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

(b) for refunding an amount of tax,

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

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

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

12:49

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

The British economy is stagnating, unemployment is rising month by month, the Government’s deficit reduction plans have gone wildly off track, middle and lower-income families and pensioners are facing rising petrol prices, rising energy bills and falling living standards—and what did the Chancellor do in his Budget yesterday? Did he admit that his economic plan has failed? Did he act to kick-start the stalled recovery? Did he give any hope to young people facing long-term unemployment? Did he set out any vision of how, over the next 20 years, Britain can compete in the world and win the investment and skilled jobs we need? Did he ease the pressure on families by cutting fuel duty, or by cancelling perverse and unfair cuts to tax credits and child benefit? No. The centrepiece of the Chancellor’s Budget, his top priority, and the political imperative for this oh so political Chancellor, was to spend more than £3 billion next year cutting the top rate of income tax for existing top rate taxpayers. People earning more than £150,000 a year—300,000 of them—are getting an average tax cut of £10,000 a year. How out of touch can he get?

To add insult to injury, the Chancellor sprung another surprise tax rise by freezing the age-related personal allowance for 4.5 million pensioners and abolishing it entirely for soon-to-be pensioners. People on modest incomes who have worked hard and saved hard all their lives will be hit by the Chancellor’s tax grab on pensioners while he gives a £40,000 tax cut to 14,000 millionaires. What can we say about that?

[Andrea Leadsom (South Northamptonshire) (Con)]

rose—

[Michael Fallon (Sevenoaks) (Con)]

Will the right hon. Gentleman give way?

[Ed Balls]

I will in a moment.

Let me say to the Chancellor today: some of the electorate he really cares about—the selectorate in his own Conservative party—may be cheering, although after this morning’s headlines, I am not so sure.

[Andrea Leadsom]

Will the right hon. Gentleman give way?

[Ed Balls]

I will in a second—I look forward to it.

As the Financial Times reports this morning:

“Some Tory backbenchers offered support for the measure”—

on pensioners—

“although they refused to be identified for fear of alienating their elderly constituents.”

Perhaps in a second some of those Conservative Back Benchers will break cover and back the pensioners tax grab in the Budget, but they are right to be worried, because all across the country, the real electorate will be thinking, “A tax cut for millionaires, paid for by millions of families and pensioners across this country? Same old Tories: looking after their friends while families and pensioners pay the price.”

[Andrea Leadsom]

Will the right hon. Gentleman give way?

[Ed Balls]

I will happily give way to the hon. Lady. Perhaps on behalf of the thousands of pensioners in her constituency who will lose from the tax grab, she will tell us whether she supports the Chancellor.

[Andrea Leadsom]

I am grateful to the shadow Chancellor. Is he as delighted as I am that we will be introducing within the next couple of years a single, unmeans-tested pension at a significantly higher rate than the current one?

[Ed Balls]

We will have to wait to see the details. There will be some winners and some losers, but the one thing that we can categorically confirm today is that thousands of pensioners in the hon. Lady’s constituency will lose up to £300 a year as a result of yesterday’s Budget. She did not say whether she supported that—hardly a clarion call of support for the Chancellor’s pensions tax grab.

[Michael Fallon]

Could the shadow Chancellor make it absolutely clear—yes or no—whether he would restore the age-related allowance if he came to power?

[Ed Balls]

I will make it absolutely clear: we will vote against the change in the Budget debates and I hope that he will join us in the Lobby. We will vote against it, but the Chancellor knows very well that I will not go through every tax rate, relief, allowance or spending commitment and make commitments for three years’ time. But if the election were called tomorrow, our manifesto would be clear—we would rescind the measure and the Government would go ahead with it. That is the difference.

[Lindsay Roy (Glenrothes) (Lab)]

I am a relative newcomer to the House, so can my right hon. Friend explain what he means when he says, “The same old Tories”?

[Ed Balls]

The same old Tories who thought in 1988 that it was right to cut the top rate of tax for the richest people in our country and who now think that having a second Lawsonian Budget is a good idea. It is important to remember that after hubris comes nemesis. It did not take long for Nigel Lawson to find out the error of his ways.

We set two tests for this Budget. First, does it kick-start the recovery and boost growth and jobs? Secondly, is it fair? The Chancellor has failed them decisively. On growth and jobs, I remind the House what the Chancellor said a year ago in his Budget speech:

“we will create jobs and support families. We have put fuel into the tank of the British economy.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]

Since then, our economy has ground to a halt and thousands of people have lost their jobs.

I remind the Chancellor of what he said in August, when Parliament was recalled:

“Those who spent the whole of the past year telling us to follow the American example…need to answer this simple question: why has the US economy grown more slowly than the UK economy”?—[Official Report, 11 August 2011; Vol. 531, c. 1108.]

What has happened since? Spurred on by the Obama stimulus, the US economy has been growing and unemployment falling. Here in Britain, our economy has flatlined and unemployment has been rising month after month. It does not look much of a safe haven to me.

What did we get in the Budget? We got a gaping hole when we so badly needed action to kick-start the recovery—Labour’s five-point plan for jobs and growth. We will not get the deficit down unless we have a plan for jobs and growth to get our economy moving and get people off the dole. When we needed a vision for the future, a modern industrial policy, what did we get? Roads privatisation and a credit-easing scheme that even the Office for Budget Responsibility says is not large enough to have any material impact.

Just look at the verdict from the OBR. The Chancellor claims it was a Budget for growth. But the OBR has downgraded its forecast for growth next year. What did it say about the ragbag of measures he announced? It said:

“We have made no other material adjustments to the economy forecast as a result of Budget 2012 policy announcements.”

It will have no impact as a growth plan.

The Chancellor claimed that it was a Budget for jobs, but not only does the OBR expect to see unemployment rising, it has increased its forecast for unemployment compared to November by 100,000—100,000 more people out of work at the end of the forecast period. As for the budget deficit, the OBR forecast confirms that the Chancellor is now set to borrow £150 billion more in this Parliament compared to his forecast at the time of the spending review. So much for “expansionary fiscal contraction”. To put it politely, that is oxymoronic. In plain language, it is just moronic.

On fairness, the Chancellor has failed too. Twenty-four hours after the Chancellor rose in the House, the full reality of the Budget is sinking in. At a time when fuel and food bills are going up for families on middle and low incomes, the Chancellor has added to them all. Whatever he says about the personal tax allowance, a family with children earning £20,000 will lose £253 a year from April. Nearly 4.5 million pensioners—[Interruption.] I am sorry for the stammer. Nearly 4.5 million pensioners who pay income tax will lose an average of £83 next April, and people turning 65 next year will lose up to £322.

At the very same time, the Budget gave a tax cut to the richest people in our country. The money could have been used to cut fuel duty or reverse perverse cuts to tax credits. It could have been used to put police officers on the beat. Instead, the Chancellor chose to cut taxes for the 300,000 top rate taxpayers.

[Stephen Hammond (Wimbledon) (Con)]

I must have missed it, but for the sake of clarity does the shadow Chancellor intend to put the top rate of tax back up to 50%?

[Ed Balls]

I am just coming to the issue of the top rate of tax. The Chancellor tries to claim that the top rate of tax does not raise any money, and that he is raising in stamp duty and tax avoidance five times the cost of cutting the top rate of tax. But his own HMRC report makes the true position clear, in table A2 on page 51. It says that next year he will give £3.01 billion in tax cuts to existing and legitimate top rate taxpayers, paid more than £150,000. That is a fact. That is six times more in tax cuts to the richest than he is raising in the stamp duty and tax avoidance measures. He is gambling that this will then bring in £2.9 billion in new tax revenues from people currently not paying tax, without any hard evidence to justify that claim—an estimate that the OBR says in the Budget documentation is “highly uncertain” and could lead to a much higher cost.

The head of the OBR said last night:

“This is a judgement based on not even a full year’s data based in terms of how people have responded to the 50p rate, in particular in terms of those self assessment tax-payers.

The costing of these sorts of changes is by no means unarguable”.

Just a few weeks ago, the Institute for Fiscal Studies said:

“If the future of the 50p rate is to be determined on the basis of evidence...then Budget 2012 will be too soon to form a robust judgement.”

Another expert has said on these matters:

“Some believe that if taxes on the wealthy are cut, new revenue will miraculously appear. I think their reasoning is this—all those British billionaires who demonstrate their patriotism by hiding from the taxman in Monaco or some Caribbean bolt-hole will rush back to pay more tax but at a lower rate. Pull the other one.”

That was the Business Secretary speaking to the Liberal Democrat conference last September. Pull the other one indeed. A £3 billion tax cut giving £10,000 each to 300,000 taxpayers and we are supposed to believe that all these people in tax havens are suddenly going to say, “I want to pay more tax.” Let me say to the Chancellor, “Pull the other one, it’s got bells on.”

[Harriett Baldwin (West Worcestershire) (Con)]

May I therefore assume that a 50p tax rate will be in the shadow Chancellor’s next manifesto?

[Ed Balls]

There will be a vote next week, and we will vote against the 50p change. It is the wrong tax cut at the wrong time. I have always said that no tax rate is set in stone, but how can anyone believe it is right to take tax credits from working families, child benefit from middle-income families and more tax from pensioners, but give £10,000, on average, to every top rate taxpayer in the country? If there were a general election tomorrow, our manifesto would state clearly that we would reverse it. That is the clearest answer I will give.

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

Does my right hon. Friend think it would be helpful, ahead of next week’s debate, for the Prime Minister to place in the Library a list of which members of the Government will benefit from that cut in the top rate?

[Ed Balls]

I think we should leave people’s trust funds out of this. I will come back to that in a moment, but I will not press the Government on it.

The Chancellor took a reckless gamble on jobs and the economy, the Prime Minister and the Chancellor have taken a reckless gamble on NHS reform and police cuts, and now the Chancellor is taking a reckless gamble with the fairness of our tax system by handing out massive tax cuts to legitimate taxpayers in the hope—based on no evidence—that the cuts will pay for themselves by somehow bringing all the tax avoiders back into the fold. That is a fact.

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

Will the right hon. Gentleman confirm that under the previous Labour Government the 50p tax rate applied for just 37 miserable days and that for the rest of the time their tax on the highest income earners was lower than under the coalition Government?

[Ed Balls]

In reply, let me quote what the Chancellor said in October 2010:

“The public must know that the burden is being fairly shared. That's why I said last year: we are all in this together. And I am clear…that those with the most, need to pay more. That is why… I have stuck with the 50p tax”—

the Chancellor of the Exchequer, Conservative party conference, October 2010. Eighteen months on, what has changed? The public still want the burden to be fairly shared, but far from keeping the top rate of tax, he is ditching it.

Let me read another quote. In October 2009, the Chancellor said:

“we could not even think of abolishing the 50p rate on the rich while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs. I think we can all agree that would be grossly unfair.”

We can all agree on that. What has changed? What is the truth? It was all a con. The mask has slipped. To 200,000 families struggling on less than £17,000 a year, he says, “I’m going to cut your tax credits to make you work harder”, but to the highest earners, he says, “I’m going to cut your taxes because if I don’t, you won’t work hard and pay your taxes.” That is it. To make the poor work harder, the Chancellor makes them poorer. To make the rich work harder, he makes them richer. Does that not tell us everything we need to know about the Chancellor? He is cutting tax credits for the poor, cutting child benefit in the middle, cutting tax help for pensioners and cutting taxes at the top. That is his priority.

[Christopher Pincher (Tamworth) (Con)]

It is apposite that the shadow Chancellor used the word “con”. If he believes that the top rate of tax is about economics, not politics, why, in 13 long years, when they had the money, time and majorities, did the Labour Government not introduce that top rate of tax?

[Ed Balls]

We all agree that, after the global financial crisis, tough choices need to be made on tax spending and pay to get the deficit down, and we all agree that it needs to be done fairly. Two years ago, the Chancellor said that he had a plan—with tax rises and spending cuts, the economy would grow and unemployment would fall—but he has had to come back to the House and announce further tax rises because his plan is not working. But who is paying more tax? The pensioners. And who is getting a tax cut? The millionaires. That is the reality.

The Liberal Democrats call this a Robin Hood Budget, but they have got it the wrong way around. Robin Hood took from the rich to give to the poor, but the Budget takes from lower and middle-income families to give to the rich. Do they not see? The Chancellor is not Robin Hood; he is the Sheriff of Nottingham. As for jobs and growth, he could not give a Friar Tuck. As for Maid Marian—trapped in the castle, desperate to escape—we all feel sorry for the Business Secretary, and not just because, as a result of the pensions tax grab, he is probably the only member of this millionaire Cabinet who will be not better off but worse off as a result of the Budget—possibly with the Justice Secretary as well. I am not sure. But he cannot say he was not warned.

[Chris Skidmore (Kingswood) (Con)]

I would be interested to know whether the shadow Chancellor has actually read the Budget and chart B5, which shows that the effect is worst on the top quintile? If he could be bothered to look at that and read the Budget, he might want to come back and change his mind.

[Ed Balls]

The hon. Gentleman should have read the small print. It is fine for him to accuse me of not having read the Budget, but is the effect of the 50p tax cut in that chart? I think not. I have read it. He has not. It is not there. If it were, the benefits would be off the scale.

After that disastrous and woeful intervention, let me return to the Business Secretary. The Business Secretary cannot say that he was not warned. In fact, he did the warning. On deficit reduction, before the election, he said:

“The IFS is right to point out that cutting spending further this year would be extremely dangerous given the weakness of the economy.”

He also said that

“it’s very difficult to believe that large sudden cuts would do anything other than a great deal of harm”.

He was right in his analysis of the dangers of going too far, too fast, and he is right today. In his devastating leaked letter to the Prime Minister, he said that the Government were without a

“compelling vision of where the country is heading beyond sorting out the fiscal mess”.

So why has he signed up to this completely vision-free Budget?

[Andrea Leadsom]

Will the right hon. Gentleman give way?

[Ed Balls]

No.

I am going to read again what the Business Secretary said on the top rate of tax, because it is such a great quote:

“Some believe that if taxes on the wealthy are cut, new revenue will miraculously appear. I think their reasoning is this—all those British billionaires who demonstrate their patriotism by hiding from the taxman in Monaco or some Caribbean bolt-hole will rush back to pay more tax but at a lower rate. Pull the other one.”

I have to ask him then: why is he going to stand here today and defend a Budget that tries to do just that?

We all know what the Deputy Prime Minister said last September. Let me tell the House—if anyone is interested in what he says. He said:

“I do not believe that the priority at a time like this is to give a tax cut to a tiny, tiny number of people who are much, much better off than anybody else.”

Let us be honest. None of us is remotely surprised that the Deputy Prime Minister has completely capitulated, just as he did on VAT, tuition fees and the NHS, but the Business Secretary is another matter. He knows that our proposal to kick-start the recovery is right because he told the Chancellor to do it. He knows that our proposal to set up a business investment bank is right because he told the Prime Minister to do it. And he knows that cutting the top rate of tax now is the wrong priority, deeply unfair and a betrayal of his and his party’s values and progressive tradition.

We all know all we need to know about the Deputy Prime Minister, but we all had—and have—higher hopes for the Business Secretary. I have to say to him—and to his colleagues—that I understand the incredibly difficult position he is now in, but I have to ask him: what on earth would the Vince Cable of five years ago think of what he is doing now? As the sketch writer in The Independent wrote last week:

“Vince has been so hammered by events…It isn’t clear any more that he could ‘press the nuclear button’ hard enough to make it go off.”

Prove us all wrong, Vince—prove us all wrong.

The Chancellor used to say, “We’re all in this together.” Not any more. In tough times, the choices that this Tory-led Government are making tell us everything we need to know about them and how totally out of touch they are with what life is like in our country. Here are the facts. The Chancellor’s plan has failed. Trying to raise taxes and cut spending too far and too fast has backfired. The country needs a Budget for growth and jobs. Instead, we got more of the same, and with his tax cut for millionaires, he is piling insult upon injury for millions of families and pensioners across this country.

13:21

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

The central issue on which this Budget—and, indeed, the coalition Government—will be judged is how we cope with the fallout from the massive financial collapse and the destruction of wealth, with the loss of approximately 10% of our national income, and put the economy back on a sustainable path.

The shadow Chancellor made some very kind and considerate remarks, and I thank him for his concern about my personal finances. Perhaps I can take him back to a toe-curling interview he gave a few days ago, when he described his two-decade relationship with his former boss, mentor, guide and friend as “unbelievably debilitating”. That is relevant to this debate, because it gets to the heart of the problem of who is responsible for the legacy that we are having to manage. We inherited not merely a large fiscal deficit, but the largest in the G20 and the largest amount of household indebtedness of any developed country.

We inherited an economy in which the share of the banking sector—the banking assets—had doubled in Labour’s period of government, to become the largest of any major economy, and in which, simultaneously, the share of manufacturing had contracted by almost a half, from 18% to 10%. We have heard a long speech about equality and fairness, but we also inherited an economy in which, throughout Labour’s period of government, the share of income of the top 1% and the top 10% of the population inexorably rose, and in which wealth became progressively more unequal.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Vince Cable]

I will take the intervention in a moment.

A narrative has developed in which one man was responsible for this fiasco, but it was a genuine team effort, and the shadow Chancellor was an absolutely key member of that team. Being lectured now on how to manage an economy is a little bit like being given a talk on seamanship by the captain of the Costa Concordia—another believer in light-touch steering.

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

The Secretary of State talked earlier about indebtedness. Can he share with the House how much of the debt was down to the previous Government having supported the banks and the finance houses to get through the potential economic crisis?

[Vince Cable]

It was actually on the back of an uncontrolled housing boom. Personal indebtedness as a share of people’s incomes doubled in the period of the last Government. Of course the process of deregulation beforehand did not help, but the core increase—the fundamental problem of indebtedness—arose when the shadow Chancellor was a key decision maker in that Government.

I want to talk about the Government’s basic economic strategy, but before I do, I want to address the issue of unfairness and distribution. There were two allegations. One was that the policies have had a damaging effect on the so-called squeezed middle; the other was about the millionaires. Let me deal with each in turn. On the squeezed middle, if hon. Members look at the distribution charts, they will see that the squeezed middle has been squeezed a great deal less than the squeezed top. The major cash impact of the Budget was on low and middle-income families, as a result of lifting the threshold to over £9,200, with £220 for more than 20 million taxpayers. That was right, not just because of the fairness involved, but because it gives a significant economic stimulus, and at the margin—the 1 million people being lifted out of tax—it is a major incentive to work. The policy also contrasts favourably with the strategy that the Labour Government adopted in office—which we discussed many times—of using tax credits. By increasing tax allowances in the way we have, we are giving people the freedom to choose how to spend their own money, not taking it from them and then giving it back to them, through a complex, means-tested system, with high marginal rates of withdrawal.

[Sheila Gilmore]

Is the Secretary of State disappointed that he lost the battle to rescind the cuts to working tax credit for couples working 16 hours, given that they do not benefit at all from raising the tax threshold, because they already do not pay tax? Did he lose that battle or did he not fight it?

[Vince Cable]

The shift from a system based on tax credits to one based on tax allowances obviously benefits the middle and low-income population as a whole. The impact on particular groups depends on a variety of things, including the minimum wage, which we have just uprated, and the complex interaction of tax and tax credits.

However, let me turn to the point about pensioner income. I find it quite extraordinary to hear the shadow Chancellor expressing such alarm about the impact of the Budget on pensioners. I do not know whether he has looked at the scorecard, but it is clear. In 2012-13, the effect of the increase in the basic state pension and the pension credit minimum income guarantee will be to transfer £1.75 billion to pensioners. The impact of the changes on age-related allowances is £360 million—one fifth of the additional funding going to pensioners as a consequence of this Budget. When we look at the pensioner population, we of course see big differences. There are 5 million pensioners who do not pay tax, many of whom are poor, and who are not, of course, affected by the changes at all. There is a small group of people—frankly, my contemporaries—who have high retirement incomes and considerable asset wealth, and it is right in principle that they should pay a bit more. There is a group in between, as the shadow Chancellor rightly said, of people who are not wealthy and do not have particularly high incomes, but who could be affected to a limited extent, as a result of inflation eroding the value of the allowances—inflation is currently estimated at 2.5%. Those people will benefit enormously from the increase in the basic pension.

Let us just remind ourselves what is happening. We have an increase of £5.30 in the basic state pension for a single person. On top of the increase last year, we are talking about a £10 increase in the basic state pension, as a result of the protections that this Government have introduced. For many years, the pension steadily fell behind earnings as a result of de-linking, and, despite numerous promises, the previous Government did absolutely nothing about the problem. More and more pensioners were sucked into means-testing. This Government have corrected that problem. We have a triple lock system and, as a result of that, and of this Budget, the vast majority of pensioners on low and middle incomes will be considerably better off than they were before.

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

What does the Secretary of State have to say to the Institute for Fiscal Studies, which has today described the Budget as a “hotch-potch of reforms” that are risky because they might be “less fiscally neutral” than the Chancellor is claiming?

[Vince Cable]

I am sorry; I do not follow the logic of the question. The Budget is of course fiscally neutral. I have just quoted figures, which the Office for Budget Responsibility has validated, which show that pensioners as a whole will gain five times as much from the increase in the pension and from pension tax credits as from the change in allowances.

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

What will the Secretary of State say to people who have saved into a pension all their working lives and who have only modest additional pension provision to rely on, but who will now, completely unexpectedly, see the reward for making that effort to save wiped away?

[Vince Cable]

There is a genuine issue about pensioners with limited income, much of it savings income, which has been progressively ignored over the years. I have fought very hard in Parliament on the issue of annuities reform, as have many colleagues, particularly on the Government Benches. Many of the people the hon. Lady describes are annuitants who have been severely squeezed by the very low interest rates. Despite numerous appeals to the previous Government, absolutely nothing was done about annuity reform. We have made an absolute commitment to end compulsory annuitisation, which will offer far more practical help than any of the things that she and her colleagues are describing.

Let me turn to these millionaires. I agree with the Chancellor that the decision to cut the top rate of tax from 50p to 45p was economically the rational thing to do. I want to focus the debate not on symbols but on substance. I share the emotional reaction of the many people who are disgusted to hear pampered financiers whinging about their taxes. On an emotional level, nobody can sympathise with that. However, we have to deal with the practical realities that were burned on my consciousness as a result of sitting in my place on the Opposition Benches for 13 years, exchanging views on the top rate of tax with successive Labour Ministers from Blair to Brown to Balls. Year after year, they would tell the Liberal Democrats that it was economically stupid to raise the top rate of tax above 40%. That was their message, year after year. Then, a few weeks before the end of their Government—I think it was 57 days—they introduced the 50p rate in order to create a political dividing line. That decision had nothing whatever to do with economics. The point that they had been making over all those years was that raising the top rate in that way would raise relatively little revenue.

Despite the casuistry of the shadow Chancellor’s intervention a few moments ago, in trying to argue that vast sums of money had been sacrificed, line 3 of the scorecard makes it absolutely clear that we are talking about a revenue loss of £100 million a year. That figure has been endorsed by the Office for Budget Responsibility. The changes that have been introduced in the Budget, including increased taxation of high-value property, plugging loopholes and much tougher anti-avoidance rules, will bring in at least five times that amount.

[Ed Balls]

The HMRC report states that, in 2013-14, the static cost—that is, the cost to existing top rate taxpayers—will be £3 billion, rising to £3.35 billion, then £3.7 billion and £4.2 billion. It then states that that will be offset by a behavioural impact of £2.9 billion, £3.2 billion, £3.6 billion and £4 billion, which I think is heroic. The document states that behavioural responses are often “highly uncertain”, and the Business Secretary himself said that such assumptions were utter nonsense. He said, “Pull the other one!” Is he now saying, “Mea culpa—I got it totally wrong”?

[Vince Cable]

I am just trying to deal with the facts. I believe in evidence-based decision making. The information in the Budget document, which has been validated as the best central estimate by Robert Chote of the OBR, suggests that we are talking about a revenue loss of £100 million. I think that the right hon. Gentleman is fundamentally underestimating the financial significance of something that happened on an epic scale when his Government moved on the top rate, which involved simply switching from one year to another. The underlying impact on revenue has been independently estimated at £100 million.

[Ed Balls]

The document from HMRC makes it absolutely clear in section A.19 that that is not HMRC’s view but the Government’s view. It was a ministerial decision on those estimates. But that does not take away from the fact that a £3 billion cost—£10,000 on average for top rate taxpayers—will be offset by a behavioural impact that is huge and, in the Business Secretary’s own words, absolute nonsense. Let us deal in the complexity of the facts, not the simplistic nonsense that the Chancellor told the House yesterday. Does the Business Secretary, with his integrity, look at those numbers—£2.9 billion, £3.2 billion, £3.6 billion and £4 billion—and say, “Yup, I agree”?

[Vince Cable]

I think we are talking about integrity and statistics. Of course there has been a big change under this Government, compared with their predecessor. The numbers that the shadow Chancellor used to use were his own numbers. The numbers we are quoting here are independently verified by the Office for Budget Responsibility. We will analyse the underlying assumptions in those figures. The figures in the Budget document are absolutely unambiguous and they have been endorsed by an independent assessor—something that the right hon. Gentleman was never used to when he was in government—which confirms the value of the numbers that we have described.

[George Freeman (Mid Norfolk) (Con)]

Is not the shadow Chancellor’s knockabout class warfare much more to do with appeasing Labour’s union paymasters? The truth is that all the evidence shows that a competitive personal and corporate tax rate is a powerful driver of entrepreneurship. We proved in the 1980s, when we last had to dismantle Labour’s tax time bomb, that lower marginal rates of tax increased revenue. The announcement today from GlaxoSmithKline of inward investment in this country is a sign that this is working.

[Vince Cable]

It is certainly true. My hon. Friend’s central point, which was made very effectively by the Labour Government when they were in office, is that in a highly mobile world, we have to take account of marginal rates of tax in comparable countries. The current top rate of marginal tax in Canada, Australia, France and Germany is around 45%, and that is the level to which we have moved.

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

Does the Secretary of State acknowledge that business leaders, who will benefit from the tax cut, said yesterday that the priority should have been to cut taxes for those on low and middle incomes in order to stimulate consumer spending? Does he agree that that should have been the priority, rather than cutting the 50% rate?

