House of Commons

Thursday 19th April 2012 Commons Chamber

Thursday 19 April 2012

The House met at half-past Ten o’clock

Prayers

Thursday 19th April 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 19th April 2012 Commons Chamber

The Secretary of State was asked—

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

1. What assessment she has made of recent trends in the level of bus fares in England; and if she will make a statement.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

As I set out in the recent paper “Green Light for Better Buses”, bus fares outside London fell by 4% in real terms between March 2009 and March 2011—the most recent figures available. Bus fares are set by local bus companies or in some cases by local councils, so they vary across the country.

[Tom Blenkinsop]

In my constituency, bus fares have jumped by a minimum of 10p since the Government subsidy cut. A basic return journey from Saltburn to Guisborough is now £5.10 for an 8-mile journey. Will the Minister explain why on ConservativeHome this week, a Lib Dem special adviser argued for means-testing free bus passes, as well increasing the age at which a pensioner would receive that bus pass? Are we to take it that that is now Government policy?

[Norman Baker]

I have no idea what the hon. Gentleman is referring to. That is not Government policy and it is not Lib Dem policy either. I am sorry that he seeks to make a political point about something as serious as bus fares. I hope he will take some comfort from the answer I gave, which was that bus fares have fallen in real terms by 4%—unlike under the previous Government, when between 1997 and 2009, bus fares increased by 24%.

[Iain Stewart (Milton Keynes South) (Con)]

Is my hon. Friend aware that in addition to the free off-peak bus pass, Milton Keynes council has introduced a discounted peak bus fare for pensioners?

[Norman Baker]

I was not aware of that development, but I am interested to hear of it. It is becoming clear that under the new localism and devolution proposals advanced by the Government, different approaches are being adopted by local government. Some councils are responding sensibly and creatively to their new freedoms, while others are responding less well.

[Clive Efford (Eltham) (Lab)]

Inside London, bus fares have gone up under Boris Johnson. This is a tax on people’s jobs, as constituents like mine who have to travel long distances to work now have to face this additional daily cost. Ken Livingstone, the Labour candidate for the mayoral elections, has identified a recurring £330 million sum in Transport for London’s budget; should that not go back to those hard-working people through a reduction in their daily bus fares?

[Norman Baker]

These matters are devolved in London. The hon. Gentleman will forgive me if I do not get involved in some sort of beauty contest between Boris and Ken.

[Gavin Williamson (South Staffordshire) (Con)]

2. What steps she is taking to encourage local authorities to improve local bus provision and services.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

Bus services are an important part of our plans to help create growth and cut carbon, and they provide a lifeline to essential services for many people. The recent paper, “Green Light for Better Buses” sets out a comprehensive and balanced set of measures to help local authorities play their part in providing better, greener and more innovative bus services—new funding, better regulations, revised guidance and reformed subsidy arrangements. These proposals have been carefully formulated to attract more people on to buses, to ensure better value for the taxpayer and to give local transport authorities more influence over their local bus networks.

[Gavin Williamson]

South Staffordshire district council and Staffordshire county council are shortly to launch South Staffordshire Connect, which will provide local transport for people to get to bus routes in my constituency. Does my hon. Friend agree that this is the type of initiative that we need to promote right across the country?

[Norman Baker]

I do agree. That is the sort of initiative that I am pleased to see some councils adopting, given the freedom that the Government are providing. Buses are a lifeline for people who do not have access to a car. I would be delighted to help my hon. Friend launch this scheme on 13 June.

[Derek Twigg (Halton) (Lab)]

One of the biggest problems with the bus cuts is their impact on young people. This week, I received an e-mail from a young constituent saying that back in 2010, his bus fare to school was £7.50, but it has now become, in his words, “a huge £12”. Cuts to local authorities and bus grants are having a disproportionate effect on young people, so what are the Government doing to help young people by ensuring that they have access to affordable transport?

[Norman Baker]

I accept that there is an issue for young people, which is why I have taken steps to ensure that young people came along to talk to the operators and local authorities at the bus forum I hold on a six-monthly basis. It is also why I discussed the matter with the Confederation of Passenger Transport, which is now taking steps to try to get a better deal for young people. I have had discussions with the confederation about that very matter.

[Dr Julian Huppert (Cambridge) (LD)]

The Minister will be aware of a recent report from scientists at Massachusetts Institute of Technology, which estimated that combustion exhausts cause 5,000 premature deaths in the UK each year. What steps is he taking to make sure that local bus provision is with more efficient buses, and that old buses are retrofitted to improve air quality standards?

[Norman Baker]

I am happy to say that we have recently announced the winners of the third round of the green bus fund. Because of our prudent financial management as a Department, we were able to increase it from £20 million to £31 million. We have also provided money to retrofit buses in London to deal with the air pollution problem there. That is a demonstration of the fact that we are committed to bus travel—both to help create growth and to cut carbon.

[Lilian Greenwood (Nottingham South) (Lab)]

The Minister’s new funding pots are like an attempt to use sticking plasters to cover a gaping wound—the wound inflicted by his decision to cut support for buses by half a billion pounds, which has resulted in not improved but disappearing services. “The picture is bleak.” Those are not my words, but the words of the boss of Arriva. Page after page reveals the effect of the Government’s cuts: “frequency reduced”, “evening and Sunday service withdrawn”, “cancelled owing to lack of funding”. Why does the Minister not admit that his policies have been a disaster for bus users?

[Norman Baker]

I will not admit it because it is entirely untrue. In fact, those policies have been a success. Recent figures from local authorities show that the average bus mileage is relatively unchanged, which suggests that there have not been the cuts that the Opposition are so keen to talk up. The industry itself has congratulated the Government on their new bus policy, as, indeed, have local authorities. Perhaps the hon. Lady should pay more attention to what the industry and users say, which, by and large, is supportive of what the Government are doing.

[Mr Philip Hollobone (Kettering) (Con)]

According to the Department’s own figures, traffic volumes will increase by 40% by 2035. Is not the simple, plain fact of the matter that unless we ensure that more people travel on buses, the country will be gridlocked?

[Norman Baker]

It is true that we must have a balanced transport policy, and part of that involves maximising the use of public transport. That is why we have invested more in rail travel than any Government since Victorian times, and why we are now investing massively in buses as well. For instance, £70 million has been invested in better bus areas, £41 million in the green bus fund, £560 million in the local sustainable transport fund, £20 million in community bus services, and £15 million in smart ticketing technology. If I go on much longer, Mr Speaker, you will tell me to curtail my remarks.

[Natascha Engel (North East Derbyshire) (Lab)]

3. If she will ensure that her response to the Competition Commission's recommendations on the market for local buses is published by May 2012.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

You wait ages for a question on buses, and then three come along at the same time.

The Government’s response to the recommendations from the Competition Commission’s report on the supply of local bus services in the UK—excluding Northern Ireland and London—was published on 26 March.

[Natascha Engel]

I must explain that I tabled my question three days before the Minister responded to the report.

I am mainly interested in rural bus services. As the Minister knows, there are bus wars on the lucrative routes between towns, and greatly reduced or no services in the more isolated rural communities where elderly and young people depend on buses. What is he doing to ensure that services are more balanced in rural constituencies such as mine—and, when he talks to the commission, will he refer it to the Plain English Campaign, which would help the average bus user to understand what is in its excellent report?

[Norman Baker]

There were a lot of questions there.

I entirely accept that buses provide a lifeline for people in rural areas. That is why we intend to devolve funding for the bus service operators grant to local authorities for tendered services, which will give them more control over those services, and why we have taken steps to fund community transport with two tranches of £10 million to help rural areas. Following the commission’s recommendations, we are taking steps to deal with bus wars by ensuring that there is a code of conduct for operators, enforced by the traffic commissioner.

[Jo Swinson (East Dunbartonshire) (LD)]

The commission’s report highlights various ways in which local bus markets are not working well enough throughout the United Kingdom and should be improved, but bus operators must be given enough time to prepare for the necessary changes. May I encourage my hon. Friend not to make the same mistake as the Scottish National party Government in Scotland, who have given operators just three months in which to prepare for major structural changes in funding and a 17.5% cut in the bus service operators grant? That is causing chaos in bus services in East Dunbartonshire and elsewhere.

[Norman Baker]

The industry tells me that it is very concerned about what is happening in Scotland and Wales. It is concerned about the short notice given by the Scottish Government, and about the even shorter notice given by the Welsh Assembly Government. We, on the other hand, gave 18 months’ notice of changes in the bus service operators grant. Representatives of the industry said at the time that, in view of the notice given and the type of BSOG changes involved, they expected to be able to deal with those changes without affecting services markedly.

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

Statements made by the hon. Gentleman before he was a Minister suggest that he must have been constrained in his enthusiasm for quality contracts by his Conservative colleagues in Government. If he cannot help local authorities to pursue such contracts, will he consider introducing a new bus regulator to deal with market failure—an Ofbus?

[Norman Baker]

The option for councils to pursue quality contracts remains on the statute book, although I think that any pragmatic council would choose to try to deal with bus companies in a collaborative way before reaching for the nuclear option. Some of the problems mentioned by the hon. Gentleman will be dealt with by our responses to the Competition Commission’s recommendations, which pick up some of the unsatisfactory behaviour of bus companies.

[Gareth Johnson (Dartford) (Con)]

4. What steps her Department is taking to reduce congestion caused by roadworks.

[The Parliamentary Under-Secretary of State for Transport (Mike Penning)]

We are consulting on plans to make it easier for local authorities to introduce roadworks permit schemes allowing them to control and co-ordinate works better. We have made regulations to allow “pioneer” lane rental schemes, and we are increasing the charges that local authorities can impose where works overrun time limits.

[Gareth Johnson]

I am grateful to the Minister for his answer, as roadworks can be extremely frustrating for all motorists. Will he therefore do all he can to ensure that utility companies take a co-ordinated approach and that, wherever possible, they avoid undertaking roadworks during rush-hour periods?

[Mike Penning]

Utility companies have the powers to carry out roadworks, but it is very important that they work with local authorities and finish on time. We intend to increase the fine for not finishing on time to £5,000 a day for the first three days, and to £10,000 a day for every day thereafter. I fully understand my hon. Friend’s frustration about works being briefly started and then stopped before being resumed again a few days later. We need to address that.

[Ian Austin (Dudley North) (Lab)]

Is not the best way to tackle congestion both at roadworks and everywhere else simply to get more people on their bikes? As a result of The Times campaign, we now have a once-in-a-lifetime opportunity to boost cycling in Britain. There is now media support, cross-party support in this House and huge public support. Instead of just being given a list of all the measures on cycling that the Government are taking, we need fresh thinking and new ideas, and investment shifted to cycling from other areas of transport spending. We must take this once-in-a-lifetime opportunity to boost cycling in Britain.

[Mike Penning]

Cycling is very popular in this country, and becoming even more so. The Government support The Times campaign. I have met many of those involved, and we support most of the things The Times has called for. The sort of roadworks my hon. Friend the Member for Dartford (Gareth Johnson) was talking about would not be affected by such cycling measures, however. We are trying to make sure that utility companies do not dig up the roads and then leave them open without having finished the works.

[Mark Garnier (Wyre Forest) (Con)]

5. What estimate she has made of the effect of the High Speed 2 rail project on job creation.

[The Secretary of State for Transport (Justine Greening)]

The Government expect that phase 1 of HS2, linking London and Birmingham, will support about 40,000 jobs. That figure includes 9,000 jobs during construction, 1,500 permanent jobs in operating the railway, and opportunities for up to 30,000 jobs in the regeneration and development areas located around stations. Phase 2, connecting Birmingham, Manchester and Leeds, will support a substantial number of jobs in those northern conurbations. A more detailed assessment is already under way as part of the sustainability appraisal for phase 2.

[Mark Garnier]

I thank my right hon. Friend for that answer. In order to reinforce the true value of HS2, will the Government give serious consideration to the expansion of Birmingham airport into a UK hub airport? That would create jobs in the west midlands, while also offering a viable and realistic solution to airspace capacity problems.

[Justine Greening]

I recognise that Birmingham airport has a crucial role to play and, as my hon. Friend will be aware, the Birmingham interchange station will enable it to be much better connected than it is at present. Birmingham airport already has planning approval for a runway extension, which should allow for the operation of airline services to more long-haul destinations. Even in the short term, there is a real opportunity for Birmingham airport to expand.

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

May I urge the Secretary of State to readjust her priorities? In terms of job creation—and, indeed, almost any other objective—the true priority should be to create a modern, fast and safe transport network in this country, and especially across the northern regions. Will she make that her top priority, above any prestige scheme?

[Justine Greening]

I do not think there needs to be an either/or choice. We need to improve our transport system in the short and medium terms and plan for the longer term, which is what we are doing through HS2. I am committed to making sure our great northern cities are well connected. There is investment in the TransPennine Express, and there has been an announcement on the northern hub. A huge amount of investment is going in to ensure that those communities are better connected than they ever were in the past.

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

I congratulate the Secretary of State on her brave decision on HS2. May I remind her, however, that the west coast main line will, perhaps, reach full capacity by 2022, and therefore urge her to bring forward the start of HS2 in order to ensure an earlier completion date?

[Justine Greening]

My hon. Friend is right to say that these huge infrastructure projects take time to come to fruition, and we are cracking on as fast as we can. We are also committed to making sure that we get this one right, which means taking a very structured approach to how we develop our proposals. In the meantime, I assure him that I take great care over his local services. He came to see me recently about Northampton station, and he made a compelling case.

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

When High Speed 2 eventually reaches Edinburgh, passengers getting off there will have a difficulty because under Network Rail’s current plans the taxi rank is to be moved outside the station. Will the Secretary of State ensure that passengers will still be able to switch to taxis with ease at Edinburgh Waverley station?

[Justine Greening]

Obviously, security issues are also involved, but I can tell the hon. Gentleman that I have already met representatives of the Scottish Government to discuss the longer-term plans that we have for improving the journey times between Scotland and the rest of the country. There are some exciting proposals that we can bring forward. I am very much looking forward to continuing those discussions over the coming weeks and months, and I very much hope that he will be involved in those discussions and thoughts, as they develop.

[Paul Blomfield (Sheffield Central) (Lab)]

6. What progress she has made on the electrification of the midland main line; and if she will make a statement.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

The Government are reviewing the business case for electrification of the midland main line, and we will consider this very carefully when we make our decisions in the summer on rail investments in the next rail control period from 2014 to 2019.

[Paul Blomfield]

I thank the Minister for her answer and for her response to Monday’s Adjournment debate, which again showed the wide support among hon. Members on both sides of the House for improvements to the midland main line. She knows that electrification alone will not deliver the improved journey times, and that the £150 million needed for the further track improvements, particularly at Market Harborough, Leicester and Derby, will make the difference, for a relatively modest investment. Does she therefore agree that we need to cut corners on the track and to do so on the budget would be a false economy?

[Mrs Villiers]

I very much agree that Monday’s debate was excellent. Although the hour was late, the attendance was strong, with a huge number of hon. Members demonstrating their support for a project that does have a good business case; electrification will be expected to pay for itself over the appraisal period. We will consider the other upgrades that the hon. Gentleman would like to happen. We do not think that their business case is likely to be as strong, but those projects will be examined carefully, too, alongside all the other competing priorities, including projects such as the northern hub.

[Nicky Morgan (Loughborough) (Con)]

16. I thank the Minister for her constructive comments and response to the Adjournment debate that I led on Monday evening. Given the remarks she made just now, she is obviously aware of the cross-party support in the House for the upgrade and electrification works. I hope that she is also aware of the support outside, including from all the local enterprise partnerships and councils affected. Is there any further information that any of us campaigning for the electrification and upgrade of the midland main line could provide to her or her office before her decision is made?

[Mrs Villiers]

My hon. Friend has been running a great campaign on this issue, alongside many other honourable colleagues. As she says, support has been demonstrated by a lot of the other stakeholders and, of course, by the Derby Telegraph, fine institution that it is. We are confident that we have the information we need, working with Network Rail, and we will be looking further at that in the run-up to these decisions. Of course we take this issue very seriously, because we are committed to electrification of the rail network; we are committed to about 800 miles of it, with about 130 miles of it on stream with TransPennine electrification, whereas the Labour Government only managed less than 10 miles of it.

[Jonathan Ashworth (Leicester South) (Lab)]

May I tell the Minister that this project also has huge support from the fine institution that is the Leicester Mercury? She has referred to the strength of feeling expressed in Monday evening’s debate. This project has huge cross-party support and support in the business community, although there is concern in some quarters that, because of HS2, we will not get the money for it. Given that the population and the conurbations that this line serves are likely to expand greatly over the next few years, the sooner she can give us a firm commitment on this, the better.

[Mrs Villiers]

I am delighted that the Leicester Mercury is also on side, too. As the Secretary of State has made clear, we believe that it is important to invest in and upgrade our current rail network, as well as prepare for the challenges of the future with HS2. But it is only because this Government have made a decision to prioritise investment in transport, despite the deficit that we inherited from our predecessors, that we are having this conversation at all and it is the only reason that electrification of the midland main line is a real possibility.

[David Tredinnick (Bosworth) (Con)]

Does my right hon. Friend agree that the project is tremendous value for money, because it will take pressure off the east and west coast main lines? With the prospect of a 60-minute journey from Leicester to London, there will be more demand on the line, so the cross-party support is genuine.

[Mrs Villiers]

I agree that electrification has general benefits, many of which would materialise if electrification on the midland main line were to go ahead. It will depend on whether it is affordable and on the assessment of competing priorities, which are also supported by communities in other parts of the country. We will take all economic issues and environmental benefits into account.

[Mr Brian H. Donohoe (Central Ayrshire) (Lab)]

7. What recent discussions she has had with the Chancellor of the Exchequer on the cost of fuel.

[The Secretary of State for Transport (Justine Greening)]

I have regular meetings with ministerial colleagues on a range of economic issues. The Government are very aware of the impact that high fuel prices have on people who rely on their cars. In the Budget last year, the Chancellor cut fuel duty by 1p per litre and it is now 10p per litre lower than it would have been under the previous Government’s plans. Between 2011 and 2013, as a result of that change, the Government will put £4.5 billion back into the pockets of motorists.

[Mr Donohoe]

I should say that I thank the Secretary of State for that answer, but the problem is that the tax on fuel is not just the excise. There is also a thing called VAT which has not been taken into account in the equation. In her regular meetings with the Chancellor, will the Secretary of State suggest to him that they change the formula for the price of fuel, given that VAT plays a fairly significant part in that and the problem is now at a critical stage in my constituency? People are writing to me to say that they can no longer travel to work and that they are considering giving up their employment.

[Justine Greening]

We want motoring to remain affordable and, in fact, this Government are working very hard to ensure that that remains the case. We must also ensure that we take the decisions that can get our public finances back into order. We must do that if we are to continue to be able to invest in infrastructure such as transport. One needs only to come to Transport questions to see how important the issue is to many constituencies and communities, so I can assure the hon. Gentleman that we are trying to strike the right balance. We have taken action as a Government and will continue to review the situation.

[Robert Halfon (Harlow) (Con)]

Will my right hon. Friend put pressure on the big oil companies to reduce prices at the pump when the international oil price falls? Will she also do everything she can to increase competition and reduce the stranglehold of the four big oil companies on the smaller independent petrol retailers?

[Justine Greening]

We want to see competition in this arena and we also want to ensure that when our Government puts through fuel duty cuts, as we did last year, they get passed on. The evidence shows that they do, but I believe that my hon. Friend is right to highlight the situation, which we should continue to monitor. I can only reiterate to him—I know that he has campaigned hard and successfully on this in the past—that we will do whatever we can to try to ensure that motoring remains affordable.

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

19. At a time when record petrol prices are hitting families and businesses very hard, does the Secretary of State at least agree that it would definitely help those struggling businesses and families if the Government reduced VAT on fuel to what it was before the Government increased it to 20%?

[Justine Greening]

As I think the hon. Gentleman will know, it is not possible to reduce VAT on fuel without reducing it on standard rated items across the board. I hope that he will welcome the steps we have taken in his local area to make it more affordable for people to travel over the Humber bridge, but his proposition that we can reduce VAT on fuel without reducing it on everything else is wrong. If we did, we would have a huge hole in our public finances that would undermine our investment for public services.

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

Is the Transport Secretary aware that Ryedale has the highest fuel pump prices in the country and that filling up the car costs more than the weekly grocery bill? Will she support my campaign for a rural fuel duty discount for the specific parts of Ryedale and Hambleton that are affected by the high cost of tax on fuel?

[Justine Greening]

I want to ensure that motoring is affordable for everybody. I think my hon. Friend’s question perhaps relates more to Treasury questions than to Transport questions and I know that my right hon. Friend the Chancellor has introduced and put in place plans to pilot such a rural fuel duty discount. I am sure that she will make her case to him on whether it could, in time, be extended to her community, too.

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

8. What assessment she has made of the effect on jobseekers of rail fare increases.

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

No specific assessment has been made of the effect on jobseekers by my Department. The Department for Work and Pensions has a scheme in place to assist jobseekers. Jobcentre Plus issues a discount card to eligible jobseekers to help them travel more cheaply on train services to job interviews and for vocational training. The card offers a 50% discount on a wide variety of fares including London travelcards.

[Grahame M. Morris]

A previous Conservative Secretary of State advised people to get on their bike to find work; it seems that the Department for Transport has taken that advice to heart given the rapid increases in rail fares, particularly over the next two years. Can the Minister confirm that the Government will now allow train companies to increase fares by as much as 8% above inflation over the next two years, and will she at least consider limiting the cost for those people in constituencies such as mine for whom this is very difficult?

[Mr Speaker]

I am grateful; we have got the point.

[Mrs Villiers]

This Government are determined to get the costs of running the railways down. We have a plan for delivering that—a plan that has been opposed by Labour Members, who have provided no ideas themselves on how we deal with this problem. We are determined to deliver better value for money for passengers. That is why we are going to get the cost of running the railways down.

[Alok Sharma (Reading West) (Con)]

Jobseekers and workers from my constituency travel regularly by train to London and elsewhere in the south-east and the wider introduction of smart ticketing should help to reduce their travel costs. Can the Minister update the House on plans to extend smart ticketing across the south-east, funding for which was announced in the Chancellor’s autumn statement?

[Mrs Villiers]

We believe that introducing smart ticketing across more of our national network is a very important way to improve services for passengers to make ticket-buying easier and more convenient and also as a way to assist our efforts to get better value for money for passengers and in terms of reducing the costs of running the railways. That is why we have allocated funding to projects to deliver smart ticketing in the south-east and why we are funding the interaction of ITSO with Oyster in London. We are determined that the sort of benefits that people have enjoyed with Oyster in London for many years can start to be enjoyed across a wide range of services across the national network.

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

The Government’s plans for the future of the rail service include the statement that Ministers wish to withdraw or reduce rail subsidies. What impact would this have on rail fares?

[Mrs Villiers]

What we want to do is get the cost of running the railways down so we take the pressure off fares and off the taxpayers’ subsidy. We need to be fair to both the groups that fund the railways and it is vital that we go forward with our programme to give better value for money and eliminate the inefficiency in the railways that arose under Labour’s term of office. In its term of office, fares rose and inefficiency increased dramatically in the railways.

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

My hon. Friend will be aware that the Opposition said they would cap train fares this year by the retail prices index plus 1%, but where Labour is in control, in Wales, it has maintained the 5% flex element. Is this not just another case of the Opposition saying one thing but doing another?

[Mrs Villiers]

My hon. Friend is absolutely right. We cannot believe a word Labour says on fares. The Leader of the Opposition stood at the Dispatch Box and said that the fares basket flexibility was an outrage, yet the Labour Administration in Cardiff are still using it. When it comes to Ken Livingstone, we cannot believe a word he says either on fares.

[Maria Eagle (Garston and Halewood) (Lab)]

Does the Minister understand that many people who are out of work do not have easy access to the internet and rely on the help and advice of staff to ensure they get the cheapest fare, which is not always clearly advertised or available at ticket machines? Can the Minister confirm whether it is Ministers or train companies who are responsible for the decision to close many of these vital ticket offices?

[Mrs Villiers]

The hon. Lady should give me an example of these closures, because I have to say they are not happening. No decisions have been made on possible changes to the way that ticket offices are regulated and we are going to be looking at this issue as part of our efforts to drive efficiency in the railways, but before any decisions are taken we will think very carefully about the impact on all rail users, including the disabled, those who are jobless and those with visual impairments. This is a very important issue to get right and part of the way we will deal with it is by expanding the smart ticketing and alternative ticket-buying opportunities we have discussed this morning.

[Maria Eagle]

That is an interesting answer. The Minister seems to be out of touch with what is happening in her own Department. I have here a leaked e-mail, dated just two weeks ago, from the civil servant responsible for the rail fares and ticketing review. It says that

“the Minister has already decided to approve some ticket office closures (it’s just not been announced yet…)…there will be more of those in future.”

What is worse, she then admits that Ministers plan to pin the blame for the closures on the train companies, saying,

“your way of slipping in there that the initiative comes from TOCs not us is very neat”.

Will the Minister now own up and admit that she has already given the green light to these closures, which passengers will find not “very neat” but very inconvenient and very expensive?

[Mrs Villiers]

The shadow Secretary of State refers to the proposal from London Midland, which is being considered but on which no final decision has been made.

[Brandon Lewis (Great Yarmouth) (Con)]

9. What discussions her Department has had with local authorities on the devolution of funding for major local transport schemes.

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

My Department has held discussions with a number of local authorities before and during the consultation period on the devolution of funding for local major transport schemes. The formal consultation exercise closed on 2 April and we are now reviewing the responses. We will publish our firm proposals later in the year.

[Brandon Lewis]

Does the Minister agree that devolving funding for major local transport schemes, such as improvements to the A47 in Norfolk, will give local communities more say on what they need, particularly by using local enterprise partnerships and bringing together businesses and local authorities with a clear understanding and focus on what is needed to achieve economic growth from infrastructure investment?

[Norman Baker]

Yes, we agree that it is a good idea that local communities have more say in such matters, as my hon. Friend says. I am happy to say that my ministerial colleague, my hon. Friend the Member for Hemel Hempstead (Mike Penning), will shortly invite him, other local MPs and interested parties to discuss relative priorities for the A47.

[Ian Lavery (Wansbeck) (Lab)]

Northumberland county council is again considering the reopening of the Ashington, Blyth and Tyne rail passenger link, which is essential for economic recovery and growth in south-east Northumberland. Will the Minister agree to meet me and other interested parties to discuss how we make sure that this necessity becomes a reality?

[Norman Baker]

We have the biggest rail investment programme since Victorian times, but we are always looking for schemes that are sensible and help local economies. I or the Minister of State will be happy to meet the hon. Gentleman and his colleagues.

[Andrea Leadsom (South Northamptonshire) (Con)]

T1. If she will make a statement on her departmental responsibilities.

[The Secretary of State for Transport (Justine Greening)]

Last month we published the rail Command Paper setting out how we will reduce the cost of running our railways so that we can end the era of above-inflation fare rises for passengers. We have also kicked off the consultations on how best to bring fares and ticketing on the railways into the 21st century and to give local communities more power over local services. We also, as we have already discussed, set out our bus strategy, including new funding for low carbon buses and smart ticketing. Users of the Humber bridge have finally begun to benefit from the lower tolls that this Government have introduced.