[Vince Cable]

I do not know where the hon. Lady has been for the past 24 hours. The central feature of the Budget was a very large tax cut for exactly the group of people she describes, and it will have exactly the consequences that she describes.

Let me get back to the core issue, which exercises me and the shadow Chancellor. The basic economic strategy of the Government is to get back to a stable, sustainable form of economic growth. I want to address head-on his central criticism, which he has made many times. It can be summarised in the phrase “too much, too fast”. This Government have a deficit reduction programme that was developed following the autumn statement, and it involves removing the structural deficit over a period of six years.

The Darling plan, which the last Government set out, involved a deficit elimination programme of seven years. What I am not clear about, particularly in view of the stridency of the shadow Chancellor’s views, is: what is the Balls plan? Is it for seven years, eight, 10, 20 or never? What is the alternative speed of deficit reduction that the Opposition are urging on us?

We are acting, successfully, on good advice. A few weeks ago, the head of the International Monetary Fund, Christine Lagarde said:

“Those countries that have fiscal space, and that can slow down their fiscal consolidation efforts are very few, and I’m afraid Britain is not in that particular group.”

That is because of the sheer scale of the structural deficit that we inherited.

[Ed Balls]

rose—

[Vince Cable]

I will give way in a moment.

The CBI, quoted in evidence by the Opposition, was equally clear, as reflected in its view that we cannot afford to slow down the austerity programme. That is what authoritative people have to say about “too much, too fast”.

[Ed Balls]

The Business Secretary is a former chief economist. He read out a quote from the head of the International Monetary Fund. On the previous day, the chief economist of the IMF said exactly the opposite—that if growth was “undershooting”, a country like Britain should

“slow the pace of deficit reduction”.

Is the Business Secretary really saying that he is ignoring the advice of Olivier Blanchard, the chief economist of the IMF? I would have thought that the right hon. Gentleman would have recognised Mr Blanchard’s economic credentials.

[Vince Cable]

I think Mr Blanchard is very firmly on record as endorsing the strategy that we have adopted.

There is, of course, a fundamental dilemma, which any Government in this situation would face. If a deficit is cut very fast, it clearly has an impact on demand; and if it is cut too slowly, we lose the confidence of international creditors and markets. That is what we have not done. Unlike many eurozone countries that are now introducing budgets in panic and under pressure, we have introduced a politically and financially stable approach to deficit reduction. The underlying theme has to be one of financial discipline.

I cannot resist quoting an excellent statement of what this Government are about, and of what any Government should be about. It says that

“we must ensure we pass the test of fiscal credibility. If we don’t get this right, it doesn’t matter what we say about anything else.”

That was the shadow Chief Secretary, the hon. Member for Leeds West (Rachel Reeves). She is absolutely right and has brought fiscal rigour to the Opposition Front Bench for the first time. I just wonder what kind of response she has made privately to some of the commitments that the shadow Chancellor, and indeed the Leader of the Opposition, have been making in the last few weeks. They have been promising to get rid of the fuel duty changes, child benefit changes, child tax credit changes and the changes to public sector pay. I think the total volume of commitments is something in the order of £30 billion. Before we proceed any further with a debate on the Budget, we need to have absolute clarity about which of those measures the Opposition are committed to and to which they are not—and if they are committed, we need to know what else they are going to cut to make way for them.

Let me summarise where we as a Government are proceeding. Unlike many other countries in Europe, we have not introduced our Budget in an environment of panic or under pressure from financial markets. Unlike in the United States, we do not have political paralysis; we have stable government. This is our strategy: we have, and we will retain, fiscal discipline and we will stimulate the economy. There has to be demand—the shadow Chancellor is absolutely right about that—but this is coming through monetary policy. In order to have a monetary policy that stimulates the economy, we need the confidence of the central bank. The central bank has made it absolutely clear that the Government have to be fully committed to fiscal discipline in order to allow that to happen. Thus we have a combination of low interest rates, quantitative easing, now credit easing and a substantial devaluation. This is where the stimulus to demand comes from.

The third element is fundamental: we are dealing with a broken banking system—something we inherited. The banking system was massively expanded under the last Government, but collapsed with disastrous consequences. There is a continuing problem of credit supply. That is a very real problem—and every small and medium-sized enterprise would tell the same story. We have introduced a whole series of initiatives. The Chancellor has taken this forward with credit easing, while my Department has a new programme building on the Breeden report relating to non-bank finance. I have no doubt that we shall have to come back to this, because the banking system is still not functioning, but this is at the heart of the economic crisis that we are trying to manage. For the first time in our lifetimes, the financial system has collapsed—with disastrous consequences—and we are having to put that right.

The fourth and final element in the story is rebalancing the economy and putting it on a proper sustainable basis. That is why the Chancellor underlined in the Budget our commitment to the growth review and to improving infrastructure. We need to recognise that banks have to be properly regulated, which is why we have increased the bank levy, but in addition, we need to give backing to our successful industries, particularly our export industries—aerospace, creative industries, the oil and gas sector, and pharmaceuticals. Over the last few weeks and months, we have been correcting some of the long-standing errors of policy pursued by the Labour Government—the way in which, for example, public procurement took no account of supply chains; we are putting that right. We are beginning to see serious positive commitment by overseas investors—we are seeing it in the car industry and in pharmaceuticals—as a result of this industrial strategy.

[Clive Efford (Eltham) (Lab)]

With all due respect, we have heard it all before. In May last year, the Business Secretary said:

“I will fight, and do fight…for manufacturing industry…It is leading this country out of recession”.—[Official Report, 24 May 2011; Vol. 528, c. 793.]

Will he tell us what went wrong with manufacturing?

[Vince Cable]

Has the hon. Gentleman followed what is happening? The car industry, for example, has grown by approximately 20% over the last year, and all the major producers are investing in the UK.

[Several hon. Members]

rose—

[Vince Cable]

Let me finish my summary. Hon. Members can make their points in their own speeches.

We are dealing with an extraordinarily dangerous and difficult situation. Quite apart from our own horrendous legacy, we have to contend with the threat of high oil prices and the currently stabilised but continuing crisis in the eurozone. As a consequence, our economic position is very difficult. The economy is not, of course, growingly rapidly. Ever since we came into office, I seem to recall the shadow Chancellor predicting a double-dip recession, which has not happened. This year, growth is not spectacular, but it is higher than Germany’s and significantly better than the eurozone’s.

We acknowledge that we undoubtedly have major problems to deal with. Unemployment is far too high, but it is the same rate as in the United States, which is often regarded as providing a role model of how to deal with a crisis. We recognise the seriousness of the problem; what we will be judged by is our effectiveness in digging this country out of the enormous economic hole that we inherited. We are on track to do it, and we will stick with the policies that we have adopted.

13:48

[Mr Nicholas Brown (Newcastle upon Tyne East) (Lab)]

It is a pleasure to follow the Secretary of State, if only because he has confirmed me in my long-held prejudices about Liberal Democrat politicians. I think he redeemed himself in the last part of his speech about the financial services sector, which is where I would like to begin my remarks.

In his BBC business lecture, Bob Diamond observed:

“We stand today at the end of a long cycle of excess borrowing: borrowing by financial institutions, by governments, by consumers and by businesses.”

The Chancellor made a similar point yesterday when he referred to the

“days of large deficits and the illusion of cheap finance.”—[Official Report, 21 March 2012; Vol. 542, c. 797.]

As we all move in the opposite direction, there are obvious dangers in the cumulative impact of collective repositioning. We should focus our attention on the significant differences between the output forecasts and the actual outcomes. The differences are striking. Corporate tax cuts, for example, marginally help corporate profitability; they do not of themselves stimulate growth or create jobs.

The second feature to focus on is the public expenditure cuts that have not yet taken place. In the autumn statement, a further £8 billion in cuts was announced for 2015-16 and a further £15 billion in cuts for 2016-17 —that £15 billion alone is equivalent to a 3p rise in VAT—and yesterday the Chancellor announced a further £10 billion in public expenditure cuts. This represents an unprecedented challenge.

In referring to external uncertainties, both the Chancellor yesterday and the Business Secretary today mentioned the eurozone and a spike in oil prices. I would add that the secrecy and complexity of the unregulated financial services sector in the United States is a further cause for concern, not least because of its size.

The overall Budget stance is fiscally neutral, but, of course, the impact of the Budget changes is cumulative. VAT is still at 20%. A combination of wage freezes and inflation will reduce real earnings—again, the effect is cumulative. A cut in the top rate of tax is useless for those who do not earn £150,000 a year—and most of us do not. Similarly, a change in lower income tax thresholds is useless for the one third of households that do not have anyone resident who pays income tax because they are too poor. The regressive impact of all this is even greater if the citizen’s housing costs are being driven up by 7% or more a year, which is what has happened to social housing rents. Again, the effect is cumulative.

Pensioners may appreciate the simplification of the age-related personal allowances, but not their collective loss of about £1 billion per year resulting from the freezing of those personal allowances. That does not hit the poorest; instead, it is a nasty assault on people who, in the main, are not particularly wealthy, but have tried to look after themselves in their retirement years. It is a sneaky and disreputable measure. Even the Government seem ashamed of it, since they coyly describe it as a “simplification” and, significantly, it is one of the few bits of the Budget that was not briefed beforehand.

The Chancellor said a lot about the money he is spending, but less about the public expenditure cuts that are going to pay for the fiscally neutral Budget stance. Given the times, it would be reasonable for the Government to look again at whether big-ticket items should be dropped as unaffordable. I urge them to think again about the Trident renewal programme. Why do we need to duplicate a strategic weapon that is already in NATO’s armoury? Nor am I convinced that the high-speed rail link between London and Birmingham is worth the expenditure in the current circumstances. I urge the Government to look at whether valuable tasks carried out in the public sector can be discharged in less ponderous and more proportionate and cost-effective ways, rather than to look at abolition as the only way of making the savings.

In a significant move, the Chancellor announced a general anti-avoidance measure in the context of the move to the 45p top rate and the widespread avoidance of stamp duty on expensive houses. He announced other tax avoidance legislation as well. The obvious danger is that, having gone to the expense of setting up an anti-avoidance device, the avoider gets a taste for it. The lower rate at 45p is a certainty, but the effectiveness of the anti-avoidance devices is less certain. There are further dangers in a general anti-avoidance measure. If it is necessary, it should be focused on the rich and powerful, and not be used in a disproportionate way against small and medium-sized businesses.

My final point is about the impact of all this on the north-east of England. Our region is a net exporter. Whatever might be the case for the country more generally, a broadening and deepening of the private sector employment base of our region is the right way forward for us. The Government do not disagree with this point in principle, but the economic development structures they have put in place are the wrong ones for delivering the stated policy, and I urge the Government—and in particular the Business Secretary, whose responsibility this is—to consider the alternative Minister-led approach to regional economic development that I and other Members set out in our regional debate last year.

I also urge the Government not to go ahead with the regionalisation of public sector pay. This is a “blue herring.” As well as being manifestly unjust, it will cost more than it saves and will throw up a range of unintended and unwelcome consequences. It is a myth that high public sector pay is undermining the creation of less well-paid private sector jobs. I challenge anybody, both in this House and outside, to point out a job vacancy in the north-east of England for which no candidate can be found at the going rate. Why should public sector workers suffer austerity measures longer because of where they live? They are already on the receiving end of wage freezes, job losses, rent rises, general inflation and long-term reductions in their pensions—and are hit even harder if they are trying to help their children through university, and harder still if they have lost their tax credits. Between 2011 and 2015, the average public sector worker will see their wages increase by 2% while the consumer prices index increases by 14%. Now is not the time to depress demand in the most vulnerable regions of the United Kingdom. As well as both the uncertainties to which the Chancellor referred in his address and those to do with the transnational unregulated financial services sector, he has left us with a further set of uncertainties all of his own: the substantial public service cuts that are yet to come. Of course the poor are hurt by this Budget, but it is middle-income Britain that is disproportionately the loser.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. Before Mr Brown’s speech, I should have announced that there is an eight-minute time limit on speeches. He is so astute that I knew he would realise that, but I now say to the rest of you that there is an eight-minute limit.

13:56

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

I am grateful to have this opportunity to participate in the Budget debate, in order to highlight the financial and economic issues that are of concern to my constituents, and in particular to raise the topics of families, fairness and the future. I congratulate my right hon. Friend the Chancellor of the Exchequer on his Budget, which I believe is fair, innovative and effective. There are a lot of very good measures in it: tax cuts, help for business, increases in pensions and personal allowances, and investment in infrastructure. That is all good news for our country. For my constituents, the key concerns are the cost of living, keeping their jobs, taxation and dealing with the appalling economic mess left to us by the last, unlamented Labour Government.

This Budget goes a long way towards dealing with the issues facing the United Kingdom, and I believe it will be strongly supported across the country. It is good news for hard-working people on moderate and low incomes. It helps families and businesses, and, most importantly, it encourages aspiration.

Shortly, I shall address families, businesses and taxation, and how this Budget will assist and encourage our economic recovery. Before doing so, however, I want to state that the infrastructure plans announced in the Budget will create jobs and opportunities for businesses and enhance our economy. In particular, I welcome the Chancellor’s announcement of a possible new river crossing in east London. As my constituents and others travelling to and from south-east London know, the Blackwall tunnel is inadequate and congested and still prone to vehicles breaking down on the approach roads or in the tunnel.

[Damian Collins (Folkestone and Hythe) (Con)]

My hon. Friend makes a valid point about the east Thames crossing. That will also be of great benefit to my constituents in Kent.

[Mr Evennett]

I am grateful for my hon. Friend’s support. As the Mayor of London has said, a new crossing at Silvertown is essential. It will enable commuters and business traffic to get to their destinations quicker, and it will relieve the pressures on the Blackwell tunnel. In order to ensure the regeneration of south-east London, such public sector projects and investment are essential, and I welcome the Government’s commitment to look further into this crossing and to support other investment to improve our infrastructure.

I commend my right hon. Friend the Chancellor on his measures on taxation and families. Conservatives instinctively believe in lower taxation, not only because it allows people to keep more of their own money, but because they then have more choice in how their money is spent. Government do not always know best. They have a role to play, but people will spend their own money more effectively; it is not for Government to tell people what to do. Unlike the Labour party, which always believes in increasing taxation, we believe that people who have worked hard should have the opportunities to get on with their lives and careers, and to spend their money as they want. I therefore welcome the Chancellor’s aspiration to raise the personal tax allowance to £10,000 as soon as possible. That is good news for all working families on low incomes.

In government, Labour professed sympathy for working families on low incomes but did little to help them—in fact, Labour hindered. We did not hear anything in the shadow Chancellor’s speech about the failings of his Government. They allowed families to get worse off, and the increase in poverty was greater under Labour. This Government do not believe that people should be allowed to remain on benefits for ever because benefits are more attractive than working and earning. That is unacceptable. We are, therefore, grateful that we are changing the benefits regime and helping people with the tax regime, so that work does pay. That is fundamental.

Under this Government, great progress has been made in the past two years, with personal allowances going up by 25%. This year there is to be another rise and next year, in April 2013, there will be an additional rise in the personal allowance of £1,100. That is a real, positive advance for people on low incomes, allowing them to keep more of their money. I particularly welcome the fact that some 2 million people will no longer pay any income tax; they are on low incomes and they should not be paying income tax. It is the Conservative-led Government—a coalition Government—who are doing this, and I welcome the Business Secretary’s speech, which highlighted what the Government are doing and the logic behind it.

[Kate Green]

I note the hon. Gentleman’s welcome for families being lifted out of income tax. How does he react to the fact that 230,000 pensioners are being brought into the ambit of taxation for the first time by this Budget?

[Mr Evennett]

The whole aspect of what we are looking at is increasing pensions and helping pensioners. This Government have done a lot more than the Government whom the hon. Lady supported—they gave a miserable 75p increase in the pension a few years back. Our Government are putting up the pension this year by more than 5%, which is a record and an achievement for this Government. We will take no lectures from the hon. Lady, because her Government let pensioners down.

Nationally, a total of 24 million people will receive a tax cut thanks to this Budget. That is good news for individuals, for families and for the economy. This Conservative-led coalition is proceeding to help working people, and the Opposition do not give us credit. I was disappointed with the shadow Chancellor’s speech. I usually listen to him with great interest, but he did not allude to anything that Labour would do if it were in government or to Labour’s failures when it was in government.

The family is the backbone of our society, and the issue of child benefit is always difficult. Fairness remains the key, and the original changes proposed caused considerable difficulty. I am pleased that the Chancellor listened to our concerns, and those of constituents, that the proposed changes were not really acceptable. By amending the proposals and tapering the benefit from an annual income of £50,000, some 90% of families will continue to benefit from financial support during these difficult financial and economic times. This Government are listening and changing policies after representations have been made, and that is to the credit of the Chancellor and the Treasury team.

Red tape, bureaucracy and taxation all adversely affect businesses. I welcome the news that more is being done to support small businesses and manufacturing. The investment in apprenticeships, lower corporation tax and extra support for start-ups will make a real difference. In addition, we heard the innovative idea of a student-style loan for young people to allow them to start up their own businesses, and I welcome the fact that the Chancellor is examining it. It would allow 18 to 24-year-olds who are keen on a business career to be helped. We all know that university is not for everybody; people may not want to go there and may want to go into business instead. So we need to provide the same sort of help for young entrepreneurs, whom we desperately need in this country, to enable them to go forward to make their name and their fortune. I welcome the fact that the Government are willing to examine that.

My constituency contains a number of innovative manufacturers, such as Texcel Technology in Thames road, Crayford, which I visited last month. I was really impressed with the dynamism of its leadership and its focus on high-tech products. I recently nominated it for the Made by Britain project. The NEPTUNE project, for which the company has provided power and switching solutions, will help to develop our understanding of the ocean and of many biological, chemical, physical and geological events that take place. I am pleased that such a successful firm in my constituency has designed and manufactured such innovative components for this international project. People at the firm were looking to the Government for some action and will be delighted with what the Government have proposed in the Budget to enable small firms like theirs to prosper and develop.

I know that the firm is concerned about regulations, bureaucracy and, of course, tax, so it will welcome the parts of the Budget dealing with business. Business is vital to our society; it makes the money and creates the wealth that allows us to invest in education, hospitals, all the other public services, pensions and all the rest that we want to invest in. If we do not allow business to flourish, we cannot make that wealth and we cannot have the taxes that come with it. This Government are focusing on those issues, to make sure that we are getting the wealth creation and the taxes from innovative small firms such as the one I mentioned.

We need to consider the whole of this Budget, as it works together as a rounded Budget, looking to the future. That is the great thing about what we saw yesterday from the Chancellor and the team; the Budget is looking to the future to make Britain better. It seeks to make Britain great again, as that will not come from the Opposition, after their 13 years. We remember how they “ended” boom and bust, and we remember all the things they had—the result was a disaster and it left us with the mess to clear up.

In conclusion, the Chancellor has been effective in looking to policies to solve our economic and financial situation. The Budget demonstrates that this Government are firmly on the side of those who aspire to do the right thing for themselves, their families, their businesses and this country, and I strongly back it.

14:06

[Mark Durkan (Foyle) (SDLP)]

Unlike Government Members, I am not in a rush to gush about how much this Budget does for families or firms in my own or anybody else’s constituency. However, I am also not here to pretend that everything in this Budget is bad, as it contains measures that will help some sectors and areas. Moving on general anti-abuse rules to deal with tax avoidance is good in principle and welcome. Obviously, we have to see the exact detail to know whether the effects will match up to the stated intent. Similarly, tax simplification for small businesses is a good thing in principle, but again the devil will be in the detail, as it will be in respect of removing borderline anomalies. Many of us have been lobbied by our local chippies and others about removing some of those anomalies, but of course there is always the danger that we end up redrawing the margins in particular businesses or sectors.

The Budget makes new provisions for the carbon price floor. Coming from Northern Ireland, I am sorry that the Government have not seen fit to open a window to relieve the serious competitiveness and investment problems that will be caused to our generating industry, because, in the context of the single energy market in Ireland, the carbon price floor will, in effect, incentivise investment to go south of the border and not stay in the north.

There are other issues to address, such as fuel duty. Again, I regret that the Government have not done more to help firms and families, who have both been affected deeply by these problems. The Government have boasted greatly about the measures that they have taken to date to protect people from the price surge, but that surge protection is still needed and now is not the time to let it go on the assumption that the other tax changes that the Government have announced will somehow carry people through or forward.

Obviously, not least in the context of Northern Ireland, I support the further moves in relation to “above the line” research and development tax credits and the tax reliefs in the creative sector, not least in film and high-end television, where Northern Ireland has recently been doing well.

On corporation tax, we in Northern Ireland are faced with the highly competitive corporation tax rate on the other side of the border and we have been looking for reductions and modifications there. I have no argument in principle with moves to reduce corporation tax, but I wonder about the Government’s measures on the control of foreign companies and the full reform that is there. Previously, I have asked about the impact that that would have on the moves to restrict the incentives towards using tax havens, and I remain concerned that while the Government have perhaps redressed some of the concerns that have been raised about the possible loss to business and revenue in the UK, there will still be a loss to developing countries’ revenue, which they absolutely need, as a result of the measure.

The Government are making much, not just in the Budget but more widely, about what they are doing for business lending. We have all heard this before. All the measures that are made relying on quantitative easing and now credit easing depend on the banks. We are told about the £20 billion guarantee, so that some banks—those that opt into the scheme—might give businesses credit at 1% less than they would otherwise have given. If yet more billions are being spent just to make that marginal difference, one has to wonder whether that is the best way of gearing support towards growth and the economy. More direct uses of that money could yield a much readier growth impact.

On the tax side, we have the hit on pensioners, with the move in the allowance and more people being brought into taxation. At a time when we are again encouraging people to save towards pensions and we again have a reform and recasting of the pension system, for the Government to come along and make another tweak that appears to hit pension provision and pension plans sends the wrong signal. It gives people the idea that the Government engage in jiggery-pokery—that they encourage people to save pensions but that then when they do so they will be clobbered. It is just a bad and unnecessary measure at a time when we are trying to encourage people to save more for pensions. Other people whom we are asking to save for their pensions are middle-income earners: we are asking them to make strong provision for their pensions and to make provision for their children’s third-level education. Many of them are still being hit by the change to child benefit. That will hit some of those people’s capacity to save for their own pensions as well as to support their children.

The Chancellor has told us of the Adam Smith principles of tax being simple and predictable, supporting work and being fair, but the tax charges being introduced in relation to child benefit go completely against that. It is a very complicated and clumsy system that is going to cause problems, and not just for those families who are affected—it will cause serious problems for employers. It will not be long before employers’ bodies will be coming to Government and saying, “You have created a very serious problem here”—a much bigger problem than the 50p tax ever created for those firms in how they could incentivise rewards and repay people. The Chancellor also mentioned the £10 billion cut in welfare coming after the next election, which he has been framing as necessary if other cuts are to be sustained.

[Sheila Gilmore]

Will my hon. Friend comment on the initial speculation in today’s edition of The Times, which is hardly a bastion of left-wing politics, that those cuts might affect attendance allowance, means-tested disability living allowance or mean the taking away of carers’ allowance?

[Mark Durkan]

Of course, these cuts could affect anything. We were told when the Welfare Reform Bill went through Parliament that that was the final destination of welfare reform. Now it is clear from the Chancellor that it is simply a staging post for further cuts. We were told about the spoonful of sugar—the extra money going into making universal credit work in the transition period—but is it the Chancellor’s plan to remove some of that, and to pull back the extra investment that has gone into making universal credit work and more acceptable, or will other benefits such as those for people with disabilities be affected? We know that families with disabilities are already being squeezed. Are they going to suffer more?

In the light of people in the Chamber teasing others about what they will put in their next manifesto, will the Government parties tell us what they will be putting in their manifestos about the £10 billion-worth of further cuts in welfare? Who will be hit? There is no point in people asking one party what they are going to put in their manifesto unless others are going to follow through. The Government are saying that such cuts will be needed after the election; will they say during the election campaign where those cuts will be made?

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

May I follow up the very important point that my hon. Friend made about the reduction of £12 billion in welfare? Does he recall that last week when we had the debate on women’s rights in Westminster Hall a number of our friends from Northern Ireland outlined just how serious that problem was? Does he think they will be in receipt of cuts as well?

[Mark Durkan]

Absolutely; that is the fear that we must have. The Chancellor has put forth the signal that such cuts would be needed and would have to be factored into the next spending review. Although this House has discharged its duties on the Welfare Reform Bill, we must ask what the changes will be. Contrary to what the Chancellor has said about support for families, the Government's direction of travel in everything they do is putting more of a squeeze on families—both low-income families on benefits and middle-income families given the pressures that they are facing.

The Chancellor also used the Budget to frame questions about moving towards regional pay in the public sector. Speaking from the Opposition Benches, I want to say straightforwardly that I know that he is not the first Chancellor to toy with the idea of regional pay and tinkering with the framework. I have heard that from previous Chancellors and Prime Ministers, so I am not in denial. I was as opposed to it then as I am now. I was intrigued to hear the Chancellor say that he had submitted evidence to the independent pay review body, so I went to the Library to see what that evidence was and I have the “Dear pay review body chair” letter from the Chancellor. Some 11 pages of evidence were submitted. I am not saying that it is dodgy dossier stuff, but in the material that it sources it really is dubious dossier stuff. It shorthands academic studies, possibly doing a disservice to the academics who completed them, in saying that the evidence suggests that the quality of public services would directly benefit if public sector pay became more responsive to local labour markets. It claims that one study

“found that over one quarter of hospital targets were negatively associated with the public/private wage differential.”

It said that another study

“found that a 10 per cent increase in wages outside of the nursing sector was associated with a 7.4 percent increase in mortality rates from heart attacks.”

When that is the quality of evidence that the Government are submitting to the pay review body, we need to examine it further.

14:17

[Michael Fallon (Sevenoaks) (Con)]

I remind the House of my interests on the Register of Members’ Financial Interests. One of the most remarkable things about the Opposition’s response to this Budget is that we have not heard a single pledge to reverse any of the changes being proposed. We have heard a lot of carping and that they are going to vote against some of the measures on Monday, but they are not actually going to change them should they ever come back to power. When they do carp, they seem to be carping on behalf of some rather strange interests. They want the top 10% of households to keep their child benefit. They want the better-off pensioners to keep their age-related allowances. Indeed, they want the super-rich to go on enjoying some £65 million-worth of evasion of stamp duty and abuse of tax reliefs. That seems to me an extraordinary position for the Opposition to get into.

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

Is it possible that the opposition to these measures we are hearing, which my hon. Friend has outlined, is opportunistic politics dressed up as principle?

[Michael Fallon]

My hon. Friend is on to something. We note that the shadow Chancellor could not answer the questions on whether Labour would restore the age-related allowances, the changes to which its Members have been moaning about today.

Where I hope there is common ground across the House is that we all want a dynamic, high-growth economy. In my view, that can be built only on sound public finances, fully flexible labour markets and rising productivity in both the private and public sectors.

I shall begin with the public finances. I welcome confirmation in the Budget that we remain on track to eliminate the structural deficit, with the result that, even in difficult trading circumstances both in the eurozone and globally, the Chancellor was able to avoid big increases in taxation or further increases within this spending round. A broadly neutral Budget confirms that we are on course, but keeping our public finances on course will require continued firm control of public spending.

I note that in cash terms public spending continues to rise each successive year that is illustrated in the Red Book. It may be that we have to have a fresh look at some of the entrenched spending targets of the previous Government. We may well need to ask ourselves whether specific targets, for example on child poverty or climate change, are the best way of focusing our spending where it is most needed.

I welcome moves towards flexible labour markets and more local pay. The hon. Member for Foyle (Mark Durkan) is right—this is not a new announcement. If you look back at the spending review of 2002, Mr Deputy Speaker, you will see that the then Government were committed to more flexible local and regional pay. You will find it in the Budget documents of 2003. You will also see it in the previous Prime Minister’s last Mansion House speech as Chancellor in 2006. Of course, the Labour Government did nothing about it; their union paymasters would not allow it. But local pay has applied for the past 25 years at least across the private sector, and it would be wrong to continue to rope off the public sector from the real differences in the associated costs of labour up and down the United Kingdom.

It is unfair to local businesses to have to compete for labour with public bodies and offices that pay well above the market rate. It is certainly unfair to the jobless in those labour markets, who are priced out of jobs as a result. I hope that the Chancellor will go on to tackle some of the other inequalities, such as the big differences in sickness pay between the public and private sectors and the real difficulties that young people under 25 have in getting that first job. One third of the unemployed are under 25. That is the legacy of the Labour party, and we have to do everything possible to help those people to get their first job, not least when at the moment we control their wages and other conditions that create so many disincentives for small companies to take on a single extra member of staff. Why should the state make it so difficult for young people to get into employment?

The test of all the Budget measures in the end is whether they will improve our productivity, as so many Labour Budgets and so much Labour spending signally failed to do. The Office for National Statistics figures for 2010 say it all and are a good summary of 13 years of Labour government. In terms of GDP per hour, France is 18% more productive, Germany is 19% more productive and the United States is 24% more productive. That shows the importance of improving incentives at every level and it is why I welcome the new incentives for the lower paid and middle earners that will be created by the changes to the personal allowance. Taking 2 million people out of tax altogether in two years will improve those incentives. That is a coalition achievement in which both parties on this side of the House can take real pride.

Sound public finances, more flexible labour markets and higher productivity are the keys to the future and to the jobs that our children need. I welcome the progress being made in this Budget towards them.

14:24

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

The Chancellor’s Budget statement yesterday was for the entire country, but for so many individuals, households and communities, it will result in many different outcomes. I want to concentrate on the impact that it will have on my constituency and the Dumfries and Galloway region as a whole. Yesterday, local people were looking for indications of potential growth in the economy and potential creation of jobs.

In the past 20 months unemployment in my constituency has risen month after month. It is a sad reflection that youth unemployment is at its highest level since 1996. Dumfries and Galloway is a rural constituency, which means that the two largest employers are the national health service and the local council. The shedding of jobs in those two specific areas has now been going on for four years, and for those who think that everything north of the border is fine under a Scottish National party Government, let me tell them that that is four years of cuts in the public sector. Yet the block grant that we all talk about—that Barnett formula, the Barnett consequentials—has been reduced only in the financial year that is about to come to an end. So there has been a lot of pain in Scotland that sometimes people do not read about in the wider UK press. The pain of loss of income spreads into the local economy. It spreads on to the high street. I regret to say that some of the pressure on households in my constituency is down to the fact that it is very much a low wage economy.

So the Budget statement cannot be taken in isolation, although that is what we are here to discuss today. We need to look at what has happened and what is about to happen. My hon. Friend the Member for Foyle (Mark Durkan) said that the welfare cuts would have an impact. That is happening at the moment. Let no one be under any illusion that only the current coalition Government have introduced welfare cuts and reforms. Our Government did on three occasions. They were trying to make those adjustments that said to people, “Work does pay. There is an opportunity there, despite any disability that you have. There is help and support to get you back into the workplace, perhaps not doing what you did in the past but it is there if you wish to seize the opportunity.” The big challenge will be in the next two weeks when so many households lose working tax credits. With the reductions in service provision through the voluntary sector that my local area has experienced, with welfare rights budgets being cut and with Citizens Advice services being cut, I am finding that more and more constituents are coming to my office for help and support.

Let me give the entire House a warning: colleagues had better batten down the hatches, because they are about to be inundated with households that are about to lose their working tax credit. The increase in tax allowance announced yesterday, which will mean £2 or £3 a week, will make not one iota of difference to households that will potentially lose £50, £60 or £70 a week. In no way whatsoever can the increase compensate for that.

The other point is that people will need to move from working 16 hours a week to 24 hours in order to avoid losing their tax credit. How on earth will that happen when people have voluntarily reduced their working hours over the past couple of years just to hold on to their jobs? Unfortunately, many of those people will be unable to keep a hold of their tax credit.

The granny tax grab, as it has been described today in the press, the changes to the age-related personal allowance, which when introduced took 680,000 pensioners out of tax altogether, is being done at the wrong time, if indeed it has to be done at all, with low interest rates and maturing annuities not delivering what people had expected.

In a rural locality fuel prices are vital, so I want to ask the Minister what has happened to the fair fuel stabiliser. FairFuelUK expected more from the coalition Government, who need to be honest about what has gone wrong. We were all inundated with e-mails from constituents about the report commissioned by FairFuelUK. I asked the Economic Secretary last week—she did not leak anything to me—what she and her officials thought of the report, but she said that she could not speak to me about it because the Budget was just a few days away. I would like to hear what Treasury Ministers and officials make of the report, because I have doubts about a 2.5p reduction in fuel duty creating 175,000 jobs; it verges on some sort of economic fantasy.

I would have loved to have seen, as I am sure would most of my constituents, an announcement yesterday of a temporary reversal in the VAT rise, because £450 extra for families would have been of real benefit to them and it would also have helped motorists. I am, and always have been, totally opposed to any kind of regional variations in these matters. I sat on the Committee that introduced the national minimum wage back in 1998 and—the Secretary of State for Business, Innovation and Skills is no longer in the Chamber—even then there were Liberal Democrat Members who wanted regional variations in the national minimum wage. It is not acceptable.

[Mr Tom Clarke]

Does my hon. Friend recall that the hospitality and tourism industries, which I know are very important in his constituency, were warned that the national minimum wage would cost them jobs, and does he agree that the opposite was the case?

[Mr Brown]

My right hon. Friend is absolutely right. In 1996 and 1997, when the Labour party was talking about a national minimum wage, the Conservative Government and others were saying that we would lose 1 million jobs as a result. In fact, the opposite happened and it created around 1.5 million jobs, especially in the service sector, so he touches on a relevant point.

My right hon. Friend mentions tourism, and it is on that point that I will bring my remarks to a close. I represent a rural constituency, and for many of my constituents using public transport is an absolute impossibility and they depend on their cars. The area is heavily dependent on agriculture and forestry. Hidden away on page A101 of “Overview of Tax Legislation and Rates” is the bombshell—it is a bombshell—that as of this October VAT will be levied on static holiday caravans. A £40,000 van will cost £48,000. There are many of these businesses in my constituency—nowhere in my constituency can someone be more than eight to 10 miles away from a static caravan site. Owners of these sites will find it much more difficult to upgrade and invest in their businesses and, importantly, those holidays will become much more expensive for hard-working families.

14:35

[Lorely Burt (Solihull) (LD)]

As a Liberal Democrat, I am as delighted as any of my colleagues or, indeed, any of our coalition colleagues by the further and faster move yesterday towards the realisation of our flagship tax policy—raising to £10,000 the threshold at which people start to pay tax. It was something that the shadow Chancellor would not acknowledge, and that was a little churlish. As the Liberal Democrat spokesperson for business, innovation and skills, however, I want, in the short time at my disposal, to focus on a small number of highlights and what the Budget means for business.

Much of the good news for business was announced in the autumn pre-Budget statement, and that is a good thing, because what business needs as much as anything is predictability, stability and simplicity. We knew that corporation tax was due to be cut to 25% this April, but I am sure the news that we will now cut it by a further 1 percentage point is good news that business will be able to deal with.

I also welcome simplifying on the basis of cash turnover the tax on our smallest businesses. What a difference that is going to make for them, as will integrating income tax and national insurance. Business has other things to worry about without collecting tax through two separate systems for the Government.

Despite the tough decisions that we had to take because of the “no money” legacy of the previous Government, we have managed to create an environment of low interest rates, and that has been vital to business. We only have to look over the channel at our European neighbours to see what a shocking state we could have been in if we had not been as tough and as firm as we have.

So, despite the tough going, we have been getting going and literally rebuilding our economy. The building trade has suffered badly during the recession, despite historically low mortgage rates, but we are helping, through the NewBuy system, by expanding the get Britain building fund to provide up-front finance to construction companies and by reforming planning.

For small businesses, the national loan guarantee scheme started operating this week, making £20 billion of guarantees available. That is all well and good as long as banks are prepared to lend, so it is important that their seeming intransigence is challenged by competition from alternative sources of finance, such as the £1 billion that we have made available to funds that lend directly to mid-cap businesses. We are also increasing funding to the business finance partnership by 20%.

The Green investment bank opens for business next month—a step towards our aspiration to become the greenest Government ever; greener business cars will get a series of tax breaks; and hauliers’ vehicle excise duty has been frozen. But most importantly, there will be £4.5 billion less in burdens on the motorist with the cancellation of the fuel duty escalator and the confirmation of the fair fuel stabiliser.

Business needs support in many ways. We are very clever and inventive—[Interruption]—all of us, as a nation, and we need to do much more on patent protection, but I welcome the cut in taxes on patents and was delighted to hear the news this morning that GlaxoSmithKline will now invest heavily in the UK and, as a result of that announcement, continue its valuable and lucrative life sciences work here.

The support for science announced yesterday was also very well received. The extension of tax credits to the creative industries, as well as to films, is also welcome. There was some banter yesterday when the Conservatives were compared to “Downton Abbey”, and perhaps the Labour party does include Wallace and Gromit, although which one out of the shadow Chancellor and the Leader of the Opposition is Wallace and which one is Gromit is something on which we have been speculating. As for the Liberal Democrats, let us not be left out. I fear that our signature film will be “Four Weddings and a Funeral” if we are not careful. [Laughter.] But these tax credits, joking apart, are most welcome.

Research and development tax credits make a big difference to companies, especially when they are deciding where to locate their R and D functions, so I welcome in particular the movement to above-the-line credits—a simpler system, which ensures that tax implications can be more easily factored into the decision-making process.

In a global world we really need to brush up on our technology and, especially, on our broadband speeds, so the provision for ultra-fast broadband and wi-fi in 10 cities, including my own of Birmingham, is very welcome, as is the extra help for smaller cities.

Overall, I am very happy with this coalition Budget. However, there is an issue on which the Chancellor and I disagree—the belief that we need a new airport in the south-east. Clearly, we need to be able to service all passenger requirements, but there is a pledge in our coalition agreement that there will be no new runway at Heathrow. Why does the Chancellor not raise his eyes a little further north? Birmingham airport’s runway is currently being extended and will be easily accessible when High Speed 2 comes in. It has spare capacity of 40 million passengers a year. In the midlands, we have the answer to the need for an English airport hub.

Our business focus is paying off. We are now in the top 10 most competitive places in the world to do business. However, we need to change the culture in this country. I am so concerned that too many young people leave school unready and unprepared to earn a good living. We must tackle that issue. We must enthuse and open the eyes of our youngsters to the opportunities out there, including starting their own businesses. I fully back the idea of enterprise loans for young people. I started my first business venture at the age of 10, and I think that it is never too early to feel the excitement of doing it oneself. I commend the Budget to the House.

14:41

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

It is a great pity that the Chancellor is not here; I would love to look him in the eye and ask whether we are genuinely all in it together. He and I represent Cheshire constituencies, but I do not think that his position is quite the same as that of the good folk living in the Westminster ward—one of the country’s most disadvantaged—in my constituency. I would really like him to say to those people that he was in the same boat as them. That is manifestly not the case. The media have picked up on that and realised that the story that we were told yesterday is full of half-truths that present the facts differently from what is really happening on the ground.

In these tough times, what the Tory-led Government are doing tells us everything that we need to know about them. It proves that the Chancellor and Prime Minister are totally out of touch with what life is like for people in this country. At a time when bills are going up for families on middle and low incomes, the Chancellor has added to them all. Fuel duty is going up, even though petrol prices are at a record high.

I am glad that some Liberal Democrats are in the Chamber. In the west country, there is already a blog about the new pasty tax. The Lib Dems should watch out; that is not the only thing that they are under attack for. They will be the real losers on the issue of regional pay, raised by my hon. Friend the Member for Dumfries and Galloway (Mr Brown) and the hon. Member for Foyle (Mark Durkan). Areas where Liberal Democrats have traditionally been strong would duck out compared with places such as my county of Cheshire, which is also the Chancellor’s, or Oxfordshire, which is where the Prime Minister is. The Liberal Democrats have a real problem when they start looking at regional pay.

[Andrew George (St Ives) (LD)]

There is a debate to be had on regional pay, and my position is well known. On the sublimely fundamental and seriously important issue of pasty taxes in Cornwall, let me reassure the hon. Gentleman that we will be fighting them on the beaches.

[Andrew Miller]

So when I go to Ann’s pasty shop, I’ll be all right, will I?

The Lib Dems are supposed to be strong on matters related to solar power. This morning, the chief executive of the Solar Trade Association said:

“We cannot understand why solar has been singled out for rough treatment on Capital Allowances when it is a popular technology which will soon reach grid parity and provide businesses with a real alternative to dependence on fossil fuels.”

Again, the Liberals have bought into something that is totally contrary to their own policy position. At the same time, the Budget gave a tax cut to the very richest people in our country, with just 14,000 people earning £1 million or more getting a Budget boost of over £40,000 each year. No wonder the Centre for Policy Studies, which is advised by the Minister for Universities and Science, among others, says that the Budget amounted to small-scale tinkering, regional handouts, and a rearranging of the deckchairs. To be fair to the Minister, there is a lot that I do not agree with in the CPS’s press release. Nevertheless, the Government have chosen to cut taxes for 300,000 people earning over £150,000—the richest 1%. How can that be the priority now?

The Chancellor looked quite smug when he sat down yesterday, but I bet he did not feel so smug when he read today’s papers.

[Stephen Lloyd (Eastbourne) (LD)]

I had the pleasure of sitting in the Chamber yesterday to hear the Chancellor and the Leader of the Opposition, and then some of the later speeches. There was a lot of noise going backwards and forwards about the veracity of the figures on how much will be raised from the different wealth taxes. It is not that I do not trust Labour Members, but last night I thought that I would go and check the figures on Channel 4 FactCheck, which I think we all recognise is very accurate, and it confirmed independently that it estimated that five times more money would be raised from the very wealthy as a result of the various taxes.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I hope that the hon. Gentleman is going to save something for his speech. I remind him that interventions are meant to be short.

[Andrew Miller]

If the hon. Gentleman had been here earlier for the shadow Chancellor’s speech, he would have heard that point put down very firmly.

Let me refer to today’s papers. Did the Chancellor expect to wake up this morning to a 33 mm-high headline—

[Mr Iain Wright (Hartlepool) (Lab)]

Did you measure it?

[Andrew Miller]

Yes, I got the tape measure out. It said: “‘Granny tax’ hits 5m pensioners”. The papers referred to a £3 billion tax raid on pensioners over the next four years, and pointed out that nearly 4.5 million pensioners who pay income tax will lose an average of £83 per year next April and that people turning 65 next year will lose up to £322. As you are in the Chair and know me rather well, Mr Deputy Speaker, I suppose I should declare an interest, as it is my 63rd birthday tomorrow. Whatever the Chancellor says about increasing the income tax personal allowance, a family with children, earning just £20,000, will lose about £253 from this April. Shockingly, he slipped out that £3 billion tax raid on pensioners over the next four years. All this comes from a Government whose economic policies on growth, jobs and the deficit have utterly failed.

Of course, there have to be tough decisions on tax, spending and pay; otherwise, we would not get the deficit down. However, although the restoring of the cuts in the science budget is one of the few measures I agree with, a lot more funding is needed if we are to retain the quality of British science. I agree with Imran Khan, the director of CaSE—the Campaign for Science and Engineering—who said today:

“I suspect the Government realises that the multi-billion pound, 50% cut made to research capital in 2010 simply is not sustainable. Despite difficult times, they are trying to put it right, and it is not going to go unnoticed.

However, simply reversing the cuts isn’t going to be a game-changer for the UK. We need to be far more ambitious if we’re serious about having a high-tech future. The Chancellor should re-invest the windfall from the auction of 4G mobile spectrum, due later this year, into science and engineering.”

The Budget said nothing about that.

[Damian Collins]

Will the hon. Gentleman give way?

[Andrew Miller]

No I will not.

I also agree with the Engineering Employers Federation. Although it welcomed the changes to research and development tax credits, it stated:

“Whilst there are some helpful measures, they fail to send a strong enough signal to growing manufacturers”.

This morning’s Financial Times states that John Longworth of the British Chambers of Commerce said that

“small and medium-sized companies felt the Budget measures would ‘overwhelmingly benefit the biggest businesses’ and were disappointed he did not do more to boost confidence across the economy.”

Finally, as the shadow Chancellor said, the Chancellor’s plan has failed. Trying to raise taxes and cut spending too far has backfired. With his tax cut for millionaires, the Chancellor is piling insult upon injury for millions of families and pensioners across Britain. This is a Budget full of failed promises that will fail the country. I urge the House to vote against it on Monday.

14:50

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

The House will appreciate that parts of the speech by the hon. Member for Ellesmere Port and Neston (Andrew Miller) were his own words and that others sounded a bit like a Whip’s handout. His birthday is to be welcomed.

I suggest to colleagues that it would be worth their while going through chapter 2 of the Red Book, because its 250 paragraphs contain all kinds of things, some of which are important and others of which are even more important.

As we all recognise, everything that we are discussing must be put in the context of the Government’s receipts and expenditure, which are shown on page 18. The attempt to close the gap between the two underlies everything that we are considering. Some of the matters in chapter 2 of the Red Book will not matter to many people, such as VAT being put on the rental of hairdressers’ chairs. Others have not been spotted by many, such as VAT relief being taken off alterations to listed buildings.

Anyone who has had dealings with English Heritage, as I have, will know that sometimes it is very helpful and that at other times it adds to the cost of what one is trying to do. If we have to take the VAT relief off alterations, perhaps we should consider giving VAT relief to the maintenance and repair of such buildings, or to a portion of those costs, because meeting the requirements of the listed buildings authorities can be expensive.

Paragraph 2.40 is on charitable giving. The Chancellor suggested that philanthropy in a person’s lifetime should be subject to a limit of 25% of their income in any year. I can imagine circumstances in which someone would have a very high income in one year, perhaps through the sale of an asset that is not protected by capital gains tax relief. If somebody gets £1 million over and above their normal income and wants to give away two thirds of it, what is the Chancellor thinking of in saying that they can give away only a quarter? It seems to me that we ought to have the same ability to give away our earnings as we have to give away our assets in death.

I ask the Chancellor, when he has his consultation with philanthropists, to ask a number of well-known philanthropists—without giving their names—how they would react to that. For people with established charitable funds, such as Dame Vivien Duffield, who gives fantastic support to charity, there is no problem, but there is a problem for people who, by chance, have a very high income for one year or a number of years and who want to give away a lot of money. That is a matter that the House should consider, but I would like to hear the Government’s response to a consultation before taking up the matter further.

I also have a question, not for answer immediately, about the lifetime limit on savings for self-invested pensions. The limit has come down from £1.8 million to £1.5 million. That does not affect me personally—not on my salary. However, somebody who has got to £1.6 million can now write in and say, “Please protect this amount.” What happens if the value of their investment goes up by 15% in the next five years? Or by 150%? Will they lose 55% of that increase? They have to take the risk that the amount of money might go down, but if it goes up, the Chancellor will say, “I will have more than half of that.” I may misunderstand the provision, and I am not saying that it was new in yesterday’s Budget, but it does matter and we ought to give it some consideration.

I welcome the provisions on employee ownership and the enterprise management initiative, some of which are really interesting.

I am not absolutely certain that I understand the gift aid and charitable giving provisions completely, but they are to be welcomed. Simplification matters, and the headline title in the Red Book is, “A fairer, more efficient and simpler tax system”. I should like to talk about that.

Some of the accusations that the Opposition have made about the so-called granny tax are exaggerated, and we have to realise that we need to get more people to have more provision for their old age. The Government are right to say that £140 should be the minimum pension level, but we need to apologise to people who did not have the chance to receive that. They often worked for much longer than the current qualifying period, but get lower pensions and are more likely to have to get means-tested support. It is unfair to them when we make things better for people in the future, and we have to apologise to those most affected.

I want to ask the Minister why we use the retail prices index for some things that people have to pay and the consumer prices index for some things that people receive. People can rightly go through the Government’s provisions and ask whether there is a philosophy to that or whether it is just what is now called fiscal consolidation, which means, “We’ll take all we can and pay out as little as we can.” That is a perfectly reasonable attitude for the Government to take, but would they like to say openly what the philosophy is?

I end by saying something about child benefit. I ran a campaign in the early 1970s to bring in family allowance for the first child, and I ran a campaign against Denis Healey when he said, “There’s no need to increase family allowance or child benefit—look at the married man’s tax allowance.” Half of that allowance went to people who had no children, and half of it went to people who had working spouses, so it was the least well directed way of supporting those caring for children.

Some of the arguments put forward over the past year, since we first heard about the proposal to cut child benefit for a certain number of people, have been grossly insulting. The idea that someone on £20,000 a year or less will support a person on £120,000 is nonsense. I saw one bit of paper suggesting that I could write to my constituents explaining why people with between £60,000 and £800,000 a year in earnings were being subsidised by the poor, but the difference between the taxation of someone earning £800,000 and someone earning £20,000 would pay for child benefit over and over again. The advantage of child benefit is that people register to get it when they are entitled, and stop getting it when their child ceases to be of eligible age. The amount of family formation, reformation and deformation, and the number of times people change or lose their jobs, will cause a lot of problems.

I say to the Government that whatever they get through this year against my wishes, they should not stick to this mistake. Amalgamating the value of the child tax allowance and the family allowance was right, and child benefit was the right way of doing it. It puts money in the purse more often than in the wallet. The Government are making a mistake, although less of a mistake than when the announcement was made a year ago. If they would like to have a serious debate about the matter, please count me in.

14:54

[David Simpson (Upper Bann) (DUP)]

I agree with a lot of what my hon. Friend the Member for Foyle (Mark Durkan) said about welfare cuts, regional pay and the £25 billion that the Government will provide to allow some banks—five at the moment, I believe—to help businesses. I trust that banks at home will take up that offer as well, because it would make a lot of difference to companies there.

I know that this was a very difficult Budget for the Chancellor, but I believe that some better decisions could have been made than the ones that we heard yesterday. First, I would like to deal with the corporation tax cuts to 24% and then to 22% by 2014. The Northern Ireland perspective, of course, is that we are in direct competition with the Irish Republic for investment. A former chief executive of the Republic’s Industrial Development Agency once remarked:

“In the battle to attract overseas investment to Ireland, no financial weapon has been more important than tax in convincing new industry to locate here. It remains the IDA’s unique selling point, giving Ireland a critical advantage in winning new investment.”

The measure in the Budget, therefore, is certainly welcome from Northern Ireland’s perspective.

Of course, not every business in Northern Ireland is liable for corporation tax and in a position to benefit—only 3% of businesses pay it. Some 99% of our businesses in Northern Ireland are small businesses. The measure is welcome news for those who will benefit, but it will have no impact on the overwhelming number of our businesses in our business community. That is why I welcome measures such as the proposal to allow the smallest businesses to move to a cash-based tax calculation. That simplification of the process could help up to 126,000 small businesses in Northern Ireland.

In the local press in Northern Ireland, the Federation of Small Businesses welcomed the Budget, but expressed disappointment that there were no plans to set up at the heart of government a small business administration to champion small businesses. Perhaps we will see that later.

I also welcome the devolution of air passenger duty, which will be included in the Finance (No. 4) Bill. That measure will allow the Northern Ireland Executive to set their own rate for long-haul direct flights—we have competed against the Republic of Ireland on that, so the measure will also help our investment strategy. The proposal for loans for young people to start their own businesses is another welcome part of the Budget.

Fuel duty, however, is one of the biggest problems that we have in Northern Ireland, especially for road hauliers. Because we rely so much on road transport to deliver our goods, fuel duty is causing a major problem. It is bitterly disappointing to people across the whole United Kingdom that the Government have decided to go ahead with the 3p duty increase, which will happen in August. I understand that in doing so, the Government will bring into their coffers somewhere in the region of £800 million from the motorist. Although the Government will get a lot of money from the measure, it will cause a lot of difficulty for those working people who must travel by car or another vehicle to their place of work. It is causing major difficulties.

[Bob Stewart (Beckenham) (Con)]

I support what the hon. Gentleman says about fuel duty in Northern Ireland. In my many times there, the one thing that always struck me was the scarcity of railways. There just is no railway system, and therefore everything must go by road. It is very sad, but the duty has an impact on Northern Ireland.