[Andrea Leadsom]

When my right hon. Friend announced HS2, she assured the House that a fair property and blight deal would address any blight caused by HS2 and reassure property owners. Many people in my constituency have been trying to sell their home for up to two years but are without access to a compensation scheme. What can I say to them to reassure them? Will she reconsider the prospects for a property bond, which would be the only way of ensuring that the property market works normally?

[Justine Greening]

I assure my hon. Friend that I recognise the impact that plans for High Speed 2 are already having on individuals, communities and businesses along the line of route. That is why we will shortly consult on a package of measures that will help property owners. It is an important step for the Government and enables those affected or interested to respond to the consultation and help shape Government policy. She talked about a bond-based property purchase scheme. I assure her that I am committed to making sure that the package is fair.

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

The minutes of the Whitehall meeting between Addison Lee chairman John Griffin and the right hon. Member for Runnymede and Weybridge (Mr Hammond), now the Secretary of State for Defence, on 13 October last year record that the then Transport Secretary said that

“he was interested to listen to the views of someone in the industry”

about opportunities to bid for plum Government chauffeur contracts. Given the cash for access scandal hanging over her Government, will the Secretary of State say whether she or her predecessor had any other private hire firms on the sofa pitching for business? Or do people get that chance only if they pay enough to become a premier league donor to the Tory party?

[Justine Greening]

If the hon. Gentleman’s proposal is that one should not be able to speak to any organisation that gives money to one’s party, it will certainly free up a lot of time in the Labour party’s diary. Labour Members could cut out all those union meetings. The bottom line is that this Government and my predecessor and I have always approached all our meetings with absolute propriety, and that is the case on this matter, too.

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

T4. The Minister will be aware from her answers to my written parliamentary questions that the Labour party spent no money and completed no track work for the northern hub during its time in government. I am sure that the House welcomes the Ordsall Chord as the down payment on the northern hub, but can she assist those in the Chamber who might be frustrated by the lack of progress on how the new infrastructure projects, such as electrification, impact on the delivery of the northern hub?

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

It is right that the Government are making considerable progress on the northern hub, in contrast to our predecessors—not just the Ordsall Chord but north trans-Pennine electrification, improving the Hope Valley line and other improvements that will benefit Manchester, Sheffield, Bolton, Preston, Rochdale, Halifax and Bradford. I acknowledge that there is more to do, and the remaining elements of the northern hub will be carefully and seriously considered when we make our decisions on the next high-level output specification railway control period.

[Mr Clive Betts (Sheffield South East) (Lab)]

T2. I apologise for raising again the issue that I raised last month without getting an answer. Two years ago the Government inherited an in-principle agreement from the previous Government for the tram train pilot scheme in Sheffield. The scheme is not about rolling out multi-billion pound expansion across the country at this stage. A simple pilot could determine whether what works in other countries works here. When will we have a starting date?

[The Parliamentary Under-Secretary of State for Transport (Norman Baker)]

We are very supportive of the concept of a tram train pilot, and I am in regular discussions with officials in the Department, Network Rail and colleagues elsewhere in Government such as the Treasury. We have to get this right because it is an important project. We have to get the specification right to ensure that it works. We inherited a position where not much work had been done, and we had to start from a very low base, but we are making progress and I hope to make a further statement shortly.

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

T6. Officials in the Department are considering the Greater Bristol metro rail campaign’s four-track bid for high-level operating strategy funds. Does the Minister agree that, if successful, the four-track system at Filton bank would unlock an essential local railway line for more regular local trains serving popular residential and business locations?

[Mrs Villiers]

I am very aware of the project and I recognise its benefits, and officials at the Department for Transport are working with Network Rail and the local authorities concerned. It looks to have a fairly positive business case and we will consider this alongside all the others put forward this morning that could be funded in railway control period 5.

[Mr Stephen Hepburn (Jarrow) (Lab)]

T3. Will the local transport Minister give us an assurance today that, despite Government Members’ statements, there will be no planned changes to the concessionary fares scheme?

[Norman Baker]

I do not know whether the hon. Gentleman has kicked me upstairs to the House of Lords, but I will try to give him an answer. There are no planned changes to the concessionary fares regime. It is in place and will be in place for the rest of this Parliament, and we are determined to ensure that pensioners benefit entirely from the arrangement.

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

T7. Last summer, Network Rail closed the barrow crossing at Downham Market station and said it would consult local residents and councillors about the new crossing. A few weeks ago, I heard that a new crossing is to be built by July this year with no consultation with local councillors and residents. Will the Secretary of State look into this and secure a meeting with David Higgins for me and local councillors so that Network Rail can be held to account?

[Justine Greening]

I will follow up the issues that my hon. Friend raises. I know that Network Rail has been keen to do what it can to improve level crossing safety, but I recognise the concerns that she raises today and we will have them followed up and make sure that a meeting happens.

[Steve Rotheram (Liverpool, Walton) (Lab)]

T5. Is the Minister aware of the problems being caused to passengers travelling from Liverpool by rail to London on Saturday 10 May for the FA cup final at Wembley with no prospect of a return train until two days later? Will the Minister get the relevant authorities, Virgin, Network Rail and the Football Association, round the table and bang their heads together until common sense prevails?

[Justine Greening]

The hon. Gentleman will be pleased to know that I have already been on the case. The underlying problem that we are trying to solve is the fact that the FA cup was planned to start at 3 o’clock but will now start later at 5.15 pm. I have spoken with Sir David Higgins of Network Rail and Virgin, and with the Department for Culture, Media and Sport about the timing of the FA cup. It is difficult to change the Network Rail work, which is really important for maintenance and safety and has been planned for 18 months, but Virgin has said that it plans to put on longer trains on the Sunday to ensure that fans have a good opportunity to get back. We all recognise that when the FA cup starts at 5.15 pm and generally the last train back to Liverpool is at 8.10 pm it will always be a stretch for fans to get there.

[Anna Soubry (Broxtowe) (Con)]

T9. I am all for improvements in public transport, but the tram works in Broxtowe are causing widespread disruption to residents, and last weekend the Wilkinson store in Beeston closed, with no alternative premises. Does the Minister agree that when deciding routes, wherever they are in the country, it is imperative to work with local people and local businesses?

[Norman Baker]

I agree with that general proposition and am aware of my hon. Friend’s concern about the extension to the Nottingham tram route. Ultimately, especially these days, when we are looking to devolve more decision making to local authorities, it is for them to decide the best way forward, and I am sorry that she feels that the local authority has not taken account of all shades of opinion.

[Tony Lloyd (Manchester Central) (Lab)]

T8. Do Ministers accept that when railway stations are left without staff, the travelling public, particularly women, feel insecure using them? Will they give an absolute guarantee that staff will not be taken out of stations when that would put the public at any kind of risk?

[Mrs Villiers]

In deciding the rules on ticket offices, it will of course be important to consider carefully how best to deploy staff in a way that keeps passengers safe and secure, so the issues the hon. Gentleman raises will be an important part of our thinking before we decide whether any changes need to be made.

[Henry Smith (Crawley) (Con)]

T10. Will my right hon. Friend join me in paying tribute to the staff of Virgin Atlantic, Gatwick Airport Ltd and the South East Coast ambulance service for their professionalism when assisting passengers following the emergency landing of flight VS27 earlier this week?

[Justine Greening]

Yes, I will. I echo my hon. Friend’s thanks and praise for the staff of both companies and members of the emergency services who responded to the emergency landing at Gatwick on Monday. It is obviously too early to speculate on what exactly caused the incident, but it is now being investigated by the Department’s air accidents investigation branch.

[Alison McGovern (Wirral South) (Lab)]

Current electrification schemes for a better railway agreed under the previous Government will hopefully yield lessons on how to improve engineering processes and should make electrification of the midland main line and the important scheme for the Wrexham to Bidston line, which runs through my constituency, a better prospect. What early lessons has the Department learned on how to improve engineering for electrification?

[Mrs Villiers]

Sir David Higgins has come up with some great ideas exactly along the lines the hon. Lady mentions, which could considerably reduce the cost of delivering electrification. However, it is still expensive and still has to be affordable, so we will have to look at priorities.

[Mr John Leech (Manchester, Withington) (LD)]

Has the Secretary of State now calculated the cost associated with increasing the motorway speed limit to 80 mph and the increased number of casualties expected as a result of such a measure?

[Justine Greening]

We would quantify the pros and cons of any move to 80 mph as part of the consultation we would publish, and obviously an impact statement would also be needed. I can assure the hon. Gentleman that we want to reach an informed conclusion on this policy area and will announce our next steps shortly.

The Minister for Women and Equalities was asked—

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

1. What steps she is taking to tackle unemployment among women.

[Paul Blomfield (Sheffield Central) (Lab)]

3. What steps she is taking to tackle unemployment among women.

[The Secretary of State for the Home Department (Mrs Theresa May)]

The Government are supporting women to move into employment through the Work programme and into self-employment through our business mentoring scheme. Over 10,000 mentors have now registered, 40% of whom are women. We are also encouraging more women to enter apprenticeships, and the latest figures show that record numbers of women have started their training.

[Mr Brown]

Does the Minister believe that when the Prime Minister addresses his hand-picked audience in Dumfries this afternoon he will say anything about the 20% increase in female unemployment in Dumfries and Galloway in the past year, and about what a waste of talent, skills and experience it is?

[Mrs May]

I am well aware of the need to help women into the workplace, which is why we are putting in place a number of programmes that do that. The Work programme will give tailored and much more individual assistance to people to get them into the workplace. The hon. Gentleman quotes the figure for those who are unemployed in his constituency. Obviously, unemployment is a matter of concern, but I gently remind him that under the previous Government unemployment among women rose by 24%.

[Paul Blomfield]

Will the Minister explain why the Government said yesterday they were encouraged by employment figures showing that women’s unemployment is still increasing, that unemployment among women has risen at twice the rate of men’s unemployment and that, over the past year alone, women have lost a further 100,000 jobs?

[Mrs May]

The labour market is still difficult. We understand that. That is why we are providing support specifically for women. I draw the hon. Gentleman’s attention to the fact that there are 61,000 more women in work today than in May 2010. I would have hoped that, unlike the Leader of the Opposition, who failed to do so yesterday, the hon. Gentleman welcomed the overall fall in unemployment that took place yesterday.

[Esther McVey (Wirral West) (Con)]

At the end of last year, the Minister announced the creation of the women’s business council. Will she assure the House that the council will advise the Government on how they can maximise the contribution of women to the UK?

[Mrs May]

I have indeed set up the women’s business council. I have announced that its chair will be Ruby McGregor-Smith, the chief executive of Mitie, with whom I have had very constructive discussions. She wants to bring forward a programme for delivery that will improve the pipeline for women in the business environment and increase their contribution to the economy.

[Margot James (Stourbridge) (Con)]

My right hon. Friend has reminded the House that female unemployment rose by 24% under the previous Government. Does she agree that our Government are taking robust action through the Work programme and the youth contract to remedy the problem for both men and women?

[Mrs May]

I thank my hon. Friend for reminding us of that figure. There are usually about 400,000 job vacancies in the economy. It is important that we help women to take up those vacancies. That is why the youth contract and the Work programme are so important in delivering the support that individuals need to overcome whatever problems they have in getting into the workplace.

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

Unemployment among women has been rising for more than two years since the election and since the economy first started to grow again. Unemployment among women was up by 8,000 in the last quarter and 100,000 more women are unemployed than a year ago. The increase in unemployment over the past 12 months has been three times higher than the drop in inactivity. With women’s jobs still being hit hard by Government policies, does the right hon. Lady agree that in asking the House to welcome yesterday’s unemployment figures, she and the Prime Minister are again demonstrating their blind spot about what is happening to women, to women’s lives and to women’s jobs across the country?

[Mrs May]

No, the right hon. Lady is wrong. It is, of course, a concern that so many women are unemployed. That is why the Government are taking very necessary action to help women into the workplace and to set up their own businesses. As I said in response to an earlier question, 61,000 more women are now employed than in May 2010. We are providing real support to women, and that will continue through the changes that we make by introducing universal credit, the changes that will make it easier to access child care and various other proposals that we have put forward. However, our concern about women’s unemployment does not mean that we cannot welcome an overall fall in unemployment when it takes place. I would have thought that, as a former Secretary of State for Work and Pensions, the right hon. Lady would do that.

[Jo Swinson (East Dunbartonshire) (LD)]

Just a quarter of the 3.2 million self-employed people in this country are women, and at the end of last year the Hertz report presented worrying evidence that banks are discriminating against female entrepreneurs, charging them higher loan rates or being less likely to offer them finance than their male counterparts. I know that the Government have made it clear that they will examine the issue further, but will the Minister update the House on the progress of that and on what they intend to do about the problem?

[Mrs May]

My hon. Friend is absolutely right to raise the issue. One reason we have specifically recruited business mentors to work with women who want to set up their own business is that access to finance is often much harder for them. My hon. Friend the Minister for Equalities has had some constructive discussions with Noreena Hertz, on which we will be able to report soon.

[Stephen Timms (East Ham) (Lab)]

4. What assessment she has made of the effect on women's employment of providing support for child care.

[Alex Cunningham (Stockton North) (Lab)]

6. What recent discussions she has had with ministerial colleagues on the role of child care for working mothers.

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

The Government fully recognise the importance of child care in helping parents—not just mothers—to move into or stay in work. Under universal credit, we will for the first time extend help with child care costs to those working under 16 hours, benefiting some 80,000 families who previously had no such support.

[Stephen Timms]

Since the Government cut the rate of support for child care a year ago, 44,000 fewer people have claimed support, women’s unemployment is now at its highest for 25 years and 50,000 more women are economically inactive than before the cut was made. Is it not now clear that cutting support for child care is a false economy?

[Maria Miller]

We have announced that under universal credit we will support an extra 80,000 families with child care, and that we are doubling the number of two-year-olds getting free nursery care. If the right hon. Gentleman is asking us to reconsider his Government’s policy of increasing support for child care to some 80%, perhaps he will explain where he will find the £600 million that the Daycare Trust feels it would cost to implement the policy.

[Alex Cunningham]

This month, 212,000 couples face losing their working tax credit if they cannot find more working hours. Many parents will be forced to give up work, and they may be forced to give up their child care places as a result. What will the Government do to monitor the impact of the changes to family support on the child care market, to ensure that when women can return to work they will not be left struggling to find a child care place?

[Maria Miller]

The hon. Gentleman is absolutely right that it is important that there is a supply of child care places. I am sure he knows that there is a duty on local authorities to ensure sufficiency of supply, and I remind him that with the new local authority early intervention grant, there is money to ensure the necessary supply for just the families he is talking about.

[Lorraine Fullbrook (South Ribble) (Con)]

Does my hon. Friend agree that removing the minimum hours rule for child care support, so that all families receiving universal credit will be eligible for financial help, will mean that families on low incomes will receive more help and support to keep them in work?

[Maria Miller]

My hon. Friend makes an excellent point. The best way out of poverty for most families is work, and helping women in particular to stay close to the labour market when their children are young is an excellent way of helping to ensure that they can continue to progress in their work and support their families.

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

Affordable and quality child care is essential to allow women to enter or stay in the work force. What additional investment are the Government putting into child care to ensure that women can make that choice if they wish?

[Maria Miller]

My hon. Friend raises the important point of the affordability of child care. It was disappointing that under the previous Administration, child care costs went up by some 60%. We are trying to ensure that there is practical help for families. We are already investing some £2 billion in child care through the child care tax credit and the early education grants, and through universal credit there will be an extra £300 million to provide 80,000 extra families with child care support that they did not have before.

[Mr Dominic Raab (Esher and Walton) (Con)]

5. What plans she has to bring forward legislative proposals on same-sex marriage.

[The Minister for Equalities (Lynne Featherstone)]

The Government believe that if a couple love each other and want to commit to a life together, they should have the option of a civil marriage regardless of their gender or sexual orientation. We published a formal consultation on 15 March, which considers how to enable same-sex couples to have a civil marriage. The consultation runs until 14 June. That timetable would enable us to make any legislative changes before the end of this Parliament. Our current priority is the consultation, and we want to hear from all those with an interest in this matter.

[Mr Raab]

I personally support the proposal to allow gay marriage in civil ceremonies. I am concerned, and constituents and local clergy have also expressed the concern, that, by redefining marriage, we may—may—expose churches and other religious institutions to legal challenge and force them to marry gay couples under the Human Rights Act 1998 and the Equality Act 2010. Will the Minister give a clear assurance that our churches will not end up in the dock in Strasbourg?

[Lynne Featherstone]

I thank my hon. Friend for his support for equal marriage. When we consider proposed legislation, we will ensure that there is no risk of successful legal challenge against religious organisations that do not marry same-sex couples. It would not be religious organisations, but the United Kingdom Government in the dock in Strasbourg. We respect and understand the concerns of religious organisations, and we want to work closely with them to give them that reassurance. Just as we were able to reassure Members of this House and the House of Lords about civil partnerships being registered on religious premises to the point where they felt that they could let that pass, we will do the same in this case.

[Fiona Mactaggart (Slough) (Lab)]

Has the Minister spoken to the Archbishop of Wales following his address, in which he said that he believes that the Church should welcome long-term, committed relationships between gay people? Can she perhaps engage people such as him in the debate to deal with some of the, I am afraid, prejudice, which some of us have faced in our inboxes?

[Lynne Featherstone]

I have not spoken to him personally, but I recognise that voices have been raised from the religious community in support of that view, and that some religious leaders express the more moderate and quite common view that same-sex marriage is to be welcomed.

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

Perhaps counter-intuitively, I, too, am moving towards supporting many of the proposals in the Minister’s consultation paper, but I am puzzled by one aspect. Under her proposals, why should gay couples have the choice of something called gay marriage or gay civil partnership in a register office, whereas heterosexual couples must, by law, only be married?

[Lynne Featherstone]

My hon. Friend raises an issue that is in the consultation paper. We recognise that people will wish to ask a range of questions. For example, issues have been raised about humanist weddings, straight civil partnerships, civil marriage on religious premises and religious marriage on religious premises for same-sex couples. It was clear in the lead-up to the proposal becoming part of the Government programme that the priority—and the glaring discrimination—is the inability of same-sex couples to have the same rights to civil marriage as other people.

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

Will my hon. Friend confirm that the Government do not intend to redefine religious marriage, but that they intend to extend equal marriage to civil and religious ceremonies?

[Lynne Featherstone]

I thank my hon. Friend for that clarification. That is exactly the case: we are not touching religious marriage or redefining marriage. Religious people may continue to believe that marriage can be only between a man and a woman. That is not the state’s view. We do not take the Orwellian view that

“All animals are equal but some animals are more equal than others”.

[Nia Griffith (Llanelli) (Lab)]

7. What recent discussions she has had on tackling age discrimination.

[The Minister for Equalities (Lynne Featherstone)]

I discuss age discrimination, as appropriate, with my ministerial colleagues, and my officials hold discussions with industry bodies and others. Earlier this month, the Government endorsed an insurance industry agreement to make motor and travel insurance more accessible to older customers through “signposting” arrangements.

[Nia Griffith]

I remember serving on the Committee that considered the Equality Bill with the Minister, and that she was keen to push forward the age discrimination provisions. What has happened in the two years since the Bill received Royal Assent? She has been a Minister, yet the age discrimination legislation has not been implemented.

[Lynne Featherstone]

I have not changed one bit my view that we should push that through. Our consultation proposed a ban on age discrimination in health and social care, and that there should be no exceptions to that, unlike other issues. It is an important lever, and the delay has come about because we want to make sure we get it right. We have consulted on the exceptions, and we are taking our time on them to ensure that we get it right. We will come forward as soon as we have made a decision, and I am sure that that will be soon.

[Jane Ellison (Battersea) (Con)]

Will the Minister welcome the statistic in the most recent employment figures showing the growing number of women over 50 entering the labour market? They are clearly overcoming age discrimination.

[Lynne Featherstone]

It was good to read that female employment for over-50s has increased by nearly 200,000 in the past 12 months. I understand that most of those jobs are due to business start-ups, which the Government are keen to encourage.

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

Are not many of those older women trying to enter the labour market because they realise they do not have the pension provision they had hoped for and that they need to stay in employment for longer, as Nick Pearce, director of the Institute for Public Policy Research, has shown? They are choosing self-employment because it is clear that there are not enough jobs available to them.

At the same time, the gender pay gap is increasing with age. The Equality and Human Rights Commission says that at age 40, the gap between women and men is 27%, compared with an overall full-time gap of 15.5%. Rather than being complacent and saying that older women are choosing to set up new businesses, should the Minister not take active steps to tackle the toxic combination of ageism and sexism that is hitting older women?

[Lynne Featherstone]

This Government are taking many steps to support women. It would be far more benevolent if the Opposition welcomed an increase in female employment. I do not think women are over the hill at 50; it is shame the hon. Lady does.

Saltford Station

Thursday 19th April 2012 Commons Chamber

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

- Hansard - - Excerpts

I rise to present this petition from Mr Christopher Warren and Mr Duncan Hounsell, supported by more than 2,000 residents who live in and around Saltford in the county of Somerset. It asks for the Saltford railway station to be reopened to the great advantage of local people for commuting and for their business life.

The Humble Petition of the users of Saltford station and others

Sheweth,

That the Petitioners believe that re-opening Saltford station alongside the electrification and re-signalling programme that is due to take place on the mainline would be cost effective for the Department for Transport and would be beneficial for train users, and further that the re-opening of the station would enhance the case for the Greater Bristol Metro.

Wherefore your Petitioners pray that your Honourable House shall urge the Government to take all possible steps to ensure that Saltford station is re-opened when reviewing the First Great Western rail franchise.

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

[P001019]

Abu Qatada

Thursday 19th April 2012 Commons Chamber

11:36

[Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)]

(Urgent Question): To ask the Home Secretary if she will make a statement on the deportation of Abu Qatada.

[The Secretary of State for the Home Department (Mrs Theresa May)]

Yesterday, the European Court of Human Rights informed the Government that, late on Tuesday evening, Abu Qatada applied for a referral of the judgment in his case to the Court’s Grand Chamber. He did so on the grounds that he would be at risk of torture if he returned to Jordan. The British courts and the European Court have found that, because of the assurances we have received from the Jordanian Government, there is no such risk.

The Government are clear that Qatada has no right to refer the case to the Grand Chamber of the European Court of Human Rights, since the three-month deadline to do so lapsed at midnight on Monday. Article 43 of the European convention on human rights explains that a request for referral to the Grand Chamber must be made:

“Within a period of three months from the date of the judgement of the Chamber”.

The letter that communicated the European Court’s judgement, dated 17 January, confirmed that, saying that

“any request for the referral of this judgement to the Grand Chamber must be duly reasoned and reach the Registry within three months of today’s date.”

Therefore, the deadline was midnight, Monday 16 April.

Because the European Court has no automatic mechanism to rule out an application for a referral based on the deadline, Qatada’s application will be considered by a panel of five judges from the Grand Chamber. They will take into account the deadline, as set out in article 43 of the convention, as part of their consideration. The Government have written to the European Court to make clear our case that the application should be rejected because it is out of time.

The Government believe that the case should be heard instead in the Special Immigration Appeals Commission court, as I outlined in the House of Commons on Tuesday. However, until the panel of the Grand Chamber makes its decision, a Rule 39 injunction preventing the deportation of Abu Qatada remains in place. That means that the deportation process and any potential SIAC appeal is put on hold, but we will resume the process as soon as the injunction is lifted. In the meantime, we will continue to build our case, based on the assurances and information we have received from the Jordanian Government. Abu Qatada remains in detention, and the Government will resist vigorously any application he might make to be released on bail.

As I said in the House of Commons on Tuesday, despite the progress we have made, the process of deporting Qatada is likely to take many months. The fact that he is trying to delay that process by applying for a referral to the Grand Chamber after the deadline has passed, and after he has heard our case in SIAC, is evidence of the strength of our arguments, the weakness of his, and the likelihood of our eventual success in removing him from Britain for good.

[Yvette Cooper]

On Tuesday, the Home Secretary told us that the deportation of Abu Qatada was under way; on Wednesday, it stopped. On Tuesday, she told us there would be no appeal to the Grand Chamber; on Wednesday, an appeal was under way. Yesterday, the Home Office said the appeal deadline was Monday night, but European Court officials said it was Tuesday night. So on the Tuesday night deadline, while Abu Qatada was appealing to European Court judges, the Home Secretary, who thought the deadline was Monday night, was partying with “X Factor” judges. [Interruption.] When the Home Secretary is accused of not knowing what day of the week it is, confusion and chaos have turned into farce. [Interruption.]

[Mr Speaker]

Order. The right hon. Lady has a right to be heard. Has she concluded her remarks, or does she wish to continue?

[Yvette Cooper]

indicated assent.

[Mr Speaker]

The right hon. Lady must be heard. There are strong feelings on this matter but opinions will be heard. If the exchanges are longer as a result, so be it, but Members must hear what one another has to say.

[Yvette Cooper]

This farce has serious consequences: additional delays, a greater risk that Abu Qatada will be put out on bail and a risk he will sue the Government. Did the Home Office get specific assurances from the European Court that the deadline was Monday night? If so, will it publish them? If not, why not? Why did it not pick up the phone to sort it out? The Home Office was told by journalists on Monday, nearly 24 hours before Abu Qatada was arrested, that European Court officials were saying that the deadline was Tuesday. Did it do anything about it?

I hope that the Home Secretary’s interpretation is right, but at best there is uncertainty, and several eminent lawyers now say that they agree with the European Court. So why take the risk? What was the harm in waiting until Wednesday? Why create a legal loophole for Abu Qatada’s lawyers to exploit? We all want Abu Qatada deported as soon as possible, under the rule of law, and kept off the streets in the meantime, but both those things are now less likely because of her actions. On Tuesday, I warned that there was a troubling level of confusion around this case, but even I did not imagine that the confusion was this great. When will she sort this out?

[Mrs May]

The shadow Home Secretary tells us that she wants Abu Qatada deported, but I am beginning to wonder whether she really does. [Interruption.]

[Mr Speaker]

Order. Let us lower the temperature. I said that the shadow Home Secretary must be heard, and precisely the same principle applies to the Home Secretary. Let us hear what she has to say. [Interruption.] Order. Then I will allow a full opportunity, if necessary, for questions to follow.

[Mrs May]

Thank you, Mr Speaker. Let me repeat what I said in my first answer. We have always been clear that despite the progress we have made, the process of deporting Abu Qatada is likely to take many months. It should hardly come as a surprise to anybody that he intended to apply delaying tactics—[Interruption.] I repeat that it should hardly come as a surprise to anybody that Abu Qatada has chosen to use delaying tactics. After all, he has been doing this since 2001. The fact that he applied to the Grand Chamber for referral after the deadline had passed and after he had heard our case in SIAC shows the strength of our arguments and of our work in putting together assurances from the Grand Chamber.

I answered the question about dates in my first answer, but I will return to the matter because the right hon. Lady referred to it again. Article 43 of the convention makes it clear that a request for referral to the Grand Chamber must be made

“Within a period of three months from the date of the judgment of the Chamber”.

I shall read out the European Court’s own guidance:

“the period of three months within which referral may be requested starts to run on the date of the delivery of the judgment, irrespective of whether the party concerned may have learned about it at a later stage. It expires three calendar months later and is not interrupted by bank holidays or periods of judicial recess. The request for referral should reach the Registry of the Court before the expiry of the above-mentioned period.”

We are talking about a simple mathematical question. The European Court’s judgment was on 17 January. The period of three months within which we were allowed to refer ended at midnight on 16 April. The right hon. Lady asked why we did not just call the European Court and check. Of course, the Government have been in contact with the Court throughout this period, and it was always clear that we were working to the Monday deadline.

The shadow Home Secretary quoted a source in the European Court, but if she had listened to what I said in my first answer, she would know that the only people at the European Court who can adjudicate on this matter are the judges on the panel of the Grand Chamber. Article 43 is very clear. She may want to listen to unofficial sources, but I suggest that she reads the text of the convention.

The shadow Home Secretary also chose to attack me today for acting too quickly in this matter. On Tuesday she attacked me for acting too slowly in this matter. She is all over the place. The truth is that because of the work that we have done, we have the assurances and information that we need from the Jordanian Government to comply with the January ruling of the European Court. Once we can get the case back to the British courts, we will resume that process, so that we can put Abu Qatada on a plane and get him out of our country for good. That is something that the shadow Home Secretary should support.

Finally, perhaps the shadow Home Secretary can answer the question that was not answered on Tuesday. While we are talking about deportation and extradition, why is the Labour party campaigning to stop the extradition of a known terror suspect to the United States?

[Sir Peter Tapsell (Louth and Horncastle) (Con)]

Does my right hon. Friend agree that the conclusion of the great majority of people in this country who have been listening to this argument over the months is that Britain should withdraw its legal processes from the jurisdiction of the European Court?

[Mrs May]

What I agree with is that we should make every effort to reform the European Court, which is precisely what is being done today at the Brighton conference, and what will be done over the next two days, by my right hon. and learned Friends the Attorney-General and the shadow Justice Secretary.

[Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)]

I am having a greater struggle today to be magnanimous than I had on Tuesday. Although the Home Secretary might accept that it is no surprise that Abu Qatada will take any measure to make a monkey out of the Home Secretary and the Home Office, was it a surprise to her to learn that a question of ambiguity about the date was raised with the Home Office on Monday? Specifically, was she told and what did she do about it?

[Mrs May]

I have made it clear that the deadline was on Monday 16 April. That is the view that we have put to the European Court. As I have also said in my earlier responses, of course the Government were talking to the European Court throughout the three months, and we were doing so on the basis that the deadline was 16 April.

[Tom Brake (Carshalton and Wallington) (LD)]

Does the Home Secretary agree not only that the most recent development in the Abu Qatada case underlines the absolute necessity of securing reforms at Brighton to curtail the number of minor cases going to the Court and to improve its efficiency, but that the Court’s position as the defender of fundamental human rights for 800 million people must stand?

[Mrs May]

The Government have been absolutely clear in our view of the importance of maintaining human rights and, obviously, of having appropriate mechanisms to ensure that that is done. My right hon. Friend is right that we need to reform the European Court. One of the key issues that we have taken up as a Government is the efficiency of the Court. Another issue that we are taking up is subsidiarity and the relationship between decisions taken by national courts and the work of the European Court.

[Alan Johnson (Kingston upon Hull West and Hessle) (Lab)]

In my experience as Home Secretary, the louder the cheers from behind, the deeper the mire the Home Secretary was in. [Laughter.] In my view, any ambiguity about the date should have meant that the announcement was made on Wednesday, rather than Tuesday. If the Home Secretary is right about her dates, I will be very pleased about that. If she is wrong, will she accept that she must take responsibility, not one of her officials?

[Mrs May]

I am grateful to the right hon. Gentleman for sharing with us his experience of when he was Home Secretary. The Government are clear about when the deadline was, but as I also made clear earlier, this is a judgment that will be made by the panel of the Grand Chamber, which is the final arbiter of what the deadline was. Indeed, it is open to the judges on the Grand Chamber to decide that even if the deadline has been passed, they will accept a referral under their discretion. They will decide whether they accept that.

The right hon. Gentleman’s final point is absolutely valid. I of course take responsibility for decisions that I have taken. This is not a question of what officials have done; I take full responsibility.

[Mr James Clappison (Hertsmere) (Con)]

Should we not put this into some sort of context? Mr Abu Qatada was first arrested in 2002, and was then released and re-arrested on two separate occasions over an eight-year period. His case has been the subject of multiple appeals to courts in this country under the European convention on human rights, which the previous Government incorporated into British law in 1998, amidst great fanfare, and which is very much at the root of these problems.

[Mrs May]

My hon. Friend is right to bring us back to the core issue at stake. The fact is that, for the past 11 years, this country has been trying to deport Abu Qatada to Jordan. As far as I, the Government, the British public and, I hope, the whole House are concerned, that is what should happen to him. On Tuesday, when the Government had their first opportunity to take action to resume that deportation, that is exactly what we did.

[Keith Vaz (Leicester East) (Lab)]

Nobody doubts the efforts that the Home Secretary has made on this issue. I think that, if she had half a chance, she would like to be handcuffed to Abu Qatada on a plane to Jordan in order to deposit him in Amman. What concerns me, however, is the fact that a north London firm of legal aid solicitors has been able to outwit the very expensive silks of the Home Office. She mentioned article 43. If she looks at the cases of Praha v. the Czech Republic and Otto v. Germany, she will see that the time limit begins the next day. I am also worried about the 15 other cases that she referred to on Tuesday. Will she look at those cases and ensure that proper legal advice has been taken and that deadlines have been met? When she comes before the Select Committee next Tuesday, it would be good if she could give us the answers to those questions.

[Mrs May]

I repeat to the right hon. Gentleman what I said in response to an earlier question. The arbiters of whether a request for a referral put in by Abu Qatada should be accepted—whether in response to a deadline or, as we believe, outside the deadline—or whether discretion should be applied to accept it outside the deadline are not a north London firm of lawyers but the five judges who will be sitting on the panel of the Grand Chamber of the European Court.

[Mr William Cash (Stone) (Con)]

The Home Secretary is trying her best—there is no question about that—but unfortunately it is not working. The root causes of this problem are the questions of what the rule of law is, whose rule of law is applicable and who interprets it. Those questions should be decided in this House. We should withdraw from the European convention, repeal the Human Rights Act 1998 and get the matter straight because the people of this country demand it.

[Mrs May]

I thank my hon. Friend for his question, which I think is fairly similar to previous questions that he has asked me on this issue. Let me assure him that I take this issue extremely seriously and I am absolutely clear that we want to deport Abu Qatada. However, I also made it absolutely clear in the House earlier this week that the Government must operate within the rule of law, and that a number of legal avenues would be available to Abu Qatada. It is no surprise that he is using delaying tactics to try to delay his deportation from this country. It is right to say that we need to reform the European Court of Human Rights, and that is exactly the work that is being undertaken by my right hon. and learned Friends the Justice Secretary—I think I inadvertently referred to him earlier as the shadow Justice Secretary; I beg his pardon—and the Attorney-General.

[Mr Speaker]

Speaking from personal experience, repeat questions are not an entirely novel phenomenon in the House of Commons.

[Fiona Mactaggart (Slough) (Lab)]

I am beginning to think that the Home Secretary has form here. She has previously accused the European Court of Human Rights of rejecting a deportation because someone had a cat, and she is giving assurances today despite the cases of Otto and Praha, which make it quite clear that she has wrongly interpreted the deadline. My suspicion is that she is playing with this very serious case in order to whip up hostility to the European Court of Human Rights, which is an important protector of human rights in Britain.

[Mrs May]

I think that the hon. Lady will be able to tell from some of the comments that have been made today that there is no need to whip up feeling about the European Court of Human Rights. May I correct her on two points that she made in her question? First, she said that I had made a claim about the European Court of Human Rights in a deportation case relating to a cat; I did not. That concerned a case in the UK courts. She also referred to the cases of Praha and Otto, to which the right hon. Member for Leicester East (Keith Vaz) referred earlier. Those two cases are not about a referral to the Grand Chamber. Perhaps she should look at them more closely.

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

Would the Home Secretary like to challenge Opposition Members who are now shouting their criticism to say whether they would support the abolition of the Human Rights Act 1998 and withdraw from the European convention, which has led to this mess in the first place? [Interruption.]

[Mrs May]

My hon. Friend tempts me down a road that I suspect it would not be wise to go down, but he had one or two sedentary responses from the Opposition. I repeat that it is the Government’s view that we should reform the European Court, and that is precisely what we are working to do.

[Mr Dennis Skinner (Bolsover) (Lab)]

Does the Prime Minister know what day it is?

[Mrs May]

Yes.

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

Does my right hon. Friend agree that the British Government’s case is strong, that Abu Qatada’s case is weak and a delaying tactic, and that the British people will be appalled by the delay while the European Court investigates the case again, because they think that action should be taken now? If it is not taken, we want reform of the Court.

[Mrs May]

My hon. Friend is quite right. I fully appreciate that the public will be concerned by the delaying tactic that is being employed. I warned the House earlier this week—and, indeed, warned people more generally—that the process of deportation could take many months and that legal avenues were open to Abu Qatada to pursue, and that is of course what has happened. In response to my hon. Friend’s first point, the Government’s case is strong. It is educational to look at what happened on Tuesday. At the beginning of the SIAC hearing, Abu Qatada’s lawyers indicated that they were going to take the matter through the UK courts. It was only after they heard our case and the judgment that was brought down on Abu Qatada by Justice Mitting that they decided to attempt this referral.

[Clive Efford (Eltham) (Lab)]

Journalists are reporting today that they have checked with the European Court, and that it was the Court’s opinion that the three-month period started to be measured from the day after the domestic decision, which was the 17th. That was reported to the Home Office. Was it brought to the attention of the Secretary of State? Did her officials ever put before her the decision whether to go forward on 17 April or 18 April? This is an important question: did her officials ever give her the option of delaying for 24 hours in order to be safe according to the European Court’s position?

[Mrs May]

The position of the Government has always been absolutely clear—[Hon. Members: “Answer!”] The position that we have been working on is that the deadline was Monday 16 April. The hon. Gentleman’s question is based on an incorrect premise, and if he had listened to the answers that I gave earlier, he would realise that. His claim is that, had the action been delayed by a day, no referral could have been made by Abu Qatada. I have made it clear, however, that it is a matter for the discretion of the panel of judges of the Grand Chamber whether to accept a referral within the deadline or outside it.

[Mark Pritchard (The Wrekin) (Con)]

I offer the Home Secretary my support, but is it not the case that the reform of the European Court of Human Rights could take many years? Is it not time that we had a Supreme Court that really was supreme, and should we not introduce a British Bill of Rights sooner rather than later?

[Mrs May]

As my hon. Friend will know, the Government have set up a commission to look at a British Bill of Rights, which will report in due course. The Government will look at the commission’s recommendations. As I said earlier in my response to my right hon. Friend the Member for Carshalton and Wallington (Tom Brake), the reforms to the European Court that we are considering include the question of subsidiarity. It is greatly to the credit of my fellow Ministers who have been working on this that we have been able to get as far as we have, and I have every expectation of positive decisions coming out of the conference that is taking place in Brighton.

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

Adding incompetent and dangerous advice on petrol and jerry cans a couple of weeks ago to this episode, our constituents are beginning to wonder whether this Government could organise a convivial social evening in the nearest brewery. Will the Home Secretary now publish the advice—not just on the question of three months, but on when exactly the clock starts ticking to calculate those three months, which lies at the heart of this latest episode? Will she also clarify the control regime under which Abu Qatada will be kept in the meantime? Will it be tighter than her proposed terrorism prevention and investigation measures, and if it is a tighter regime, why is it appropriate for him and not for the other terrorist suspects to whom she is planning to grant the freedom of the capital city?

[Mrs May]

I have answered questions about the European Court, the treaty and the advice and guidance given by the European Court on the dates. On the right hon. Gentleman’s final point, Abu Qatada is in detention at the moment. If he and his lawyers apply for him to be let him out on bail, we will vigorously oppose it. It is the case, of course, that he had been on bail prior to his arrest on Tuesday. The bail conditions on which he was held were among the most stringent ever applied to anybody here in the United Kingdom. Those bail conditions were tighter than the control order regime that I know the right hon. Gentleman supported.

[Mr Edward Leigh (Gainsborough) (Con)]

Further to the Home Secretary’s answer to the Father of the House, the fact is that the Brighton conference process is designed to weed out trivial cases. It would not affect a serious case like this one. If one believes in the European Court of Human Rights, that Court should deal with this case. I think we all have to be honest and the Home Secretary has to be honest about it. Is she personally prepared to argue for the supremacy of this Parliament, which would mean that we must repeal the human rights legislation and create a British Bill of Rights?

[Mrs May]

My hon. Friend will recall that I have made my own views on the Human Rights Act absolutely clear. The Conservative party, of course, went into the last election saying that we would bring in a Bill of Rights. The Government have established a commission to look at the whole issue of a British Bill of Rights. I suggest that my hon. Friend waits for that commission to report.

[Mr Tom Harris (Glasgow South) (Lab)]

Did the Home Secretary—at any time and from any quarter—receive advice to delay the re-arrest of Abu Qatada by 24 hours? That is a very simple question, demanding a yes or no answer.

[Mrs May]

I have made it clear that the Government’s view is that the deadline finished on 16 April. I repeat that Opposition Members who think that we would somehow be in a different position if Abu Qatada’s arrest had been delayed for 24 hours need to be careful, as the European Court is able to exercise discretion about the deadline and it could accept a referral outside that deadline.

[Mr Charles Walker (Broxbourne) (Con)]

The Home Secretary must not delay in getting this scumbag and his murderous mates on a plane out of this country. In so doing, will she send a metaphorical two fingers to the ECHR?

[Mrs May]

As I have already made clear, this case has been going on for 11 years. At the first opportunity this Government had to take action to resume the deportation of Abu Qatada, we took that action, and when the processes of the European Court are complete, we will take that action again and resume his deportation because, with the assurances we have received from the Jordanian Government, we have a strong case. Our aim, like everybody else’s, is to deport Abu Qatada.

[Nick Smith (Blaenau Gwent) (Lab)]

Does the Home Secretary believe that her actions will lead to Qatada successfully suing the Government?

[Mrs May]

No.

[Mr Marcus Jones (Nuneaton) (Con)]

Does not this whole situation clearly demonstrate why, following the Brighton conference and given our chairmanship of the European Council, we must see significant reform? If significant reform is not achieved for any reason, should we not move far more quickly to adopt a UK Bill of Rights instead of the convention?

[Mrs May]

As I said earlier, I believe that there is every prospect of us being able to move forward on reform of the European Court of Human Rights as a result of the work being done by the Justice Secretary and the Attorney-General. On that basis, I look forward to the outcome of the Brighton conference.

[Kevin Brennan (Cardiff West) (Lab)]

The Home Secretary is not helping her case by wriggling and wriggling and wriggling on the question put to her. Did she receive any advice on the ambiguity surrounding the 24 hours?

[Mrs May]

Let me say to all hon. Members who are intending to repeat this question that I have already answered it. [Hon. Members: “No you have not.”] The Government’s position is absolutely clear—the deadline was on Monday 16 April. The only arbiters, however, and the only people who can decide on the deadline and on whether to accept a referral are the judges sitting on the panel of the Grand Chamber. They will give us their determination in due course.

[Patrick Mercer (Newark) (Con)]

Does the Home Secretary agree that Abu Qatada and his lawyers are doing nothing more or less than attempting to belittle and thwart the British judicial system—an attempt to terrorise just as surely as is laying a bomb or firing a bullet? If so, how will this be reflected at the Brighton conference?

[Mrs May]

I agree with my hon. Friend that this is an attempt by Abu Qatada and his lawyers to delay the action we have taken. It is, as I said, educational— and, I believe, very significant—that Abu Qatada’s lawyers did not make a referral or attempt to make a referral until they had seen the strength of our case in SIAC on Tuesday after we had arrested him and taken him before the courts. It is, of course, essential to ensure that we continue with the deportation, and we will do so as soon as this process in the European Court is completed.

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

The Home Secretary said this is a simple matter. If, then, in the days and perhaps weeks ahead, it becomes clear that the Home Secretary did have advice from officials that there was some ambiguity, will she resign?

[Mrs May]

It is a simple matter because the deadline was Monday 16 April and the decision will be taken by the judges in the Grand Chamber of the European Court. What is also a simple matter is the fact that it is this Government who got the assurances from Jordan that will enable us to resume the deportation of Abu Qatada. That is what we want to see and what the British public want to see.

[Mr Mark Spencer (Sherwood) (Con)]

I wonder whether the Home Secretary would agree that the European Court of Human Rights is putting this nation in a position in which we could be perceived as a safe haven for foreign criminals who want to avoid justice from outside the EU, and that the only way to avoid that is to establish a Bill of Rights for the UK.

[Mrs May]

I made the Government’s position clear when I mentioned the commission on the Bill of Rights. I said here on Tuesday, and will repeat it today, that there has been concern about the ability of other European countries to deport people more quickly than we can. I have thus already initiated work to look at the processes— and the legal structures and systems—that happen in France and Italy, for example, to see whether we could learn anything from them and whether legislative changes could be made to give us the ability more quickly to deport people who are a threat to our national security.

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

I listened carefully to the Home Secretary on Tuesday and I have listened to her answers today, and it is absolutely clear from her evasive answers that she did receive advice about the ambiguity of the 24 hours—yet she went ahead with the media circus of this arrest. Does she accept that people will be extremely angry if Abu Qatada now gets bail?

[Mrs May]

The Government will vigorously oppose any application that Abu Qatada makes for bail. We have been clear throughout that we believe he should be in detention. That is where he is today. I have been clear, and am happy to repeat, that the deadline was Monday 16 April, but that the decision as to whether his application for a referral will be accepted is for the panel of the Grand Chamber. That has been made clear by me here and by the European Court.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

Would my right hon. Friend invite the Grand Chamber to consider the human rights of my constituents to live out their lives free of the sort of activities that might be carried out by Abu Qatada and the 15 other individuals awaiting deportation on similar grounds?

[Mrs May]

As my hon. Friend knows, we are very clear about wanting to ensure that we can deport people who are a threat to our national security, as in the case of Abu Qatada. That is why we have worked so hard with the Jordanian Government to obtain the assurances that we need, which have given us the strong case that we have: the strong case that was presented at the SIAC hearing on Tuesday and was, I believe, recognised as a strong case from the UK Government. When we have completed the process with the European Court, we will resume the deportation process. I assure my hon. Friend that I am very clear about the need to take account of the rights of British citizens, and that the duty of the Home Office, which is all about keeping people safe, is always foremost in our thoughts.

[Ann McKechin (Glasgow North) (Lab)]

In response to a question from the Chairman of the Home Affairs Committee, my right hon. Friend the Member for Leicester East (Keith Vaz), the Home Secretary said that the cases that he had cited in connection with the definition of the time limit were not relevant to this case. Will she tell us whether she relied on any case precedent in making her decision on the definition of the deadline, and, if she did not, why she did not opt for a precautionary response?

[Mrs May]

Of course we have looked at the definition of the deadline as used by the European Court. We have looked at the treaty definition of the deadline as used by the European Court, which I have quoted to the House, and I think that that treaty definition makes the position absolutely clear.

[Nicola Blackwood (Oxford West and Abingdon) (Con)]

Does my right hon. Friend share my disbelief that there is no administrative mechanism at the ECHR to establish the simple question of whether an application is out of time, which means that we and the taxpayer will have to wait up to two months for the ECHR to establish that simple point before we can proceed with the deportation of Abu Qatada? Will the Government raise the matter at Brighton, and get on with this aspect of reform of the ECHR as soon as possible?

[Mrs May]

My hon. Friend has made an extremely valuable point. I have found that many people here in the UK consider it astonishing that there is no simple mechanism for setting a clear deadline and then striking out any applications that fall outside that deadline. What is absolutely clear is that the panel of the Grand Chamber has discretion to accept applications made outside the deadline, and to determine what that deadline was.

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

In view of the xenophobia and hysteria on the Tory Benches, why does the Home Secretary not have the courage to say that it is a lie that the European Court of Human Rights is in the business of trying to protect terrorists—last week’s decision contradicts that—and is it not a great advance for Europe that there is such a court in the first place?

[Mrs May]

We have made it clear that we are abiding by the rule of law. We have abided by the decisions made by the European Court. We now believe that we have the assurances that we need in order to be able to challenge the Court’s decision in relation to article 6, which was the ground on which it prevented the deportation of Abu Qatada. We believe that the right way of dealing with the issue of his deportation was to gain those assurances from the Jordanian Government. Obviously we will await the European Court’s decision on whether to accept the application for a referral.

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

Given that Abu Qatada would almost certainly have appealed against any decision by the British courts and taken that appeal all the way back to the European Court of Human Rights, does his present appeal not give Government lawyers an opportunity to seek the Court’s determination that the assurances obtained from the Jordanian Government mean that he should now be deported immediately?

[Mrs May]

My hon. Friend has made a valid point about the legal avenues that would be available to Abu Qatada in any case in the UK courts. The first decision that the European Court will make is a decision on whether to accept the referral—the appeal, effectively—from Abu Qatada, and it is that decision that we will expect in the coming weeks. If the Court chooses to accept the referral, it will—as I made clear to the House on Tuesday—examine the whole case that was put before it initially. The UK Government will, of course, present their arguments, as they have done previously.

[Helen Jones (Warrington North) (Lab)]

The Home Secretary’s judgment has now been called into question on two important issues: first the shambles over checks at our borders, and now this. It is therefore a question of her competence. Will she resolve that question by publishing all the advice that she received on this matter, including any advice about the ambiguity of the deadline?

[Mrs May]

This country has been trying to deport Abu Qatada since 2001. The Government acted on the first opportunity that they had to take the action necessary to resume the deportation, and we will resume that deportation when the processes in the European Court have been completed. Our view is very clear: we want to deport Abu Qatada.

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

The good folk of Brigg and Goole are not xenophobes for believing that judges in this country should decide who is innocent and who is guilty. The Home Secretary mentioned the Brighton conference in her statement. Can she assure me that she and the Lord Chancellor will listen to the people of Brigg and Goole today and not to the comments of Lord McNally, who, apparently, is a Liberal Democrat and a Minister who described the debate on this matter as “unreasonable”?

[Mrs May]

My hon. Friend is always assiduous in bringing the views of his constituents to the House, and comments that I have heard from some other Members suggest that their own constituents share those views.

The Brighton conference is considering reform of the European Court, and I think that that is important. I also think it important to remember that it is this Government who took the action that was necessary to bring about reform of the Court, something that was never done by the Labour party.

[Mark Durkan (Foyle) (SDLP)]

If we are worried about the possibility that this apparent debacle offers some propaganda value to Abu Qatada’s supporters, should we not also be wary of offering a parliamentary spectacle which compounds that propaganda value through some of the dangerous messages that are being sent here?

[Mrs May]

I think it absolutely right for Parliament to have the opportunity to ask questions, and to raise the issues that Members wish to raise, in response to this case. As I said on Tuesday and have said again today, it was always going to be the case that various legal avenues would be open to Abu Qatada and his lawyers which they could pursue in an attempt to delay his deportation, and that is exactly what they are trying to do. The fact that they are using those delaying tactics comes as no surprise to anyone. The Government are clear about the deadline, and clear about our case and the strength of the assurances that we have received.

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

Given some of the opportunistic nonsense that we have heard from Opposition Members, may I assure my right hon. Friend that she has the full support of Government Members? She will know—[Interruption.]

[Mr Speaker]

Order. I want to hear the hon. and learned Gentleman. As well as being the Member of Parliament for Sleaford and North Hykeham, he is a distinguished Queen’s counsel. Let us hear his views.

[Stephen Phillips]

My right hon. Friend will know that the European Court of Human Rights’ own practice direction on rule 39 indicates that rule 39 measures should be granted only in exceptional circumstances. Will she discuss with the Attorney-General whether it is now open to the Government to apply for removal of the rule 39 injunction, and indeed whether it is still in place, given the expiry of the time limit, which is so obvious to every Member on the Government Benches?

[Mrs May]

My hon. and learned Friend has raised an important point. I can tell him that in indicating that it has received an application for referral that will be put before the panel of the Grand Chamber for consideration, the European Court has made it clear to the UK Government that the rule 39 injunction still applies.

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

It is very disappointing that we are not going to receive a clear answer from the Home Secretary about what advice she received from her officials. We do know, however, that the BBC informed the Home Office on Monday that there was some uncertainty about the deadline. On that basis, why did the Home Secretary not wait for an extra 24 hours before making her announcement?

[Mrs May]

I will repeat it again. I could not be clearer. [Interruption.] The deadline was on Monday 16 April. The Government took the first opportunity that arose to take action to resume the deportation, and we will do so again when the process through the European Court is finished.

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

Does the Home Secretary agree that claiming that 17 April is within three months of 17 January is rather like claiming that new year’s day is on 2 January?

[Mrs May]

My hon. Friend has put it extremely well. I suggest that those who are trying to make that claim listen to him carefully.

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

When the Home Secretary came to the House on Tuesday, was she aware that there was a different opinion from hers about the deadline?

[Mrs May]

As has been made clear to the House, the BBC was making claims about the deadline at that time. The Government have been absolutely clear that the deadline was 16 April. As I have tried to explain to the House today, the Government have also been absolutely clear that the decision as to what the deadline was and whether an application for referral can be accepted—and whether it is within the deadline or whether it can be accepted outside the deadline at the discretion of the European Court—is a matter only for the panel of the Grand Chamber of the European Court. It is the arbiter of this—nobody else.

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

I welcome the Home Secretary’s support for a Bill of Rights, but I am sure that my right hon. Friend recognises that the British people are quickly losing patience with the European Court of Human Rights. Will she therefore urge the Cabinet to ensure that a Bill of Rights is included in the Queen’s Speech, so that the British people can be reassured on this matter very quickly indeed?

[Mrs May]

My hon. Friend knows very well the Government’s position in relation to a potential Bill of Rights. The Government have set up the commission; that commission will report, and we will consider its recommendations.

[Mr Denis MacShane (Rotherham) (Lab)]

Can the Home Secretary envisage Britain withdrawing from the treaty setting up the European convention on human rights?

[Mrs May]

I thought that, in response to various answers, I had explained what I think is the right approach for the Government to take, which is for us to reform the European Court of Human Rights to deal with the concerns that have been raised about the way the European Court operates, and that is exactly the work the Government are undertaking.

[Michael Ellis (Northampton North) (Con)]

Does the Home Secretary agree that we have been seeing raw and naked opportunism from the Labour Benches today? Is it not the case that the operative words of article 43 are that the reasons for the judgment being appealed must

“reach the Registry within three months”

of the date, which was 17 January, so Monday 16 April was within three months, whereas Tuesday 17 April would have been three months, not within three months? Therefore, the Home Secretary is right, and Opposition Members who have suggested otherwise have been siding with Abu Qatada’s lawyers and supporting their arguments.