[David Simpson]

I thank the hon. Gentleman for his comments. That is one difficulty we have in Northern Ireland because for 40 years of the troubles, the infrastructure investment was not there. We are only now playing catch-up. Perhaps some day when he comes across to the Province, we will have a new railway link from Belfast International to the centre of Belfast, which will be beneficial. It could be some way off, but perhaps we will achieve it.

Many people will welcome the tax credit measure to be introduced for the video games, animation and high-end TV industries. The Northern Ireland Executive have tried to promote that sector for some considerable time. Of course, Northern Ireland has seen significant investment in the sector, especially in film production. I hope there will be added benefits to be derived from this announcement. Recently, it was announced in the press that the series “The Game of Thrones”, which was made in Belfast, is to return shortly to film a new series.

In a passing comment, the Chancellor mentioned an enterprise zone for Northern Ireland. I would welcome that, if we could just find out from someone what is meant by an enterprise zone in Northern Ireland. The Secretary of State tells us that it is an enterprise zone for the whole of Northern Ireland. When we tease it out, some will say that it is going back to the 1980s, when there were different enterprise zones across Northern Ireland. We are yet to have any beef on the bones, and we need that if we are to determine exactly what is meant.

One of the issues that has continually acted as a brake on business is the endless red tape and planning laws, and I welcome the announcement in the Budget that we will perhaps see a quicker response to businesses when they apply to expand their premises. Of course, it is a devolved matter for the Executive, but I am sure that the Minister in Northern Ireland will see fit to fall into line in order to create an environment that is helpful for businesses in Northern Ireland. We also have the dreaded dead hand of EU regulation. I urge the coalition to have a firm hand when it comes to all the directives and regulation that the EU imposes on businesses. That needs to be addressed and, frankly speaking, the coalition needs to tell the EU where to get off. This is the United Kingdom, and we make our own decisions for our businesses and companies.

Although there are some plusses in the Budget, there are of course some negatives, but I wish the Government well with it. I hope that the Government can turn around the fortunes of the United Kingdom, and that we can see the people of this United Kingdom having a better standard of living.

15:07

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

I am pleased to have an opportunity to contribute to this most important debate. Before I start, I put on record my appreciation to my right hon. Friend the Chancellor for his statement yesterday, for putting growth at the heart of the Budget, for unashamedly backing business, and for rewarding hard-working families. Those are the areas I want to focus on, but first I want to talk a little about the cut from 50% to 45% in the top rate of tax.

I have to say that I did not campaign for the cut and I was surprised to see it in the Budget, although that does not mean I do not welcome it. As a Conservative, I believe that all taxes should be as low as possible so that everyone can keep as much of their money as possible and spend it how they wish. But I recognise that at a time of national austerity, when public sector workers are experiencing a pay freeze and then very modest pay increases, and ordinary families are struggling with high fuel and energy prices, giving what appears to be a tax cut for the wealthiest in society seems to make no sense. Our hearts say this cannot be right, but if we use our heads, look at the hard facts and stop listening to the class war rhetoric of the Opposition, it begins to make a little more sense.

The 50% tax rate left Britain isolated as the country with the highest income tax rate in the G20—higher than our competitors such as the United States and countries in Europe. It made Britain a less attractive place for wealth and job creators to set up and do business. It encouraged the wealthiest in society to be more creative about where in the world they paid their tax. It saw £16 billion of income deliberately shifted into a previous tax year, meaning that the total take from the 50% rate was only around £l billion. It did not raise the levels of income expected and it made Britain less competitive.

[Richard Fuller (Bedford) (Con)]

My hon. Friend is making a lot of sense. Would he also draw Members’ attention to the HMRC report and the chart on page 23 showing that even with a 45p tax rate we will still have the highest tax rate for top earners in the OECD and G20?

[Stephen Metcalfe]

I think my hon. Friend has just done that.

The higher tax rate made Britain less competitive, and if we are less competitive, it means less growth, fewer jobs, reduced prospects for economic recovery and fewer tax cuts for the rest of us. Despite the perception, therefore, that this cut benefits the wealthiest, I believe that it benefits us all. Having a top rate of 50% rather than 45% raises only £100 million in direct tax, whereas the other Budget measures introduced yesterday raise five times that amount—£500 million.

We should not listen to Labour on this matter. Its aim is to reignite the class war and divide Britain along the lines of envy for its own political gain. I want to say to the people of South Basildon and East Thurrock, “Ask yourself this simple question: what is in the best interests of you and your family? If you answer economic growth, better job prospects, low interest rates or lower taxes, welcome this change, because it goes some way to delivering those aims.” On its own, however, it is only a small step. To achieve real growth, we need more, and I am pleased that we are getting more. The Chancellor both confirmed existing growth measures and announced new ones. As a member of the Science and Technology Committee, I am pleased that the science budget is receiving continued support. Investment in science and technology is vital if we are to emerge from financial austerity. New technologies, deployed for our own economic gain, can provide both jobs and growth. I therefore welcome the maintenance of the £4.6 billion science budget. I believe—I think the Chancellor does too—that science and technology form the basis of our future competitiveness.

Investment in sectors that Britain excels in is also vital. Investments such as in the Francis Crick Institute at St Pancras, the establishment of a UK centre for aerodynamics, which will encourage innovation in the aircraft industry and help design and commercialise new ideas for decades to come, and the £100 million of support, alongside the private sector, for investment in major new university research facilities are important parts of that support.

Also important are the changes to research and development tax credits to encourage businesses to invest in innovation and technology. We also need to improve links with small businesses and the research base to assist in the commercialisation of research and, I hope, capture the value that can come from that. These will be the key drivers of economic growth, and the Government should continue to strive to create the best possible operating environment in which this can take place to encourage greater investment and international interest. We want the international research community to see the UK as the best place to invest in science and technology. I am therefore pleased that the Science and Technology Committee will be looking at how we can bridge the valley of death—the chasm between concept and commercialisation.

This goes wider than just science-based businesses, however. We want all businesses to see the UK as the best place to set up and do business, and I welcome the measures that the Chancellor has taken to ensure that this becomes a reality. The reductions in corporation tax, the introduction of corporation tax relief for video games, animation and high-end television, and the investment in broadband provision and infrastructure are all welcome additions to the growth programme.

[Mr Iain Wright]

Notwithstanding the 1% cut in corporation tax, what impact will the 5.6% rise in business rates have on growing businesses and economic growth?

[Stephen Metcalfe]

Obviously, any rise in cost base will have an impact, but we are working hard to reduce that to the absolute minimum, and we are putting in place a framework around which businesses can grow that will mitigate the 5.6% rise.

We all welcome the investment in infrastructure, which will be a driver for growth, although I add the caveat that I and my constituents remain wholly unconvinced that an airport in the Thames estuary is the right solution to maintaining our hub status. I would therefore encourage the Government to listen to my hon. Friend the Member for Solihull (Lorely Burt), who made a very good bid for that increased capacity in Birmingham.

I also want to put in a plea for small and medium-sized enterprises. In 2009, they accounted for 49% of private sector turnover. SMEs are vital to the economy. Cutting corporation tax, abolishing Labour’s job tax and offering support through the national loan guarantee scheme are all welcome, I am sure. However, if SMEs are to operate at their full potential, regulation, red tape and bureaucracy must be cut. They have been strangling the economy for too long. I am therefore encouraged to see measures that will allow greater freedoms for businesses in this area. My right hon. Friend the Chancellor’s announcement yesterday that he plans to reduce the number of UK SMEs required to undertake an audit and to reduce the burden of financial accounting for UK businesses has to be welcome. I hope that the consultation on a new cash basis for calculating tax, which the Federation of Small Businesses has welcomed, will benefit many small and micro-businesses, allowing them to concentrate on growing their businesses, rather than spending time, money and effort fulfilling requirements that were designed for much larger businesses.

[Bob Stewart]

As an expert, my hon. Friend will be able to confirm this, but I have heard that about 10% of what small businesses do is taken up with bureaucracy—filling in forms, and so on. Does he agree that we need to avoid that?

[Stephen Metcalfe]

My hon. Friend makes a good point. It varies from sector to sector, but that is not an unrealistic figure.

Finally, in the short time I have left, I want to talk about jobs. Businesses are vital for growth, but they are equally vital for tackling unemployment. I am delighted to see that unemployment is beginning to stabilise. Dealing with unemployment, through the building business and enterprise loans, will allow jobseekers to start their own businesses and unleash a new generation of entrepreneurs. However, we should not forget that our existing small and medium-sized enterprises have the potential to deliver sustained employment. We should redouble our efforts to create confidence for businesses to take on staff. I therefore reiterate my call to make it easier for firms to hire staff in the knowledge that employment regulation will support them if things do not work out.

As we emerge from the deepest recession in living memory, I applaud the Government’s commitment to addressing an over-leveraged economy, an unsustainable budget deficit and a broken model of growth, inherited from the previous Administration. Our plan of fiscal responsibility has allowed the UK to surge ahead of the curve. We have become a safe haven in the sovereign debt storm. As a result, we have been able to deliver record low interest rates for families, businesses and taxpayers, yet still remove millions of people from paying any tax at all, by increasing the tax threshold. Although we are not immune from events taking place on our own doorstep, we can—as this Government are demonstrating—steer this country out of a financial quagmire and deliver growth, employment and a future brighter than any alternative the Opposition may offer.

15:14

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

Just about the only announcement that was not flagged up in advance of the Budget yesterday was the £3 billion granny tax grab, which means that those men and women in my constituency who built Birmingham and Britain, who are coming up to retirement next year, will face a cut in what they had hoped and planned for of £314.

There are many laughable examples from the historical lexicon of the politically disingenuous—for example, the spokesman in the dying days of the Nixon Administration who said at the height of Watergate that “all statements heretofore issued are now considered to be inoperative”—but to describe this granny tax grab as “simplification” takes some beating. There is one thing that the Business Secretary and I have in common: we are both follicly challenged. Neither of us detains hairdressers for too long. Following yesterday’s Budget announcement, the next time I go to Imad’s, the barbers on Slade road, I will ask for my hair not to be cut, but to be “simplified”.

Why has this happened? Quite simply, it is a granny tax grab to fund a £40,000 tax cut for 14,000 millionaires.

[Sir Peter Bottomley]

The Labour Government were in power for about 150 months. For fewer than two of those 150 months they had the 50p tax rate. Why?

[Jack Dromey]

I will contrast the record of our Government with the record of the hon. Gentleman’s Government, any time. After 13 years of a Labour Government, Britain was a stronger, fairer, better country. We have now been given a Bullingdon Budget whose first priority is millionaires, by a Cabinet who are oblivious to the consequences.

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

rose—

[Jack Dromey]

I give way to the hon. Member for Downton Abbey.

[Jacob Rees-Mogg]

I am extremely grateful for that substantial promotion in my class standing. Will the hon. Gentleman explain why, when tax rates were cut in 1979 and again by Nigel Lawson, that led to more revenue coming in? This point has been ignored by the Labour party.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Just before the hon. Member for Birmingham, Erdington (Jack Dromey) resumes his speech, I want to make sure that he meant North East Somerset.

[Jack Dromey]

I stand corrected, Mr Deputy Speaker.

This Government are oblivious to the consequences of their actions. I am proud to represent Birmingham, Erdington. It is a constituency that is rich in talent but it is one of the 12 poorest in Britain. I see what too many Conservative Members shut their eyes to, which is the pain being felt in such constituencies as a consequence of the Government’s actions. Let us take as an example the hard-working Castle Vale family who have two wonderful children and earn just over £20,000. They face a £253 cut to their tax credits in April. Let us consider the one in four young people in Kingstanding who are unemployed. They are desperate for a job, but the Budget offers them no hope. Alongside the victims of the shameful changes to housing benefit and the changes in the Welfare Reform Act 2012, there are 1,333 households in my constituency who are now facing the iniquitous consequences of the bedroom tax.

Grotesque unfairness runs through everything that this Government do. For example, let us contrast how Birmingham and Wokingham have been treated. High-need, high-unemployment Birmingham has had £313 million of cuts to its local budget over the past two years, resulting in every citizen in Birmingham losing £164. In leafy Wokingham, the figure is £19. Whether we are talking about police budgets, fire budgets or the voluntary sector, why have the Government got it in for cities such as Birmingham? They should be standing by such cities; at a time of rising unemployment, they need more help, not less.

Now we are to have regional pay. I declare an interest, in that I have led many national bargaining arrangements in the national health service, in local government and in the Ministry of Defence. I worked with some Conservative Members when they performed various ministerial duties in that regard. For example, I was chair of the MOD unions at a time when a Conservative Minister was chair for the Government side. Anyone who has experience of national bargaining knows that it is efficient, that it is increasingly flexible in its approach and, crucially, that it is fair. The Government’s proposal will say to nurses, teachers, doctors, firefighters and home carers in Birmingham that they are worth less than their counterparts in Surrey.

[Angie Bray]

Does the hon. Gentleman’s dislike of regional variations mean that he does not support his own party’s take on the possibility of regional benefits?

[Jack Dromey]

We would never introduce the kind of unfair flexibility—if I can call it that—that the Government are now promoting. The simple reality is that hard-hit areas will be hit even harder in the next stages, be they in Wales, the north-east, the north-west, Birmingham or Northern Ireland.

In the time remaining to me, let me deal with something that commanded but a passing reference in yesterday’s Budget—housing. We have the biggest housing crisis in a generation. Millions of people in Britain are in need of a decent home at a price that they can afford. About 2.8 million people are on council waiting lists, 30,000 of them in the city of Birmingham. Owing to the combination of this Government’s economic mismanagement and the failure of their housing policies, this crisis gets worse by the day.

House building was down by 11% over the first 18 months of this Government in comparison with the last 18 months of the Labour Government. It was the vainglorious boast of the Housing Minister who gives hubris a bad name that he would beat Labour “hands down” year on year, but that is not what is now happening. Homelessness is up, with families presenting themselves as homeless up by 14%. Rough sleeping is up 23%, yet it fell by 70% under the Labour Government. We have a mortgage market where millions struggle to get a mortgage. Scottish Widows estimates the average age of unassisted first-time buyers to be going up from 37 to 40 to 44. We have a private rented sector growing rapidly which is characterised by soaring rents and, all too often, abuse of tenants.

What, then, of the “housing revolution” announced by the Government in November last year? All I would say is that if we had a house for every press statement issued before and after that time, we would not have a housing crisis. The Prime Minister and the Deputy Prime Minister donned wellies and went to a building site to say that all would be well. What came out the following day, however, was that as a consequence of the £4 billion cut instituted by the Chancellor in October 2010, affordable house building had collapsed by 99% throughout England.

What of the new homes bonus? It is both inefficient and unfair, while our planning system is being thrown into chaos by the Government.

[Richard Fuller]

The hon. Gentleman is talking about the building of affordable homes. Does he not regard it as appalling that, under the last Labour Government, the building of social houses went down by 25%?

[Jack Dromey]

Under our Government, there were 2 million new homes, 1 million more mortgage holders and half a million more affordable homes, and 1.6 million homes were renovated under our decent homes programme. Has housing been at centre stage as much as it should have been under successive Governments for 25 years? No, but I will compare our record any time with the failure of this Government.

In conclusion, housing matters. Housing matters to the economy. Housing matters to health, as evidence of the damage done by poor or overcrowded housing confirms. Housing matters to educational attainment. Kids are held back at school because they live in damp or overcrowded housing. That is why urgent action on housing matters. That is what we did in 2008, after the bankers’ collapse, with our kick-start programme, which had 110,000 homes built, creating 70,000 jobs and 3,000 apprenticeships. That is why we are absolutely right to say that we need a repeat of the bank bonus tax to build tens of thousands of homes, to create jobs for unemployed building workers and to create apprenticeships and hope for the young people of my constituency. I see the consequences of the Government’s actions every day, and I know what my constituency wants. It wants to put people back to work to build that which the community so badly needs—homes.

15:28

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

Listening to today’s debate, I have heard little from Opposition Members to dissuade me from the conclusion I arrived at yesterday after hearing the Chancellor’s speech: that this is a fiscally responsible and fair Budget, but one that continues to build the foundations for our long-term growth and prosperity. What the Government are doing for growth and prosperity will be the focus of my speech. First, however, I want to make a few comments about fiscal responsibility allied to fairness.

I am pleased that the Chancellor chose to stick to the plan—a framework within which all the Government’s decisions are being made. At the beginning of this Parliament, the Chancellor made the right decision, to pay the debts of the past and, after a decade of uncontrolled borrowing, to tighten our belts. It is encouraging that the Chancellor continues to stick to that plan, which was initially unfashionable but has now entered the international mainstream.

The task facing us is not easy, and it will continue to be challenging. The gap between how much we earn and therefore take in and how much we spend has fallen from £156 billion—an all-time high, set just before the coalition came to office—to £126 billion. We have therefore made a lot of progress in balancing the books, but we must not take our foot off the gas, which is why I am glad the Chancellor continues to stick to his plan in this Budget.

It is interesting that Opposition Members no longer call for a plan B. A year or so ago not a day would pass without their calling for that. They are no longer calling for it because plan A is working: the deficit is falling and we are beginning to see private sector-led job creation. That is why the Chancellor is right to stick to his plan and to focus on being fiscally responsible. Very few western Governments could these days have announced the Budget that he has just delivered, and he has been able to achieve that because of his past decisions.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

The hon. Gentleman says plan A is working. Does he agree that it must have been an oversight not to mention at the outset that it would result in damaging growth and therefore pushing up unemployment and the costs of some areas of borrowing?

[Mr Gyimah]

It is precisely because plan A is working that in this Budget we can afford to lift 2 million people out of tax—2 million people who were penalised by the 10p tax introduced by the last Labour Government. Because plan A is working, 24 million of the 30 million workers in the UK can get a tax cut—a very important tax cut in very difficult times. The hon. Member for Birmingham, Erdington (Jack Dromey) said that he would compare his record with our record any day. I say to him that we are lifting 2 million of the poorest people out of tax, while the previous Labour Government penalised them. Our record certainly stands up to scrutiny on that.

Labour has now quietly dropped its plan B, and is instead opportunistically opposing our measure on the 50p tax rate. However, Labour does not say that it would reinstate that rate if it were elected to office tomorrow. It is also saying it would somehow give child benefit to higher rate tax payers.

[Mark Durkan]

If the need for deficit reduction was the justification for the temporary nature of the 50p tax rate and the withdrawal of child benefit, why has the 50p tax rate remained a temporary measure while the withdrawal of child benefit will be permanent?

[Mr Gyimah]

All three main parties agreed that the 50p tax rate was to be a temporary measure. Also, we must ensure that any tax that is imposed actually raises the required revenue for the Government coffers. If it does not do so, it would be irresponsible of a Government to carry on with that tax just because it is good politics. It is right for the Government to set that tax at a rate that discourages avoidance and encourages people to pay.

Fairness must not be the only test of this Budget. Economic growth is also very important. In truth, the Chancellor has very limited room for manoeuvre, and it is good that we have nevertheless done quite a lot for hard-working people, giving back to them more of their hard-earned cash. However, only economic growth will lift the prosperity of all of us. Today, we focus on who are the winners and losers from this Budget, but growth is the most important theme.

I was therefore encouraged to hear the Business Secretary talk about access to finance from the banks. My party colleagues and I know that more borrowing, spending and debt is not the way to get economic growth and to create jobs. We believe that the way to achieve that is through encouraging a spirit of enterprise and adventure, but we cannot encourage that unless we ensure that finance gets into the real economy.

One of the biggest challenges we face in coming out of the 2008 financial crisis is the concentration in our banking system. Some 90% of small business lending is concentrated among five banks. No matter what they say, that means that there is little price competition and it is important that the Government do a lot to ensure that we can get money into the real economy. That is why I welcome credit easing, because by using the Government’s balance sheet to enable banks to borrow and lend to businesses, we enable a situation whereby even if a business had a 1% interest rate discount, it could refresh loans that may otherwise not be refreshed.

[Richard Fuller]

My hon. Friend is talking about credit easing and the use of banks. Does he not also think there is scope for considering alternative mechanisms to provide financing to our small businesses?

[Mr Gyimah]

I very much agree with my hon. Friend that credit easing is a temporary measure. In the long term, the Government have to change the lending landscape for small businesses—that is the point I was driving at. We cannot continue to rely on five major banks, which is why I welcomed the business finance partnership, a £1.2 billion fund that the Government are using to support non-bank lending institutions that are closer to small businesses. Many of these are peer-to-peer lenders, such as MarketInvoice or Funding Circle, or more traditional institutions such as M&G Investments. It is absolutely right to diversify the lending landscape, so that businesses in my constituency and in many others do not just have to rely on the same bank manager and, more importantly, the computer, which will say no to them when they try to refresh a loan or get the credit that they need.

I welcome the fact that the Budget realises that debt finance should not be the only source of finance for businesses. Equity finance is very important, especially in the context of businesses that do not have the cash flows or the revenues to support debt. That is why I welcome a lot of the flexibility associated with the enterprise investment scheme, venture capital trusts and the seed enterprise investment scheme. Those are all schemes in the Budget that would not make the headlines; nobody is going to focus on them because they do not immediately tell people who are the winners and losers in the Budget. However, it is those measures that will ensure that individuals who want to take risk, to start businesses and to build up their companies are capable of doing so. Whether we are talking about The White Company, lastminute.com or The Body Shop, it is these British success stories that will get us out of where we are at the moment.

What would I like to see as the Chancellor reflects on his Budget, and I hope, takes it further? On the diversification of the lending landscape in this country, we need to be very careful not to stifle innovation as we examine banking regulation. So much of what we are doing on banking regulation is about dealing with the crisis of the past. We should make sure that, in doing so, we do not freeze our banking system in aspic so that new, enterprising and innovative companies that can get credit to small businesses fail to thrive. The Government have announced £20 billion of credit easing, but we probably need to consider doing more in that direction to help businesses.

[Mr Iain Wright]

Does the hon. Gentleman think that the massive downgrading in business investment growth forecasts over the medium term is a sign that plan A is working?

[Mr Gyimah]

Anyone who has been in business before, as the hon. Gentleman has—he was an accountant—and as I have been, will know that one of the most important things is confidence. For businesses to gain confidence, they need to know, first, that the Government are going to create an environment of certainty in which they can operate. They also need to know that the Government are going to balance their books and to create the right environment in which to invest. Lowering corporation tax is a clear signal that we are going to be creating the right environment for businesses to operate in. I am confident that once we have that macro-economic framework right, businesses will have the confidence to invest. It is only through business investment that we will generate the growth and the jobs that all Government Members want and are fighting for. The Chancellor is on the right side of this argument, because we cannot do this through more borrowing, more spending and more debt—that is more of the same and it is all I have heard from Labour Members today.

15:39

[Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)]

The hon. Member for East Surrey (Mr Gyimah) might be persuaded that plan A is working but I can tell him that, even if it is working in his constituency and the rest of Surrey, it certainly is not working in Scotland. I hope to demonstrate that in my remarks. The truth of the matter is that we appear to be living, even in this Chamber, in two different worlds. Let us ignore the fact that, despite all the efforts of the Government and all the leaks that we debated earlier, we face a Budget that represents the reality of what the coalition means. This Government and this Budget will be remembered for cutting the top rate of tax for the rich while putting the boot into pensioners. I have already spoken to a number of my constituents and I have absolutely no doubt that that is their view.

It might seem odd for me to refer to a Foreign Secretary during a Budget speech, but some hon. Members might recall that some years ago a young representative at the Conservative party conference—a 16-year-old by the name of William Hague—addressed the conference, saying:

“Half of you won’t be here in 30 or 40 years”.

That may well be true, but what are we seeing in the Budget for the half who are left? While £30,000 a year is freely given to millionaires, the Chancellor is seeking to end age-related tax allowances, despite the evidence from HMRC, which says that 4.4 million pensioners will be £83 a year worse off in the long term. How can anyone defend that and give us the kind of nonsense we have heard about the so-called class war?

Let me address the real economy in our constituencies, which I believe the Chancellor had a wonderful opportunity to address but missed. Unemployment is by far the biggest problem we are now facing, certainly in constituencies such as mine where there has been a 54% rise in long- term unemployment and an 80% increase in youth unemployment. A league table of every constituency in Britain was produced last week, relating alcohol abuse to mortality, and it is with great regret that I have to say that my constituency came out as No. 1. Almost every professional who was consulted on those figures made the point that we cannot ignore poverty and its implications; we cannot ignore unemployment and what it means; we cannot say to young people that there are no jobs for them, whatever educational qualifications they might have attained, and not expect the kind of reaction that I have just described. Nearly a quarter of 16 to 24-year-olds in the UK are unemployed. That is a wholly unacceptable statistic and I make the point that we are talking not just about statistics but about people.

We can see from the unemployment figures that are available that in the UK there was a 22,000 increase in unemployment among women in the last quarter alone. I am seeing that in my constituency. Women are the bedrock of our society, as we are rightly told. They are at the heart of our families, whom the Government in earlier days told us were one of their priorities. Well, there is little evidence for that.

We need to restore the future jobs fund—initiative after initiative has been annulled by this Government—and we need to look at new opportunities in fresh sunrise industries, which I am happy to say exist in my constituency, particularly in solar energy. I welcomed what my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) said a few moments ago, but I did not welcome the Government’s change to feed-in tariffs, which is frankly too deep and too fast. Home owners who seek to go along with developments in this sector now face soaring energy costs, and burgeoning industries such as AVC Sky in my constituency face enormous difficulties, which is bad for home owners, bad for jobs and bad for growth. The Government’s rhetoric is simply not matched by their actions, especially when the Government tell us that they are the greenest Government ever.

Mr Deputy Speaker—I beg your pardon, Mr Speaker; I welcome you to the Chair. We saw at points during the Budget speech yesterday Liberal Democrat Members waving their Order Papers. Were they waving them at the kind of measures that I describe?

[Lorely Burt]

We were waving our Order Papers with delight at the fact that our coalition Government are bringing the tax threshold towards our £10,000 target faster than we could ever have hoped.

[Mr Clarke]

They were waving their Order Papers at some of the most miserable measures that I have heard in the House. They reminded me of Jim Callaghan’s comment when he found that the Scottish National party—which is not even represented here today—was working with Mrs Thatcher to bring down his Government. He referred to SNP Members as “Turkeys voting for an early Christmas”, and deservedly in their case.