[Mrs May]

My hon. Friend helpfully clarifies again the definition of the deadline; it was, indeed, Monday 16 April. This is a very simple matter: this Government want to deport Abu Qatada. We have taken action to do that, and we will resume it when it is once again possible, but I was clear that it may take many months to do that, and there are various legal avenues available to Abu Qatada.

[Bill Esterson (Sefton Central) (Lab)]

It seems to me that the raw and naked opportunism came from the Home Secretary seeking good headlines from announcing this prematurely. She has admitted that she knew of the BBC advice. Will she confirm whether she had advice from her officials that there was doubt about the deadline—yes or no?

[Mrs May]

That is interesting, as we have now learned that the Opposition’s view is that the best advice to Government should always come from the BBC. I can only assume that that is what they did when in government. What this Government did on Tuesday was take, at the first opportunity, the action to resume the deportation of Abu Qatada. After 11 years, we want to take the action that will see Abu Qatada deported. That is what we started to do on Tuesday, and it is what we will do again when it is open to us.

[Gavin Barwell (Croydon Central) (Con)]

I would hope that the whole House agrees that it is utterly unacceptable that it has taken 11 years and counting to remove this man from the United Kingdom. What will the Government do to ensure that future cases are dealt with much more speedily, and that the rights of millions of our constituents to live in peace are not trumped by the rights of men like Abu Qatada?

[Mrs May]

My hon. Friend raises a very important point. There are two things the Government can do: first, the work we are doing to reform the European Court, to which I have referred on a number of occasions today; secondly, the work I have initiated to look at why it appears that other countries can sometimes deport individuals more quickly than we can. That work has started, and we will be looking to see whether any sensible legislative changes are open to us in order to enable the UK to deport such people more quickly.

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

This is not a simple question of mathematics, as the Home Secretary has suggested. It looks increasingly possible that her Department got it wrong. We understand what the Government’s view is on the advice she has received, but in coming to that view, did she receive any advice from any officials—albeit, perhaps, a minority opinion—that there was some ambiguity in respect of this date?

[Mrs May]

The hon. Gentleman is wrong. It is a simple question of mathematics, as I have made absolutely clear.

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

Does my right hon. Friend accept that there is a great deal of legal debate as to whether an injunction based on a rule 39 action is enforceable? What is the worst thing that could happen if we ignored this injunction?

[Mrs May]

I dealt with this issue in answer to questions raised with me on Tuesday. Of course, I believe that the Government should operate within the rule of law. A rule 39 injunction has, indeed, been placed on the deportation of Abu Qatada, as it was during the period following the judgment of 17 January. As I am sure my hon. Friend will be aware, if the Government were to take action to break that injunction, not only would that be contrary to that legal judgment made by the European Court, but the first step would be to ask for an injunction here in the UK courts. If the Government were to act against that injunction, not only Ministers, but anybody involved, would be acting illegally, and I do not think that is right.

[Several hon. Members]

rose—

[Mr Speaker]

Order. In view of the intense interest in this subject on both sides of the House, I have allowed the urgent question exchanges to run longer than is customary. I am happy to try to accommodate remaining colleagues, but I appeal now for extreme brevity.

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

May I suggest that if the Home Secretary wants to avoid being asked the same question again and again, she might answer it at the first time of asking? She has repeatedly said she is clear that the deadline was 16 April. She has not said, however, whether she was made aware that there could be uncertainty about that in the European Court. Was she made aware of that?

[Mrs May]

The deadline was 16 April. The European Court is the only arbiter. Indeed, it is not the European Court itself, but the panel of the Grand Chamber, which is the only arbiter of the deadline issue.

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

Is it not the case that this vile preacher of hate would have made such an application and abused the European Court of Human Rights to seek delay regardless of the date?

[Mrs May]

Exactly. The point is that, as I said earlier, this comes as no surprise, as I think everybody would expect Abu Qatada and his lawyers to use whatever delaying tactics they can. As I have made absolutely clear, it is within the discretion of the panel of the Grand Chamber of the European Court to decide to accept a referral that is outside the deadline, so it is little wonder that Abu Qatada and his lawyers have made this attempt at a referral.

[Ian Lucas (Wrexham) (Lab)]

For the avoidance of doubt, will the Home Secretary confirm what is becoming increasingly clear: that she did receive advice from officials that there was ambiguity about the deadline? Also, as we are discussing important legal matters, why is the Attorney-General not present?

[Mrs May]

I have answered that first point on numerous occasions, and the reason the Attorney-General is not here is that he is in Brighton reforming the European Court of Human Rights.

[Mr Matthew Offord (Hendon) (Con)]

There is palpable frustration among all Members about the length of time this case has taken, but we have repeatedly seen such cases ever since the European Court of Human Rights was incorporated into British law. Is it not time that the Government acknowledged the frustration of the British people, who want a Bill of Rights, and want it now?

[Mrs May]

As I have said, the Government have set up a process in relation to the Bill of Rights. I also gently remind my right hon. and hon. Friends that people in the United Kingdom had access to the European Court of Human Rights before the Human Rights Act; the situation is simply that the relationship has changed.

[Mr Ian Davidson (Glasgow South West) (Lab/Co-op)]

Are this Government funding this man’s interminable appeals by providing unlimited legal aid?

[Mrs May]

No, we have been very clear about the issue of the availability of finance for Abu Qatada, and I assure the hon. Gentleman that some of the claims being made about the finances that are being made available to Abu Qatada are not correct.

[Brandon Lewis (Great Yarmouth) (Con)]

Given that the Qatada case goes back through almost a decade under the previous Government, is my right hon. Friend more surprised by the Labour party’s audacity earlier in the week in complaining about delay or by its audacity today in complaining that she has acted too quickly?

[Mrs May]

I thank my hon. Friend for his question. The Opposition really do need to get their act straight on whether they think we have acted too quickly or too slowly. They are trying to give two different messages this week. What is important is that the Government took the first opportunity to act to resume the deportation of Abu Qatada, and will indeed do so again.

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

We know that the Home Secretary was warned about the uncertainty surrounding the deadline. We also know—or expect, at least—that she would have received advice from the Attorney-General. So can she explain why she did not simply wait 24 hours before rushing to the Dispatch Box to make her announcement?

[Mrs May]

I came to the Dispatch Box to make the announcement because the Government were taking action, and I rather thought that the House of Commons would like to hear about it.

[David Mowat (Warrington South) (Con)]

The Home Secretary may have seen today’s press reports saying that the appeal was launched only after a reminder was sent by officials of the Court to Abu Qatada’s lawyers. If that is the case, does it not bring into question the independence of the officials and of the Court itself?

[Mrs May]

What I do know is that the application for a referral by Abu Qatada’s lawyers was made only a matter of hours after they had heard the strength of our case in SIAC. At the beginning of that case in SIAC, they had clearly been intending to take the case through the UK courts. It was only when they heard the strength of our case—it shows the strength of our case—that they went away to see whether there was any other delaying tactic they could use, and they have used the delaying tactic.

[Simon Danczuk (Rochdale) (Lab)]

What is the Home Secretary’s best estimate now of when this gentleman will be sent back?

[Mrs May]

As the hon. Gentleman might have noticed on Tuesday, were he in the Chamber then, I have not made any estimate of when the gentleman concerned will be sent back to Jordan. I am absolutely clear—I made it clear on Tuesday and have repeated it today—that this could take many months, because various legal avenues are available to Abu Qatada and it would be no surprise if he chose to try to use them.

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

I commend the Home Secretary’s efforts in this case, but does she agree that it is intolerable to my constituents that a perception has been created that she is unable to act in what they perceive to be their national interest?

[Mrs May]

I am well aware of the concern that people have in the UK, across the board, in relation to their desire to see Abu Qatada deported, which of course the Government share. That is why the Government will be ensuring that, at the first opportunity, we resume deportation.

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

Will my right hon. Friend reassure me and my constituents that the Government will continue to do everything they can to get rid of this known terrorist? Will she remind the European Court and the panel of judges that they have a duty to defend my constituents’ human right to live in safety in their own country?

[Mrs May]

I assure my hon. Friend that the Government will be doing everything we can to take the action that we believe is necessary, which is the deportation of Abu Qatada.

[Bob Blackman (Harrow East) (Con)]

No one will be surprised that Abu Qatada is, once again, attempting to delay his deportation to face justice in Jordan. What estimate has my right hon. Friend been given of the time it will take before the European Court of Human Rights determines whether this case is to be heard? How long will it take before this case is taken, if the Court accepts it?

[Mrs May]

The only indication that has been given by the European Court is that it will meet in a matter of weeks to look at whether it accepts the referral—of course that is the first stage, and the Court may choose to reject it.

[Glyn Davies (Montgomeryshire) (Con)]

Does my right hon. Friend agree that greatly delayed justice is no justice at all, and that until the European Court stops wanting to interfere in matters that should be dealt with in a national court and until the great backlog of cases is reduced, the calls for withdrawal from the Court altogether will increase?

[Mrs May]

My hon. Friend expresses concerns that I know have been expressed not only by Government Members in this House, but elsewhere, by members of the public. That is why it is so important that the Government have taken up the work being done to reform the European Court of Human Rights, particularly on its efficiency, but also on the issue of subsidiarity. Indeed, as I say, it is what my right hon. and learned Friends are pursuing, as we speak, at the Brighton conference.

[Kris Hopkins (Keighley) (Con)]

I suggest to the Home Secretary that, after many, many years, we can take comfort from the fact that the Labour party has finally recognised the seriousness of the need to kick this terrorist out of the country. Does she agree that if Labour had applied the same urgency and enthusiasm when in government, this country would be a safer place today?

[Mrs May]

The length of time that it has taken to take action is obviously a matter of fact, but of course what this Government did was resume deportation at the first opportunity.

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

Does my right hon. Friend agree that Abu Qatada’s lawyers have made this reference to the European Court only after hearing the exceptionally strong Government case showing that he has a very weak case against deportation? Does she agree that instead of hurling cheap shots, those in this House should be united in their determination that Abu Qatada should be deported from this country as quickly as possible?

[Mrs May]

My hon. Friend makes an important point. This House should indeed be united in its determination to see Abu Qatada deported. I hope that it will also be united in welcoming the work that has been done by this Government to achieve the assurances that mean that we have got such a strong case for deporting him.

[Robert Halfon (Harlow) (Con)]

Does my right hon. Friend agree that a major flaw in the European Court is that a significant number of the judges come from countries with very questionable human rights records? Does she also agree that it is time for the European Court not to be a charter for criminals, but to be a convention for human rights?

[Mrs May]

The role of the Court is obviously in upholding the European convention on human rights. It is important that we seek to ensure that the cases that the Court is taking are indeed appropriate to be heard by that Court, and of course that is part of the work that my right hon. and learned Friends are undertaking.

[Mr Speaker]

I am grateful to the Home Secretary and to all 59 Members who were able to question her on this important matter.

Business of the House

Thursday 19th April 2012 Commons Chamber

12:37

[Ms Angela Eagle (Wallasey) (Lab)]

Will the Leader of the House give us the business for next week?

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

The business for the week commencing 23 April will include:

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



Tuesday 24 April— If necessary, consideration of Lords amendments, followed by a motion relating to section 5 of the European Communities (Amendment) Act 1993, followed by a motion on an EU directive on data protection in the areas of police and criminal justice, followed by a general debate on the national planning policy framework.

Wednesday 25 April—Consideration of Lords amendments, followed by Report stage of the Civil Aviation Bill, followed by, if necessary, consideration of Lords amendments.



Thursday 26 April—Consideration of Lords amendments.

The provisional business for the week commencing 30 April will include:



Monday 30 April—Consideration of an allocation of time motion, followed by all stages of the Sunday Trading (London Olympic Games and Paralympic Games) Bill [Lords], followed by, if necessary, consideration of Lords amendments.

I should also like to inform the House that the business in Westminster Hall for 26 April will be:

Thursday 26 April—Presentation of a report on the work of the Backbench Business Committee in session 2010-12, followed by a debate on EU working time regulation and the NHS.

[Ms Eagle]

I not only thank the Leader of the House for his statement and congratulate the new Serjeant at Arms on his appointment, but pay tribute to the former Leader of the House, Tony Newton, who has sadly died.

Four weeks ago, the Chancellor made one of his rare appearances at the Dispatch Box to present his Budget, and it has gone down so brilliantly that the Leader of the House is going to find it even more difficult to coax the Chancellor out of hiding and back to the Dispatch Box any time soon. It takes a unique combination of political skills, which only this Chancellor possesses, to unite pie and pasty makers, Church and charity leaders, philanthropists, university vice-chancellors and caravan owners. The Chancellor’s magic touch has now extended to his own Back Benches, because last night nearly 10% of the Conservative parliamentary party voted against their own Government on the Budget.

It is not just the Budget that this Chancellor has bungled. He has made the wrong choices on the economy and the Government have no strategy for growth. While ordinary families are being hammered by soaring fuel, food and housing costs, this part-time Chancellor has chosen to give a huge tax cut to the richest 1%.

One of the first acts of the Secretary of State for Culture, Olympics, Media and Sport on coming to office was to give a speech on philanthropy. In it, he announced that the Government would be

“reviewing what it can do to encourage philanthropy across the board”.

You have to say, Mr Speaker, that they have come up with a very novel way of doing it. The Culture Secretary briefed that the Budget process was such a shambles that the Chancellor did not bother speaking to him about the charities tax, and presumably he did not know about the churches tax either. Will the Culture Secretary come to this House and make a statement on that debacle?

Following on from the shambolic Budget, yesterday the Government forced through a tax cut for the richest 1%. Last November, the right hon. Member for Sheffield, Hallam (Mr Clegg), the Liberal Democrat leader, said:

“It would be utterly incomprehensible for millions of people who work hard...if suddenly the priority is to give 300,000 people at the very, very top a tax break”.

If it was utterly incomprehensible then, why have Liberal Democrats voted for it now? Will the Leader of the House coax the Deputy Prime Minister to the Dispatch Box to explain his damascene conversion to the interests of the top 1%?

Do the Liberal Democrats seriously think they can get away with agreeing a policy round the Cabinet table, denouncing it in the media, and then voting for it in the House? It is not just on the Budget that they have tried that trick. As the Prime Minister pointed out while on his most recent world tour, the Liberal Democrat leader secretly signed off the policy on internet surveillance in Government and then, when details appeared in the papers, he publically denounced it. A pattern is emerging. Judging by his track record, the Deputy Prime Minster will now ensure that Liberal Democrats vote for the measure while he blames the Tories for it.

Perhaps the Liberal Democrat leader could explain this leaflet, which the party has just put out in Cornwall. It states “Stop the Tories Taxing Our Pasties!” Just five Liberal Democrat MPs voted for Labour’s amendment, and analysis of last night’s result reveals that it was Liberal Democrat votes what won the pasty tax for the Government. May we have a statement on this desperate effort to hoodwink the public? People are not fooled by the Liberal Democrats’ dubious political posturing. The pasty tax, the caravan tax and the churches tax were all voted through the House last night because of Liberal Democrat support.

The part-time Chancellor’s shambolic handling of the Budget is matched by the Home Secretary’s increasingly chaotic attempts to deport Abu Qatada. On the interpretation of time limits, I have to ask, why did no one in the Home Office think to phone up the European Court to check when it thought that the deadline was at an end?

This parliamentary Session is finally staggering to a close, ending a spectacularly mismanaged legislative programme with a spectacularly mismanaged Budget, and we have already started to have leaks about the content of the next Queen’s Speech. The entire Budget was leaked, but the content of the Queen’s Speech should not be briefed to the media before Her Majesty has delivered it.

In his statement, the Leader of the House referred to all the time he has allowed for consideration of Lords amendments next week, but will he take this opportunity to deny rumours that the House will rise much earlier than he is planning?

In an interview this week, the chair of the Conservative party tried to explain away what she herself described as the Government’s “incoherence” with two words “Liberal Democrats”. Can the Leader of the House tell us what on earth she could have meant?

[Sir George Young]

I begin by thanking the hon. Lady for her kind words about Tony Newton, whose funeral I attended last week, where I listened to some generous tributes from John Major and John MacGregor. It was a very well attended and moving funeral.

Let me move on to the hon. Lady’s questions. Most of them related to the Budget; I gently point out to her that we are debating the Budget for the whole of this week and that this time is for questions about next week’s business. All the issues she raised have been the subject of a debate this week or will be the subject of a debate later today. Let me also gently remind the hon. Lady about Budget rebellions. Three weeks ago, an amendment was tabled to the Budget opposing the cut to the 50p tax rate. In other words, it was an amendment that would have implemented the Labour party’s policy. When there was a vote, only two Labour Members voted for it: the hon. Members for Bolsover (Mr Skinner) and for Newport West (Paul Flynn). They were the only two Members who supported the official Labour party policy. Everyone else, including the hon. Lady, rebelled, so I will take no lectures from her on rebellions on Budget measures.

The hon. Lady raised some points about taxation. She did not mention the 2 million people we are taking out of tax or the 24 million taxpayers who will benefit from the changes we have made. As she knows, the better-off will pay five times more in extra tax than they will get from the reduction in the rate from 50p to 45p.

On the subject of Qatada, we have just had a whole hour of exchanges on Qatada and I hope that the hon. Lady’s colleagues have raised all the questions on that subject that could possibly be raised.

On the legislative Session, I gently remind the hon. Lady that, unlike during the previous Session under the previous Government, we have not rushed through Bills with guillotine after guillotine. We have consistently allowed two days on Report for several Bills, many programme motions have been supported by the Labour party—all credit to Labour for coming to a sensible accommodation—and we have had adequate discussion. I remember the hon. Lady saying that we would not get all the Bills through, but we are getting them all through, with adequate time.

On the hon. Lady’s final question, I have announced that the House will be sitting the week after next and I have announced the business for the Monday. She will understand that at this stage in the parliamentary Session, with four Bills still in play between the two Houses, it is impossible to forecast exactly when the House will prorogue. I anticipate that it will be some time the week after next.

[Mr Peter Bone (Wellingborough) (Con)]

Can the Leader of the House say when the parliamentary business committee will be established so that all the issues with programming motions can go? That would offer the opportunity of taking control of business away from the Executive and back to Parliament.

[Sir George Young]

As my hon. Friend will know, the Backbench Business Committee has been established and elections will take place at the beginning of the next Session. He will know of the commitment in the coalition agreement to introduce a committee to deal with Government business by the third year, which ends in about a year’s time and so, as my hon. Friend will understand, we have 12 months to honour that commitment. I plan to honour it.

[Natascha Engel (North East Derbyshire) (Lab)]

On Tuesday, the Backbench Business Committee met for the last time this Session—[Hon. Members: “Aah!”] I see the grief on the Chief Whip’s face. As the Leader of the House announced, Thursday is the last debate this Session from the Backbench Business Committee in Westminster Hall, where we will be launching our end-of-term report with a mini-statement, in which I hope all Members will participate. Will the Leader of the House ensure that all political parties elect new members to the Backbench Business Committee as a matter of urgency when we return to Parliament on 9 May? Until that Committee is reconstituted no further debates can be scheduled, so I encourage the Leader of the House to encourage all political parties, especially his own, to ensure that members are elected as quickly as possible.

[Sir George Young]

I take this opportunity to compliment the hon. Lady on her chairmanship of the Backbench Business Committee during its first two years. As she has just said, it has met for the last time. I have no idea whether she is going to stand again as Chair and the last thing she would want would be any endorsement from business managers of her candidacy, but I hope that if she stands, the House will take on board her record of leadership over the past two years.

Speaking for the two coalition parties, I can say that we plan to proceed as quickly as possible at the beginning of the next Session with the election of our members of the Backbench Business Committee, and I am sure that the shadow Leader of the House will ensure that her party does the same. The Government want to see the Committee up and running as soon as possible and we will do all we can to facilitate it. I commend the hon. Lady on her public service announcement about the launch of her report in Westminster Hall next week and I very much hope to be in my place for that.

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

The people of Hay-on-Wye in my constituency are twinned with the people of Timbuktu in Mali, where they carry on many good projects involving health, education and agriculture. They are now concerned about the well-being of their friends in that trouble-torn country. Will the Leader of the House either make time available for a debate or ask the Foreign Secretary to come to the House and make an oral statement so that we can ascertain what is happening in that country and to our embassy there?

[Sir George Young]

I understand my hon. Friend’s concern, particularly because of the links between his constituency and Timbuktu. We had an opportunity on Tuesday in Foreign and Commonwealth Office questions for those concerns to be ventilated, but I will ask the Foreign Secretary to write to my hon. Friend and give him up-to-date information, particularly about any impact on British citizens in that country.

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

The whole House will be aware of the courage and commitment to democracy of the Burmese opposition leader Aung San Suu Kyi. Is the Leader of the House able to make a statement about her visit to the UK? Perhaps he might agree with me that an invitation to address both Houses of Parliament in Westminster Hall would be a fitting tribute to her and a very great honour to us all.

[Sir George Young]

I am grateful for the right hon. Lady’s comments. As she knows, the Prime Minister extended to Aung San Suu Kyi an invitation to visit this country and I have seen reports, which I welcome if they are true, that she plans to spend some time in Oxford where she used to live. I suspect that the question of an address in Westminster Hall is above my pay grade, but I will ensure that it goes to the relevant authorities for serious consideration in view of her record on human rights.

[Mr Stewart Jackson (Peterborough) (Con)]

It is more than 20 years since the landmark Medical Research Council study that showed that the fortification of foodstuffs with folic acid taken prior to conception would reduce neural tube defects such as spina bifida and hydrocephalus. Many countries have pursued that policy, but there is an impasse in our country between the Scientific Advisory Committee on Nutrition, the Food Standards Agency and the Department of Health. May we have a debate in Government time to ensure that we properly debate this matter and follow the lead of other countries to reduce the incidence of these dreadful medical conditions?

[Sir George Young]

I applaud my hon. Friend’s concern on this subject and his campaign and zeal for progress. I cannot promise a debate, but it sounds like an appropriate subject for a debate in Westminster Hall or on the Adjournment of the House. In the meantime, however, I will ask my right hon. Friend the Secretary of State for Health to bring my hon. Friend up to date with the progress he is making on resolving the conflict of interest to which my hon. Friend has referred.

[Ann Clwyd (Cynon Valley) (Lab)]

I should like to join in the tribute to Tony Newton. He fought for what he believed, right up to the week of his death, and I would like to give my commiserations to his family.

What is the Foreign and Commonwealth Office’s present travel advice to people thinking of going to the Formula 1 race in Bahrain, given that Amnesty International this week published a report saying that nothing much has changed in Bahrain over the past year? This morning, the BBC’s sports reporter made it quite clear that there is a lot of unrest in Bahrain and there is a man on hunger strike at the moment—on the 70th day of that hunger strike. What is the Government’s advice to people thinking of going to the Formula 1 race?

[Sir George Young]

My understanding is that the Foreign Office has given no specific advice that people should not travel to Bahrain. The Formula 1 event is a matter for the Bahraini authorities and the FIA organisers. Although we are concerned by some of the violent exchanges still occurring in Bahrain and we call on all sides to exercise restraint and follow the rule of law, at this stage the Foreign Office is not giving any specific advice to potential visitors that they should cancel their visit.

[Jason McCartney (Colne Valley) (Con)]

I had a wonderfully positive Easter recess in which I opened a new dye works—the first to open in the UK for 20 years —presented a cheque for £45,000 of Olympic legacy cash from the national lottery to a local rugby club and also met an engineering works that is expanding so fast that it needs new premises. With all that positivity around, may I suggest that my right hon. Friend should suggest to the Chancellor that we slap a tax on doom-mongers and mitherers?

[Sir George Young]

My right hon. Friend the Chancellor might be looking for new ways of broadening the tax base but whether that one would be easy to implement I very much doubt. My hon. Friend makes a good point. When the House is not sitting, MPs are not on holiday. His hyperactive work during the Easter recess shows just how hard MPs on both sides of the House work during the recesses.

[Yvonne Fovargue (Makerfield) (Lab)]

In light of the Commons vote on Tuesday to remove from scope the majority of social welfare law, which will have a major effect on the viability of many advice agencies, will the Leader of the House tell us when the long-awaited advice review will be published so that we might at least have some attempt at a strategic approach instead of just allowing advice deserts to flourish?

[Sir George Young]

What I will undertake to do, now that the Bill has gone back to another place, is see that when the other place considers the amendments we made an answer is given by the Minister responsible to the hon. Lady’s question about the date of the help she has just mentioned. As she knows, some concessions were made on Tuesday in view of the concern that she and others had expressed and it is now a matter for the other place to see whether they accept our amendments.

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

Should you wish to visit Brighton and park your car on the sea front, Mr Speaker, the Green-run council would charge you £20 to do so. Will the Leader of the House find time for a debate on excessive parking charges?

[Sir George Young]

That would be an interesting debate. The Government believe in local democracy, in devolving decisions about parking charges to local authorities and in local electors holding people to account if they take unpopular decisions on parking. My hon. Friend will have seen the Mary Portas review and some of the proposals in that to make it easier for people to park in towns or cities such as his, and I can only suggest that he pursue his campaign in Brighton, because I think the key to a change in policy is held there rather than here.

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

May we have a debate on employment rights at the Olympics? The Musicians Union has learned that the London Organising Committee of the Olympic Games and Paralympic Games is expecting musicians to play for nothing at the summer events. Those who put on the events will be paid, as will those who provide the equipment and the security. I am sure that the Olympic bureaucrats will be handsomely paid, but uniquely musicians will be expected to play for nothing. Does the Leader of the House believe this is totally unacceptable and that musicians should always be offered a fee for their services?

[Sir George Young]

I understand the strong feelings and I commend the hon. Gentleman on his own performance as a musician. I will raise the issue with my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport. I do not know whether there will be an opportunity to raise the matter in the rather narrow debate on Monday week on the Olympics and Sunday trading. Depending on the ingenuity of the hon. Gentleman and the breadth of tolerance of whoever happens to be in the Chair, there might be an opportunity to raise it then, but I shall certainly forewarn my right hon. Friend of the concern the hon. Gentleman has just expressed.

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

Returning power to people and communities is a vital coalition reform. Cornwall council wants to make the most of the new opportunities to be the first rural region to have the same powers as our important cities, so that we can improve the quality of life of people in Cornwall. Will my right hon. Friend seek to have the Ministers responsible make a statement to enable that?

[Sir George Young]

The short answer is yes, of course. We are anxious to devolve power to local communities, including communities in Cornwall, and my right hon. Friend the Secretary of State for Communities and Local Government will want to consider very carefully the case that my hon. Friend makes for ensuring that the people of Cornwall can have the best possible deal and achieve the economic growth that the area needs so much.

[Siobhain McDonagh (Mitcham and Morden) (Lab)]

Three months ago a dossier about war crimes committed by the defence attaché at Sri Lanka’s high commission in London, Major General Prasanna De Silva, was sent to the Foreign Office. However, the Foreign Secretary has reportedly refused to strip him of diplomatic immunity so that he can be questioned about these terrible accusations. I hope we can have a debate about the case and about the abuse of diplomatic immunity, because if the attaché is allowed to leave without being questioned, that will undermine Britain’s proud reputation for not tolerating war criminals. If we are soft on Sri Lanka, other shady regimes will surely also begin to regard us as a refuge for people who commit atrocities.