I wrote to the Prime Minister recently to draw his attention to the fact that Korean shipbuilders are given preferred bidder status for Royal Navy tankers, with almost £500 million involved. It simply cannot be right that, as we defend our country, as we should, defence orders exclude British and especially Scottish firms that are willing, able and skilled enough to respond to the task. I want to ensure that highly skilled workers are kept working for our nation’s security and for our people’s safety.

I finish with a reference to the Chancellor’s announcement of a £12 billion cut in welfare—a shameful figure that the Liberal Democrats were also cheering. That is added to the Remploy closures, which have never been fully explained. Hundreds of disabled people will be thrown straight on the dole. Two thirds of Remploy factories will close. We are seeing on top of that changes in benefits that are very much to the disadvantage of people with disabilities and their carers and families. We are seeing disadvantages even to disabled children and their families. It is not fair, not acceptable, and the Government deserve to be rejected and hounded by the British people.

[Several hon. Members]

rose—

[Mr Speaker]

Order. Angie Bray will be the next speaker, but before calling the hon. Lady I inform the House that, in view of the large number of Members seeking to contribute, the time limit for Back-Bench speeches will now be five minutes, with immediate effect.

15:49

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

A little over a year ago I stood here and drew the Chancellor’s attention to the level of debt hanging over the heads of every single voter in my constituency. The amount—the generous legacy the Labour Government bequeathed to the people of Ealing and Acton—was an astonishing £37,000. I asked the Treasury team for reassurance that they were committed to putting that right. The answer was a resounding yes. Yesterday, a year on, the Chancellor’s Budget reconfirmed that. By sticking to his original plan he is reducing the structural deficit every day and lessening the burden on my constituents, their children and their children’s children.

Many of my constituents own their own businesses locally. The Budget will encourage them because it sends out the crystal-clear message that the Government are behind them and back aspiration, new ideas and creativity. Now these businesses know that from next month their corporation tax bill will be reduced to 24% and that it will drop still further to 22% by 2014, and hopefully 20% thereafter. They know that London’s coffers will be boosted to the tune of £70 million by a new development fund to attract new business and jobs and that the national loan guarantee scheme will step up to the plate and make bank loans easier by making them cheaper.

When those measures are allied to the reduction in the top rate of income tax to 45% from next year, it is clear that the Government are serious about supporting enterprise and encouraging aspiration. Long-term measures such as those help to instil confidence and encourage businesses to take the bold decisions needed to thrive. Only by allowing them to thrive will we create the conditions for growth and go some way to addressing the related problems of getting more of our young people into work and improving our communities.

Young people in my constituency can be encouraged, too. The Chancellor announced the introduction of enterprise loans to help 18 to 24-year-olds to set up and grow their own businesses. They will get the opportunity to pitch their ideas before a panel and, if they have a viable business plan, get a cash injection of between £5,000 and £10,000 to help them start up. So often it is the young, creative, positive ideas people who are stymied by a wall of red tape when they try to start up on their own. In the long term, schemes such as that can go some way to bridging the gap between great ideas and the start of a great business.

Already in my constituency I know of a number of set-ups that could benefit from that kind of scheme. The Doughnut Factory in Acton is supported by a number of organisations, including Action Acton and the university of West London. It is a creative hub where local entrepreneurs can rent affordable office space. Many of the young people based there would be eager to pitch their plans. I spent a happy morning there meeting a group of young, enthusiastic students, all looking to start their own businesses, the very people that that scheme is aimed at helping. It is just the latest in a raft of hugely positive measures that the Government have already introduced to help young people: the upcoming youth contract, the Work programme, a dramatic increase in apprenticeship places and the national citizen service for 16-year-olds, which is now entering into its second year.

The real headline news from the Budget has to be the largest real increase in the personal tax allowance for 30 years. An additional 840,000 people will be lifted out of income tax, meaning that altogether the Government will have taken 2 million people on the lowest incomes out of tax altogether. The personal tax allowance will go up to over £9,000, and we are well on our way to our target of taking everyone earning up to £10,000 out of tax. Of course, even those earning above that stand to benefit as well. That will help a great many of my hard-working constituents. It is also part of the Government’s overall strategy, sitting alongside the benefit reforms that ensure that work always pays.

London has done well out of the Budget. The Chancellor announced vital cash for London rail; £15 million for Transport for London, specifically for cycle safety; accelerated broadband; more support for the enterprise zones—please can we have one in west London?—new funds to help young people into work; and £70 million for the Mayor to help London businesses grow. As I have said, London has done well out of this Budget. Enterprise and aspiration have done well out of this Budget. In tough times, this is the right Budget for the country.

15:55

[Nick Smith (Blaenau Gwent) (Lab)]

In my maiden speech almost two years ago, I highlighted my constituency’s strengths: our beautiful land and strong sense of community; a pride in our radical past of Chartism and of Nye Bevan, who established the NHS; and its hard-working people, who started our industrial revolution. I highlighted also its challenges and, particularly, high unemployment and a creaking infrastructure that is badly in need of significant investment. Sadly, unemployment is even higher now and, in particular, almost 20% of our 18 to 24-year-olds are on the dole—a shocking figure for young people.

In Blaenau Gwent there are 18 decent and talented people chasing every advertised vacancy, so job creation, transport infrastructure and growth are still top of our agenda. Sadly, the Budget showed that they are not the Government’s top priorities, and we see no coherent strategy for jobs and growth. The UK Government must do more. We need investment in jobs and growth, and we need it now.

The fact is that we are losing jobs faster than we are creating them. Everybody I speak to about regeneration in Blaenau Gwent, in the public and private sectors, stresses the importance of good transport links. Being in the east of Wales, we have good access to the rest of the UK, but we need adequate infrastructure—both road and rail—to deliver the benefits of that access, and that is why I am campaigning for both.

Work to improve the Heads of the Valleys road is under way, and, although the work is disruptive in the short term, when it is complete we will see the benefits. Thankfully it started before the Government proposed linking road improvements to new tolls. Welsh business would also be given a real boost if the Severn crossing’s toll was axed.

Rail electrification to Cardiff is going ahead, and that is good. The Ebbw Vale to Cardiff line was resurrected under Labour, and it is now so successful that carriages are jam-packed and locals call it the “Bombay Express”, but it needs a more frequent service and a line upgrade. In the Budget the Government state that they are working with the Welsh Government on the electrification of the valley lines, with final proposals due this summer. The Ebbw Vale to Cardiff line must be included to give a boost to the place that, because of our high unemployment and related deprivation, needs it so much.

The Welsh Business Minister, Edwina Hart, has committed £2 million to the development of a world-class motor racing circuit in Blaenau Gwent, and that could lead to a £200 million investment and create 1,000 jobs —a real game changer for our area. I had hoped that the Chancellor would support this opportunity, hailed by some as the UK version of the famous German Nürburgring track, but from his statement yesterday it appears that Deeside in north Wales will be the only Welsh enterprise zone to benefit from enhanced capital allowances. Will the Minister please clear that up?

Such tax treatments are focused on plant and equipment costs, not on the infrastructure itself, but capital allowances need to attract individual as well as corporate investors. That would help kick-start those exciting automotive plans for Blaenau Gwent, and the Government should think much more creatively about enhanced capital allowances for business growth.

In the Welsh valleys we punch above our weight in terms of the number of brave men and women recruited to our armed services, so I welcome the measures in the Budget which improve military accommodation and help with council tax rebates and with forces families’ welfare. They are an important part of the military covenant and are supported by both sides of the House.

I should also comment on the Budget proposals affecting fuel prices. A stonemason in my constituency travels from job to job in his 4x4, but with the cost of fuel he thinks that he would be better off out of work, and that cannot be right. Many in Wales will also be fearful of the proposals for regional public sector pay, which would hit women hard in particular, and teachers and nurses especially.

Blaenau Gwent deserves more than this damp squib of a Budget. In the future can we see real Budget leadership on growth and improved transport infrastructure, and on support for business development and public health? Then Blaenau Gwent and Wales will be able to play their part in boosting our economy and make a further positive contribution to our UK budget.

15:58

[Andrew Griffiths (Burton) (Con)]

It is a pleasure to take part in this debate and to listen to the contributions. I was particularly pleased to listen to the speech made by the hon. Member for Birmingham, Erdington (Jack Dromey), who is no longer in his place. In his usual articulate and erudite manner, he opposed every single measure that the Government had brought forward to cut the deficit. He opposed changes to welfare, to benefits and to housing, yet he had not a single idea about how his party would begin to cut the deficit—the terrible legacy that we were left by the last Government.

I pay tribute to the Chancellor and the Treasury team for yesterday’s Budget announcement. I wanted a Budget that was good for business and hard-working families, and I feel that I got that. Thousands of families will be lifted out of paying tax as a result of yesterday’s announcement. It is important that that measure is particularly beneficial to women, who tend more to be part-time or low paid workers. A measure that lifts people out of paying tax is particularly helpful to the women in our society, and that is a good thing.

Now I come to the “but”, both as the MP for Burton and chair of the all-party group on beer. The Chancellor said that he intended to make no changes to the duty regime. That was a little disingenuous, shall we say, as he knew—and I knew, and brewers up and down the country knew—that that meant an increase of 5% on beer duty because of the continuation of Labour’s beer duty escalator. That is putting jobs and livelihoods at risk.

In the past four years, beer duty has increased by 42% in this country. Our beer duty is now the highest in Europe—eight times higher than France, 10 times higher than Spain and 11 times higher than Germany. We pay 40% of all Europe’s beer duty, yet we represent only 13% of its beer consumption.

We have seen a 52% increase in duty over recent years, yet only a 10% increase in revenue and, as a result, a 25% drop in beer sales in this country. Yet beer is a great British product. Some 80% of beer drunk in this country is brewed here. There are 800 breweries across the country, which employ people in all our constituencies. Compare that with the wine we drink, 90% of which is imported, and we see the unfairness of the current duty regime. Yesterday’s announcement will cost an average pub about £2,800. I commend the 106 MPs who signed the early-day motion in support of freezing beer duty.

I turn to the unfairness in how the system treats beer and cider. Cider pays half the duty of a 4% beer, and at high strength—8%—beer pays four times the duty on cider. That means that breweries and pubs suffer. The cider industry tells us that the reason is the increased costs in running an orchard and growing apples for cider.

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

Why, in the hon. Gentleman’s opinion, is there such discrimination in the coalition in favour of cider?

[Andrew Griffiths]

I should say that what I meant when I spoke about the Chancellor was a lack of clarity in relation to yesterday’s statement.

I have with me a private and confidential presentation—

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

I welcome what my hon. Friend is saying about beer, but I am worried that he is suddenly targeting cider. There is a great amount of cider in my constituency, and I would be worried if he wanted extra tax on it.

[Andrew Griffiths]

I assure my hon. Friend that I am not targeting cider; what I want is fairness in the system.

The presentation I mentioned, which is used by the makers of Stella Cidre, clearly states the differences in duty. It says that the duty per hectolitre paid on Stella Artois, at 5% strength, is £86.60, the duty paid on Strongbow is £36.01, and that there is a difference of £50.59. At the top it says: “Why cider? Favourable duty position resulting in margin opportunity”. As a result of our taxation system, we are penalising beer. Every time somebody chooses to have a pint of cider rather than a pint of beer, the Treasury loses 50p. All we are calling for is some fairness in the system.

Last week at Prime Minister’s Questions, I asked the Deputy Prime Minister what measures he had in place for beer, and he said that he wanted to support community pubs. The best way to do that is to give beer a break. We want a fair taxation system that recognises the importance that beer, as a lower-strength drink, can have in our society. We want recognition of the efforts that brewers are making in relation to responsible drinking and reducing the alcohol by volume of their products. I commend the Government for their work on the 2.8% strength beers that were introduced recently. We recognise that the community pub is at the heart of the big society and that it has an important part to play in all our communities. I urge the Treasury to look at this again and work out what we can do to give British beer and British pubs a fair break.

16:06

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

The Chancellor’s Budget speech painted a positive picture, in some ways, of what his policies are doing for the UK economy. However, although some businesses in my constituency are doing well, at the grass roots, among small businesses, I find a lot of people who are very worried about the future of their businesses, and that many of those who have been struggling to survive over the past year are now on the brink. I am sure that my constituency experience is typical of that of many Members in constituencies up and down the country.

That is why the Chancellor has made a dramatic mistake by rejecting Labour Members’ call for a temporary cut in VAT, which could have provided an immediate boost to businesses, created jobs and provided real relief for those on the lowest incomes. On the main street in my constituency, there are all sorts of shops, offices and other types of businesses, and I am genuinely worried that many of them are in great danger of going over the cliff edge if there is not an immediate boost to the economy such as a reduction in VAT. The temporary VAT reduction that Labour introduced at the end of its period in government certainly had that effect, and another temporary reduction would be an important boost for all types of businesses, but particularly small businesses, in my constituency and up and down the country.

[Kwasi Kwarteng (Spelthorne) (Con)]

The hon. Gentleman talks enthusiastically about businesses. Do not the measures in the Budget to cut corporation tax support business?

[Mark Lazarowicz]

The measures on corporation tax will have a beneficial effect on some businesses, but not so much for the smallest businesses. I am particularly concerned about the small businesses in a fragile situation in many parts of my constituency, which does not, relatively speaking, have very high unemployment overall, although some areas do have high unemployment.

First, we need a general 2.5% reduction in VAT that would benefit all types of businesses, as well as relieving people on low incomes, in particular, from the difficulties in which they find themselves as a result of the general economic situation and the policies of this Government. We also need targeted cuts in VAT. It is extremely disappointing that yet again the Government have rejected the call, not only from Labour Members but from organisations such as the Cut the VAT Coalition, which has called for VAT on home maintenance, repair and improvement work to be cut to 5%. That would not only be a boost for the depressed construction sector but would create work for joiners, plumbers, electricians and painters, and opportunities for young unemployed people looking for their first job.

Of course, one has ask how one would pay for a temporary cut in VAT. If the argument is that the top rate of tax is being cut because it will bring in more income by encouraging economic activity—a fairly dubious argument in my view—surely temporary cuts in VAT of the kind that I and my party have argued for are much more likely to lead to an immediate increase in economic activity than the cut to the top rate that is proposed in the Budget.

[Neil Parish]

I am interested in why you say that it is dubious to cut the rate from 50% to 45%, when in 13 years of your Government, you did not put it up from 40% to 50%.

[Mr Speaker]

I am extremely grateful to the hon. Gentleman, but I am not sure why he refers to my Government. There should be no reference to my Government in these matters.

[Neil Parish]

I meant the Government of which the hon. Member for Edinburgh North and Leith (Mark Lazarowicz) was a member.

[Mr Speaker]

I am sure that that is what the hon. Gentleman meant. It would be good in future if that is what he said.

[Mark Lazarowicz]

Those points were covered earlier in the debate.

I want to highlight the problems for businesses in my constituency. I say again that a cut in VAT would certainly make a difference for businesses in my constituency that are on the brink. Such a reduction in VAT would increase business activity, increase sales, increase the taxation income of the Exchequer and decrease unemployment, with a consequent cut in spending on benefits. The boost for smaller retailers and smaller companies in the construction sector would have other beneficial effects. From my constituency office, which is in a street that is still relatively well occupied, I can see shops and businesses closing and the resulting cycle of deterioration not only in the local economy, but in the local environment. I can see that happening in my constituency. That is why I believe that the temporary reduction in VAT that we have called for would be a great boost not just for business, but for the wider economy.

There were some announcements in the Budget that will benefit my constituency. There was confirmation that Edinburgh will be one of the cities that will benefit from superfast broadband and the green investment bank was also mentioned. However, those two announcements have been made a number of times already. The announcement about superfast broadband for Edinburgh and a number of other cities was made at the end of last year. The fact that the Chancellor chose to highlight those innovations again only goes to show the lack of imagination in the Budget when it comes to growth. We could have had a Budget for jobs and growth. Instead, we had a Budget with very few specific policies. That is regrettable and it is bad for the country.

I hope that the Government will change course and reduce VAT, if not in this Budget, then at a later stage, to support smaller businesses in the construction sector, which would benefit greatly from such a change.

16:12

[Kwasi Kwarteng (Spelthorne) (Con)]

I am pleased to have the opportunity to speak in the Budget debate, because we had a significant Budget yesterday.

We have to consider what the Chancellor said in the Budget in the context of 10 years of Labour profligacy in public spending and in the context of the international economy. The Office for Budget Responsibility has been clear about the problems that face the British economy. There are structural problems caused by too much debt, which in turn was caused by too much spending. It is clear to everyone that spending more money or running a greater deficit would not help to get us out of this situation. The Government are doing what they set out to do and they are reducing the deficit. The Budget yesterday was a step in the right direction. We are trying to cut regulation and to encourage enterprise and aspiration. All that was clear in the Budget.

I would like to talk about tax cuts. The most significant tax cuts in yesterday’s Budget were not at the top end of the income scale, but at the lower end. It was an historic step to take hundreds of thousands of people out of taxation. It is striking that in this debate, the Labour party has made no comment about that. It has not given us the courtesy of saying that it agrees with the proposal, nor has it opposed it, yet it was the most significant move in the Budget.

There were other, perhaps more controversial moves, such as cutting taxes for wealthier citizens and subjects, which have created some debate. It is received wisdom, I think, that high taxes did not stimulate economic growth. Some Members will remember that there was a 98% super-tax in the 1970s, and we were a very highly taxed nation. Other Members were here when Nigel Lawson cut the top rate of tax from 60% to 40%. That was so successful that in 12 years, Labour did not touch it. It always accepted that 40% was a reasonable and good tax rate, not because it was friendly to the rich but because Labour’s leadership realised that there needed to be incentives to make the economy grow.

[Mr Speaker]

Order. I think the hon. Gentleman was referring to his noble Friend the Lord Lawson of Blaby. It would be good to preserve some of the courtesies of the House.

[Kwasi Kwarteng]

Indeed. I am very grateful to you, Mr Speaker, for putting me in my place. I will refer to him with proper courtesy with his title. The Budget in which he cut the top rate—the 1987 one, I believe—was the most significant in recent years, and only latterly have a series of political games been played and has the top rate been increased. Other Members have referred to that, and it is an elephant trap that the Government have mercifully dodged.

We have to consider the Budget in its national context, but also in an international context. It is no good our having worthy debates here without referring to what is going on in the rest of the world. I was very pleased to see that the Chancellor had finally realised that aviation capacity in the south-east is a massively important issue. The fastest-growing cities in the world need to have more connections. We will not be able to make money or trade with them without connections, and the Chancellor’s step of recognising the problem is mature and bold.

While we are focusing on spending and regulation, we have to realise that other parts of the world such as China, India, Brazil and places in the middle east such as Dubai have favourable regimes for business. If we are to compete seriously with those countries and their regimes, we will have to do an awful lot more even than we are doing to make ourselves competitive.

The Budget was excellent and a step in the right direction, although we need to do more to meet the targets that we have set ourselves. The Office for Budget Responsibility has said that it is looking for 3% growth in 2015 and, to meet that, we will have work an awful lot harder.

16:17

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I begin by apologising to you, Mr Speaker, to the respective Front Benchers and to other colleagues for the fact that I will not be here for the end of the debate. No discourtesy is intended, but I have a pressing constituency engagement.

As I listened to the tail end of the Business Secretary’s speech, I heard him outline the many problems confronting the economy and he cited the banks as one of the remaining problems. It strikes me that for that reason, it is important that Government Members try to appreciate that my constituents in Selly Oak, who work long hours for low pay or care for sick children or elderly relatives, will struggle to understand why one of the key tax give-aways in the Budget will amount to £325,000 a year for one of our leading bankers. He is hardly on his uppers, so people will find that very difficult to understand.

If the central argument about the 50p tax rate is that it has not raised much, that is because people have been avoiding it. The decision to cut the rate amounts to rewarding and reinforcing tax avoidance behaviour. What will prevent the group of people involved from trying to avoid the next band of tax? That is the problem—the Government are saying, “Because they avoided it, we’re going to reward them.”

I now turn to something that the Chancellor did not address. One of the most pressing problems of this age is youth unemployment—all hon. Members share that concern—and I was surprised the Chancellor did not take advantage of the opportunity in the Budget to do a bit more. The Government like to tell us about the number of apprenticeships, but most of those are not for people in the 16 to 18 age range. The vast majority that have been created tend to be for older people. There was an opportunity in the Budget to offer more incentives to small businesses to take on young people, but it was missed. Successful manufacturing companies in my patch such as B.H. Leake, Birmingham Powder Coatings and Cameron Price have all told me that they would like to take on a young person or apprentice, but they find the system extremely complex and apprenticeships difficult to fund. Something to improve that would have been welcome indeed.

I welcome the news on the loan guarantee. I hope the initiative is more successful than others. Quantitative easing has given the banks plenty of money; the problem is that they are still not passing it on to small companies. In the same vein, I welcome the proposals to give support to the computer games and animation industries. That is a really good thing that the Chancellor has done. I hope we get the details of how it will work soon, and that it will not turn out to be mired in complexity and red tape, because that would be a tremendous setback.

There is another area in which the Chancellor could have helped young people. National Express is keen on a travel card for young people. It has been in talks with the Government and was directed to the National Apprenticeship Service, which directed it to learning providers, who said, “We don’t have the budget. Go back to the NAS.” There is quite a lot of evidence that the cost of travel inhibits young people from finding the jobs they are looking for. Anything we can do on that front, Minister, would be most welcome.

I shall conclude by mentioning one other thing. I was relieved that the Chancellor said there will be a White Paper on social care. We cannot afford for that issue to be kicked into the long grass. If it is not tackled in the next year or so, it will not happen in this Parliament, and we will not address the problem.

16:22

[Jackie Doyle-Price (Thurrock) (Con)]

I am grateful for the opportunity to contribute to this debate and congratulate the Government on their increase of the personal tax allowance. I believe that a defining characteristic of the coalition Government is that we are taking so many more people who can least afford it out of paying tax altogether. It is an achievement of which we can be proud, and which reflects on both parties in the coalition. The measure also reflects the fact that Government Members have the right values when it comes to deciding who carries the burden of paying for public services. It should not be the lowest paid. We need to reward work and encourage aspiration.

The Opposition response has been predictable and disappointing. I was reminded why I got involved in politics in the first place many years ago when I heard the language of class war and envy being expressed by Opposition Members. They say, “Same old Tories,” but I say, “Same old socialists.” We have heard today the final nail going into the coffin of new Labour. The socialists are back in charge.

Let us be clear. The Government inherited an economy in which the state was borrowing more than it could afford. We certainly were not living within our means. The Chancellor’s achievement is that he has been able to reduce borrowing and establish credibility in the eyes of the markets, with the result that we retain confidence and continue to benefit from low interest rates. Our constituents benefit from lower mortgages.

I wholeheartedly welcome the Government’s decision to issue a statement to each taxpayer to explain how much of their tax is going on various areas of spending. It will strengthen the accountability of Government to the taxpayers. We on these Benches never forget that it is taxpayers’ money and we need to make sure that taxpayers have the opportunity to judge whether we are spending their money wisely and delivering the outcomes they wish to see.

What we really need now to move our economy on is a strategy for growth and job creation, and I wish to focus my remarks on those elements. I welcome the Government’s commitment to reviewing airport capacity in the south-east as that is clearly important for our international competitiveness. There has been a growing enthusiasm for a Thames estuary airport, most notably on the part of the Mayor of London. I have to put on notice my firm opposition to such a proposition. My objection is really that the Thames estuary reaches out to the rest of the world by ship and sea. In fact, the motto of the borough of Thurrock is “By Thames to all the Peoples of the World”. I want to retain the Thames estuary as a shipping centre, not as a centre for an airport.

The west London advocates of such an airport seem to think that north Kent and south Essex are economic wastelands waiting to be transformed, but nothing could be further from the truth. While the docks in east London have gone, they have moved east to accommodate the ever-larger ships. The ports in Thurrock are thriving and growing. The investment by DP World at Shell Haven and by Forth Ports at Tilbury docks mean that this sector will go from strength to strength. Within a couple of years, Thurrock will be the port capital of this country and it will strengthen the port of London and cement Thurrock’s role as a major logistics hub.

The debate about the future of a hub airport would have severe implications for Heathrow, if the new airport were constructed. The economic dislocation caused by such a move would be seismic. It would cost jobs and shift business: it would be displacement, not new economic activity. I hope very much that the review will consider what more can be done for Heathrow.

[Lorely Burt]

I totally agree with my hon. Friend about the inadvisability of a further airport in her lovely constituency. Does she agree that we already have the capacity in the west midlands—Birmingham international airport has 40 million spare passenger places?

[Jackie Doyle-Price]

I thank my hon. Friend for that intervention and I think a lot could be done by just increasing connectivity between existing airport capacity.

In the little time I have left I wish to address the issue of energy. The Chancellor has given notice that he will bring forward an energy strategy to look at what can be done to encourage more gas-fired power generation. I want to put on record a plea for biomass-fuelled generation to be given greater prominence in our energy mix. As part of a shift to more energy generation from renewables, we have had considerable emphasis on solar and wind, but when it comes to generating serious quantities of energy, biomass is clearly a great way forward. We are heading towards a situation in which a number of coal-fired stations will need to close due to their non-compliance with the large combustion plants directive from the EU. These stations are sitting on top of connections to the national grid and we could do much more to encourage energy companies to look at whether they can replace the redundant coal-fired plants with new plants that generate from biomass. That is something that the power station in Tilbury, run by RWE npower, is determined to do.

Opposition Members have mentioned regional pay. We already have regional pay. I live but two miles away from the boundary with London so public sector workers in my constituency are less well off than their London counterparts as they do not receive London weighting. We do not struggle to fill those public sector jobs. Public sector wages lag far behind those in the private sector in my constituency, and we need to encourage that elsewhere because we need to ensure that we are attracting the best talent into private sector jobs.

16:29

[Alex Cunningham (Stockton North) (Lab)]

I am proud to be a socialist, although hopefully not such an old one.

The rich will get richer and the poor will get poorer—the Tory party has very clearly reverted to type, putting the needs of the wealthy first while abandoning the poor, whether they are working or not. Even the Chancellor’s favourite red-top newspaper, which today portrayed him as Wallace, agrees and says that he has put money in “The Wrong Trousers”. Yes, Mr Speaker, women wear trousers! The Prime Minister, himself a man with young children and a working wife, once promised that he would make this country the most family-friendly in Europe, but this week’s Budget will make life even more difficult for ordinary, hard-working families—not that he knows what it means to struggle to feed a family.