[Sir George Young]

I understand the hon. Lady’s concern. It is important that diplomatic immunity is not abused. There was an opportunity on Tuesday to raise this with the Foreign Secretary. I am not sure that it will be possible to raise it again before Prorogation, but I will ask the Foreign Secretary to drop her a line explaining what action he is taking in response to her concern about the continuing diplomatic immunity of the individual to whom she referred.

[Mark Pritchard (The Wrekin) (Con)]

May we have a debate on the European Commission? Will the Leader of the House take this opportunity to end the rumours that the replacement for Baroness Ashton, whose term of office ends in 2014, will not be a Liberal Democrat, but that the next UK Commissioner to the EU Commission will be a Conservative?

[Sir George Young]

That is way above my pay grade. We have two years in which to come to a decision on this very important matter concerning the UK representative on the Commission. I hope that between now and 2014 my hon. Friend will have an opportunity to ask questions of the Foreign Secretary at Foreign Office questions, where he may get a more authoritative response as to the procedure and consultation process before a replacement for Baroness Ashton is announced.

[Nic Dakin (Scunthorpe) (Lab)]

I understand that the Prime Minister is being uncharacteristically coy about whether he has ever stayed in a static caravan. I hope the Leader of the House will be less coy in answering. Will he ensure that an impact assessment is published on the effect of the caravan tax on sub-regional economies, such as that of Humberside?

[Sir George Young]

We had a fairly extensive debate on the subject yesterday. I am not sure whether the hon. Gentleman was able to catch the eye of the Deputy Speaker. It is open to him to table a parliamentary question in order to get the answer to the question that he asked—what is the impact on a particular region of the imposition of the tax?

[Joseph Johnson (Orpington) (Con)]

The Prime Minister was in Orpington on Tuesday, making him, I believe, the first serving Prime Minister to visit the constituency in more than 40 years, since the days of Edward Heath. May we have a debate on the historic neglect of the outer London boroughs that this mayoralty and this Government inherited and which this mayoralty and this Government are working so tirelessly to reverse?

[Sir George Young]

My hon. Friend has, of course, an interest in the outcome of the elections. It is certainly the case that Boris Johnson has given consideration to the outer London boroughs that was denied to them by the previous incumbent. I very much hope that on election day those who share my hon. Friend’s concern that the outer London boroughs should not be neglected at City Hall will turn out in force and vote for Mayor Johnson.

[Richard Burden (Birmingham, Northfield) (Lab)]

The Leader of the House will be aware that today is the designated international day of remembrance for victims of the holocaust. Some years ago I was asked to be a guardian of the memory of Jacob Billauer, about whom I have been able to find out very little, other than the fact that he was a Polish Member of Parliament—a Member of Parliament like us. Does the Leader of the House agree that it is appropriate that our House should spend a moment to remember the victims of the holocaust and to record the name of Jacob Billauer in Hansard so that it can be remembered in history in this place as well?

[Sir George Young]

I am very grateful to the hon. Gentleman for reminding us about this day of remembrance for victims of the holocaust and for reminding us of Jacob Billauer and all the other victims. He will know that this House had a debate on Holocaust memorial day on 19 January, a very moving debate, part of which I attended, and which was organised by the Backbench Business Committee, and many Members on both sides of the House will have signed the book in the House to commemorate those who lost their lives. The debate that we held this year and in previous years highlighted the importance that the House places on ensuring that the victims of the holocaust are never forgotten.

[Mr John Leech (Manchester, Withington) (LD)]

During Transport questions the Secretary of State confirmed that the Department has no idea of the cost of increasing the motorway speed limit and its impact on road casualties. Given that the Opposition have already come out in favour of a policy that will cost millions and cost lives, may we have a debate in the House on the financial implications and the cost in human life of an increase in the speed limit?

[Sir George Young]

This is a matter which I, as a former Secretary of State for Transport, have looked at and have some interest in. Again, it strikes me that that would be an appropriate subject for a debate in Westminster Hall, where we could give it the consideration that it deserves. If such a debate were to take place, I would do my best to ensure that the statistics that my hon. Friend has asked for—the cost in extra consumption and, if it is indeed the case, the cost in accidents and lives—are available so that that can help to inform the debate before a final decision is taken as to whether the speed limit should be raised on motorways.

[Valerie Vaz (Walsall South) (Lab)]

May we have an urgent debate on staffing levels in Government Departments, particularly Her Majesty’s Revenue and Customs and the Department for Communities and Local Government? My constituent, Mrs Dhillon, received a late penalty notice for her husband, who died in 2008, for 2011. That is mainly a result of the fact that many systems are automated. I have also contacted DCLG about business rate rebates and have not had a reply yet. Could the Leader of the House look into this?

[Sir George Young]

My view is clear that all Members of the House are entitled to prompt responses to correspondence with Ministers or from officials at HMRC. The hon. Lady has given me the details of the particular correspondence to which she is awaiting a reply, and of course I will chase that up immediately.

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

Two thirds of people in Halesowen and Rowley Regis have gross earnings of less than £26,000, and most do not believe it to be fair that some families can receive much more than this from benefits. May we have a debate in Government time on what further work the Government need to do to make sure that people are always better off in work?

[Sir George Young]

The motivation behind the introduction of the universal credit, which I hope is supported by Members on both sides of the House, is to ensure that it always pays to work. My hon. Friend will know that the relevant legislation has gone through, along with a benefits cap and a serious approach to benefit fraud. The current system costs the taxpayer £1.5 billion a year. We hope to make progress on that and introduce new measures to tackle fraud, tougher rules and a benefit ban of three years for people who offend repeatedly. The Welfare Reform Act 2012 is an Act of historic importance. We have taken bold action both to make work pay and to protect the vulnerable.

[Mr David Hanson (Delyn) (Lab)]

Before the end of the Session, may we revisit the changes to the feed-in tariff regime, given the astonishing figures produced today by the Government which show that solar panel installation has fallen by more than 90% since the Government’s changes were made, damaging industries such as Kingspan in my constituency, installers and ultimately consumers, and not making this Government the greenest Government in history, as they claim?

[Sir George Young]

I understand the right hon. Gentleman’s concern. I would be misleading him if I said I could find time for a debate, but after Prorogation and when we have a debate on the Queen’s Speech, depending on what is in it, he might be able to draw to the attention of Ministers the concern that he has just expressed.

[Karen Bradley (Staffordshire Moorlands) (Con)]

Over the Easter recess I spent a morning at our local job club, run by Staffordshire Moorlands community voluntary services. They are having enormous success in getting some of the hardest to place people back into work, including on the Work programme. Could the Leader of the House find time for a debate on the role of the voluntary sector in the Government’s Work programme and in finding work for difficult to place people?

[Sir George Young]

I commend my hon. Friend on her activity during the Easter recess, and I commend the work that voluntary organisations are doing in delivering the Work programme, which has been calibrated to encourage them to help find work for people for whom it has historically been difficult to find work. I commend the work that is taking place in her constituency. The Work programme is the biggest back-to-work programme that the country has ever seen. It has already helped 300,000 people. We hope it will help more than 3 million people. I cannot promise a debate in the very near future, but there may be opportunities to develop this dialogue in the new Session.

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

May I remind the Leader of the House that one of the consequences—it may be an unintended consequence—of Government changes to benefits for families is that many children from the poorest families will lose their free school meals? That is a very important and terrible challenge for the House. Will he make sure that we have an early opportunity to debate this dramatic change?

[Sir George Young]

I understand the hon. Gentleman’s concern, which has been in the news today. He will know that we are moving from an array of different benefits to a universal credit—a move that I hope hon. Members on both sides of the House will welcome—under which everyone will be better off in work. There is a particular issue, to which he has just referred, as we migrate from where we are to universal credit, about what happens to entitlement to free school meals. He may have heard the Minister of State, Department for Education, my hon. Friend the Member for Brent Central (Sarah Teather), speaking about this. We are determined to protect vulnerable children—those children on low incomes. We recognise that free school meals are an important ingredient for them and we are in consultation to ensure that, as we move to the new regime, we continue to protect those in most need.

[Andrew Stephenson (Pendle) (Con)]

In March, Conservative-led Pendle council purchased Brierfield Mills, a landmark grade II listed building, thanks to a £1.5 million grant from the Homes and Communities Agency. Under the previous Government, the building had been bought by Islamic Help, which controversially planned to turn it into a 5,000-place Islamic girls school. Thankfully, now, the site will remain in economic or commercial use. May we have a debate about what the Government are doing to support the economy in the north of England and such economic regeneration?

[Sir George Young]

I was interested to hear of the project referred to by my hon. Friend, and we are anxious to promote regeneration in his constituency. The regional growth fund is on schedule. The first two rounds allocated £1.4 billion, but a new bidding round has opened recently and an additional £1 billion is now available. I hope that projects in his constituency will consider applying for this so that we can regenerate, provide employment and create wealth.

[Kevin Brennan (Cardiff West) (Lab)]

As a former charities Minister, I am disappointed that we have not heard much from the Parliamentary Secretary, Cabinet Office, the hon. Member for Ruislip, Northwood and Pinner (Mr Hurd) about the Government’s position on philanthropy, so may we have a statement from him to give him a chance to stop the traducing of the Chancellor’s reputation on philanthropy, because he has been described as anti-philanthropy despite being the man who has brought us the Budget that just keeps on giving?

[Sir George Young]

The coalition Government are in favour of philanthropy and we have taken a number of steps to promote it. We have made changes to the inheritance tax regime, we have proposals for small donations so that tax can be claimed back, and we are streamlining the mechanism by which charities reclaim tax.

On the specific measure to which the hon. Gentleman refers, he will know that we are having discussions with the charitable sector to seek to protect it from any damaging changes in the proposals that have been announced, which come into effect in a year’s time. There is a serious issue as to whether those on high incomes, who have philanthropic objectives, should be able to exempt themselves from income tax by making substantial donations. In America, which has a good culture, there is a cap on relief, so there is nothing inherently anti-philanthropic in ensuring that those who have high incomes make some contribution to the overheads of the country through income tax.

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

In Crewe, a local action group led by Glenn Perris has campaigned successfully, with my support, against the imposition of a council Traveller site, assisted by the new Government policy of working with the private sector to meet any unmet Traveller need. Can we find time for a debate on this important common-sense policy and congratulate Mr Perris and his team on their sterling work?

[Sir George Young]

I endorse what my hon. Friend says about what is happening in his constituency. He will know that on 23 March we introduced a new light-touch policy on sites for Travellers, and I hope that that will be developed in his constituency in consultation with local communities. Resources are available from Government. There is £60 million of Traveller pitch funding through the Homes and Communities Agency, and Traveller pitches attract the new homes bonus. I hope that the new short light-touch and fair policy puts the provision of sites back in the hands of local people, and that they will find the right balance between the needs of Travellers on the one hand and the interests of local communities on the other.

[Mr Tom Harris (Glasgow South) (Lab)]

Despite the dismal weather of the past week, large parts of England face drought conditions. Meanwhile, in Glasgow we know that it is summer only because the rain warms up. Does the Leader of the House see any value in discussing in a debate on the Floor of the House the costs and practicalities of a nationwide water distribution network so that we in Scotland could perhaps share some of our excess water wealth with our more parched southern compatriots?

[Sir George Young]

The Glasgow tourist board may be in touch with the hon. Gentleman about his rather disparaging remarks about the weather in that great city. There is an issue about drought, however. We have had one drought summit and there will be another in May. There is a drought group in the relevant Department, and we are taking steps to conserve water, and, where feasible, to move water from those areas in surplus to those in shortage. I cannot promise a debate between now and Prorogation, but perhaps in the new Session, depending on what happens to the weather in between, we may have an opportunity to revisit this.

[Ian Swales (Redcar) (LD)]

The day after the first tonne of steel was made at Redcar’s reopened steel works, I am sure the Leader of the House will join me in congratulating operators SSI. Will he find time for a debate on the vital issue of energy costs for our energy-intensive industries, such as steel?

[Sir George Young]

My hon. Friend raises an important issue. The Chancellor has recognised that our climate change proposals have a particular impact on high-energy users, such as steel, and I share my hon. Friend’s delight at the reopening of the plant in his constituency. I do not know if there will be an opportunity as the Finance Bill goes through the House to raise this, but I will share his concern with the Chancellor and inquire about the progress being made in the discussions between the high-energy users and the Treasury, to make sure that the undesirable consequences are mitigated and the industries remain competitive with our European colleagues.

[Julie Hilling (Bolton West) (Lab)]

May we have a debate on the lessons of our industrial heritage, and will the Leader of the House join me in congratulating the people of Westhoughton, who this weekend will be commemorating the 200th anniversary of the burning of Westhoughton mill by the Luddites, an act committed because of the unemployment and poverty that existed at the time? The commemorations will include the burning of a replica mill.

[Sir George Young]

I hope that the local fire brigade is aware of the rather unique way that the hon. Lady’s constituents have of celebrating these events. I share her commitment to industrial heritage and I hope the ceremony goes well. I will share with the appropriate Minister the concern that she has just expressed.

[Gavin Barwell (Croydon Central) (Con)]

New academies, such as Harris, South Norwood, Oasis Shirley Park and Quest, serving Croydon Central have significantly driven up standards. May we have a debate on the Government’s academies programme, which built on the ideas of Tony Blair and Lord Adonis, which were so shamefully stymied by the shadow Chancellor, but are doing so much to drive up standards for all of our young people, but particularly those from deprived areas?

[Sir George Young]

I would welcome such a debate on the way that we have driven forward at high speed the policy that we inherited from Lord Adonis. We are clear that academies are helping to increase school standards, and this year’s academy GCSE results improved by nearly twice the level seen across all maintained schools. I hope that we can maintain the momentum and that in the new Session there might be an opportunity for a further debate on our education policies.

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

Yesterday evening, as you know, Madam Deputy Speaker, the Government narrowly staved off a defeat on the imposition of VAT on static caravans. Despite the fact that 17 Tory MPs rebelled against their own Government, that was made possible by Liberal Democrats. May we have a debate on the genuine dislike of Liberal Democrats that is shared across the House and the country?

[Sir George Young]

No. Those of us who have been in government before, particularly under John Major, would regard a majority of, I think, 25 as a healthy one, compared with that of ’92 to ’97. The degree of harmony between the Conservatives and the Liberal Democrats in the Government is far greater than it was between the Brownites and the Blairites in the last Labour Government.

[Mr Matthew Offord (Hendon) (Con)]

Given the increasing number of people in this country who have been diagnosed with wet age-related macular degeneration, will a Minister come to the Dispatch Box and advise us why the National Institute for Health and Clinical Excellence refused to license the use of Avastin when it has been proved to be much cheaper than the use of Lucentis?

[Sir George Young]

The Macular Disease Society is based in my constituency in Andover, and I have very close links with it. The short answer to my hon. Friend’s question is that the manufacturer of Avastin, Roche, has not applied to the relevant authority for a licence to treat wet AMD with this particular product. It is up to it to make the application. In the meantime, a licence has been granted to Lucentis, which is slightly more expensive, but I hope as effective.

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

On 1 March the Commons spokesperson for the Department for Environment, Food and Rural Affairs, the right hon. Member for South East Cambridgeshire (Mr Paice), stood at the Dispatch Box and pledged that the Government would bring forward proposals to tackle dangerous dogs and their owners before the Easter recess, yet still none has been published. It is nearly two years since the consultation on changing the law on dangerous dogs closed but, despite numerous promises from Ministers, still nothing has been done. On behalf of my constituents Angela McGlynn and John Massey, who tragically lost their four-year-old son, John-Paul Massey, and have been campaigning on the issue so that no other families have to go through what they are going through, I ask the Leader of the House please to inform us when we should expect a statement from DEFRA.

[Sir George Young]

The spokesman the hon. Lady refers to is my right hon. Friend the Minister of State, Department for Environment, Food and Rural Affairs. I will try to find out from the Department when we plan to publish our conclusions. It is important that we get it right. She might remember that in the 1990s the House legislated in haste on dangerous dogs and got it wrong. We are anxious not to make the same mistake again.

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

Will the Leader of the House grant a debate on the role of local government in supporting microfinance start-up companies, which might help my constituents understand why the Labour council in Enfield is disposing of the business innovation centre, which is profitable and provides valuable services but might now end up as a housing estate, which of course stands in sharp contrast to the support and funding received from the Conservative Mayor of London?

[Sir George Young]

I am grateful to my hon. Friend for his question. I am not sure whether it will be possible for the Mayor of London to intervene in the project in my hon. Friend’s constituency and see whether even at this late stage it might be saved for the purpose he has outlined. I cannot promise an immediate debate on this subject. We are anxious that local government uses its powers to promote wealth and employment and create jobs in appropriate locations. I can only suggest that my hon. Friend applies for an Adjournment debate or a debate in Westminster Hall.

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

A number of Scottish newspapers have revealed a shocking history of domestic violence and child beating by a nationalist MSP, Mr Bill Walker, stretching over 30 years. Mr Walker, like all who commit domestic violence acts, has arrogantly refused to take responsibility for his actions and will not resign his seat. Will the Leader of the House confirm whether the Government will consult the Scottish Parliament on extending any new provisions for the recall of MPs to MSPs so that my constituents can be represented in the Scottish Parliament by a fit and proper person?

[Sir George Young]

I understand the hon. Gentleman’s concern. He will know that we have published a draft recall of MPs Bill. In fact, this morning the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Forest of Dean (Mr Harper), gave evidence to the Political and Constitutional Reform Committee, which is doing pre-legislative scrutiny. We have said that we will consider extending recall to the devolved legislatures, including the Scottish Parliament, as part of our overall consideration of responses to the inquiry. In the first instance we want to honour our commitment to the recall of MPs, but we have not ruled out extending it to the devolved legislatures at a later stage.

[Eric Ollerenshaw (Lancaster and Fleetwood) (Con)]

This week saw a report from the Department of Energy and Climate Change’s independent expert giving a green light to the resumption of fracking for shale gas in Lancashire. At the same time, my constituency has a third application before the Infrastructure Planning Commission for the storage of imported gas in excavated salt mines, Claughton moor has a second application for an onshore wind farm and, to cap it all, the National Grid now wants to build bigger and newer pylons to transmit power to newly proposed offshore wind farms. Is there any chance of having a debate on the cumulative impact of this on the people of Lancashire and their environment?

[Sir George Young]

There certainly seems to be a high concentration of energy-related projects in my hon. Friend’s constituency. On fracking, operations remain suspended. We are consulting on the Cuadrilla report and the independent expert’s recent report, but in the meantime no drilling will take place. I understand the other issues that my hon. Friend raises and the cumulative impact they have on his constituency. I cannot promise an early debate, but it sounds like a subject for a potential debate in Westminster Hall or on the Adjournment.

[Derek Twigg (Halton) (Lab)]

As further evidence that the Government are in a shambles, we have today seen figures showing shocking increases in waiting times for common operations, so may we have an urgent debate on the NHS and waiting times? As an example, during the past six months I have had more complaints from constituents about the NHS than I have had in six years, and of course the Government have been in place for two years. I think that that is indicative of how they are handling the NHS.

[Sir George Young]

I understand the hon. Gentleman’s concern. The latest figures I have seen show that for in-patients and out-patients average waiting times are around the level they were at two years ago, despite a big increase in throughput and the number of treatments. Waiting times might have gone up for some processes, but for others they have gone down. Fewer patients than ever are waiting a long time for treatment in the NHS, the number of people waiting for over a year has reduced by two thirds and, as I said a moment ago, the average time patients have to wait for treatment is at roughly the same level as it was two years ago. We are determined to maintain the progress we have made and have committed extra resources to the NHS, which the Labour party would not have granted it.

[Mr Marcus Jones (Nuneaton) (Con)]

In the first two years of the Conservative-led coalition, council tax has been virtually frozen across England. That is in stark comparison to the previous Labour Government, under whom council tax doubled for my constituents and for people across the country. May we have a debate on council tax and value for council tax payers’ money?

[Sir George Young]

We would welcome such a debate. We had one in February when the House debated the revenue support grant—it is an annual debate—and those points were forcibly made. As in many parts of the country, when people decide how to vote in local elections I am sure that they will remember the Government’s benevolent treatment of council tax payers and the way we sought to protect them from the pressures on household budgets by enabling many local authorities to freeze council tax for two years running.

[Nick Smith (Blaenau Gwent) (Lab)]

There has recently been wide media coverage by the television programme “Watchdog”, Private Eye and others of rip-off private car park operators. Car parking regulation is not working and motorists need better protection. May we please have a debate on that?

[Sir George Young]

My recollection is that we have banned the clamping of motor vehicles, which I think is now an offence. I hope that that will reduce to some extent the grievances to which the hon. Gentleman refers. If he has in mind any other changes to the legislation, perhaps he will be good enough to let me or my hon. Friends know and we will certainly look at them. We must get the balance right between, on the one hand, those who own property that they do not want to operate as free car parks and, on the other hand, motorists who are legitimately looking for somewhere to park their cars while they go about their business. I hope that we have the right balance, but if he has any proposals we will of course look at them.

[Duncan Hames (Chippenham) (LD)]

May we please have a statement on buses? The Leader of the House might have noticed the great interest in buses during Transport questions this morning, which was far higher than usual, following the publication on 26 March of the Government’s paper, “Green Light for Better Buses”, which I dare say is the most wide-ranging policy on buses we have seen since the Leader of the House was in the Department for Transport. Why did a Minister not make a statement to the House at that time?

[Sir George Young]

There is always pressure on Government time and we have to balance the House’s appetite for statements with the business before the House on a particular day, which is why we sometimes make written ministerial statements rather than oral ones. If my hon. Friend looks at the Government’s record, he will find that we have made more statements than our predecessors. Ultimately, it is a question of balance; a statement, which can last an hour, squeezes the subsequent debate, and if it is an Opposition day there are sometimes protests from Opposition Members. We try to get the balance right, but not every Government announcement scores an oral statement in the House.

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

May we have a debate on the concerns set out in early-day motion 2969, which calls for ethical standards to be maintained during the Olympics?

[That this House is concerned about press reports that UK Olympians will be asked to wear sporting equipment produced by exploited child labour; is further concerned that successful Olympians will be presented with medals produced by multi-national company Rio Tinto who have locked out their entire workforce in Alma, Quebec without any serious consultation; and, therefore calls on the Government and the Olympics governing body to ensure that ethical trading standards will be maintained during a hopefully successful Olympics in the UK.]

Recent press reports suggest that exploited child labour is being used to make the sports equipment used by UK athletes, and now we hear that the company producing the gold medals, Rio Tinto, has locked out its entire work force since December last year. If we are to have a successful Olympics—we all hope that we will—ethical standards must be maintained by all involved.

[Sir George Young]

I endorse what the hon. Gentleman has said. Of course we should maintain high ethical standards. Like him, I want the Olympic games to be a great success. I will raise with the London Organising Committee of the Olympic Games and Paralympic Games the two issues that he has raised about the medals and the possible use of child labour, and ask Lord Coe to write to him.

[Robert Halfon (Harlow) (Con)]

May we have a statement on which councils are providing value for money for taxpayers? Harlow’s Conservative council has frozen council tax not just for one or two years, but for the past three years, and has protected discretionary services. Does that not show that Conservative councils cost taxpayers less?

[Sir George Young]

The short answer is yes. Perhaps I should not develop that too much, in view of what I said earlier about my Liberal Democrat friends. Under the last Labour Government, council tax doubled across England. This Government have worked with councils to freeze council tax for two years. I applaud what has happened in Harlow, where the council anticipated that policy by freezing council tax for a third year. Those who have an opportunity to vote next month must cast their votes according to the record to which my hon. Friend has referred.

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

Cleveland has seen a 1.2% rise in crime this week and has lost 224 police officers since May 2010, and yet the Home Secretary has never visited the north-east region to see the effects of her cuts. Can we have a debate on rising crime in the north-east, which is due to the Government’s cuts to front-line police?

[Sir George Young]

I think that the hon. Gentleman makes a mistake in drawing a direct correlation between the volume of crime and the number of police officers; it is a much more subtle equation than he implies. He will know that in many parts of the country, police authorities have coped with the challenging budgets without reducing the front-line effectiveness of the police force. I will see whether Home Office Ministers are able to visit the north-east to see at first hand what is going on. I hope that the police authority will respond to the challenge and maintain front-line effectiveness, as has happened in other parts of the country.

[Richard Fuller (Bedford) (Con)]

May we have a debate on the political situation in Bangladesh, in particular to highlight the disappearance of a series of Opposition politicians, including Mr Elias Ali, the former Member of Parliament for Bishwanath in Sylhet, whom I met in Sylhet two weeks ago and who, along with his driver, disappeared on Tuesday evening?

[Sir George Young]

I understand my hon. Friend’s concern. The British high commission in Dhaka is taking this matter up with the appropriate authorities. Every effort must be made to trace Mr Ali and to ensure his well-being. I will pass my hon. Friend’s concern on to my right hon. Friend the Foreign Secretary.

[Jonathan Ashworth (Leicester South) (Lab)]

The Leader of the House is very familiar with the review of children’s cardiac services. I understand that a decision on the unit at Leicester’s Glenfield hospital will be made on 4 July. Naturally, Members on both sides of the House have strong views on the review. Will he consider finding time for a debate before July in the next Session? The House last debated the matter last June. I think that many Members would appreciate the chance to make last-minute representations.

[Sir George Young]

I am, indeed, familiar with that issue. It is a matter that concerns Members on both sides of the House. It will be possible in the new Session to bid for time through the Backbench Business Committee, in Westminster Hall or on the Adjournment. I quite agree that this subject would generate considerable interest on both sides of the House. It is an important matter that deserves further consideration.

[Christopher Pincher (Tamworth) (Con)]

Earlier this week, Belgrave high school in Tamworth received the welcome news that its application to become an academy has been given the go-ahead by the Department for Education, affording its students, who suffer some challenging backgrounds, a real opportunity to succeed. I echo warmly the call of my hon. Friend the Member for Croydon Central (Gavin Barwell) for a debate on the opportunities afforded by academies, focusing particularly on the benefit of vertical integration between primary and secondary academies.

[Sir George Young]

My hon. Friend raises an interesting angle in the academy debate by drawing the House’s attention to the links between primary and secondary education. As I said earlier, GCSE records indicate faster improvement among schools that have become academies than in the rest of the school population. I hope that other schools in his constituency will follow the example of the one to which he has referred and go for academy status, with the benefits and freedoms that go with it.

[Neil Carmichael (Stroud) (Con)]

The Government are rightly promoting the development and marketing of electric cars. In parallel, we need energy supplies that are consistent with our CO₂ objectives. May we have a debate on energy infrastructure and on how we can develop electricity storage systems, because that would lead to technical developments that we could market abroad?

[Sir George Young]

My hon. Friend is right that if we are to hit our targets, we need to develop more effective methods of storing electricity. I understand that storage demonstration projects have been funded through Ofgem and through DECC’s low carbon investment fund. Announcements will be made in the summer about how the Department proposes to support energy storage innovation, which will include the examples to which he has referred.