Yesterday, I met Terry Fullerton from Holme House prison immediately after the Budget. He pointed out that the tax cut for many of the super rich, such as bankers, celebrities and others, is about the same as the starting salary for a prison officer. It is also several thousand pounds more than the average annual wage in my constituency. That is not fair.

Brendan Cox, director of policy and advocacy at Save the Children, said that some had called it a Robin Hood Budget. He said:

“Robin Hood was known for hitting his target. If help to the poorest was his aim, the Chancellor will be known for missing his.”

The Institute for Fiscal Studies says that an average family will be £530 a year worse off after the Chancellor’s tax and benefit changes. On top of that, the poorest 20% of households will see their incomes fall by about 1.5% in 2012-13, scuppering any chances of meeting coalition targets of reducing child poverty.

[Sheila Gilmore]

Will my hon. Friend comment on the fact that, as detailed in the Budget, the cut in the 50% rate will mean the Exchequer forgoing £3 billion of income, whereas it would cost £500 million to reverse the cut to working tax credits for people about to lose it because they only work 16 hours a week? Which does he think is the better choice?

[Alex Cunningham]

I am sure that my hon. Friend knows exactly what my choice would be—it would be on the part of working families.

I have mentioned the 1.5% cut. It might sound paltry, but even if it represents as little as £1 or less per week, it is still worth a lot for those on a low income who need to feed a family. It will also be the poorest families who are, or will be, hardest hit through the uprating of benefits in line with the consumer prices index rather than the retail prices index, through higher food and fuel costs, through the freezes to child benefit and working tax credit, and through the time-limiting of employment and support allowance.

We must not forget that for low-paid workers inflation is not 3.4%, as it was yesterday, but nearer 10%, because they spend proportionately more on food, fuel and transport. The Government’s raising of the personal tax allowance is welcome but sadly does nothing to help the one third of the adult population, including part-time workers and pensioners, who are too poor to pay income tax, yet still have to face those same challenges.

[Angela Smith]

Does my hon. Friend agree that the threat of £10 billion of further spending cuts to welfare after 2014 will only exacerbate the problems he is describing?

[Alex Cunningham]

I agree with my hon. Friend. I have people streaming through the doors of my surgeries, and e-mailing and phoning my surgeries, saying how worried they are now, let alone about the impact of £10 billion of cuts in the future.

In the borough of Stockton-on-Tees, 23% of children already live in poverty, and the Child Poverty Action Group has highlighted that the jobs shortage in the north-east region, exacerbated by further public sector jobs losses, will lead to even greater rises in child poverty. Quite simply, unless parents can access and remain in work, the economy will struggle to return to sustained growth and child poverty levels will be hard to reduce.

The Government’s changes to tax credit rules mean that 2,500 families with more than 5,000 children in the Tees valley alone, working between 16 and 24 hours a week, will have to work at least 24 hours a week or lose that working tax credit. That is as much as £3,870. What research have the Secretary of State for Work and Pensions and the Government done to find out how many people will be able to find those extra hours? Surely he understands that it is deeply unfair that a family already on a low income will lose vital cash to feed their families because their employer cannot provide them with more hours.

What about women? Some 72% of the Government’s changes to tax and benefits adversely affect women, and with 46% of working women being employed in the public sector in the north-east, they are bearing the brunt of the Government’s enforced public sector job losses. The number of women in work across north-east England has already fallen by 19,000, with unemployment among women increasing at twice the rate of men in recent times. I saw no hope whatever in the Budget that the hundreds of young people in my constituency would get the help to secure long-term employment. The Chancellor spoke of skills, but not how they would be delivered. He certainly did not talk about jobs for those young people.

I have tried to concentrate on poverty and the substantial increase in the number of families and individuals who are now facing the toughest of times. We desperately need economic policies that will deliver the jobs and growth that our people need. We do not want to see more and more people forced out of work in the coming months. We do not want to see pensioners penalised by having their personal tax allowance frozen. We do not want to see any growth in the number of soup kitchens and food banks springing up across the country, including at the New Life family centre in my constituency. We do not want to see women bear the brunt of the unfair cuts and rules being imposed on them. The Budget, read out to much cheering from the Tories and their Lib Dem allies yesterday, will not help to deliver any fairness whatever in our society; nor will it provide the platform on which to grow our economy.

16:35

[Pauline Latham (Mid Derbyshire) (Con)]

I would like to congratulate the Chancellor and his team on producing an innovative Budget in difficult times, but none the less a Budget for business and hard-working families. We need more jobs, more employment and more businesses set-up, because we cannot borrow our way out of a crisis, as Labour would like us to do. Rather, we have to earn our way out of this situation.

I find it strange that Opposition Members are so miserable all the time. All they can do is pour scorn and misery on what is a very good Budget. There are so many things in the Budget that are good for Britain and good for hard-working families, but Opposition Members never seem to be able to see it. The hon. Member for Blaenau Gwent (Nick Smith) is no longer in his place, but I was pleased that he mentioned the measures dealing with future armed forces spending, such as the doubling of the service accommodation relief for families and the welfare grant, along with council tax relief. I am sure that everybody in the House, including Opposition Members, will welcome anything that helps our hard-working service people, who are out there fighting for this country. However, apart from the hon. Gentleman, I have not heard anybody else mention the fact that the Chancellor is doing that.

There are so many positive things in the Budget that it is difficult to pick them out.

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

Do try.

[Pauline Latham]

The hon. Gentleman should not worry; I will try, although I am disappointed that I have only five minutes to do so.

The Growing Places fund for the local enterprise partnership in my area will bring in an additional £8.5 million, which will be a tremendous boost to the area. Nobody over there on the Opposition Benches really seems to be all that pleased about the largest increase in the personal allowance for 30 years, which I find staggering. I would have thought that they would support the measure, which will take a lot of people out of tax altogether; indeed, 24 million people in this country will benefit from that.

[Mr Iain Wright]

The hon. Lady has mentioned the personal allowance and talked about those of us on the Opposition Benches being miserable. Does she think that the 16,994 pensioners in her constituency will be miserable as a result of the actions in yesterday’s Budget?

[Pauline Latham]

I do not know how you have calculated that for my constituency, because I am not even sure you know where it is. We are looking after pensioners. They will not be losing what you are talking about. They are getting a bigger increase than ever from the triple lock, and we are increasing their allowances. There will possibly be a year when some people will have to pay slightly more tax, but not the majority. Most people will not be spending any more money, and they will certainly not be losing any more money next year compared with this year, so you might like to look a little more carefully at what we are doing.

[Mr Speaker]

Order. I gently remind the hon. Lady, as I did the hon. Member for Tiverton and Honiton (Neil Parish) earlier, that we direct debate through the Chair. I am not involved in these arguments.

[Pauline Latham]

I do apologise, Mr Speaker.

The change to child benefit is also something that we should welcome, as it shows that the Chancellor has listened to what people out there have been saying. There will not be a cliff edge, as people have suggested, and no one earning £50,000 or less will lose anything. Only when people earn more than £60,000, which is quite a lot of money, will they lose their child benefit.

[Kate Green]

None the less, would the hon. Lady acknowledge that the Chancellor has been unable to resolve the anomaly whereby a couple earning £98,000 between them might be able to keep their child benefit, while a single parent on an income of £49,500 would not?

[Pauline Latham]

What the Chancellor has done is prevented us from having to go through a huge amount of paperwork that would have cost the country an awful lot of money. People might say, “Oh, but we don’t live together. We used to, but we are no longer together.” There will be so many loopholes, but he has done a good thing by going up to £60,000. I think that the majority of people in this country would agree with that, although of course Labour Members will not.

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

Will the hon. Lady give way?

[Pauline Latham]

I will not, as I do not have much time left.

We have not heard much about the rate of corporation tax going down significantly, yet that will benefit small businesses in particular. We need those businesses to thrive and to employ more people. The Chancellor has also introduced the new enterprise allowance and enterprise loans, which will help more people, particularly women, to start up businesses. That will give those businesses an opportunity to flourish and to take on more people to work for them.

No one has mentioned the fact that the national planning policy framework is to be published shortly. The increase in construction that that will bring will significantly help the country to move out of recession. There will be protections for the countryside, for the green belt, for national parks, for sites of special scientific interest and for areas of outstanding natural beauty, despite the doom-makers on the Opposition Benches trying to persuade people otherwise.

I am very pleased to see the introduction of an above-the-line research and development tax credit. In my area, Rolls-Royce, Toyota, JCB and Bombardier employ a lot of people from my constituency, and they will benefit from such a measure. We must remember that Rolls-Royce is doing exceptionally well in the aerospace industry in our area. We have not heard much about the investment decision by GlaxoSmithKline, which is a direct result of the Government’s policies. It would not have decided to spend that money in this country if the Government had not come up with the solutions that they put forward yesterday.

I would, however, like to put in two pleas to the Ministers. I would like Derby and the area of Derbyshire around it to be considered as one of the areas that will benefit from high-speed broadband. There is a part of my constituency in Derby that used to be the largest private housing estate in Europe, and it has some of the slowest broadband speeds around. I would like to put in a bid for Derby to be a recipient of any improvements. I should also like to point out that the electrification of the midland main line was missing from the Budget statement. I would have liked to have heard that in this Budget, but perhaps it is in the pipeline and the Chancellor will bring forward those plans in the future.

16:43

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

This is a millionaires’ Budget delivered by a Cabinet dominated by millionaires. It is regressive in what it does with tax, but it is equally a Budget that will do little, if anything, to deliver the jobs and growth that the economy needs. Exactly a year ago, the Chancellor told the House that he had just

“put fuel into the tank of the British economy.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]

He told us that we would see the economy turn the corner in this financial year, that positive growth figures were forecast, and that unemployment would stabilise as the private sector rose to the challenge as the public sector retracted.

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

Is my hon. Friend aware that the OBR is predicting that the effect of this Budget will be to increase unemployment by 100,000 this year and next?

[Angela Smith]

I agree with my hon. Friend; unemployment already stands at 2.67 million, and youth unemployment is at a record level.

Despite the Chancellor’s predictions a year ago, things have turned out very differently in the real world. As we enter spring 2012, it is clear that the British economy is flatlining, and the OBR is forecasting just 0.8% growth for 2012.

In effect, the economy will continue to flatline. The Government have conceded that they will overshoot their borrowing target by £150 billion. Consumer confidence is also at a record low. As people see their income squeezed while VAT increases push prices up and inflation runs ahead of wages, many are fearful for the future. VAT costs a family an average of £450 a year, and while the increase in personal allowances reduces tax for the low paid, that is completely outweighed by the VAT rise, cuts to tax credits and higher fuel duty—again, smoothed over by the Chancellor yesterday.

The major beneficiaries of this Budget are, of course, those 14,000 people earning £1 million or more, who are receiving a tax cut of more than £40,000 a year. Some 300,000—just 2% of earners in the UK—will benefit overall from the cut of the top rate to 45%, yet just 4,000 houses a year are sold for more than £2 million. That means that the vast majority of those who gain from this tax cut for the richest will be totally unaffected by the rise in stamp duty to 7%.

[Sheila Gilmore]

What we hear from the Government is that if people are avoiding those taxes, we should just give up on it. Is there are any reason, however, in my hon. Friend’s opinion, why we cannot bring in measures to clamp down on tax avoidance while retaining the 50p tax rate?

[Angela Smith]

I completely agree with my hon. Friend, and I shall come to the point a little later.

To put the tax reductions for top-rate earners in context, we need to understand that these are people who earn £2,900 a week—that is right, each week. That is more than an average worker in Sheffield earns in a month. It is quite ironic, is it not, that this Government should believe that the best way to make the poor work is to cut their income, while at the same time believing that the best way to get the rich to work harder is to boost their income. The reduction is also a massive gamble. As Jonathan Freedland points out in The Guardian, today, it is built on

“a hoped-for influx of returning top-rate taxpayers: to most people that looks like giving up hard cash in return for a wish.”

Since when has tackling tax avoidance qualified as a tax increase for the rich?

Pensioners are also hard hit. The granny tax—the £3 billion raid on pensioners by freezing their personal allowance—will mean that people who turn 65 next year will lose out by £314. On average, 4.5 million pensioners will lose £84 a year from next April.

One has to ask what influence the Deputy Prime Minister has had on this Tory Budget, when the personal allowance increase delivers less than the recent increase in VAT, so it amounts to a tax cut for the rich. Let us not forget that the Chancellor has pencilled in more tax increases for after 2014 and a further £10 billion cut in welfare costs. To people out there, that means even further potential cuts to child benefit, pension credit and tax credit.

In difficult times—and these are difficult times for many families—a Budget needs to be fair, and it needs to give people hope. Is it fair that a one-earner family on £55,000 will lose much of their child benefit, while a couple on as much as £99,000 can keep every penny of it?

As for jobs and growth, as the Business Secretary has said, this Government do not have

“a compelling vision of where the country is heading”.

For once, I agree with the Business Secretary. There are no measures of substance in the Budget to help rebalance our economy, either geographically or structurally.

Last year, the Chancellor told us he had put fuel in the tank of the economy. Unfortunately, he put the wrong fuel in the tank and the economy has stalled. If he does not do something soon for the many in this country, the economy will not only continue to splutter along, failing to fire on all cylinders, but will continue irreparably to damage the lives of those who need jobs and growth to improve their life chances.

16:49

[Mr William Cash (Stone) (Con)]

I welcome many aspects of the Conservative parts of this Budget, including its emphasis on the need to encourage small businesses, enterprise and research and development, and its encouragement of economic growth, which is the key to everything. I welcome the simpler cash accounts system, which will bring significant benefits to small businesses, and the R and D tax credit system, as well as the seed investment programme for start-ups, which is very important. The patent box arrangements will be very useful, too, as will the proposals for young enterprise loans. Indeed, I recently attended an event in my constituency at which young people from Alleyne’s school in Stone were selling produce, based on proper commercial principles. They were learning key enterprise skills, therefore, and it would be wonderful if they could have access to some loans as well, to enable them to continue in that virtuous direction.

I welcome the reductions in corporation tax. In fact, I believe we should aim to reduce it to 15% by 2020, as the Institute of Directors proposes. I also approve of the proposals to reorganise personal allowances. That will be enormously beneficial to many people. However, despite the statements made this morning, I remain slightly concerned about the situation of pensioners. I am not yet convinced on that issue, so I think we shall have to tease it out during our deliberations on the Finance Bill.

I remain deeply worried about fuel duty. I do not think we should increase it at all. At least £31 billion comes into the Exchequer as a result of that duty, and 60% of the price at the pump is represented by taxation. Therefore, more positive policies were required. I would have liked fuel duty to have been reduced, and certainly not increased.

There will be no economic growth unless we have proper private enterprise, as that is what pays for every penny received by the public sector. There is no money except for what comes from reasonably taxed private enterprise. We must therefore ensure that we are truly competitive, and if that requires reducing our tax rates, that is the direction in which we must go.

I am deeply concerned about the failure to deal with the problem of over-regulation. I have read the Red Book, and it does not fill me with a great deal of confidence. On page 43, under the heading “Exports and inward investment”, there are a few comments about export finance. The next heading on that page is:

“Making the UK the best place in Europe to start, finance and grow a business”.

[George Freeman]

The best place in the world, surely?

[Mr Cash]

My hon. Friend anticipates what I was about to say: the UK should be the best place for businesses in the entire world, not just Europe.

That is very important. Especially given the current eurozone crisis, we cannot carry on kidding ourselves that our future depends on our trade with Europe. It is an important part of our trading relationships, but it is a failing part. Our balance of payments figures show that in just one year the deficit in our trade with the other European Union member states has risen from £14 billion to £46 billion. I understand the figures will be revised on 28 March. I trust the figures for 2010-11 will not show that the deficit is worse still.

The previous Government put all their eggs in the European basket. This Government, to their credit, are beginning to refocus their trading relations with the rest of the world. We have a monumental opportunity to be able to get that straight in terms of—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. Time is up.

16:54

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

In the past 24 hours, many people have attempted to provide a description of this Budget. Some have compared it to Lord Lawson’s giveaway Budget in 1988, others to the orthodox Budget of Philip Snowden in 1931, but in entrenching the disastrous mistakes in fiscal policy of its two immediate predecessors perhaps this Budget will deserve to be known as the great stagnation Budget. Despite the measures unveiled by the Chancellor yesterday, the verdict of the Office for Budget Responsibility was that they will make no difference to the levels of growth in this country in the next two years.

[Angela Smith]

Does my hon. Friend agree with The Guardian, which said this morning that the Liberals will live to regret the fact that they have moved so far away in principle from the Lloyd George Budget of 1909?

[Mr Bain]

My hon. Friend is entirely right. Staggeringly, in that year the Liberals introduced one of the most progressive Budgets—the people’s Budget. This Budget certainly does not compare to that remotely; it is a highly regressive Budget, as the Institute for Fiscal Studies has confirmed this afternoon.

The effects of this Budget are likely to be 100,000 more job losses—20,000 more in the public sector; £150 billion more borrowing than that forecast in June 2010; and a substantial rise in inequality across the country. Having choked off growth in the past two years, and having weakened both public and private sector demand with austerity cuts that strip eight times more public consumption from the economy this year and nine times more next year than even the eurozone average, the Chancellor is presiding over the weakest recovery from recession since the 1870s.

In addition, as the OBR revealed yesterday, despite the Chancellor’s rhetoric on diversifying the economy and promoting manufacturing, his plan for growth is based on the share of private consumption more than trebling, from 12% to 37.5% this year alone; half of all the new growth in the next five years is forecast to come from consumption. This is not an export-led recovery, but debt-fuelled consumption to maintain stagnant output, at a time when consumer spending has fallen in the UK by 0.8% in the past year. Small wonder that the OECD has found that domestic demand in Britain has slumped. It rose by 2.7% in 2010, when Labour was in government, but fell by 0.2% this year, under this Chancellor. The figure is massively below the 2012 OECD average increase in economic demand of 1.4%. It shows the crisis of the lack of demand that is in our economy, which the Chancellor did not begin to tackle yesterday.

On growth, the Chancellor has given up on fiscal policy as a lever of driving demand, even when the credit ratings agencies, the International Monetary Fund and his US counterpart warn him not to. We face a jobs crisis, and in a crisis of this magnitude, we need fiscal and monetary policy to work in concert to grow the economy out of a slump.

[Angela Smith]

Is it not also the case that the current use of monetary policy to drive growth—quantitative easing—is driving the markets but not necessarily the growth that this country needs?

[Mr Bain]

That is precisely the point that many small businesses up and down the country are making. What we should have had yesterday was a facility to securitise loans to small businesses and have them indemnified by the Treasury. That would mean that the quantitative easing money could flow directly from the Bank of England into small and medium-sized businesses, and not simply on to the balance sheets of the banks. That would have made a huge difference. As many businesses have said, the credit easing scheme launched by the Chancellor with great fanfare on Tuesday will barely scratch the surface of the £190 billion shortfall in credit financing from which our businesses are suffering at the moment.

The Chancellor is refusing to learn the lessons from Japan in the 1990s. He is placing all his eggs in the basket of long-term low interest rates, but in Japan that led only to a decade of stagnation because of similarly catastrophic mistakes in cutting spending too far and too fast.

Even on its own terms, the Budget was a failure for business, with levels of business investment £48 billion below their peak of 2008 and business investment growth having been slashed from 7.7% to just 0.7% in the OBR’s latest forecast. There should have been innovative ideas about promoting long-term investment; there should have been plans for a national investment bank; there should have been plans to bring forward more infrastructure spending; there should have been plans to enhance and boost the borrowing powers of the UK Green investment bank, which will not have those until 2016 because of the Chancellor’s failure on growth. But in yesterday’s Budget, sadly, there were no ideas that would really make a difference to business.

Shamefully, the Chancellor never even mentioned, much less produced, a plan to tackle youth unemployment. With 1 million young people out of work across the United Kingdom and with the figure approaching one in four in Scotland, he should have announced measures for a proper national insurance holiday for small and medium-sized firms employing young people. He should have repeated the bank bonus tax to help to create 150,000 youth jobs. He should have announced a temporary VAT cut, which would have boosted consumer demand, and he should have cut VAT for home repairs and maintenance to give the construction sector a much needed lift.

The test on which this Budget is found most wanting is that of fairness. We are told that the wealthiest 3% of the population require massive fiscal incentives to reward hard work, but it is a different approach when it comes to those on lower incomes or pensioners who have saved for their retirement. The poor are told to work harder and do extra hours of work that are not available in the depressed economy, but 14,000 millionaires will receive a permanent tax cut of £40,000. This Budget is highly regressive and I urge Members to vote against it on Monday.

We are told that the Chancellor has advised the Prime Minister on matters strategic, instead of focusing on the crisis of demand made in No. 11 Downing street—a flatlining economy, slumping business investment, rising unemployment and soaring inequality. The country will not forget that yesterday was the day when the part-time Chancellor produced a bit-part Budget.

17:02

[George Freeman (Mid Norfolk) (Con)]

I congratulate the Treasury team on a Budget that I believe will come to be seen as an historic Budget that will put Britain back on track for sustainable economic recovery. I want to say something in the time available about the problem we inherited, because it bears repeating, about the challenge we face and about the opportunity that I believe we can and should be optimistic and ambitious in tackling. The problem has been well chronicled, but the views and ignorance displayed by Opposition Members in this afternoon’s debate suggest that we need to repeat it for them.

We have inherited from the Labour party the worst deficit and debt crisis in this country’s peacetime history; a structural deficit that would have been a crisis alone; an annual deficit from Labour’s historical explosion in public spending; a crisis in the situation with debt as a percentage of gross domestic product; and interest payments that are set to rise, if we have not tackled them, by £76 billion a year—£1 in every £4 the Government spend. As a result, there is a deep fiscal crisis, with tax increases and restraint on public spending hitting every family in the country, and a legacy of rising unemployment because of the credit crunch and bank financing for small businesses. Most powerfully of all, and most damningly after 13 years, there was the unsustainable economic model—a labour boom fuelled on cheap credit and cheap immigrant labour and a consumer boom that Labour knew was unsustainable. Worst of all, perhaps, there is a deep crisis of trust and confidence in political economy and in the belief and faith that the Government can do anything about it.

The challenge is to restore some credibility and confidence, first, in the capital markets through the coalition’s programme for tackling the deficit, and secondly in the boardrooms and businesses of Britain that are the only true mechanism for sustainable recovery. There is also a need to restore credibility and confidence in relation to the entrepreneurs we will need to take the risks to drive growth and the citizens and consumers of this nation so they can have faith again. That requires a new economic model, which my right hon. Friend the Chancellor spoke passionately about yesterday—a model for sustainable recovery. We cannot borrow and spend our way out of a debt crisis.

Recovery needs to be sustainable not just in terms of avoiding the mistakes of boom and bust. We must produce the things that people around the world want to buy and we must have a clean economy in terms of resources and the environment. Recovery needs to be sustainable in the sense that our public services must be financed in a sustainable way. Every pound that we in this place claim as government money has to be earned by citizens and businesses and taken from them, and we should never forget it. At heart, that means that the coalition’s programme for a rebalanced economy must shift from over-dependence on the public sector to the private sector, from London and the south-east to the cities and the regions and to the real businesses of this country that can drive sustainable growth. I congratulate the Treasury team on keeping interest rates low, paying off the debt and supporting business. We have the most competitive corporation tax regime.

[Mr Bain]

Will the hon. Gentleman give way?

[George Freeman]

I am going to plough on if I may. The move on the top rate of income tax from 50p to 45p has set a clear direction.

[Angela Smith]

Will the hon. Gentleman at least acknowledge that a significant proportion of the private sector jobs created are part-time and in that sense are doing much less than he suggests to drive growth in the economy?

[George Freeman]

If my constituents were given the choice between a part-time job in a sustainable private sector business or a full-time job in the public sector that was not sustainable, I know which they would choose.

More than 600,000 new jobs have been created in the private sector since the election.

[Mike Weatherley (Hove) (Con)]

Will my hon. Friend welcome with me the measures for the video games industry, which are so important to Brighton and Hove, protect jobs in this country and stop them going abroad?

[George Freeman]

My hon. Friend makes an excellent point with which I entirely agree.

If I had only one small complaint about the Budget it was that, for reasons I well understand, the Government were unable to do anything to relieve the pain of rural fuel prices in areas such as my constituency, where the cost of living is an acute problem. I urge the Government to look at what might be done to relieve the effect of fuel prices on the rural economy.

I said that I would touch on why I believe that this country can begin to be optimistic about our future. The Government have begun to set out a credible and coherent plan for long-term economic recovery based on a model of trading again around the world. There is a high rate of growth in the emerging nations—the so-called BRIC nations, Brazil, Russia, India and China—and with the pace of globalisation and the explosion in those markets, if this country can set out a model of producing and selling the things that those countries need, we will be on the road to a secure recovery.

Last year saw the publication of the foresight report, which set out how the world population is rising to 9 billion, which will drive huge demand for life sciences such as food science, biomedicine and energy and environmental science. The Government have set out over the past 18 months a long-term strategy to unlock that science and research base and tackle the problems of sustainable development around the world. That is a sustainable model for us as well as for other countries.

There is a huge opportunity for the UK to trade on our great strengths and to unlock the power of the City and financial services sector to back and build the companies and businesses of tomorrow in the sectors of tomorrow. So I support—it is worth repeating—the measures that the Government have taken, especially in the Department for Business, Innovation and Skills, including the Green investment bank, new sources of finance for infrastructure, the enterprise zones, the competitive tax regime and the £20 billion of credit easing, allied with the reforms to welfare, schools, universities and science and research. The Government are setting out a modern industrial policy for a modern innovation economy. Will it work, I hear you ask, Madam Deputy Speaker? Well, it is already working. The programme has been welcomed by the Office for Budget Responsibility, the Institute for Fiscal Studies, the World Bank and the International Monetary Fund. Even the BBC’s business editor last night said that the Budget had had the most positive response of any Budget he could recall. If any more proof were needed, today one of the world’s great businesses, GlaxoSmithKline, announced a major £500 million investment in the UK, directly citing yesterday’s Budget as a reason. It is an historic Budget that will put us on track for a long-term recovery.

17:09

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

All Budgets have a tendency to create both winners and losers, but this Budget, unlike others, appears to create winners and losers in an inconsistent and illogical manner and without any clarity of guiding values or objectives.

[Mr Bain]

My hon. Friend is showing her customary generosity in giving way. I anticipate that she might make the point that 70% of the cuts in tax credits will affect people in the lower half of the income scale, but the Resolution Foundation determined yesterday that 70% of the gain from the change in the personal allowance will go to people in the top half of the income scale.

[Kate Green]

My hon. Friend does indeed anticipate my first point. Although there is of course an attraction in lifting more people at the bottom of the wage spectrum out of tax, it makes little sense to introduce a measure that still favours more men than women when women have already lost out under previous Budgets and spending announcements.

[Mr Tom Clarke]

On that point, which I dealt with briefly in my speech, is it not a great worry that female unemployment has risen by 22,000 in the past year, adding to the problems that were already there?

[Kate Green]

It is of deep concern to me, as I am sure it is to you, Madam Deputy Speaker, that female unemployment is now the highest it has been in a quarter of a century and that it was female unemployment that rose most rapidly in the last quarter, considerably outstripping what is happening to men.

I find it difficult to understand the fairness or logic of introducing a higher tax threshold that lifts some low-paid workers out of tax while at the same time disincentivising many other low-paid workers who are seeing their tax credits frozen or lost altogether if they cannot reach sufficient hours, to the extent that work will become hardly worthwhile for them at all. I cannot see the logic of the Government telling pensioners that on the one hand they will give to them through the triple lock, which I welcome, but with the other hand they will take away from them by raising the threshold and bringing 230,000 of them into tax, while at the same time trying to take people in low-paid work out of tax.

I am struggling to understand how a Government who said that they wanted to be fair and to operate a system that was simple can have arrived at the decision they reached on child benefit, according to which a couple with an income just short of £100,000 will be able to keep all their child benefit but another couple where only one member of the household has an income, but it is in excess of £50,000, will not. How can that be fair? How can a system be simple when it starts to claw back at the rate of 1% for every £100? How will people know where they stand in relation to their child benefit entitlement, and where is the incentive to work more and earn more in such a context?

I am struggling to understand why a Government who want to be progressive, who say that that is their reason for moving away from universal child benefit, which I hugely regret—I want to put on record that I absolutely stand by universal child benefit—and who say that they think there needs to be more progressivity, as they see it, in the way they administer child benefit, then introduce less progressivity in income tax by cutting the top rate from 50p to 45p when, as the OBR has said, there is considerable uncertainty that such a measure will deliver the tax receipts that the Government seem to believe will be brought into the Exchequer. With respect, I think that the Chancellor was a little over-optimistic in his analysis of the OBR’s comments on the likely efficacy of that measure, and it is also unclear to business commentators that the measure will be good for our economy.

Let us be clear that our corporation tax, even before this Government took office, was by no means among the highest in the developed world. I am interested in how a Government who make great play of seeing small businesses as the future of increasing employment, who want to reduce corporation tax, who are on a downward trajectory in relation to it and who want to enable small businesses to employ more workers have failed to notice that the very smallest businesses are completely unaffected by the cut in corporation tax because they already have a tax rate of only 20%. What are the Government doing to support those businesses when what they would really like is effective measures on employers’ national insurance contributions, something that again the Government have managed to address only in a most limited way?

[Lorely Burt]

What we are doing for small businesses, which will alleviate many administrative difficulties, is introducing measures such as cash accounting on cash flow, so we are working hard to help them in every way we can. We are also amalgamating national insurance with the other forms of tax paid so that only one lot of tax is collected.

[Kate Green]

It is not that everything the Government are doing is necessarily bad, but overall it is woefully insufficient in relation to business and not what the smallest businesses have been talking to me—or I suspect to the hon. Lady in her constituency—about. They have been talking about employers’ national insurance contributions, business rates and their concerns about the rise in VAT, which means that there is pressure on their turnover, but in the Chancellor’s statement yesterday the Government had nothing to say about any of those issues.

I should like to say a little about welfare and pensions. On welfare, I share with many of my right hon. and hon. Friends the deep concern that, after £18 billion of social security and tax credit cuts already from this Government, the lowest-income households in this country now face a further £10 billion of cuts. That will mean a hit on disability benefits and on the benefits that enable people to reach basic living standards. When the Government publish on people’s tax statements, as they say they will, a breakdown of where their spending has gone, I hope that they show in great detail who the losers are from that welfare spending. A broad-brush statement, “This is what is spent on welfare,” will not tell people that carers, the disabled and people raising children are actually the losers, so I hope that such information appears on the tax statements that the Government produce.

Finally, the Government propose to keep the state pension age under review in line with rising longevity. That, too, is a measure that will deliver greater inequality, because it will penalise most of all the poorest, who already have poorer health outcomes and poorer life expectancy, and those doing manual and hard, physical jobs. So buried in the detail there is considerable injustice, unfairness and inconsistency, and I shall vote against the Budget on Monday.

17:17

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

I welcome a Budget which shows that the coalition Government remain determined to tackle the deficit and to drive growth and job creation throughout the country, and that we will deliver tax cuts for millions of hard-working people and demand from the wealthiest in our society that they pay their fair share. This really is a Budget for millions of ordinary families throughout the country who are struggling to make ends meet, not a Budget for millionaires.

I welcome in particular, of course, the increase in the personal income tax threshold, the largest increase for a generation and a thoroughly progressive policy. It has gone from the front page of the Liberal Democrat manifesto and been turned into action under the coalition Government, and both parties deserve credit for introducing it. In terms of helping the families whom I represent in Cornwall, the measure sits alongside a freeze in council tax and the Government’s determination to tackle the injustice of water bills throughout the duchy. Some 19,300 people in Cornwall will be taken out of paying income tax, and more than 4,000 in my constituency alone will no longer pay it. I thoroughly commend the measure to the House and hope that in future years the Chancellor will be able to go further and faster.

[Angela Smith]

Will the hon. Gentleman not at least acknowledge, as my hon. Friend the Member for Glasgow North East (Mr Bain) said earlier, that the biggest beneficiaries of the increase in the tax allowance will be higher-income earners, not the lowest-income earners?

[Stephen Gilbert]

It is a bit rich when the Labour party talks about benefits to higher rate taxpayers, given that it abolished the 10p rate of tax, making 5 million of the lowest paid pay more tax. The coalition Government are taking the lowest paid out of tax, and that is a better direction of travel for the people whom I represent—and, I am sure, those whom the hon. Lady represents as well.

I am also keen to welcome the measures in the Budget to drive business growth—the cutting of red tape on small and medium-sized firms; the introduction of cash accounting; the enterprise management incentive scheme; and the fact that the Government are making available £20 billion-worth of additional funding to ensure that businesses across our country, from which will come the growth that will get us out of our financial difficulties, have the money to invest, expand and grow.

[Alex Cunningham]

The hon. Gentleman has talked about investment. If the 50p tax rate had been retained, there would be more money for investment. The Chancellor said that the rate was making little impact on the amount of money coming into the Exchequer. If it was making so little money, could he not have just done away with it altogether—or is it actually a real source of income for the Government and the Exchequer?

[Stephen Gilbert]

Again, there is an obsession for a policy that Labour implemented only during the last 37 days of its Government. If it was so keen on the 50p rate, why did that not last for 13 years under Labour, rather than 37 days? This is nonsense from the Labour party.

Some of the measures to improve finance for small and medium-sized enterprises will build on some of the other mechanisms that the Government have introduced in Cornwall to try to drive the Cornish economy. I am thinking of the enterprise zone at Newquay airport, the Cornwall and Isles of Scilly local enterprise partnership, the fact that Cornwall will be the first county—not just in the United Kingdom, but across Europe—to have access to superfast broadband across its entire length, and the commitment to renewable energy generation as a way of driving some of the job creation of the future.

I also welcome the measures on housing growth that the Chancellor announced. Government and Opposition Members recognise that there is a serious housing crisis in the country. We need to get on and build our way out of it to ensure that we meet the aspirations of those, many from my generation, who simply want to start their lives with their partners, but are unable to do so because they do not have access to stable, decent and affordable accommodation.

In my remaining time, however, I would like to put a few concerns on the record. The first is about alcohol taxation. Duty on beer has gone up by 42% in the past four years. As my hon. Friend the Member for Burton (Andrew Griffiths), who is not in his seat, said earlier, the community pub is at the heart of many areas, including many of Cornwall’s villages. Community pubs serve a useful function, employing 300,000 young people across the country. When the Government bring forward their alcohol strategy, I hope to see some redress from the burden that beer taxation has taken on in recent years.

I am also concerned that air passenger duty has gone up by 360% over seven years. When I talk to the manager of Newquay airport, he tells me that that is having an impact on its ability to continue to drive custom.

I share the concern of my hon. Friend the Member for Stone (Mr Cash) about fuel taxation in rural areas. An innovative scheme is being trialled in the Isles of Scilly and other places, but the Government need to consider again whether the balance is right.

I have two final points. I disagree with my hon. Friend the Member for Sevenoaks (Michael Fallon), who thinks that the introduction of regional pay will be a welcome move. Far from it—it runs the risk of institutionalising some of the inequalities in regions, such as Cornwall, with above-average housing costs and below-average wages. I have deep concerns about this proposal, as do my hon. Friends on the Liberal Democrat Benches.

Finally, I turn to an issue that is exercising my countrymen in Cornwall. There is some ambiguity about whether the increase to 20% in VAT on hot food will include pasties that are served from bakeries. The Minister will no doubt be aware that the pasty is not only a staple, hearty meal but, in effect, employs thousands of people and brings millions of pounds into the Cornish economy. Will he give some clarity on whether we can avoid a pasty tax?

17:25

[Sheila Gilmore (Edinburgh East) (Lab)]

The altruism of the high-paid is remarkable. If they are not paying tax because of successful avoidance measures, their delight at the rate reduction requires some explanation. Perhaps they agree with the Chancellor’s statement that they will pay more tax as a result; if so, their delight is clearly because they are ready to pay more tax than they were previously.

[Mr Bain]

I wonder whether my hon. Friend has had an opportunity to consider what the Institute for Fiscal Studies has said this afternoon—that there is a one in three chance that the Treasury will recoup only 30% of the £2.9 billion in the Red Book that relates to behavioural changes and to people moving from the 50p to the 45p rate. Does not that bear out her point?

[Sheila Gilmore]

It definitely does.

Of course, that may not have been what people were cheering. They may have been cheering in relief at not having to do tiresome tax avoidance planning all the time. If the HMRC’s calculations are correct, high-paid employees are a bit like highway robbers who are holding a musket up to the rest of us and saying, “If you tax us, we are going to take our ball away and not play any more.”

[Mr Tom Clarke]

Is my hon. Friend as concerned as I am that the Government seem to pay little attention to HMRC’s informed views?

[Sheila Gilmore]

Clearly, the Government see tax planning as a perfectly rational and sensible reaction to tax changes. However, if a working couple who are about to lose £3,000 in tax credits make a sensible and rational decision to stop work because that will make them better off, will they be seen as merely making a sensible and rational decision, or will they be seen as lazy, as scroungers, and as people who prefer to watch daytime television than hold down a job? If they make that decision, which is rational for them, the outcome will be wholly irrational for the Government, because it will cost the Government more if that family stop work.

I have still not had a satisfactory response from the Government to a question I asked in an earlier intervention. I also asked it of the Deputy Prime Minister earlier this week, because he is fond of telling us that Government can do two things at once. Why can we not retain the 50p tax rate and deal with tax avoidance? Apparently, in the previous year, when people were expecting more tax, they brought their income forward, so presumably this year, knowing that the measure has only a year to run, they will be able to put their income back to the following year so that they do not have to pay more. If we know that such things are happening, why are we unable to find a means of stopping it? Perhaps people’s incomes should be looked at over two or three years to ensure that they cannot engage in these blatant tax avoidance games, which many people on lower incomes cannot do.

When we had the discussions some months ago about bankers’ bonuses and executive pay, the Secretary of State for Business, Innovation and Skills told us, “Well, these people are paying 50% tax.” Either they are paying it or they are not. One moment we are told that we do not need to bother doing more about bonuses and high pay because the tax rate is dealing with it and the next we are told, “It’s not bringing anything in, so we shouldn’t bother.” There is a lot of smoke and mirrors.

It is clear from the Red Book and it is even clear from the Daily Mail—I am hardly a friend of that paper—that the Exchequer plans to forgo £3 billion in making this change to the tax rate. It hopes to get that back through people willingly paying more tax in various ways and through the relatively small amount that is expected from the changes in stamp duty.

Since May 2010, we have been told regularly by the Government that the way to achieve economic growth is to cut the public sector, which has been stifling the private sector, and then the private sector will spring to life and replace the jobs that are lost. Two years on, we are still asking where those jobs are. Yesterday at Prime Minister’s questions, the Prime Minister told us yet again how good it is that so many private sector jobs have been created. The figure that he used was 600,000, which was repeated a few minutes ago by the hon. Member for Mid Norfolk (George Freeman).

More than a year ago, we were told that 500,000 jobs had been created since the election. Many commentators have made it clear that most of those jobs were created in the first six months of the financial year that started in 2010, and that the likeliest cause for their creation was the previous Government’s economic stimulus. The Government cannot keep recycling the figures. The number of times that the Prime Minister has talked about those 500,000 jobs is incredible. I accept that it has gone up slightly and he is now talking about 600,000 jobs. He should get a prize for recycling, even if he does not get a prize for job creation. If those jobs were created as a result of the economic stimulus, the Government should look again at whether they should continue to rule out such a stimulus.

Do we even know that those private sector jobs are completely new jobs? In my city, there has been a lot of outsourcing and people have moved positions through tendering processes. For example, 2,000 care workers in Edinburgh will now be in the private sector because of the decisions that the council has taken. No doubt those jobs will move from the public sector side of the equation to the private sector side, but they are not new jobs that are driving economic growth. Once again, this is smoke and mirrors and there is no economic growth. That is the important point. If we do not get jobs and growth, we will not get out of the recession.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I intend to start the winding-up speeches at 5.40. That gives us eight minutes. Members can work out for themselves whether they will share the time or not.

17:33

[Christopher Pincher (Tamworth) (Con)]

I will certainly attempt to share the time, Madam Deputy Speaker.

Although it is a great pleasure to follow the hon. Member for Edinburgh East (Sheila Gilmore), I hope she does not mind me saying that the performance that I most enjoyed from her side of the House was that of the shadow Chancellor, whom Government Members think of with great affection. His performance reminded me of that of an ageing, end-of-the-pier show entertainer, rather like Archie Rice in the film “The Entertainer”, who was once a great character actor, but who, as he gets to the end of his career, has to reheat jokes to get more and more lame laughs. Members will remember that the last words of Archie Rice in “The Entertainer” were, “I’ve had enough.” That sums up our view of the shadow Chancellor.

I was at the Pickerings business breakfast in my constituency just a few days ago, where small and medium-sized enterprises, the engines of growth in my constituency, made three points to me: we need to deal with access to credit, we need to deal with the cost of business taxation, and we need to deal with the burden of bureaucracy that weighs them down. I will not go over the points that many hon. Members have made, but we have heard about the national loan guarantee scheme and Project Merlin, which is providing more money to businesses, allowing them to invest, create jobs and build growth. We have heard about the reduction in corporation tax from 26p to 24p, with a view to taking it to 22p and an aspiration to reduce it to 20p.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Will the hon. Gentleman give way?

[Christopher Pincher]

I will not, because I do not have much time.

The corporation tax reduction sends a message that this country and its businesses are open for business.

[Angela Smith]

Will the hon. Gentleman give way?

[Christopher Pincher]

No, the hon. Lady has had enough time to get herself into Hansard. I am not going to give way to her.

The reduction in corporation tax also sends a message to business that the Government are on its side and want it to create the jobs that pay the taxes that fund the public services we want and need. It is unfortunate that we have heard the shadow Chancellor today, and the shadow Chief Secretary bestriding the airwaves yesterday, saying that they would not have made the cut and would reintroduce corporation tax at 26p. What a message that sends to businesses in this country—that Labour has learned nothing and forgotten nothing from its mistakes. It does not want to kill the fatted calf; it wants to starve the entire herd.

I wish to give Ministers an important message about bureaucracy. Small and medium-sized enterprises have said to me that when they apply for a slice of the Government procurement pie, as the Government want them to do, they find the online application process time-consuming. For small businesses, time is a form of tax. I hope that my hon. Friend the Financial Secretary, who is in his place, will work with my right hon. Friend the Minister for the Cabinet Office continuously to streamline the process, with a view to reducing the time needed for initial online applications by just a few hours. That would help many small businesses apply for the slice of the Government procurement pie that we all know they need.

In the past, Chancellors have had a tin ear. Conservative Chancellors have made Budgets for accountants by accountants. The last Labour Government, after a reasonable start, began to write Budgets by spinners for spinners. It seems to me that Budgets should be made for the people. The Budget that we heard yesterday was an authentic Budget that spoke to the people. It spoke to the strivers, who want to get up, get on and make something of themselves. It spoke to the grafters, who are trying to build a business. It spoke to mums and dads who want their kids to grow up in a country that is free of crippling debt. It spoke to the aspirants, and I am happy to support it.

17:37

[Damian Collins (Folkestone and Hythe) (Con)]

We have heard a number of Members today say that the Government have no industrial strategy and no strategy for jobs. I say that they should make that argument to the people who will benefit from the £500 million investment in this country that GlaxoSmithKline announced this morning following the Budget; to the people who will benefit from the 2,000 jobs being created by Nissan in Sunderland and around the country with the support of Government money; or to the clients and employees of companies such as WPP, one of the world’s largest communications networks, which will headquarter in the UK under this Government’s new lower tax regime, instead of Dublin, to where it flew under the last Government.

The Government are setting out a bold and ambitious industrial strategy to bring jobs to this country in the sectors in which we will see the highest levels of growth. That is why I particularly welcome the announcements that the tax credit for production in the video games industry will be brought back and that the film tax credit, which a Conservative Government introduced in the 1990s, will be extended to sectors such as animation and high-end TV production.

It is ridiculous that Julian Fellowes’s new series “Titanic” has been filmed in Hungary, instead of in Belfast, where there is a film production studio in the shipyards where the original ship was built. That shows how our system has taken jobs and investment abroad instead of bringing them here. The changes will help big businesses, but also small animation companies such as Cognitive Media, which is based in Folkestone, in my constituency. It will help in the other creative clusters around the country where such jobs are providing necessary skills and employment. That is part of a strategy, with the Government supporting big investment in centres such as Tech City, where we will fulfil the Chancellor’s ambition to make Britain the technology capital of Europe and a leading player in the world. They will be a major driver for growth for our economy and new jobs in future.

I very much support the Government’s initiative to support the programme championed by Virgin to allow young people who want to set up their own business to borrow money to invest and start up on their own on the same terms as students can borrow money for tuition fees. That will be a great source of jobs for young people and give them the boost they need to get on to the job ladder.

17:39

[Mr Iain Wright (Hartlepool) (Lab)]

May I begin by wishing my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller) a very happy birthday? He does not look a day over 75, which is just as well, because he is only 63 tomorrow.

With the greatest respect to my hon. Friend, his is not the biggest birthday of the week. Today marks the birthday of my mother. I hope the whole House wishes her a happy birthday—[Hon. Members: “Happy birthday!”] She will not thank me for saying this, but my mother was born in 1948, so she is absolutely being hit by the Chancellor’s Budget provisions. She will lose out along with another 4.4 million pensioners. She has worked hard all her life, and still works hard, and will be penalised for it.

This has been an interesting and informative debate and I have enjoyed it immensely. My right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) mentioned regional pay, which is also a big concern to me as a fellow north-east MP, as did my hon. Friends the Members for Dumfries and Galloway (Mr Brown) and for Ellesmere Port and Neston. My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) rightly mentioned the importance of youth unemployment, and his fellow Brummie and neighbour, my hon. Friend the Member for Birmingham, Erdington (Jack Dromey), stood up fiercely for housing, if not for hairdressers. My hon. Friend the Member for Stockton North (Alex Cunningham) mentioned the importance of child poverty and my hon. Friend the Member for Stretford and Urmston (Kate Green) mentioned the importance of ensuring that we tackle female unemployment.

I was interested in the points made by the hon. Member for Bexleyheath and Crayford (Mr Evennett) on ensuring that the Budget provisions are fair and innovative. I agree with that. I want to ensure that work is incentivised, but he failed to mention the concept of fiscal drag, which will bring 300,000 people who are trying to work hard and do what is best into the higher tax rate.

I was also interested, as I always am, in the comments of the hon. Member for Solihull (Lorely Burt). It is interesting that she is an out-and-out apologist for the Government. She has a majority of 175, so it will be interesting to see how she explains the fairness of the Budget to the 20,082 pensioners in her constituency.

In the opening paragraph of the financial statement yesterday afternoon, the Chancellor said that the Budget

“unashamedly backs business…and…is on the side of aspiration”.

The Opposition would want such a Budget, but if only yesterday’s Budget backed responsible business, rebalanced the economy in favour of manufacturing, built on the progress made by the previous Government on new industries and jobs, and put in place an active Government industrial policy that emphasised the need for Government procurement to establish a level playing field for British companies. Sadly, we did not get that.

We agree with the Chancellor that

“We earn our way in the world if we stop being afraid to identify Britain’s strengths and reinforce them instead”.—[Official Report, 21 March 2012; Vol. 542, c. 793.]

We also agreed with him when he said in his Budget speech in 2011:

“Yes, we want the City of London to remain the world’s leading centre for financial services, but we should resolve that the rest of the country becomes a world leader in advanced manufacturing, life sciences, creative industries, business services, green energy and so much more.”—[Official Report, 23 March 2011; Vol. 525, c. 953-954.]

The problem is this: the Chancellor keeps saying these things—these important warm words—but does not do anything about them. It is little wonder that the Secretary of State for Business, Innovation and Skills was forced to write in his leaked letter to the Prime Minister that the Government had

“something…missing: a compelling vision of where the country is heading beyond sorting out the fiscal mess; and a clear and confident message about how we will earn our living in future”.

The fact of the matter is that the Budget is yet another missed opportunity by the Government to put in place the framework needed for a 21st century rebalanced economy. Terry Scuoler, chief executive of EEF, the manufacturers organisation, was right when he said last night:

“The Chancellor began positively by setting out his thoughts for a new economic model. But, by the end of his speech, the task of rebalancing our economy looked as daunting as ever.”

He added that the measures in the Budget

“fail to send a strong enough signal to growing manufacturers that now is the time to bring forward their investment plans and to do it here.”

Steve Radley, policy director of the EEF, reaffirmed this when he said:

“This year it doesn’t look as though we will be making…much progress to a new economic model because we are now looking at business investment driving much less of the economic growth”.

That is the key point of a Budget that is meant to be backing business.

In the 2010 Budget, the Chancellor forecast that business investment growth would be 10%, and 10.9% in 2013. Last year’s Budget downgraded this forecast to 8.9% in 2012 and 10.6% in 2013. But according to yesterday’s Red Book, business investment growth this year is not going to be 10% or 8.9% but 0.7%, and next year 6.4%, as my hon. Friend the Member for Glasgow North East (Mr Bain) so rightly said. What on earth is the Chancellor doing with the British economy that he instils so little confidence in the business community? At a time when companies are sitting on record cash piles—something like £750 billion—which could be used to invest and make the British economy more productive and more competitive, the Chancellor is failing to persuade them to invest in Britain now.

Business investment as a share of GDP has fallen sharply since this Government took office and is now, at less than 8% of GDP, at the lowest level for more than half a century. So much for yesterday being a Budget for business. It is little wonder that John Longworth, director general of the British Chambers of Commerce, has said that small and medium enterprises—the very bedrock of this country’s economy and the firms we need to nurture today to make them the big, successful global companies of tomorrow—will be disappointed that the Chancellor did not do more to boost confidence. An additional 1% cut in corporation tax does not make up for the 5.6% rise in business rates still going ahead next month, or for the lower allowances for capital investment and a lack of incentives to boost employment, particularly for young people.

There was nothing in the Budget on supply chain improvement, despite the fact that the Business Secretary, in his leaked letter, specifically argued that

“There is as yet little attention given to supply chain issues.”

With this Budget the Chancellor has once again shown how he is a roadblock to reform. He has missed an opportunity to make Britain more competitive and fairer, and to ensure our economy is more balanced and productive. His own Budget figures, backed up by the OBR, reveal that his tweaks and fiddling, his tinkering and meddling, his leaks and pre-announcements, will make little difference to Britain’s growth prospects and global competitiveness. This is in a month when the likes of Brazil are powering away from us in terms of competitiveness and the growth and size of their economy.

The Chancellor’s tax cuts for the privileged and most prosperous, paid for by tax increases for pensioners, reveal that he, the Prime Minister and the Deputy Prime Minister are looking after their own. The Chancellor’s favouring of Mayfair over Middlesbrough and Belgravia over Burnley, aided and abetted by his Liberal Democrat accessories, shows that he has the wrong values and the wrong priorities, and he is making the wrong decisions. What we—and, more importantly, Britain—needed was the Chancellor to make a Budget focused on growth, on long-term business support, on a modern industrial partnership between business and industry, and on fairness in tough times. He failed to deliver any of it.

17:48

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I am grateful for the opportunity to respond to this debate. Over the course of the last two days, debate has been wide-ranging and there have been 60 Back-Bench speeches. At the heart of the debate is the Government’s determination to restore the UK to prosperity. As hon. Members are already aware, it is because of the decisive action that this Government have taken since the June Budget of 2010 that we have secured and maintained the stability of the UK economy, sheltering it from the turbulence that undermines our nearest neighbours and securing record low market interest rates that support families and businesses across the UK. Stability is a vital precondition for growth, and this Budget builds on those solid foundations, safeguarding a stable economy, creating a fairer, more efficient and simpler tax system, and driving through the reforms to unleash the private sector enterprise and ambition that are critical to our recovery.