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

May we have a debate on truancy at primary schools? The latest figures show that almost 400,000 primary school pupils are absent for 15% of the school year or more, which is equivalent to a month out of school. I hope that all Members agree that addressing poor patterns of school attendance early would have major benefits not only for the pupils and families involved, but for the whole of society.

[Sir George Young]

I agree with my hon. Friend. He may have seen Charlie Taylor’s report, which was published on Monday, and the accompanying written ministerial statement, which supported the report and stated which measures would be taken forward. I agree that attendance at school is a key factor in driving up levels of achievement. We need to change the culture whereby it is acceptable regularly to take family holidays during the school year. We also need better statistics on truancy, which was another of the recommendations. I would welcome such a debate, but my hon. Friend may have to contain himself until the new Session.

[Henry Smith (Crawley) (Con)]

Many of my residential and corporate constituents have raised significant concerns with me about delayed and missing post in the Crawley area. Despite a Freedom of Information Act request by the Crawley Observer, Royal Mail has refused to release performance data for the RH10 and RH11 postcodes that cover my constituency. Will my right hon. Friend raise this matter with the Secretary of State for Business, Innovation and Skills? Will he also consider the need for a debate on the transparency of Royal Mail on its performance and customer service?

[Sir George Young]

We take very seriously information about the quality of service. My understanding is that Royal Mail publishes such information every quarter. Of course I will raise with Department for Business, Innovation and Skills Ministers the case of the two postal districts to which my hon. Friend has referred to see whether we can get those specific performance statistics. If they are deficient, I hope that Royal Mail will take the appropriate steps and drive up the quality of service to the level to which my hon. Friend’s constituents are entitled.

[Madam Deputy Speaker (Dawn Primarolo)]

I thank the Leader of the House, the shadow Leader of the House and the 48 Members who were able to participate in business questions.

Finance (No. 4) Bill

Thursday 19th April 2012 Commons Chamber

(Clauses 1, 4, 8, 189 and 209, Schedules 1, 23 and 33, and new Clauses and new Schedules relating to value added tax)

[2nd Allocated Day]

Further considered in Committee

[Dawn Primarolo in the Chair]

[Relevant document: The Thirtieth Report from the Treasury Committee, Budget 2012, HC 1910-I.]

Clause 4

Personal allowances from 2013

13:38

[Rachel Reeves (Leeds West) (Lab)]

I beg to move amendment 65, page 2, line 37, leave out subsection (2).

[The Second Deputy Chairman of Ways and Means (Dawn Primarolo)]

With this it will be convenient to discuss the following:

Amendment 66, page 3, line 5, leave out

‘was born after 5 April 1938 but before 6 April 1948’

and insert

‘is 65 or over at some time in the tax year, but under 75 throughout the tax year.’.

Amendment 67, page 3, line 17, leave out

‘had been born after 5 April 1948’

and insert

‘is under the age of 65 throughout the tax year’.

Amendment 68, page 3, line 19, leave out paragraph (d).

Amendment 69, page 3, line 26, leave out

‘was born before 6 April 1938’

and insert

‘is 75 or over at some time in the tax year.’.

Amendment 70, page 3, line 38, leave out

‘had been born after 5 April 1948’

and insert

‘is under the age of 65 throughout the tax year.’.

Amendment 71, page 3, line 40, leave out paragraph (d).

Amendment 72, page 3, line 42, leave out subsection (5).

Amendment 73, page 3, line 45, leave out sub-paragraph (i).

Amendment 74, page 4, line 2, leave out subsection (7).

Clause stand part.

[Rachel Reeves]

It is a privilege to serve under your chairmanship, Ms Primarolo.

I rise to speak to the amendments and to oppose clause 4, which will freeze age-related allowances for those who are receiving them and abolish them for those who are approaching retirement. I hope that Members from all parts of the Committee will join us in our opposition this afternoon. Defeating the clause would prevent a real-terms increase in tax for millions of older people in this country, which will cost £83 a year for 4.4 million people on modest incomes and as a much as £322 for 360,000 people who will reach the age of 65 next year.

We are seeking to reverse the Government’s freezing and abolition of age-related allowance for three simple reasons: first, that tax increase adds to the financial pressure already felt by older people on modest incomes facing rising costs; secondly, it picks the pockets of pensioners to fund an irresponsible tax cut for millionaires; and thirdly, the way in which it has been introduced adds insult to injury, breaking a promise made by the Chancellor just a year ago and using the language of tax simplification to cover up what is clearly and simply a tax grab.

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

The hon. Lady is expressing opposition to the freezing of the age-related allowance. Did she express the same opposition when the last Chancellor did exactly the same in the Labour Government’s last Budget?

[Rachel Reeves]

This is a permanent freeze, and the allowance is being abolished entirely for people coming up to retirement next year, so it is very different from a one-year freeze.

[Alun Cairns]

Will the hon. Lady give way?

[Rachel Reeves]

I will make some progress.

For the reasons that I have given, pensioners from the National Pensioners Convention have come to Parliament today to lobby MPs to vote against the change. Let us take each issue in turn and consider who will be hit, because there has been some myth making by defenders of the granny tax about how only well-off pensioners will be affected. The truth is, those who will be hit have very modest incomes.

[Harriett Baldwin (West Worcestershire) (Con)]

The hon. Lady refers to the “granny tax”. I know that she, like me, would really like to see older women retiring with the same income as men over time. Does she therefore accept that 60% of the effect of the freezing of the age-related allowance will be on men and 40% on women, so it should not really be referred to as a granny tax?

[Rachel Reeves]

The money involved will not alleviate the pressure on women in retirement. It will all be used to give a tax cut of £40,000 to 14,000 millionaires. The hon. Lady talks about women in retirement, and it was Government Members who voted to increase the state pension age for women with just five or six years’ notice, hitting them by up to £15,000 in lost retirement income. We will not take any lectures from them about the matter.

[Derek Twigg (Halton) (Lab)]

I notice that we have not heard much about fairness or about the big tax cuts being given to millionaires in the interventions by Government Members. Is it not true those retiring next year with personal or occupational pensions of as low as £67 a week could be affected by the change to age-related allowance? The Government are attacking a group of pensioners with modest incomes, which will be a particularly devastating blow in the most deprived areas such as Halton.

[Rachel Reeves]

I know that my hon. Friend sticks up for pensioners in his constituency, unlike Government Members, who want to grab the incomes of pensioners in their constituencies.

My hon. Friend points out the evidence that we have commissioned from the House of Commons Library, which shows that a small personal or occupational pension of just £67 a week, or little more than £3,000 a year, would be enough to put someone in the firing line of the additional tax. People with such pensions are not the privileged few, living a life of luxury in retirement. The measure will hit millions of people who have worked hard in ordinary jobs and managed to set aside just enough to give them a small pension that relieves them of reliance on means-tested benefits and allows them to have some security in retirement.

[Ian Swales (Redcar) (LD)]

Can the hon. Lady tell the Committee how much tax somebody getting an occupational pension of £67 a week would pay under the new arrangements?

[Rachel Reeves]

If they were being taxed at 20%, that would mean tax of about £13 a week on their pension. Such pensioners will be hit hard by the changes.

We know how hard it already is for many people to save enough for a modest pension, so why have the Government picked on pensioners to pay more? As the chief executive of Saga has put it:

“Amid all the talk of tax cuts…the main tax-raising measure”

in the Budget

“consisted of a stealth tax increase on older people who did actually work and save hard for their future.”

Gransnet has warned that

“this tax change offers no incentive to save”,

and the National Association of Pension Funds has stated that it will

“come as a blow to millions of pensioners who have paid in to the tax system throughout their working lives. Pensioners with modest amounts of pension saving stand to be the biggest losers.”

Let us be clear that the change will hit people with small pensions who have made sacrifices to save and are now being penalised for doing the right thing.

13:45

[Brandon Lewis (Great Yarmouth) (Con)]

Putting aside the fact that people on incomes such as my hon. Friend the Member for Redcar (Ian Swales) mentioned would pay zero in tax, which makes the hon. Lady’s argument purely academic at best, is it not true that she is referring to the same group of people who have just had the biggest ever increase in their pension? That is much different from the previous Labour Government’s 75p insult.

[Rachel Reeves]

The people who will be hit by this tax are those who have an income in retirement of between £10,500 and £25,000 a year. They will pay tax at 20% on any income over £10,500 a year. That is why 4.4 million pensioners will lose out by an average of £83 next year. People retiring next year will lose out by up to £322. That is the reality of the change that we will vote on this afternoon.

[Nick Smith (Blaenau Gwent) (Lab)]

I understand that age-related benefits were an idea put forward by Winston Churchill. Does my hon. Friend think that George Osborne knows better than Winston Churchill?

[Rachel Reeves]

Government Members would do well to look to Churchill rather than to their current leaders when deciding how to vote today.

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

Will the hon. Lady give way?

[Rachel Reeves]

I look forward to the hon. Gentleman’s intervention.

[Jacob Rees-Mogg]

Winston Churchill, a very great man, took us back on to the gold standard as Chancellor. If we were to follow every proposal of Winston Churchill’s as Chancellor, we would find it very difficult to run the economy.

[Rachel Reeves]

I thank the hon. Gentleman. His constituents have had a hard time in the past few days. Older people will be hit by the changes to pensioners’ tax allowances, and of course the pasty industry in Cornwall and the south-west will be hit hard, so there is a double hit for his region.

We need to remember the situation that most pensioners face. They do not have ways of making up for a loss of income by going out and finding work. That is what it means to be retired. They are therefore particularly vulnerable to rises in the cost of living and to unanticipated changes in their financial circumstances. The Office of Tax Simplification report notes that the current age-related allowance was

“introduced to reflect potentially higher costs of living of older people.”

That was why Winston Churchill introduced it in 1925. As the OTS has stated:

“Older people can struggle to meet living costs. They are often on a fixed income once they have retired, or perhaps on a declining income in real terms where flat annuities have been purchased”.

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

I understand that one reason why the age-related allowance was originally introduced was the higher cost of heating when people are older. Does my hon. Friend agree that that is particularly important now given the rising cost of fuel, and even more so in parts of the country where the weather is worse, such as the north and Scotland?

[Rachel Reeves]

It has been pretty cold in my constituency in Leeds this winter, as well. My hon. Friend is right to make that point, because people face many extra costs as they get older, such as in heating their home.

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

I am enjoying my hon. Friend’s speech, and she is being extremely generous in allowing hon. Members of all parties to intervene. To continue her point, pensioners now face an increase in the cost of not only gas and electricity, but of a decent, healthy meal that will sustain them. As people get older and more frail, they need to ensure that they eat proper, decent, balanced meals. Costs are going through the roof all the time and constituents such as mine will look at their weekly household bills and be horrified. To add this insult to that injury is simply a disgrace.

[Rachel Reeves]

I thank my hon. Friend for his intervention. Indeed, Citizens Advice said that the change

“has to be considered in terms of the cumulative impact. Fuel prices continue to rise, and that is a key worry; 43% of the people who come to us are worried that they will not be able to meet their fuel bills. We have examples of people coming into our bureaux who do not heat their homes because they are worried about not being able to afford it... This group of people very often have to rely on their savings in order to live in their retirement, and they are getting very low interest on them.”

My hon. Friends have therefore made good points, which represent their constituents’ very real concerns.

Moreover, pensioners have already been hit hard by the Government. The winter fuel allowance has been cut; pensions have been indexed to a lower measure of inflation; the raising of the state pension age for women has been brought forward, and last year’s VAT rise has added £275 to the costs that an average pensioner couple faces. Evidence from the Institute for Fiscal Studies to the Treasury Committee confirms that, as a result of the tax and benefit changes that the Government have implemented, the incomes of pensioner households have fallen by 1.4%, and most have little prospect or opportunity of making up that loss.

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

I have a very simple question: will the hon. Lady reverse the policy on the allowance?

[Rachel Reeves]

We do not know what the economy will look like in three weeks, let alone in three years. The Government’s choices are making our economic prospects worse and worse. In the past year, the Office for Budget Responsibility has had to revise down its forecast for UK growth three times. It is now expected to be a third less than it was a year ago. We will publish our manifesto before the next election, but it will be very different from Government Members’ manifestos because we prioritise hard-working families, not a tax cut of £40,000 for 14,000 millionaires. That is why we will vote against the provision this evening.

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

On the Government’s treatment of pensioners, the hon. Lady mentioned uprating the state pension. She will know that we have introduced a triple lock so that the state pension increases by the higher of 2.5%, CPI or earnings. She will also know that, according to the plans we inherited, pensions would rise in line with earnings. As a consequence of the increases by CPI rather than earnings, the state pension has increased by £127 more a year than it would have done under the plans that we inherited. Does she accept that?

[Rachel Reeves]

Not many Governments would want to take credit for the fact that inflation has reached 5.3%. Pensions have had to rise by just over £5 to compensate for the increase in the cost of living for pensioners. The Government increased VAT and took no action to tackle excessive gas and electricity bills, and that is why inflation is so high for ordinary working families and pensioners.

[Mr Gauke]

I perhaps forlornly hoped that the hon. Lady would concede the point that the state pension has increased more under us than it would have done under the previous Government’s plans, which would not have increased it in line with the rate of inflation.

[Rachel Reeves]

That is like suggesting that if inflation was 10% and the Government had to increase pensions by £10 a week to keep pace, pensioners should celebrate and thank them. Of course they will not thank them because the increase in pensions only keeps pace with the rising cost of living. If the Government want to take credit for record high inflation, be our guest.

[Richard Harrington (Watford) (Con)]

Will the hon. Lady give way?

[Rachel Reeves]

No. Cuts to vital services such as the NHS and to social care and local transport also hit pensioners hard on top of the increases in VAT and the cuts to their pensions.

Many of the worst cuts are still to come. Analysis of the 2010 spending review showed that, on average, pensioner couples would be hit hard by cuts to services, amounting to £1,275 a year or 6% of their household income, while single pensioners stood to lose services worth £1,300 a year or 11% of their income. As we heard from the Treasury Committee yesterday, many pensioners are also paying a price for the Government’s failure to get the economy moving because the Government are relying on the Bank of England to undertake more quantitative easing to prevent the economy from sinking deeper into recession. That means that annuity rates and returns on pensioners’ savings are lower than they would otherwise be.

[Brandon Lewis]

The hon. Lady referred to the increase in the pensioners’ allowance and linked it to inflation. How high would the Labour Government have moved it in the current circumstances of inflation? How would they have paid for that with council tax rises elsewhere?

[Rachel Reeves]

I return to my earlier point: if inflation was 10% and pensioners got a £10 increase in their pension, would Government Members celebrate and say that that was huge largesse for pensioners? It is not; it just keeps pace with the cost of living. The increase in VAT, and the increases in gas and electricity prices, which the Government have done nothing to tackle, and the rise in petrol prices, mean that the cost of living for pensioners and other families has increased enormously because of the Government’s choices.

There is a further hit to pensioners’ incomes, buried in the detail of the Budget documents. This year, an estimated 300,000 pensioners stand to lose their savings credit, while others stand to lose as much as £276 a year as a result of reduced rates of savings credit. Under the Chancellor’s latest plans, the savings credit will be abolished completely, costing more than 100,000 new pensioners as much as £897 a year: another stealth tax that the Chancellor tried to slip past pensioners; another slice taken from the constrained budgets of ordinary families.

[Kelvin Hopkins (Luton North) (Lab)]

I support my hon. Friend’s comments. Rather than speculate about what the next Labour Government will do after the next election—I like to think that Government Members have already conceded defeat—what about the Government’s backing off now and reversing the dreadful decision?

[Rachel Reeves]

I thank my hon. Friend and congratulate him on hosting the National Pensioners Convention in Parliament today. It came to make the very point that my hon. Friend just made, and that pensioners made to us in the Committee Room earlier. Some Government Members would do well to listen to some of the pensioners in their constituencies.

It adds insult to injury for the Prime Minister and other Government Members to tell pensioners that they should be grateful for a rise in the basic state pension that merely matches the rate of inflation. It is not a rise—it simply keeps things level. If Government Members do not know the difference, they should get out into the real world, where the costs of food and fuel are going up and it is getting harder and harder to make ends meet.

[Richard Harrington]

rose—

[Rachel Reeves]

The idea that pensioners have been protected from the squeeze on living standards is simply not true. It is divisive and distorts reality when Government Members try to make that point, and conceals the fact that many older people are under genuine pressure. We should do what we can to help them, not see pensioners as a soft target for stealth taxes, as the Chancellor so clearly does.

[Julie Hilling (Bolton West) (Lab)]

The increase in pensions has not actually kept up with the cost of living, because if the Government had not been so mean as to change to CPI, but had used RPI, pensioners would have an amount of money that kept in touch with the increasing cost of living.

[Rachel Reeves]

I thank my hon. Friend for that intervention. All hon. Members know that the average rate of inflation for pensioners is often very high—higher than it is for ordinary families—because they spend more of their income on gas, electricity and food, the rates of inflation for which are going up at a higher rate.

[Richard Harrington]

rose—

[Fiona O'Donnell (East Lothian) (Lab)]

rose—

[Rachel Reeves]

I believe my hon. Friend wants to intervene.

[Fiona O'Donnell]

In constituencies such as mine, many pensioners live in rural communities without access to public transport, so we need to add into the mix the cost of running a car, which is essential to their quality of life.

14:00

[Rachel Reeves]

My hon. Friend sticks up for pensioners in her constituency, where, as she says, there are many pressures on their costs and standard of living.

In fact, the only people insulated from the Government’s unfair choices and economic failures are the wealthiest. The richest 10% of people over the age of 65 will be wholly untouched by the tax increases that we are debating. Indeed, those with incomes over £150,000, including, we might note, some members of the Cabinet, will benefit from the cut in the 50p rate of tax that we debated yesterday.

[Richard Harrington]

rose—

[Rachel Reeves]

I will give way to the hon. Gentleman.

[Richard Harrington]

I am so extremely grateful to the hon. Lady for giving way—I hope she will forgive my perseverance. Having listened to her argument in some detail, I should like to ask her a question. Principle is very important to her. Does she believe that under-65s should have a lower personal allowance than over-65s as a point of principle?

[Rachel Reeves]

Winston Churchill was right in 1925 when he introduced that measure. People who are retired have fixed incomes, as a result of which there are more pressures on them and they cannot make up the additional changes. That is why the Opposition will vote against the Government’s change. We do not think it is the right priority or the right thing to do at this time, especially because the money is not being used to help young people to get back to work, to help the poorest pensioners or to help families of children who are struggling with the rise in the cost of living. Instead, the money is being used to give a tax cut of £40,000 to 14,000 millionaires. I can tell the hon. Gentleman what my principle is: we should prioritise ordinary families, ordinary pensioners and young people who are out of work, not those on multi-million pound salaries. That is my principle and those are my priorities. I am sorry that Government Members do not share them.

That is the second reason why the Opposition are opposing the tax increase on millions of modest-income pensioners. As my hon. Friend the Member for Pontypridd (Owen Smith) so eloquently expressed on Monday, the measure is unfair and unnecessary when the Government are spending £3 billion on a tax give-away for the richest 1%. Hon. Members will remember that, originally, the Government said that the 50p tax cut would be paid for by a mansion tax and a crackdown on tax avoidance. However, the cut costs 10 times as much as is raised by the new measure on stamp duty—the Chief Secretary’s sorry substitute for a mansion tax—and more than three times as much as is raised in the Budget by reductions in tax avoidance. In fact, cutting tax avoidance should be part of every Budget anyway, and the money raised by measures to tackle tax avoidance in this Budget is less than the average reductions in tax avoidance achieved by Labour’s Budgets. In addition, we have since discovered that the Government’s definition of tax avoidance includes donations to UNICEF, Macmillan, the Royal National Lifeboat Institution and other charities that do fantastic work in our communities. That the Government cannot see the difference between tax avoidance and giving money to worthwhile causes again shows how out of touch they are.

Meanwhile, the single biggest revenue raiser in the Budget is the measure before us. More than £3 billion over the next five years will be raised from the pockets of pensioners with modest incomes. Where does it all go to? Does it go towards paying down the deficit? No. Does it help young people to get back to work? No. Does it help poorer pensioners? No—they have been hit too by VAT rises and service cuts. Instead, the money, which is being taken from those with pensions of just a few thousand pounds a year, is being spent on a tax cut for people for whom this tax grab would have counted as mere small change.

The Government were said to have been surprised by the anger that the measure has aroused, but that again goes to show how out of touch they are with the reality faced by most people, and how far they have strayed from the values and priorities of the British people. It goes to the heart of the problems that the Government face and the problem with their conception of fairness, and the callous arrogance with which they have abandoned the pretence that we are all in it together.

Age UK responded to the Government’s measures by stating:

“we feel it is disappointing that the Budget offered a tax break of at least £10,000 to the very wealthy while penalising many pensioners on fairly modest incomes who are already being squeezed”.

The chief executive of Saga said:

“Over the next five years, pensioners with an income of between £10,500 and £24,000 will be paying an extra £3 billion in tax while richer pensioners are left unaffected.”

The National Pensioners Convention, which I met earlier today, stated:

“We have been inundated by pensioners who are disgusted that those on around £11,000 a year will no longer get additional reductions in their tax…whilst those earning £150,000 or more will see their tax bills reduced. This is seen by many as the last straw…Pensioners feel they are being asked to bail out the super rich…and it’s simply not fair.”

Age UK, Saga, and the National Pensioners Convention have hit the nail on the head. It is just a shame that the Chancellor and the Prime Minister are so blinded by the demands of the super-rich that they fail to see it.

Finally, it is worth recognising that the measure is not the only reason why people are so angry. It is not just the blatant unfairness that has offended people, but the way in which the change was announced. Most people believe that our older generation deserve to be treated with respect and dignity, yet this Government and the Chancellor tried to get away with going back on a previous promise by dressing up a tax grab as a “simplification”. Just one year ago, on page 35 of the 2011 Budget Red Book, people were told:

“For the duration of this Parliament…the age related allowance will be over-indexed”

according to

“CPI and will increase by the equivalent of the…RPI”.

What the Chancellor said then was clear and unmistakeable, but that is another broken promise by the Conservatives and their Liberal Democrat friends. The Institute for Fiscal Studies agrees. It says that the Chancellor

“should have avoided dressing up what is clearly a tax increase as merely a simplification”.

In the same letter from Age UK to the Chancellor that I have quoted, it also states:

“We are concerned that you announced the change to age allowances as a way to simplify the tax system and indeed the Budget Report lists the change under…‘Simplification’... rather than under ‘Personal and Property taxes’”.

The Chancellor also attempted to hide behind the Office of Tax Simplification, but its director has told the Treasury that attempts to use its recommendations as a cover for his tax grab are “not 100% accurate”. The relevant report by the Office of Tax Simplification states clearly:

“we would stress…that the Office of Tax Simplification has not reached any conclusions as to the best way forward with age-related allowances, nor have we formulated detailed recommendations”.

It is all too clear why the Chancellor did not bother to wait for the final OTS report: he was not really interested in simplifying taxation for older people. Rather, his single-minded focus and overriding priority was getting his millionaires’ tax break through, and he was willing to fund it by cutting the incomes of pensioners.

In conclusion, we all know what an embarrassment this Budget has become to Government Members. We know how it has shaken their confidence in the strategic genius of the Chancellor and that many of them have heard from constituents who are anxious about the impact that the measure will have and angry about how the Government have treated people who deserve better.

Therefore, today, the Opposition are glad to be giving Government Members an opportunity to make amends and a chance to dissociate themselves with this disreputable raid on the incomes of older people. They have a choice. Do they stand with the millions of people who have worked hard and saved what they can? Or do they stand with the Chancellor and his friend, the Chief Secretary, who see pensioners as a soft touch ripe for a sneaky tax grab? The Opposition know whose side we are on. We are about to find out whose side Government Members are on.

[Ben Gummer (Ipswich) (Con)]

I am pleased to follow the hon. Member for Leeds West (Rachel Reeves) in this important debate. It is important because it touches on perhaps the greatest challenge facing politicians and representatives in this Chamber. She is a luminary of the new Labour party and one of the stars of her intake, and it is always a pleasure to hear her in the Chamber and on the television. No doubt, at some point, she aspires to high office not only in her party but in government. [Interruption.] There is no punch line. The hon. Lady is no joke. It is important to remember that, at some point, Labour will form a Government. I hope it is not too soon, but it is in the nature of our democracy, and a fine thing, that we swap sides now and again.

[Richard Harrington]

I was interested to hear my hon. Friend’s comments about Labour’s prospects of forming a Government. I listened to the comments about pensions from the hon. Member for Leeds West (Rachel Reeves). Does he think I will be a pensioner by the time Labour forms another Government?

[Ben Gummer]

My hon. Friend is full of vigour and will be going a long time, so I hope not.

The key challenge facing us is the extraordinary rate of demographic change in this country. Between now and 11 minutes past 3, the average age at which people are expected to die in this country will increase by 15 minutes. As a consequence, by 2041, the amount we spend on old-age pensions will have increased from about £80 billion now to £250 billion, even with the changes introduced by my right hon. Friend the Chancellor and his colleagues. Even with the reforms that the Government have initiated, we will deliver to our successors in this place—including the shadow Chief Secretary to the Treasury—a formidable challenge, and not only have we not properly faced up to the challenge but we are not talking properly to the public about it.

I can understand why Labour Members have tabled amendments on VAT and other matters—they can make their political points about the balance in the Budget and the Finance Bill with complete justice—but I am seriously disappointed that they have tabled amendments on this issue, because it is the most modest start to trying to deal with what is a really big and fundamental problem for us all.

[Mark Field (Cities of London and Westminster) (Con)]

My hon. Friend is making a sensible and thoughtful speech and some important points. The hon. Member for Leeds West (Rachel Reeves) prayed in aid changes made by Sir Winston Churchill 87 years ago. However, the numbers qualifying then for any sort of pension, let alone an age-related one, were minuscule compared with the numbers qualifying today and in decades to come.

[Ben Gummer]

My hon. Friend is entirely right. When Sir Winston Churchill served in Lloyd George’s Cabinet and the Liberals introduced the universal pension—one of that Government’s great achievements—a quarter of people never reached pension age. They never got to the point where they could draw down their pension. We are in a completely different place now.

I am not proposing to the Committee that we start now to think about the wholesale and widespread pension reform that is required, but surely we should start by trying to change some of the anomalies, and this anomaly is such a glaringly obvious one. At the moment, Members on both sides of the House, including those of us who represent constituencies with many low-earners—low-earners with families struggling desperately—are telling our constituents to pay a different rate of tax from pensioners, who, only because of their age, qualify for a different allowance.

14:15

[Katy Clark]

If the hon. Gentleman believes that the allowance is such a glaring anomaly, why was there not something about it in his party’s manifesto?

[Ben Gummer]

The hon. Lady asks about the party manifesto. I had hoped to discuss the broader issues and great challenges facing us. Manifestos are, by their nature, broad brush, and this is such a tiny change to the tax system in the grand scheme of what the Treasury has to deal with. It is entirely right that the Government are, bravely, addressing it now. In all honesty, would either party go down to such detail in any future manifesto? It is entirely right that the Government are saying, “This is an anomaly. It is incorrect and unfair, and what is more, it is one of the many anomalies that are unaffordable in the long term.”