The Government are unashamedly committed to building a recovery through enterprise, private sector investment and exports. That is why John Cridland, the director general of the CBI, has said:

“The Chancellor has also painted a clearer vision of how the UK will earn its living in the future and, by seizing the opportunity to make sure our corporate tax system is more internationally competitive, he has sent a powerful signal to companies to invest, do business and create jobs in the UK.”

Kevin Green, the chief executive of the Recruitment and Employment Confederation, said:

“Changes to corporation tax will encourage businesses to invest in their workforce. Plus, in continuing and speeding up year-on-year reductions the Chancellor creates certainty for businesses, which is so important in encouraging growth.”

This commitment to building a recovery through enterprise, private sector investment and export will help to unwind the imbalances and distortions that the previous Government built up, expanded and ignored, to everyone’s cost.

We will not return to growth fuelled by unsustainable debt, irresponsible spending and over-reliance on one sector and one region. I would have thought that the hon. Member for Hartlepool (Mr Wright) would at least have recognised that when Labour was in office, despite the many billions of pounds spent on regional development agencies, the gap between the north and the south widened, not narrowed. That is the legacy that they left to this country. Rather than growth being dependent on debt-fuelled expansion, as in the Labour days, Britain will earn its way in the world. While the previous Government let the economy slip into a stupor of spending and competitive decay, we are reversing that decline and revitalising our ambition.

[Mr Love]

Will the Financial Secretary explain why, after feeding in all the numbers related to the Budget, the OBR did not make any changes to its growth forecasts for the coming years?

[Mr Hoban]

We face a challenge. The OBR has said, on this Budget and the autumn statement, that the scale of the problem we inherited from the previous Government was bigger than everyone thought. The scale of the boom was bigger and the scale of the bust was bigger. That is the legacy that we are tackling.

Critical to realising our goal are the far-reaching tax reforms that the Chancellor announced yesterday. We are committed to creating the most competitive tax system in the G20—a tax system that supports work, encourages growth and keeps our most successful businesses here in the UK. While the previous Government increased taxes on small businesses, we have cut the tax rate on small companies to 20%; while the previous Government wanted to increase national insurance on jobs, we have cut it; and while the previous Government sat idle as our competitiveness drained away, we have already taken action to reduce the headline rate of corporation tax to 23% by 2014, cutting one of the most important and growth-impeding taxes there is.

As the Chancellor announced yesterday, we are going even further by cutting the rate of corporation tax to 22% by 2014—a headline rate of corporation tax dramatically lower than that of our competitors. It is the lowest in the G7 and the fourth lowest in the G20. It is a sign that we are open for business, an invitation for investment and a spur for prosperity and job creation across the economy. That is also why we are cutting the 50p rate of income tax—a rate higher than in the US, France, Italy and Germany, and a rate that damaged our competitiveness while raising nothing in additional revenue. From April next year, the top rate of tax will be 45%, which will restore our competitiveness and galvanise our private sector.

I turn briefly to what the Government are doing to help protect pensioners. I want to make it clear that the Government have taken action to help pensioners. We have taken action to protect the winter fuel allowance, free prescriptions and eye testing, free television licences and free bus passes, and our triple lock on state pension uprating means that the basic state pension is £120 a year higher than it would have been had the previous Government remained in office. The triple lock means that from next month, the state pension will increase by an extra £5.30 a week—in cash terms, the biggest increase in the state pension that we have seen. We are freezing the age-related allowance in cash terms, but no pensioner will pay more in tax. This measure simplifies the tax system, moving everyone towards a simple tax system, where everyone has the same allowance. Even taking into account the change in age-related allowances, everyone will be better off as a consequence of the increase in the basic state pension.

However, there are other things that we need to do to secure future economic growth. As a number of my hon. Friends have said, we need to lift the layers of stifling bureaucracy that serve to suffocate growth. For too long, businesses have been trapped by a web of bureaucratic cynicism and nimbyism. If we want our most innovative and entrepreneurial businesses to lead our economic recovery, we have to match their can-do attitude. That is why the Budget announced a fundamental overhaul of the planning system, replacing 1,000 pages of guidance with just 50, and introducing a presumption in favour of sustainable development and a new planning guarantee, so that no decision should take more than 12 months, including appeals.

However, if businesses are to seize the opportunities to grow, we have to ensure that they have the finance they need to feed their ambition. If we want businesses to take the risk to invest, hire new workers and take a leap into the export market, we need to ensure that they have access to finance. In particular, it is critical that we support smaller businesses, which provide more than 50% of private sector jobs and 30% of private sector investment and have the potential to become the global leaders of tomorrow. That is why the Chancellor launched the national loan guarantee scheme earlier this week, to give smaller businesses with a turnover of up to £50 million access to cheaper loans. Through the scheme, the Government will provide guarantees on unsecured bank borrowing, enabling banks to borrow at a cheaper rate and pass on the full benefit to their customers. We have provided £5 billion of guarantees in the initial phase, with up to £20 billion of guarantees available in total.

[Mr Iain Wright]

Will the Minister give way?

[Mr Hoban]

It is this Government’s deficit-reduction strategy that has earned this country market credibility and low interest rates, and it is this Government who are ensuring that the full benefits of those low interest rates are passed on to businesses across the UK. Barclays, Santander, Lloyds and the Royal Bank of Scotland are already participating in the scheme—a new bank, Aldermore, has agreed to join in principle—helping thousands of small businesses across the UK. However, in addition to the national loan guarantee scheme, we are trying to broaden the range of sources of finance available to new businesses and tackle some of the issues in supply-chain financing, while also ensuring that other sources of finance are available to businesses. That is why we have launched the business finance partnership. I was delighted to see a large number of people coming forward to take part in the programme and ensure that more money is available to invest in small businesses. That is an important change to ensure that businesses are in a position to take advantage of the opportunities before us today.

[Mr Wright]

Will the Minister give way?

[Mr Hoban]

It is this Government who are committed to making Britain the best place to start, grow and finance a business. It is this Government who are putting the ingenuity, innovation and enterprise of people and businesses at the heart of our recovery. This Government are releasing our ambitions for a private sector recovery, through a competitive top rate of tax, one of the lowest rates of business tax in the world, an overhaul of cumbersome planning rules and bold action to ensure access to finance for businesses to lead investment and job creation across the country.

[Mr Wright]

Will the Minister give way?

[Hon. Members]

Give way!

[Mr Hoban]

Opposition Members had plenty of time to make their arguments. They should take responsibility for the problems that this country is having to deal with. They left behind the deficit that this Government are sorting out. They left behind an economy that needs repairing and restoring. It is this Government who will ensure that the British economy will earn its way out of its problems.

17:59

The debate stood adjourned (Standing Order No. 9(3)).

Ordered, That the debate be resumed tomorrow.

Prevention of Development on Green Belt Land

Thursday 22nd March 2012 Commons Chamber

18:00

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

I should like to present a petition, a copy of which has already been presented to No. 10 Downing street, from more than 1,000 residents of Bournemouth East who seek the protection of precious green belt land in the wards of Strouden, Throop and Muscliff from the proposed development of three Traveller sites. Residents believe that Bournemouth is already affected by overdevelopment, and that this would be an inappropriate use of much treasured green belt land and open space.

The petition states:

The Petition of residents of Bournemouth,

Declares that the Petitioners are opposed to the proposed development of three permanent sites for gypsies and travellers in Strouden, Throop and Muscliff; that the Petitioners believe that Bournemouth has already more than adequately contributed to Dorset’s housing numbers; and that this would be an inappropriate use of much treasured greenbelt land and open space.

The Petitioners therefore request that the House of Commons urges the Government to bring forward legislation to strengthen the powers of local Councils to allow them to prevent residential developments from being built on the greenbelt.

And the Petitioners remain, etc.

[P001014]

Electricity Transmission (North Somerset)

Thursday 22nd March 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Stephen Crabb.)

18:01

[Dr Liam Fox (North Somerset) (Con)]

Those who read the title of this debate might be tempted to think that it deals with a localised issue of interest only in North Somerset or the county of Somerset. That would be a major mistake. The issues at stake in this project are likely to be replicated across many other parts of the country, and the principles involved are universally applicable.

At the moment, there are some 22,000 high-voltage pylons carrying 7,000 km of overhead lines across England and Wales. National Grid, the monopoly provider of transmission infrastructure, is planning to build nearly 480 km of new overhead power lines at a cost of some £14 billion. That became an issue in our part of the west country in the autumn of 2009, when National Grid began what it termed a consultation on the installation of a new feed line with 400 kV of electricity to connect the proposed new Hinkley C nuclear power station to the national supply network at Avonmouth, a distance of some 57 km. The most direct route between the two points lies across a body of water, yet the debate centred entirely around a land route that would involve overhead transmission and new pylons. The concerns of local residents about the new 400 kV lines—the current lines carry about 132 kV—were exacerbated when they discovered that the new pylons would be around 150 feet high, and very much bulkier in design, thereby creating greater environmental impact. I will return to the question “When is a consultation not a consultation?” later.

Our experience has been mirrored by colleagues in other parts of the country, notably in Suffolk, and I would like to thank them publicly for the support that they have given us throughout our campaign. One of the biggest problems that we have faced has been the perceived inconsistency in National Grid’s arguments and in the figures it has provided. At a packed meeting in Nailsea in my constituency before the last general election, residents were first told that to lay the cables under the sea was not technically feasible. Then, when they challenged National Grid with the fact that it already owned three undersea cables, they were told that it would be too expensive.

We now have a further complication, in the welcome announcement by the Government of the south-west as the first marine energy park, which will utilise—guess what—undersea cabling. We are still unclear as to why subsea links of similar length should be suitable for Europe, for the New York-New Jersey link and for the Scotland-Wirral link, but not for us. National Grid and Scottish Power Transmission even put out a press release stating that

“the companies are working together to deliver a major project to build a 400 km high voltage circuit which will run predominantly under the sea from Scotland to England. The new circuit will enable the transfer of large volumes of energy from Scotland directly to England and Wales through subsea cables, bypassing the constraints of the existing transmission system.”

[Tessa Munt (Wells) (LD)]

Is it not also the case that Steve Holliday, the chief executive of the National Grid, said in June 2009 that putting cables under the sea was a “no brainer”?

[Dr Fox]

That is indeed correct, but one of the problems we have had, as I mentioned, is that what we are told one day can be diametrically opposed to what we are told the next week. That has resulted in the local population’s loss of confidence in their dealings with National Grid.

There have been huge variations in the costs and estimates of alternatives. National Grid originally estimated that undergrounding power lines would cost between 10 and 20 times more than overhead lines. That does not fit with the evidence produced by groups such as the Campaign for the Protection of Rural England or even with National Grid’s own experience in London or Oxfordshire.

Some clarity was achieved earlier this year with the report from the Institution of Engineering and Technology and Parsons Brinckerhoff. That was a useful contribution to the public debate—well constructed, informative and indicative of the approach that National Grid should have taken from the outset if a meaningful public debate were genuinely sought. It provides better costings for the alternative technologies, and shows that the price differentials are much less than the public were originally led to believe.

However, the report’s remit relates purely to the tightly defined engineering costs. It does not take into account any analysis of the aesthetic, human or environmental impacts of the proposed new overhead lines. It scarcely covers the AC subsea option and does not give an equivalent level of detail for gas-insulated transmission lines as for overhead lines and underground cables. It does not sufficiently take into account whole life costs, or the public’s willingness to pay for undergrounding new and existing electricity transmission lines.

National Grid commissioned Brunswick to look into the public’s willingness to pay for these changes, and the research revealed widespread public ignorance about the percentage of an electricity bill that is attributable to transmission. Most consumers thought that about 10% of their bills as opposed to the actual figure of about 4% related to transmission. Ofgem commissioned further research from London Economics to look at the same data, and we currently await the results of research commissioned by National Grid from Accent.

Throughout the process, National Grid has told us that it is constrained in the actions it can take by Ofgem. My first question to the Minister, then, is: what representations, if any, has National Grid made to the Government, outlining concerns about these restrictions; and what freedoms from those constraints have been requested? What can the Government do to free National Grid from the perceived and well used excuse that it must use the “least-cost option”?

Meanwhile, back in North Somerset, many of the changes originally ruled out as impossible magically became part of the agenda for discussion, following public pressure. The 50-metre pylons, which caused such outrage, might be reduced to the current height by altering the design, although we have subsequently learned that that is limited by the ability of the new pylons to allow transmission lines to bend through more than 3°. We have been told that the 18 lines can be reduced to 12, and that the existing Western Power distribution—the pylons we currently have—might be removed to make way for the new pylons, rather than running in parallel as we were originally told had to be the case.

Other concessions, such as the burying of cables for environmentally sensitive areas and places of greater housing density, have been brought forward. That is particularly important in relation to housing in the west of Nailsea, where those who bought housing close to the existing 132 kV lines might find themselves with housing blight and unknown health implications. I wonder how many National Grid executives or shareholders would choose to have their homes, or send their children to school, under the new 400 kV cables.

Let me return to the question of when a consultation is not a consultation. From the outset, it was the belief of residents in my constituency—particularly in Nailsea, Backwell, Yatton and the surrounding villages—that the alternatives represented were not real alternatives at all. We were offered a Hobson’s choice: we could either accept a transmission line that kept close to the current one, running around the western border of the town of Nailsea, or have another line that would totally destroy a nearby valley and produce widespread planning blight. To the great credit of the local community, nobody bought into the divide-and-rule tactics. To us, a consultation is not about the means of execution, but about whether we wish to be executed or not.

In this particular case, how do the Government define a consultation? Surely, all the aspects of all the schemes ought to be considered—their costs, advantages and drawbacks, whole-life characteristics, environmental impacts, potential health impacts and social costs, not least housing blight. What weight will ultimately be given to the consultation and the views of those affected? If 90% objected to these proposals, would they go ahead in any case? If so, why bother? If not, what level of public disquiet would be required to produce a change of policy? Under the proposed changes to planning law, how will the population be able to be satisfied that its voice has been heard in policy formulation? How can we be guaranteed transparency?

[Tessa Munt]

I wish to place on record that both Somerset county council and Sedgemoor district council believe that the consultation was deeply inadequate. There were more than 4,000 responses to the consultation from members of the local community—constituents of mine and of the right hon. Gentleman—which is far more responses than National Grid has received in any past consultation.

[Dr Fox]

The hon. Lady makes an important point. This issue is not simply about the consultation as it affects her constituency or mine: many people outside North Somerset and Somerset county will be wondering what precedent the decision on the Hinkley C transmission will set for future changes involving high-voltage lines elsewhere in the country. Many will be concerned that their options may be constrained, and that they may be railroaded into the wrong outcome on the wrong assumptions.

I shall now turn to the issue of the future of Hinkley C and where it fits into our broader energy policy. I have always been a supporter of nuclear energy on the basis that it makes a fundamental contribution to the nation’s energy security and guarantees a means of keeping the lights on if, for whatever reason, our imports of fossil fuels are interrupted. On balance, I remain very much of that view, but in light of the growing evidence of the abundance of natural gas worldwide and the massive potential for shale gas production, possibly including here in the United Kingdom, it is reasonable for us to pause and re-examine some of our energy policy assumptions. If the cost predictions we have made turn out to be wrong, and energy prices in the rest of the decade are lower than we anticipated, might there not be an unprecedented opportunity to overhaul our electricity transmission network without a significant impact on consumer prices? Indeed, consumers need to know what impact the options that are available will have on their electricity bills, so that they can make an informed decision in this debate. In other countries, notably Norway and Denmark, the decision has already been taken that any future transmission lines should be buried underground, and the development of new technology, such as gas-insulated transmission lines, offers a whole range of new possibilities.

On the Hinkley C project, we have already seen major changes to the original time scales. Initially we were told that the transmission lines had to be up and ready by 2015 for Hinkley’s operation in 2016. That has now slipped to the lines being ready in 2019 for Hinkley going live in 2021, assuming all is smooth in the Hinkley build and commissioning processes. The bottom line is that we may have more time than we thought, so why do we not use this time to pause for thought, examine all the evidence, consider all the possibilities and get it right?

Let me end by paying tribute to all those in Somerset, Suffolk and elsewhere who have campaigned with such tenacity and vision on this issue. In particular, campaign groups in Nailsea, Yatton, Backwell and Wraxall have shown extraordinary community solidarity against divide-and-rule tactics, using reason and persistence as their primary weapons. May I single out Wraxall and Failand parish council, Chris Ambrose, Hugh Pratt, Fiona Erleigh and Sue Turner, along with their respective groups, for the sterling service they have given to the community?

This coalition Government have put quality of life issues, a greener environmental agenda and long-term policy considerations at the forefront of policy making. A basic issue such as how we transmit our electricity and the considerations we give to our environment, to the well-being of future generations, to the implications for our tourist industry, the health of our people and our ability to welcome new and liberating technology can paint a vivid canvas of who we are and our ambitions for our country. The decisions we make today will have an impact for a generation or more. Technology has changed, public attitudes have changed and our priorities, not least the value we place on the physical environment around us, have changed. We now have an opportunity for public policy to change, and we should grasp that opportunity with relish.

18:16

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

I thank my right hon. Friend the Member for North Somerset (Dr Fox) for securing a debate on this important issue. I am grateful that he has done so. I agree with him that the need for, and impact of, electricity transmission infrastructure is, inevitably, a complex and sensitive issue. So I welcome the opportunity to explain the need for upgrading the existing transmission network, and to clarify the approach to deciding where and how new infrastructure is delivered and how this relates to North Somerset, in particular. I hope that I can also reassure him that many of the changes he has been calling for are already being put in place by this Government.

The Government are committed to meeting the UK’s climate change targets and maintaining energy security. Achieving those combined objectives represents a major challenge. The United Kingdom is increasingly dependent on fossil fuel imports, leaving us much more exposed to risks from rising global demand, limitations on production, supply constraints and price volatility. At the same time, we expect to lose about a quarter of our existing electricity generation capacity by 2020, as old or more polluting generating plant closes.

My right hon. Friend rightly referred to the future costs of energy, and that is certainly an important consideration, however security of supply and reducing the carbon impact of generation are also important factors. That is why we need a mix of energy going forward. It is not for the Government to prescribe how much of each generation source is required, but we are setting the framework for delivering the appropriate energy mix through, for example, our proposals for electricity market reform.

I welcome my right hon. Friend’s support for nuclear generation. I wish to take the opportunity to reiterate its vital role in securing our energy future—we want it to be part of the future energy mix. The UK has everything to gain from being the No. 1 destination to invest in new nuclear. Nuclear is the cheapest low-carbon source of electricity around, so it keeps bills down and the lights on.

[Tessa Munt]

rose—

[Charles Hendry]

I will give way in a moment, but I want to respond to a further point raised by my right hon. Friend about the potential golden age for gas with shale gas emerging. For the United Kingdom, most of that gas would need to be imported, as our own resources decline. So we, too, need to look at how we can harness our own low-carbon electricity resources, such as nuclear and renewables. Putting off building new generation has got us into the mess we are in, where the previous Government identified that the lights could be going out around the end of this decade. We cannot afford to delay any longer in securing the investment in new capacity.

[Tessa Munt]

It is very kind of the Minister to give way. I am on record as being a little more resistant to nuclear power, mainly because of my concerns about the waste. I think that a number of community benefits could be put in place by companies such as EDF. They would be of much more significance to the community. Undergrounding or putting cables under the sea might be examples of that. I accept completely that I am not going to be able to stop Hinkley all on my own, but that is my point.

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The hon. Lady has gone very wide of the issue of electricity transmission into its generation. Perhaps the Minister could respond on the transmission question only.

[Charles Hendry]

I will indeed, but the hon. Lady makes a relevant point in that when a nuclear plant is being proposed there is often strong local support, but that where transmission lines are proposed there tends to be much stronger local opposition. I think that ties in because it is all part of the security of the network that we need.

The existing electricity network will need to be substantially expanded to accommodate the new generation we require. That is particularly the case where new generation is located far from demand or where the existing infrastructure is insufficient. Developers of new generation need the reassurance that the network will be delivered in line with their project time scales so that they are able to generate electricity once their projects are completed. We should recognise that these are substantial long-term investments and that timely network delivery is crucial to these projects commencing.

My right hon. Friend referred to National Grid’s approach to engaging with local communities and its consideration of different network solutions. Before I address the issue of transmission lines in North Somerset it might be helpful for me to explain the wider approach for deciding upon new network infrastructure. Under the current regulatory framework, it is for network companies such as National Grid to submit proposals for new network infrastructure to the industry regulator, Ofgem, and the relevant planning authorities. Those proposals are based on a well-justified need case such as new generation connecting or maintaining a safe and secure network. The network companies also propose routes and types of infrastructure. In doing so they are required to make a balanced assessment of the benefits of reducing any adverse environmental and other impacts of new infrastructure against the costs and technical challenges of doing so following extensive consultation with stakeholders. Those requirements are set out in their licence obligations under the Electricity Acts to develop economic and efficient networks and to have regard to the preservation of amenity and the mitigation of the effects that their activities have on the natural beauty of the countryside.

My right hon. Friend asked about perceived regulatory constraints for network companies to propose alternative solutions. In addition to the legal requirements to consider the wider impacts of new network infrastructure, Ofgem published guidance, in March 2011, on how this should be taken into account. This clarifies that network companies are required to consider wider impacts and alternative solutions to overhead lines. In response to my right hon. Friend’s question on this point, this very much took into account the representations that the Government and National Grid had been making.

That regulatory approach is reinforced by the Government’s energy national policy statements, which set out the framework for factors to be considered when consenting to an infrastructure project of national significance. I emphasise to my right hon. Friend that we have changed those national policy statements from those we inherited specifically to take more account of these matters. They make it clear that for electricity networks, cost should not be the only factor in determining the type of transmission technology used and that proper consideration should be given to other feasible means of connection, including underground and subsea cables.

Within the framework, National Grid published in September last year its new approach to building new transmission infrastructure. Using that approach, it will put greater emphasis on mitigating the visual impact of its new electricity lines, and will balance that consideration against the need to manage the impact on household bills. I hope that this more sensitive approach provides reassurance to those areas potentially affected by cables and pylons that alternatives to new overhead lines are considered very seriously. As the costs and technical difficulties vary so much from project to project, it is important that each one is assessed on a case-by-case basis to ensure that the right planning decision is taken each time. My right hon. Friend has already referred to different projects with quite different characteristics where subsea cabling has been proposed or deployed. Indeed, the recently announced project, which he mentioned, between Scotland and England is specifically to get around an onshore constraint, and therefore new ways of dealing with that had to be found.

The Government consider that the costs and benefits of undergrounding transmission lines are important issues that must be kept under review in the light of new information and evidence. That is why the Department of Energy and Climate Change arranged for an independent study, to which my right hon. Friend referred, to be carried out to give clarity on the practicality, whole-life costs and impacts of undergrounding and subsea cabling as alternatives to overhead lines. That report was published in January 2012, and its findings are generally consistent with the comparative costs that National Grid has quoted when evaluating options on current projects, including in North Somerset. The report should provide a useful reference point to inform the planning process.

My right hon. Friend identified some issues that were not being looked at, but as I hope I have explained, the Government have already put in place those other wider issues in the national policy statements.

My right hon. Friend raised the question of consultation and how the views of stakeholders on a range of impacts are taken into account. Let me reassure him that the impacts he mentioned are indeed taken into account in the decision-making process. However—I know that he will accept this—there is a balance to be struck between impacts and there is no simple formula that can be applied to produce the right decision. I know that my right hon. Friend will understand that from the decisions that he had to make as Defence Secretary.

Network companies must proactively explore new and alternative technologies to overhead lines. National Grid is currently exploring the development of gas insulated lines and it would be for it to consider whether the use of this technology was appropriate for any project. However, the issues involved with gas insulated lines are complex. For example, gas insulated lines are still an emerging technology and untested, and much more work needs to be done for longer, directly buried installations such as the Hinkley Point connection. There is currently no directly buried gas insulated circuit longer than 1 km in operation anywhere in the world.

The application for transmission infrastructure in North Somerset will be decided by the appropriate planning authorities, which may include Ministers. It would therefore be inappropriate for me to give a view on the particulars of those proposed developments. However, I do recognise from the issues raised in the House and elsewhere that many people feel very strongly about pylons and the impact they can have on the landscape. When announcing its preferred route corridor for the Hinkley connection, National Grid reported that it had received over 8,000 responses.

Effective consultation with local communities and other interested parties is a vital part of the planning and regulatory approval process. When making proposals for new infrastructure, National Grid has to demonstrate that alternatives have been considered and why its preferred option is justified. This must show that stakeholders have been engaged effectively.

My right hon. Friend spoke in detail about his experiences with the National Grid consultation process. I think it fair to say that the new planning process requiring greater engagement with stakeholders and examination of options before submitting a planning application has been a learning process for all participants and can be significantly improved as it goes further.

I am encouraged, however, by the greater stakeholder engagement and consideration being given by National Grid to alternatives over the past year or so. This is the behaviour that the new planning and regulatory frameworks require. Having announced its preferred route corridor for the Hinkley Point connection, National Grid is considering carefully the type of technology it will use for the connection. It has stated that many people want the cables put underground, as indeed my right hon. Friend has said, or under sea, and as it continues its consultation, it expects that the final plans will include some undergrounding as well as overhead lines.

I would like to thank my right hon. Friend and the hon. Member for Wells (Tessa Munt), who have participated in a valuable and important debate. Our challenge is to build a low-carbon economy based on an energy mix that meets our environmental targets and security of supply needs. This will require a substantial expansion in the transmission network to accommodate the required generation. Deciding where and how this infrastructure is delivered requires informed and balanced consideration of a number of factors including costs, environmental impact, and the needs of local communities and the country as a whole. The planning and regulatory approval processes for new transmission infrastructure require that stakeholders are consulted on these important decisions and their views demonstrably taken into account. This is happening now in North Somerset, where National Grid continues to undertake an extensive stakeholder engagement exercise on developing its proposals.

National Grid has expressed the desire to work with stakeholders to lessen the impact of any new infrastructure using mitigation measures such as woodland planting, placing cables underground or use of lower height pylons where appropriate. I strongly encourage those with an interest to engage with National Grid as it further develops its proposals.

This is an important issue to which I know the House will return, but I hope that I have been able to reassure my right hon. Friend that we have already been acting on the concerns that he has expressed.

Question put and agreed to.

18:29

House adjourned.