[Kelvin Hopkins]

I hear time and again the Government saying that things are unaffordable and raising spectres of vast pensions bills in the future. This is a simple matter of transferring money from one group of people to another—namely, from the rich to the less rich. Were the abolition of the 83p rate by Mrs Thatcher and Geoffrey Howe and of the 60p rate by Nigel Lawson and getting rid of the 15% surcharge on unearned income all anomalies?

[Ben Gummer]

I profoundly respect the hon. Gentleman. He is a torchbearer for a former age in the Labour party, and he should raise that point with his own Front-Bench team. We are clearly not going to agree on it. However, at some point, someone needs to face up to the fact that we will almost double spending on old-age pensions between now and 2040. I shall put that in context: the number of people retiring this year who will be alive in 2041 will be more significant than now. I cannot give the precise figure, but hundreds of thousands of people retiring in the next few years will be alive in 20 or 30 years. We are not only dealing with an intergenerational problem, with a problem between this generation and a generation in two or three generations’ time or with a problem between people in their 20s and those in their 60s or 70s; we are dealing with a problem of those retiring now and to whom we must promise pensions and a decent standard of living in 30 years’ time. The ability to afford that is at the crux of the Government’s reforms, and this proposal is just the start of it.

[Graeme Morrice (Livingston) (Lab)]

My hon. Friend the Member for North Ayrshire and Arran (Katy Clark) asked why, if this was such a wonderful proposal, it was not in the Conservative party’s manifesto. My question is this: if this is such a wonderful proposal, why was it the only one not leaked before the Chancellor’s statement?

[Ben Gummer]

The hon. Gentleman knows that that is not the case. [Interruption.] Well, it isn’t. I was endeavouring to have a wider debate about the importance of the reform in the context of the massive pensions challenge and of trying to pay for the pensions of vulnerable people not just this year but in 10 and 15 years.

[Nadhim Zahawi]

I take my hon. Friend back to Labour’s chances of forming a Government. Does he agree that that requires credibility, and that credibility is built on taking debates such as this one as seriously as he is taking them and addressing these important issues, rather than just jumping on bandwagons, being opportunistic and misleading the nation at the precise time when the nation requires real leadership?

[Ben Gummer]

I thank my hon. Friend for his intervention and for his compliment, because I, too, could be critical of the Government in one respect—[Hon. Members: “ Ah!”] It is not a criticism of the policy. None of us in this place has yet started to be completely straight with people about the enormous scale of the challenge that faces us.

[Sheila Gilmore (Edinburgh East) (Lab)]

rose—

[Ben Gummer]

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

[Sheila Gilmore]

The hon. Gentleman’s discussion about the issue of old people is interesting, but is it not the purpose of this provision not to provide greater pensions—or, perhaps, better social care—but to balance the cut to the 50% tax rate?

[Ben Gummer]

I wish we could deal with this canard. I did not want to be political about this—[Interruption.] No, I tell the hon. Member for Nottingham East (Chris Leslie) that I did not. Five times more revenue is being taken from the wealthiest people in this country as a result of the Budget than from reducing the top rate of tax. That argument has been dealt with and, although it is pity, I suspect that that is why the hon. Member for Leeds West, who is a serious-minded and intellectual member of the Opposition Front-Bench team, realises that the only way she can make an argument about this issue is by trying to shackle it to a false argument about the top rate of tax, to which it has no relation whatever. This is about beginning to reform provision for people who are retiring in our country. If we do not begin to make these small changes, we will not even be in a position to make the changes that will be necessary in future.

[Mark Field]

Will my hon. Friend give way?

[Ben Gummer]

I will give way once more.

[Mark Field]

My hon. Friend was absolutely right when he said earlier that we have collectively been living well beyond our means. That over-consumption by today’s Britons, including today’s pensioners, will have to be paid for by generations to come, and that cannot be justifiable. Given the interventions on him from the Opposition, does he agree that we made it clear before the election in our manifesto that we would maintain intact all the universal benefits—in particular, TV licences, the winter fuel costs and a lot of the travel allowances, along with a significant number of other pension-related benefits—that we have been true to our word and that we will remain so for the rest of this Parliament?

[Ben Gummer]

My hon. Friend represents a seat with a huge personal vote. I was not lucky enough to take over from a Conservative Member of Parliament with a huge personal vote such as his. I was therefore targeted in the last few weeks of the campaign by the Labour party and its union friends, who issued a series of postcards claiming that we would abolish the winter fuel allowance, free TV licences and all those other things. It is a matter of great pride to me that even in coalition, when compromises must be made, those promises, made by my right hon. Friend the Prime Minister, were kept.

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

Will the hon. Gentleman give way?

[Ben Gummer]

If the hon. Gentleman will allow me, I would like—

[Anna Soubry (Broxtowe) (Con)]

Will my hon. Friend give way?

[Ben Gummer]

I am so deeply tempted by my hon. Friend that I will give way to her.

[Anna Soubry]

I am sorry that I had to leave the Chamber for a short period, but I am extremely grateful to my hon. Friend, who is making an important and thoughtful speech. However, I am sure that, like me, he will have received e-mails and letters from pensioners in his constituency who are worried that their real incomes are in some way being cut by this Government. What would he say, not only to the pensioners in his constituency, but to those in mine—and no doubt in many other constituencies—who are worried about their futures?

[Ben Gummer]

My hon. Friend is right in two senses. Everyone is concerned about their standard of living. That is the nature of recovering from this terrible recession, which has many causes. As a Government, we are in the position of having to make very difficult decisions. Again, it is a point of great pride to me that we are being brave enough to make those decisions and to spread the load throughout the entire taxpayer base. It is a matter of extraordinary difficulty, but the group that has been hit least so far by the savings, efficiencies and cuts that the Government have had to make has been pensioners, because they have benefited from the triple lock and a whole series of other interventions by the Government, and because they are not recipients of other benefits. As a result, this measure is probably the most modest incursion into pensioner income.

[Fabian Hamilton (Leeds North East) (Lab)]

Modest to you.

[Katy Clark]

Will the hon. Gentleman give way?

[Ben Gummer]

I will, but before I do, let me say in response to that intervention that there are many pensioners in my constituency who are on very low incomes. They are suffering considerably at the moment. Most of them do not have incomes anywhere close to the current allowance. What we are trying to do—in improving their lot through the triple lock guarantee, as well as protecting the pension credit, the winter fuel payments, the cold weather payments and the free TV licences—is protect the benefits of those who are least able to look after themselves.

My hon. Friend the Member for Broxtowe (Anna Soubry) is right in another sense. It is not just today’s vulnerable pensioners whom we must look after and seek to help, but the vulnerable pensioners in 20 and 30 years’ time. If we do not make changes now and try to protect the state’s income to some degree, we will not be in a position even to afford the benefits and pensions that we promise people now, let alone to anything like that degree in 20 or 30 years’ time, and that will be a problem for both parties.

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

Obviously the proposals that we are talking about today do not apply to the very poorest pensioners or the better-off pensioners. However, let me ask the hon. Gentleman a simple question: what incentive will there be for people to save for their retirement?

[Ben Gummer]

The hon. Lady is entirely right. One of the terrifying things that comes out of all public opinion surveys is the lack of savings and even the lack of people expecting to save for their old age. I hope that the reforms brought in by the Minister responsible for pensions—the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb)—for auto-enrolment and encouraging savings will be the beginning of a fully funded pensions system.

However, that is for another debate. I am aware of the strictures regarding Committee time and the fact that other Members wish to speak. I would therefore like to make one final comment. Lord Turner’s 2005 report, which was commissioned by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), said that

“unless new government initiatives can make a major difference to behaviour, the present voluntary system of pension savings, combined with the present state system, is unlikely to deliver adequate pension provision.”

Moreover, he went on to say that the only means of achieving that would be through cross-party consensus. If we are to be serious about providing decent pensions, not only to people today, but to people in five, 10 and 15 years’ time—that includes people retiring this year and next year, who will be in their 80s and 90s when we will really be starting to pick up the bill—all parties must, between us, come to some sort of consensus about the difficult decisions that need to be made.

[Mark Durkan (Foyle) (SDLP)]

In that context, does the hon. Gentleman agree that if we are to encourage confidence among people out there that they can commit to planning and saving for their pensions, no Government should ever engage in an easy drive-by hit on pensioners?

[Ben Gummer]

The hon. Gentleman would be right, were the changes in the Bill modest to that degree. They represent a freeze for those who are already receiving the allowance, which will be merged into the basic rate allowance which will then move up towards it. In that regard, the taper could not be more gentle.

It is entirely right to say that the Government need to sketch out a very long-term plan for pensions, and I know that the Pensions Minister is beginning that process, but it will need the support, input and intellectual vigour of Members such as the hon. Member for Leeds West if it is to be a success in the long term. Otherwise, we and our successors will be unable to pay the bill, and pensioners will be freezing and starving as a result. The bill will be unaffordable and we will be fighting to pay it against a global economy in which we are unable to compete. That is a terrifying prospect, and I hope that we can begin to deal with it now by supporting the Government in what I hope is the first of many of the changes that need to be made in order to protect the living standards, the decency and the dignity of those people who have worked hard all the way through their lives.

[Several hon. Members]

rose—

[The Temporary Chair (Mr Bone)]

Order. I remind right hon. and hon. Members that, because of the programme motion, this debate has to finish at 4.38, and that the Minister has to reply to it. Short speeches would therefore be appreciated.

14:30

[Dr Whiteford]

I will try to keep my remarks short. I have listened to today’s debate with great interest. First and foremost, it is important that we take proper account of the long-term erosion of pensioners’ incomes over the past three decades, since the link between earnings and the state pension was broken, and of the more recent pressures in the wake of the financial crisis.

The changes to age-related allowances that we are discussing will not affect the poorest pensioners or those who are comfortably off. They will, however, affect the 40% of pensioners who have modest incomes. Those people have saved for their retirement, and 4.4 million older people will be worse off as a result of the changes.

[Katy Clark]

I agree with everything that the hon. Lady has said so far. Does she agree that a subject that we do not discuss often enough is that of pensioners who rely on their savings? Low interest rates mean that they are currently getting a far lower income from their savings than they had envisaged.

[Dr Whiteford]

I absolutely agree. In fact, that was one of the points that I wanted to make, because that subject has been eclipsed in the debate about the changes.

The Government have made great play of the recent increases to the state pension, and seem to suggest that they will somehow offset the changes to the tax allowances. As the hon. Member for Leeds West (Rachel Reeves) pointed out, however, we must remember that that is simply an inflationary rise. It will only keep pace with prices; it is not an increase. It is only a small step in the right direction towards restoring pensioners’ incomes to a level that most of us would recognise as providing a decent standard of living.

I have mentioned in the House before that the way in which pensioners experience inflation can differ markedly from the way in which the general population as a whole experiences it. One of the most obvious and significant examples of that relates to heating and domestic fuel costs. Retired people are more likely to have to heat their homes during the day, while the rest of us enjoy the benefit of our workplace heating systems. Many pensioners also find it harder to keep warm because of their age and the fact that they are not moving about so much. So any inflation in the cost of energy is felt disproportionately by pensioners, and nowhere more so than in those parts of these islands that experience consistently colder weather.

Last year, we saw sharp and dramatic increases in home energy costs, which played a big part in driving inflation up to over 5%. Energy prices have come down since that peak, but I heard on the news this morning that some economic commentators believe that inflation this year is going to be well above the Bank of England forecasts that the Government are using, and that we could experience inflation of over 3% this year as well. The welcome increases in the state pension have only kept it in line with inflation and might not keep it in line with inflation as it is experienced by people of pensionable age. That is why the Government’s argument that the changes to age-related tax allowances are compensated for by the increases in the state pension is somewhat spurious. In real terms, this tax grab squeezes the incomes of pensioners on modest incomes.

It is also all too easy to forget that pensioners have already paid a heavy price for the financial crisis. Those pensioners affected by these new changes to age-related allowances are in many cases the same people who saw the value of their savings and investments plummet in the wake of the financial crisis. Since then, they have had to contend with record low interest rates, coupled with high inflation. As the Treasury Committee reminded us earlier this week, quantitative easing, whatever its intended consequences, has had some very nasty side effects for those reaching retirement age and looking to buy an annuity in the last few years.

[Fiona O'Donnell]

The hon. Lady, like me, has many pensioners in her constituency who are on modest incomes and thought they could afford to live out their retirement and be able to cope with running a car, higher food prices and all the other added costs of rural living. Does she agree that this change is going to wreck the plans of many of those pensioners?

[Dr Whiteford]

I agree entirely. It is about not only rural and transport costs, but increases in VAT, cuts in fuel allowances and so forth. All these things have put a real squeeze on people living on fixed incomes, who have little opportunity to find money from any other source. These have not been easy financial times for those on fixed incomes, who have been the forgotten victims of the financial crisis. It is not fair to say that pensioners have got off lightly so far from the public spending squeeze—quite the reverse. In considering changes to age-related allowances, we need to understand that the granny tax will tighten the screw on people who have already had significantly to tighten their belts in recent times.

Those affected by this measure are all living on below-average incomes. Most will have paid tax throughout their working lives, and most thought they were doing the responsible thing by saving for their retirement. Crucially, they do not have the opportunity to find alternative sources of income. They are on fixed incomes and are living off savings.

[Stephen Williams (Bristol West) (LD)]

Will the hon. Lady give way?

[Dr Whiteford]

I was about to wind up, but I would be delighted to take an intervention.

[Stephen Williams]

The hon. Lady just said that this group of people are on below-average incomes. That might be true across the broad span of the population, which includes people in work on enormous salaries, but for pensioners, surely they are on way-above-average incomes.

[Dr Whiteford]

The hon. Member for Leeds West pointed out that nobody on an income of more than £25,500 a year will be affected by this measure. Frankly, with average earnings above that, I do think that most of those pensioners are living in what most people would consider to be quite modest circumstances, particularly when, as I have already argued, they have to pay much greater heating costs. Their lifestyles are not without particular burdens that they have to bear, and they do not have a chance to improve them.

[David Mowat (Warrington South) (Con)]

rose—

[Dr Whiteford]

I shall not take another intervention; I am trying to conclude my remarks.

The Government had a chance to regain the confidence of pensioners after a long hiatus and much erosion of the position of pensioners over a number of decades, but they have squandered that opportunity. They are sneaking through these proposals in the fine print, claiming that they are for simplification. That undermines whatever confidence pensioners had left in them. On the streets of my constituency, people have been angry to see that what has been given with one hand as a modest increase in the state pension has been taken away from their occupational pension with the other hand.

We are leaving pensioners without any real incentive to save. We are not going to tackle the challenges of our changing demographics with that kind of attitude because people will question whether it is worth their while putting money aside for their retirement. I do not think that is a way forward, and I hope the Government will step back from this very regressive measure.

[Margot James (Stourbridge) (Con)]

I welcome the Budget, which has been a Budget for enterprise and growth, and I would defend the reduction in the top rate of tax, which seems to be the Opposition’s main bone of contention. I think older people have a stake in the future of our economy just as great as everybody else. There is no doubt in my mind that the introduction of that 50p top rate of tax by the last Government—right in the last throes of the last Government—was extremely damaging to our country’s image as a place of business, growth and prosperity. I am glad that the Chancellor has taken the brave step of reversing it in part.

[Katy Clark]

The hon. Lady will be aware that the income of the very rich has increased by 20% over the last two years since her Government came to power. Politics is, of course, a question of choices. Does she not think that our choice should be to try to get money from those people rather than from pensioners on modest incomes?

[Margot James]

I thank the hon. Lady for her intervention. I notice that she cited the last two years over which the incomes of the very wealthy have increased, but she might equally well have quoted the last 12 years of the Labour Government, during which I believe top earners did extremely well. It is a question of choices, and I feel that the Chancellor has made the right choice. In fact, it is a set of choices: it is not just a choice between one thing and another. I think it essential for this country not to be out of kilter with the rest of the world in terms of its top rate of income tax.

[Several hon. Members]

rose—

[Margot James]

I wanted to begin by setting the scene and explaining why I thought that the Budget represented a step forward, but as the debate is actually about the age-related allowance, I will make a bit of progress on that subject now.

[Mark Field]

rose—

[Margot James]

However, I will give way to my hon. Friend.

[Mark Field]

I thank my hon. Friend. I entirely agree with what she said about the importance of promoting enterprise.

It was suggested earlier that 14,000 millionaires would benefit from the tax reduction. I am not sure how Labour Members arrived at that figure, but surely the notion that all our problems could somehow be solved if the rich paid their way is the nub of the issue. Given the relative scarcity of rich people in comparison with the vast majority of the electorate and as a proportion of the United Kingdom’s population of over 60 million, it is an absolute myth that we could solve all our problems by imposing heavy taxes on bankers and other rich people.

[Margot James]

I thank my hon. Friend for his intervention, which prompts me to remind the House that the top 1% of wealthy people in this country account for 30% of tax revenues. As my hon. Friend has pointed out, they constitute a very small segment of the population, and I think that if they are required to contribute any more than a third of the total, many will choose to go overseas where they will be taxed less.

[Several hon. Members]

rose—

[Margot James]

I want to make some progress on the main subject of the debate, which is the freezing of tax allowances, but first let me make a couple of other points. Labour Members did not mention that the other thing that the Budget has rightly done is take many people out of tax altogether by increasing tax allowances. I believe that that has benefited up to 24 million.

All this must be seen in the context of deficit reduction. There have been exchanges across the Chamber about parties’ manifestos. I stood on a manifesto that was all about getting some sense back into the public finances and reducing the outrageous deficit that was bequeathed to the current Government. The Chancellor’s central strategy to deal with that deficit involves 80% of spending cuts and 20% of revenue raising. Given that the Opposition oppose virtually all the spending cuts, would reduce VAT, and are proposing not to freeze older people’s allowances, we can only conclude that they are not serious about reducing the deficit, and in that regard they are grossly out of step with public opinion.

[Fiona O'Donnell]

Perhaps the hon. Lady will make the progress to which she referred and will begin to deal with the issue that represents the substance of today’s debate. May I ask her whether she made representations to the Chancellor before the Budget, asking him to freeze the age-related allowance?

[Margot James]

I did not make representations to the Chancellor on a matter as technical as the one that we are discussing. Having dealt with that point, I will now proceed to discuss the freezing of older people’s allowances.

I consider the term “granny tax”, coined by the media and exploited by the Labour party, to be very pejorative. As was pointed out by my hon. Friend the Member for West Worcestershire (Harriett Baldwin), it is also very inaccurate, as 60% of those who will be subject to the freeze are men. Moreover, this is not a new tax, although some sections of the media presented it as such. I do not see how the freezing of an allowance can possibly constitute a new tax.

It is unrealistic to suppose that older people should be immune from the need to contribute to reducing the deficit. My hon. Friend the Member for Ipswich (Ben Gummer) made that point very eloquently. Let me add a statistic of my own: the number of people aged 65 and over is expected to rise by 65% in the next 25 years to 16.4 million. Some of the measures that were introduced so many decades ago to the benefit of older people simply cannot be sustained in the current period of rapid demographic change.

14:45

[Robert Flello]

I would argue that pensioners are not at all immune to the effects of the Government’s policies, whether in terms of their cost of living or their access to the NHS, and almost all the pensioners I speak to also argue that. As a result of the allowance freeze, pensioners are paying more because their allowances are not increasing in line with inflation. They are being hit with a tax, therefore, and what really sticks in their craw is that they are being asked to pay this extra money at a time when it appears to them that millionaires are paying less.

[Margot James]

I thank the hon. Gentleman for his comments, but I should not take any more interventions as other Members wish to speak.

[Mark Field]

Will my hon. Friend give way?

[Margot James]

Yes, but for the final time.

[Mark Field]

It cannot be bad that a U-turn should come so quickly. Seriously, however, I wanted to make the point that there are some very poor pensioners in my constituency—it is more socially mixed than many colleagues might imagine—and they are suffering greatly. However, the message I get from many of my pensioner constituents is that they worry for their grandchildren. They worry about their opportunities and about the difficulties they will face in getting on the housing ladder and in having the quality of life that their grandparents perhaps took for granted. Many of my pensioner constituents understand my hon. Friend’s point that the burden of getting the deficit down must be shared across the generations.

[Margot James]

My hon. Friend has, in part, responded to the point made by the hon. Member for Stoke-on-Trent South (Robert Flello), and I was going to say that some 5 million older people will not be affected by this measure. We can split hairs on this issue, but I accept that the measure does amount to an additional payment. However, although the allowance freeze results in an increase in tax payable, it does so only by an average of £84 a year. I accept that that is not nothing, but it is a relatively small sum. The measure is raising so much money for the Exchequer by dint of the fact that so many people are in receipt of state pensions. The pain, as it were, can therefore be shared by many, and the resulting amount per person is very small. I apologise for the fact that I shall not take any more interventions, but so many other Members still want to speak.

To address the other point made by the hon. Member for Stoke-on-Trent South, the Government have a good record in protecting people on pensions. We have restored the earnings link. The Labour party had 13 years in which to restore the link, and Barbara Castle called for that every year until her death. We have done it. We have also secured it with the triple lock.

The hon. Member for Leeds West (Rachel Reeves) was ungenerous in arguing that we appeared to be proud of the inflation rate. If she had remained in the Chamber, I would have told her that that inflation has largely been driven by increased oil and commodity prices, which Governments have no control over. It is to the credit of this Government that they were brave enough to say, “We will increase the state pension by either 2.5%, the rate of inflation or the rate of earnings, whichever is the greater.”

[Alison McGovern (Wirral South) (Lab)]

rose—

[Margot James]

I am sorry, but I will not take any more interventions.

As a result of that Government pledge, there will be no cash losers from this allowance freeze. We have protected universal benefits, with the single exception of not renewing the temporary increase of £100 in the winter fuel payments. We have protected all the other universal benefits, however, as we promised to do. Some 600,000 of the poorest pensioners have received a warm home discount of £120 extra to help with their fuel bills. We have also frozen council tax for two years running. Council tax has been a bone of contention among older people, many of whom have been hit hard by increases in it over the past decade. We have also protected, and increased slightly, the budget for the NHS. As we all know, older people account for more of that expenditure than any other group and they will benefit disproportionately from the NHS budget increase.

I have already made the point that freezing this allowance will entail a cost of, on average, £84 a year. I accept that that is not a derisory amount for someone living on an income of just over £10,000 a year. However, 5 million pensioners will not be affected by this measure. In fact, the Joseph Rowntree Foundation, an organisation that Labour Members sometimes cite, has said that the media coverage has lost all perspective on this matter, stating that

“you would think it’s doomsday for older people…I’m not sure. I think we’re losing perspective on phasing out the Age-Related Allowances”.

It makes a number of good arguments as to why it takes that view.

In conclusion, I must say that I have received very few critical letters on this subject from pensioners. The vast majority of older people in my constituency are more concerned with the prospects for their grandchildren; the average age of a new home buyer is now 38. They might not have read “The Pinch” by my right hon. Friend the Minister for Universities and Science, which was published two years ago, but he pointed out, among many other things, that those in the generation born after 1970 are the first not to be able to look forward to a better standard of living than their parents. That point is felt keenly by many older people in my constituency. Although they cannot easily increase their income, they accept that their grandchildren are facing a different future from the one they faced. Unlike the Labour party, they know that the alternative to facing down this deficit, with everyone making a contribution to that strategy, is the further impoverishment of their grandchildren, and that is not a price that they are willing to pay.

[Graeme Morrice]

I am conscious of the time, Mr Bone, so I will keep my speech short. May I start by congratulating my hon. Friend the Member for Leeds West (Rachel Reeves) on her excellent introductory speech? What she said clearly reflects the views of Labour Members.

The Chancellor’s granny tax is certainly the aspect of the Budget that has caused the most anger among my constituents. As we now know, the Chancellor’s plans, which were buried in the Budget smallprint and described as a “tax simplification”, will mean that 4.4 million pensioners who pay income tax will lose an average of £83 per year next April, with people who turn 65 next year set to lose the most, at up to £322. This measure will affect pensioners on modest incomes of between £10,500 and nearly £30,000, with pensioners on incomes above the higher threshold being unaffected by the change. The pensioners in my constituency I have spoken to about the granny tax are really angry about the Chancellor’s decision to hit them in this way. It seems obvious to them that it cannot be right that while putting up taxes for pensioners, the Government are giving the rich a tax cut. My constituents simply cannot understand why, after they have worked hard all their lives, the Chancellor is now targeting those on low and middle incomes in retirement in order to fund a tax cut for millionaires. As one constituent put it to me recently,

“I sincerely hope you and your colleagues do not support this granny tax and you fight for all our pensioners who worked all our lives to help this country. I am 71 years old and thought I had seen it all, but this is the pits, so do your job and kick this out.”

[Harriett Baldwin]

Has the hon. Gentleman shown his constituents the article in the Financial Times headed: “When is a tax not a tax? Answer: when it’s ‘the granny tax’?

The article says:

“let’s calmly consider what has actually happened…In fact, grannies have retained their cherished position within the UK tax system: they will continue to be allowed more tax-free income than other members of the population—and for at least another three years”.

Has he shared that article with his constituents?

[Graeme Morrice]

I must confess that I have not shared that article from the Financial Times with my constituents, who, like me, are more avid readers of the West Lothian Courier. As we know, the increase in inflation, high fuel, energy and food prices and the VAT increase up to 20% have eroded any increases given to pensioners by the Government.

I am delighted to be able to tell the constituent whom I have just quoted and all the others who have contacted me about this issue that we on the Labour side of the Committee are trying our best to do exactly that today. In other words, we will do our job and kick this proposal out.

[Alun Cairns]

I am grateful to the hon. Gentleman for his generosity in giving way. There is an inconsistency between his actions and his standpoint at the last Budget brought in by the previous Chancellor, who froze the age allowance and the personal allowance. The hon. Gentleman is talking about the effect on pensioners on modest incomes, but at least on this occasion there was a significant increase in the personal allowance. When the previous Chancellor froze the age allowance, he also froze the personal allowance, so that tax affected people on lower incomes. Does the hon. Gentleman not accept that logically that position is inconsistent?

[Graeme Morrice]

I am grateful to the hon. Gentleman for his contribution, but I thought we were talking about the proposals in this Bill.

Although we are clear that the granny tax is not right and not fair, the coalition parties have been desperate to try to play down the significant impact of the measure. As we are aware, this is a £3 billion tax raid on our nation’s pensioners. Indeed, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) actually went as far as to insist that there is no granny tax at all. That will no doubt come as a great surprise to the 4.4 million pensioners who will be worse off as a result of the proposal, but it is typical of the increasingly desperate attempts by Liberal Democrats to distance themselves in the media from unpopular Government policies, before voting with the Tories to get those same measures through Parliament.

[Ian Swales]

Will the hon. Gentleman give way?

[Graeme Morrice]

I notice that there are two Lib Dems in the Chamber today, so I will give way to one of them.

[Ian Swales]

The hon. Gentleman has obviously discussed the fairness of this measure with his pensioner constituents. Has he discussed with his other constituents the fact that when his Government left office, people on the minimum wage and hard-working parents were paying £603 a year more tax than their grandparents on the same income? Does he think that that is fair and has he discussed it with his other constituents?

[Graeme Morrice]

I refer the hon. Gentleman to my comment a few moments ago: we are talking about the proposals contained within this Bill.

Whereas some brave souls in the coalition parties were prepared yesterday to rebel over pasties and static caravans, we wait to see if any of them will speak up for millions of pensioners and join us in opposing this squeeze on pensioners’ incomes. I suspect not, and the message today on the granny tax will be clear: only the Opposition will stand up for pensioners and working people in these tough times.

15:00

[Brandon Lewis]

I supported the Budget a couple of weeks ago and I still do now. It is important to look at it in its entirety, and at how it fits in with other things that are going on. At the moment, an increase in personal allowance is being put in place; it will rise by £1,100 in April 2013, taking it to £9,205 in total. That is the largest real personal tax cut for the median earner in more than a decade, from which 24 million people will benefit. It will give basic rate taxpayers a real cash gain. The Government are taking 2 million low-paid workers out of tax altogether.

Let me put that increase in local context as the Member of Parliament for Great Yarmouth. It lifts an additional 75,000 people in the east of England out of income tax altogether. That will have a dramatic impact on many low earners in my constituency, which is the 54th-most deprived local authority out of 326. The average earnings in Great Yarmouth are £21,900 per annum, compared with the national average of £26,100.

[Mr Iain McKenzie (Inverclyde) (Lab)]

Does the hon. Gentleman agree that to benefit from this increase in the tax threshold one first needs to have a job? That is what most of my constituents are asking for—a job.

[Brandon Lewis]

I thank the hon. Gentleman for that intervention, which gives me a chance to highlight the good news we had this week regarding the number of people in employment. In Great Yarmouth we saw not only an increase in employment this month, which is very welcome, but an increase in the number of young people in employment. That is a testament to the work the Government are doing, and also, I hope, a sign of the improvements that are coming. It is also a testament to the opportunities put in place through the previous Budget and the work of the Department for Work and Pensions, particularly on work experience and the Work programme, which is also having an impact.

In Great Yarmouth, we also have a particularly high number of part-time and seasonal workers due to the nature of the constituency and its tourism industry. The change in personal allowance is a huge help to that sector of the local work force. It puts extra money into the pockets of hard-working families across my constituency.

[Fiona O'Donnell]

I am sure that the hon. Gentleman is going to talk about the age allowance at any moment. Has he considered its impact on his local economy? That money was not being spent on skiing trips or foreign holidays; it is money that would, in the main, be spent in the local economy.

[Brandon Lewis]

The hon. Lady has just made a very good argument for cutting taxes and increasing the personal allowance, which is exactly what this Government are doing. The reason why I have chosen to talk about particular issues is that I agree with something my hon. Friend the Member for Stourbridge (Margot James) said a moment ago. Pensioners in my constituency are often concerned about the future for their family—their children and their grandchildren. The work this Government have done has put in place changes, enterprise zones and opportunities for people to increase jobs, as we have seen this month, so there is a real opportunity for people in future.

We must also take into account something else. In Great Yarmouth, a prediction listed by our local health teams in the past few years is that our pensioner group will increase by 35% in the next 15 years. That is a huge increase. I fully agree with my hon. Friend the Member for Ipswich (Ben Gummer) that we have to ensure that this country can provide for people in their pensionable years in future. As we face such an increase in the number of such people, the Government must take the decisions that mean we can provide a good and fair opportunity for the future of all pensioners. That is why I also appreciate the Government’s work to move towards a fair and straight flat-rate pension for pensioners in future, on which I congratulate them. The work done in the last two Budgets will make that possible. It will mean that our economy can move forward and that we can make fair and proper provision for people in various age groups.

As the personal allowance for all people, including under-65s who work hard, increases, there will be an impact on pensioners in future. The changes announced in the Budget that simplify the tax system make it clear that there will eventually be a flat, fair and generous rate of allowance for all people. As Opposition Members have admitted, that means that nobody has a cash loss at all. In fact, pensioners under this Government had the biggest increase in their basic state pension ever seen. More than 5 million of the poorest pensioners are unaffected thanks to the triple lock. All pensioners are therefore better off and will receive the biggest ever increase of £5.30 a week. In 2013, they will receive £130 more than they would have received under the previous Government’s plans. Pensioners will respect this Government for that and appreciate the Government’s credibility for putting together a solid economic base to allow it to happen.

That is why the measure should be looked at as a whole, particularly for an area such as Great Yarmouth, where we have a high proportion of pensioners. We must make sure that we can provide for them properly and fairly in the future, and also that the economy can create jobs for their families and increase our economic growth. Being in government is about making tough decisions. Those must be the right decisions, and that is what being in government is about. As we heard today from those on the Opposition Front Bench, opposition is often about opportunism, not about making right or proper decisions.

[Alison McGovern]

I shall make a few remarks about an important impact of the changes, which is at risk of going unrecognised. I think of that as the cluster impact of the changes. Our country does not have the same kind of people distributed uniformly across the United Kingdom. People of different ages cluster in different areas.

I am deeply proud to represent the Wirral, not least because the area has a higher proportion of older people. It is a great strength of our area. They bring a large amount of expertise and stability, and we should not talk about people living longer as though it was a negative thing. I benefited from having grandparents who lived longer than they might have expected, and I cherished each of those relationships.

With that clustering of older people comes a responsibility to pay attention to the issues that affect them. Even if that was not the right thing to do in and of itself, our local economy in Wirral is highly dependent on the income of pensioners. We have many small independent businesses whose relationship with their customers is important. They have regulars of many years’ standing, and many of those people are retired and on a fixed income, so even if it was not the case that we should care about the needs of older people, the employment of the rest of us in the Wirral and the vitality of some of the local shops is related to the income of older people.

Before I deal with the clustering of the local economy and the attention that Ministers must pay to how our economy works in practice, I want to make a few points about longevity and the increase in life expectancy that we are seeing. We must recognise that this is not a uniform phenomenon. Not everybody in our country is living longer in the same way. There is a social justice element. Poverty is still a pretty strong determinant of the length of people’s life. People such as those in my constituency who have worked in manufacturing might not expect to live as long as those in relatively more affluent parts of the country. My constituency is very mixed, and there are people there who may not be able to expect to live longer as the average increases. That average masks different expectations.

When Treasury Ministers make decisions about, for example, age-related allowances, I ask them to find out how those will impact on different parts of the country and different groups of people. The impact will not be uniform. We are not all uniformly living longer in exactly the same way. The NHS is a wonderful thing, but we still have a heck of a long way to go on public health to make sure that poverty does not limit people’s life expectancy, as it has done in the past and still does.

[Ben Gummer]

The hon. Lady makes a sensible point. One of the big challenges that faces us in increasing the state pension age and the point at which people retire is trying to understand the different requirements of people who have done heavy manual labour throughout their life or for any part of their life and have had different physical pressures put upon them, and those who have not. But that does not remove the point that most people who are affected by the tax allowance freeze are relatively wealthy pensioners—most of them. Therefore, although this is not a precise instrument, I am not sure that her point addresses exactly what the Minister seeks to do.

[Alison McGovern]

I shall return to my constituents and tell them that a moment of cross-party agreement broke out over the problem that the hon. Gentleman and I agree exists, where we must rightly consider the state pension age, but that that decision will affect certain people in a completely different way from that suggested by any average figure. I hope that the hon. Gentleman will allow me to respond to his second point by saying that I will remark later on whom the proposals affect and their relative position.

Before making my substantive point about how the economy clusters and how these proposals will affect us, I want to answer the point about inflation made by the hon. Member for Stourbridge (Margot James), who has unfortunately just left the Chamber. She sought to make a case against my hon. Friend the Member for Leeds West (Rachel Reeves), saying that the Government were doing pensioners a great service by increasing their pension on inflation, which has come about because of events beyond our shores, and the Government are just trying to respond to the oil price, and so on. I have no doubt that world events have had an impact on inflation in this country. Thankfully, I do not have to work out which events have an impact on inflation and report that to the Chancellor. That is the job of the Governor of the Bank of England. I have read the Governor’s letters on inflation and he remarks on the impact of the Government’s VAT rise on inflation. If the hon. Lady were here, I would tell her that it is not entirely true to say that the inflation that we face that has caused the Government to be so proud of their cost of living rise for pensioners is entirely beyond our control. It is in part at least down to the Government’s action.

I want now to think about the cumulative impact of this policy and a couple of others on the part of the world that I represent, but also on similar local economies. Some of the Government’s decisions have resulted in a kind of conflagration that means that particular localities face a really difficult economic future.

[Charlie Elphicke (Dover) (Con)]

The hon. Lady makes much of the fact that age and longevity vary quite a lot throughout the country. She has also made a connection between shorter life span and deprivation. How many of her constituents with a short or shorter than average life span will be affected adversely by the age-related allowance, because it is over £10,000?

[Alison McGovern]

The hon. Gentleman seems to be saying that if you are poor enough to have a short life span, you are not rich enough to be affected by the change, which is an interesting hypothesis. It is a testable proposition, but it seems entirely wide of the mark.

[Lyn Brown (West Ham) (Lab)]

You are too generous.

[Alison McGovern]

I always try to be generous. In fact, I thought that we were agreeing across the House that the argument about increasing life expectancy cannot be made in such a broad-brush way, but perhaps the situation was not as happy as I had thought it was.

15:15

I would like Treasury Ministers to stop and think about the cumulative impact of their policies on particular localities. In this place, and in politics generally, we often tend to focus on one particular change or alteration, but people who live in the Wirral and other parts of the country are worried about their economic future and that of their towns and of our country, so the focus on one aspect in isolation can sometimes be unhelpful. If a place has any level of worklessness and its local authority has had its area-based grant removed and is facing severe cuts, there will be a knock-on impact on its ability to provide social care. If a place such as the Wirral had previously seen leadership, investment and resources expended by a regional development agency, it will have lost the body that was driving forward its economy.

The Wirral has a high proportion of older people, but some parts of the country, such as parts of London, have high levels of worklessness and a high proportion of younger people who have lost out as a result of the removal of the education maintenance allowance and other changes. That means that particular localities are having money taken out of their economies from different directions as a result of Government policy. We cannot shy away from looking at the impact that that has on the possibility of developing those areas. When any company seeking to invest looks at whether it should put money into the Wirral or any other area, it will first do the postcode analysis of the resources that local people have, so it makes it harder and harder to get investment when the Government, by different means over time, seem to be taking money out of particular localities.

[David Mowat]

The hon. Lady is making a powerful point about the cumulative impact of policies on particular regions of the country. Her constituency is close to mine. Will she concede that in the last year of the previous Government the north-south divide, measured in terms of gross value added per head, reached its maximum level in the past 20 years? That is something we have to fix in this Parliament, not continue.

[Alison McGovern]

I am so pleased that the hon. Gentleman chose to mention the north-south divide, because it gives me the opportunity to discuss a concept that trips off the tongue so easily but is actually extremely unhelpful in tackling the kind of local economic development that I am asking Treasury Ministers to consider when making decisions. He will know as well as I do that although the north-west, which we both represent, has significant deprivation, it also has some pretty wealthy areas—the Chancellor himself has the honour of representing one such area. The north-south divide, as a concept, masks a whole lot of other inequalities. Again, I mention the inequalities in London. It cannot be said that there is a simple, straightforward north-south divide in this country affecting every locality in the same way; we should have a much more fine-grained analysis. There are places in the north that are extremely successful and places in the south that really need help.

Before I try the patience of the Chair any further, I will return to the importance of age-related allowances.

[Charlie Elphicke]

Will the hon. Lady give way?

[Alison McGovern]

I will give way, and I feel sure that the hon. Gentleman will say what he thinks the Government ought to do to ensure that the cumulative impact of their policies, and their policy on age-related allowances specifically, does not hold back local economic development in parts of Wirral.

[Charlie Elphicke]

I thank the hon. Lady for giving way again; she is being extraordinarily generous in taking interventions. She is making a characteristically extraordinarily thoughtful speech. It is a matter of great concern that over the past decade and a half, the gap between the least well-off and the richest has grown. There is now more inequality. Will it not help to reduce the inequality between pensioners to increase the basic state pension by the biggest amount ever—£5.30, which is a big jump—and to ensure that the richest pensioners do not get such a high benefit, but do not lose out either, by capping the allowance?

[Alison McGovern]

That was a long intervention. The hon. Gentleman said that inequality grew under the previous Government. I point him to analysis done, if I recall correctly, by the Institute for Fiscal Studies at the time of the 2010 general election, which showed that the incomes of the lowest on the income scale increased significantly under the previous Government. We can have a discussion about how one deals with the inequality that is created when the incomes of people who earn a great deal of money rise, but I fear that it would not be within the scope of this debate. I am sure that we will discuss that on another occasion.

I will conclude my remarks by talking about the squeezed middle, because it is people on what one would think of as middle incomes who are affected by age-related allowances. In its frequently asked questions section on this policy, the BBC states that

“it is a ‘middle-income’ range of 40% of pensioners who will not get what they might have expected from the tax system.”

[Lyn Brown]

Is my hon. Friend not astonished by the figure of 40%? If one listens to the Conservative party trying to explain away this awful attack on our pensioners, it does not seem like it is talking about 40% of the pensioners in this country. A very high number of pensioners will be affected by this change.

[Alison McGovern]

That point was very well made. I am never surprised by the ability of people to brush over things. We have heard this afternoon that this is a minor technical change. As I said, I am quoting the BBC itself—[Laughter.] I know that Conservative Members are not always the greatest fans of the BBC, but it states that

“it is a ‘middle-income’ range of 40% of pensioners who will not get what they might have expected from the tax system.”

[Harriett Baldwin]

Much as we all love and admire the BBC, not everything that it puts on its website to do with benefit changes is accurate. I am sure that the hon. Lady would want to find a more reliable source.

[Alison McGovern]

Would the hon. Lady like to intervene on me again, then, and say what proportion of pensioners will be affected, if she thinks the BBC is unreliable?

[Harriett Baldwin]

A BBC website had a wholly inaccurate story yesterday about the changes to employment and support allowance, so it is not an accurate source. That is the point I am trying to make.

[Alison McGovern]

Is the hon. Lady therefore saying that the proportion is not 40%? She indicates that she does not know—that is fine.

[Ben Gummer]

Whatever the proportion of pensioners affected, whether it is 10%, 20%, 30% or 40%, does the hon. Lady think it is right that they currently get a different tax rate from low-earning families who are struggling hard but for some reason seem to be discriminated against just because they are not over 65?

[Alison McGovern]

The hon. Gentleman, too, is welcome to intervene on me again and say what he thinks the proportion is if he thinks the BBC is wrong. He said it might be 10% or 20%. No? Okay.

[Rachel Reeves]

Does my hon. Friend agree that it is disappointing that hon. Members will vote on the matter today without having any idea what proportion of older people it will affect? She is correct to say that 40% of pensioners will be affected, and I am pleased that Opposition Members know their facts, unlike Government Members.

[Alison McGovern]

The great Bill Shankly once said that he was always surprised that people were surprised at surprises. In one sense it is surprising that Government Members seem to question the BBC and yet cannot intervene to tell me that it is wrong. As the BBC states, those affected will be

“a ‘middle-income’ range of…pensioners who will not get what they might have expected from the tax system.”

That is a very important point. Of course we are all concerned about the impact of the recession on the poorest, but there is another factor to consider. People on middle incomes, who might have had certain expectations about how they could live their life, are now being disappointed and do not know what is coming in the future.

People feel that one of the big problems with the Budget is that certain matters that were brushed over and not explained fully have subsequently come out as being pretty serious. The insecurity facing people at the moment, especially those in the middle of the income distribution, is really quite serious, not least because it is not very good for people’s quality of life if they are constantly worrying about what next year might bring financially. How they interact in the economy and their actions as consumers are also deeply affected by that insecurity.

One of the biggest challenges for Treasury Ministers to address is how communities such as I have mentioned in the Wirral and other parts of the country, where time after time Government announcements have chipped away at the money in the local economy, can deal with the insecurity facing people. The Budget will have a significant impact on people’s quality of life.

[Fiona O'Donnell]

My hon. Friend is making an excellent contribution. Does she agree that when we meet older people in our constituencies, it is inspiring to hear how concerned they are about young people’s future? However, what they see in the Government’s taking money from 40% of pensioners is not an effort to invest in creating jobs for young people. What really hurts is the fact that that money is being used to give a tax break to millionaires.

[Alison McGovern]

My hon. Friend is right. Of course, older people are worried about the next generation’s future, and they do not believe that the Government are making the right move, not least for the reasons that she gave.

I hope that Treasury Ministers will reconsider the proposal and their approach to local economic development. Economies are geographically centred, and businesses currently face, as I have said time and again, a chipping away of resources in their area. That makes growth extremely hard and I hope that Ministers will consider that.

15:30

[Graham Evans (Weaver Vale) (Con)]

I pay tribute to my hon. Friends the Members for Stourbridge (Margot James) and for Ipswich (Ben Gummer), who have eloquently made many of the points that I intended to make. I do not want to repeat them.

First and foremost, the Bill makes it clear that the Government are sticking to the plan to deal with the mess left by Labour and eliminate the structural deficit. That is essential for market confidence in the future of our economy and wealth creation.

Secondly, the Bill is clearly on the side of working people and pensioners. It is pro-business and helps people who want to do better for themselves and their families. It cuts tax for 24 million ordinary families across the country, including 2.5 million in the north-west. Thanks to the Budget, most basic rate taxpayers will keep an extra £220 of their salary every year. That represents the largest real personal tax cut for people on average earnings in more than a decade. I appreciate that £220 might not seem like that much to the Labour leader, sat in his multi-million pound home in Primrose Hill, but for people struggling to get by in Cheshire, £220 is a real help. The Bill therefore helps working people.

[Mark Garnier (Wyre Forest) (Con)]

Does my hon. Friend agree that over the period of the changes to the tax-free allowance, the total contribution will be more than £500 for the average individual?

[Graham Evans]

I am most grateful to my hon. Friend for making that good point, with which I agree. It is a good Budget for working people on basic rate tax.

[Sheila Gilmore]

Does the hon. Gentleman accept that, particularly for families with children, the decreases in tax credits and other benefits more than outweigh the increase in the personal allowance?

[Graham Evans]

As a father of three young children, I realise that we are all in this together, and we need to make those sacrifices. The Government’s maximum benefit cap of £26,000 is all to do with that.

[Brandon Lewis]

Following on from the intervention about growth and families, since the Budget one company in Great Yarmouth has made an acquisition and an investment of hundreds of millions of pounds that will create more jobs. Another company, Seajacks, has received investment from a Japanese company of hundreds of millions of pounds, which will allow expansion and create more jobs, which will help those families who need that money and families of pensioners. Does my hon. Friend agree that that sort of work in the Budget, which facilitates such growth, will move our country forward and ensure that we get out of the mess that we inherited from the previous Government?

[Graham Evans]

Absolutely; I am most grateful to my hon. Friend for that contribution. At the end of the day, the Budget tells the world that this country is open for business because private sector investment and wealth creation through businesses such as those that my hon. Friend mentioned are critical to the success of the whole nation, not just young people and hard-working families, but pensioners.

Thanks to measures such as the clamp-down on tax loopholes, the very rich will pay more. There is an ideological divide: the Labour party wants the rich to pay symbolically higher rates of tax; the Budget ensures that the rich actually pay more tax. Her Majesty’s Revenue and Customs and the independent Office for Budget Responsibility agree that the 50% rate raises next to nothing. Indeed, having a higher income tax rate than communist China indirectly reduces tax revenues as it fundamentally undermines the competitiveness of the UK economy, discouraging inward investment and risking a brain drain of our brightest talent.

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

The hon. Gentleman’s comparison with communist China is completely spurious when we look at what remains of a western capitalist economy, but does he accept that it is widely agreed, including by the OBR, that the calculations on the amount raised by the reduction of the 50p rate to 45p are highly speculative?

[Graham Evans]

The hon. Lady makes a valuable point. I have huge respect for her and for everything she has done on child poverty, but if the 50% tax rate was so important to right hon. and hon. Members of the Opposition, why did the Labour Government introduce it only a month before a general election? Why did they not introduce it in 1997, 1998, 1999 or any of those 13 years? They left it until their last month.

[Brandon Lewis]

Bearing in mind what the hon. Member for Stretford and Urmston (Kate Green) said, was my hon. Friend as surprised as I was yesterday when we voted on a Labour new clause that would have cut the rate to 40%?

[Graham Evans]

My hon. Friend makes a good point, which the Prime Minister made yesterday at the Dispatch Box.

[David Mowat]

A number of Labour Members have mentioned bravery in respect of Government Members and some Budget measures. I was not a Member of the House before the last election, but perhaps Opposition Members who were could tell us whether they lobbied the Chancellor for a 45% or a 50% tax rate during the 12 years of the Labour Government, in which the disparity between rich and poor in this country rose to the highest level ever.

[Graham Evans]

I am grateful to my hon. Friend for making that point on the disparity between rich and poor under the Labour Government.

I accept the point made by the hon. Member for Stretford and Urmston (Kate Green), but bringing the UK’s top rate of tax in line with other international competitors such as Italy, France and Germany, and cutting corporation tax to the lowest level in the G7, will send out a powerful message that enterprise and aspiration are valued in this country. In the spirit of the Leader of the Opposition’s recent Occupy-style hyperbole, I want the 1% to come and occupy and therefore pay tax and create jobs in the UK.

[Graeme Morrice]

The hon. Gentleman said a few moments ago that reducing the top rate from 50p to 45p raises next to nothing. We had a discourse on this in Committee yesterday, and in Prime Minister’s questions, when the Prime Minister said something similar to what the hon. Gentleman says. However, in fact, the official HMRC book confirms that the loss to the Treasury will be up to £3 billion. Should we not use that money to finance the deficit and avoid having to make draconian cuts on our pensioners?

[Graham Evans]

I am not sure about those figures, but I would go back to my original point: if the 50% tax were so important to the hon. Gentleman and his colleagues, why did Labour not introduce it 13 years ago?

[Stephen Williams]

Perhaps I can help my hon. Friend with his rhetorical question. Apart from Mr Williams in the Chair, the Minister and me, and the delightful Labour Whip, the hon. Member for West Ham (Lyn Brown), everyone in the Chamber happens to be from the 2010 intake and probably did not witness members of the Labour Government cheering when they produced tax cuts for the super-rich—they reduced their capital gains and income taxes while at the same time raising tax for the poorest by abolishing the 10p rate. Therefore, in fact, the pressure was all in the opposite direction.

[Graham Evans]

I am grateful for the hon. Gentleman’s astuteness in recognising that most hon. Members in the Chamber are relatively new. He raises a good point, but I want to go back to the one made by the hon. Member for Livingston (Graeme Morrice). My hon. Friend the Member for Stourbridge made the point that the top 1% richest people in the country now contribute 30% of tax to the UK Exchequer. In 1976, when Denis Healey, the famous Labour Chancellor, said he would squeeze the rich until the pips squeak, the top 1% richest people in the country contributed only 11%. So the 1% now contribute significantly more. I would be interested to hear how much more the hon. Gentleman feels they should contribute.

The Bill contains a raft of additional measures, some of which have been mentioned, to promote growth, especially in the north of England. There are far too many to list but I will point out a few that as a northern Member I especially welcome. Enterprise loans to help young people to set up and grow their own businesses are a great idea to foster ambition and creativity among the next generation. I firmly believe that what matters is not where someone comes from or went to school but where they are going, and there is no better way for young people to get on than starting up their own business, working for themselves, employing other people, growing that business and contributing to wealth creation.

The introduction of an above-the-line research and development tax credit is a simple but important move. It will help British businesses to stay competitive in the long run and send out the message that we back innovation. I am fortunate to have Daresbury science and innovation campus in my constituency. It is an internationally outstanding campus with more than 100 outstanding start-up businesses. I hope that they will be the Googles, Amazons and Microsofts of the future which are born in this country.

There are also excellent measures to help make the UK the technology capital of Europe, including a new £100 million fund to support investment in new university research facilities; £60 million of investment in the UK centre for aerodynamics; the allocation of £100 million for ultra-fast broadband in 10 of our biggest cities, including Manchester; £50 million to fund ultra-fast broadband in 10 smaller cities; and the extension of mobile coverage to 60,000 rural homes along 10 key roads.

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

On a point of order, Mr Williams. I thought we were having a debate on the granny tax rather than on Second Reading of the whole Finance Bill.

[The Temporary Chair (Hywel Williams)]

That is a very good point.

[Graham Evans]

Thank you, Mr Williams. I say to the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) that, as I alluded earlier, many of these points have been raised by other hon. Members on both sides of the House. I will soon bring my speech to an end. I hope he will forgive me.

There is even more support coming business’s way in my neck of the woods with £4.3 million extra for Cheshire and Warrington local enterprise partnerships. In addition, the Budget confirms a further £130 million for investment in the northern hub rail project, which will work well alongside High Speed 2. Furthermore, the new city deals, which will decentralise power and bring even more investment directly up to Manchester and Liverpool, are excellent news for those great cities and my constituents who commute to them in huge numbers each morning.

[Lyn Brown]

Will the hon. Gentleman give way?

[Graham Evans]

I have given away several times. I am bringing my speech to a conclusion.

Finally, I welcome the Chancellor’s announcement that people will now receive a personal tax statement detailing exactly how much tax they have paid and what it has been spent on by the Government. This is a great move for transparency. I know that Labour are nervous about what will happen when people see, in black and white, how much of their taxes go on paying interest on the last Government’s debt.

This is an excellent Bill. It is a radical and reforming Bill. It comes from a Government firmly on the side of business, working people and pensioners, and it tells the world that Britain is open for business.

[Katy Clark]

Thank you, Mr Williams, for giving me the opportunity to follow on from that Second Reading speech by the hon. Member for Weaver Vale (Graham Evans). I will resist the temptation of talking about the Budget because I had that opportunity in Monday’s Second Reading debate.

[Lyn Brown]

Does my hon. Friend think that the hon. Gentleman was unwilling to discuss age-related taxation because he thought the policy indefensible?

[Katy Clark]

I think that many Government Members must feel ashamed of this policy, particularly given that it was not in the Conservative party’s manifesto. Many people who voted for the Conservatives, particularly pensioners, will be disappointed that they have introduced this policy.

We have heard numerous comments from Government Members giving the impression that the policy would affect super-rich pensioners, but, in reality, pensioners on modest incomes will be affected. It is pensioners on incomes between £10,500 and £29,400 who will be affected by the change. I do not think that anyone in this House can really believe that these are rich people; rather, we are talking about people on modest or middle incomes.

15:45

[Alun Cairns]

Does the hon. Lady accept that when the last Chancellor froze the age allowance and the personal allowance at the same time, pensioners on much lower incomes were affected?

[Katy Clark]

That was done as part of a range of measures. We have been talking about a package of measures today, and what we know is that pensioners will be disproportionately affected by the range of measures that this Government are steamrollering through. I will return to that later, but the hon. Gentleman’s point also highlights the fact that the changes proposed at that time treated everybody, of all ages, in the same way. In this debate we are trying to focus on the impact on pensioners of the freeze in what is an age-related benefit. We have heard a number of contributions that have highlighted how pensioners are struggling as a result of many of the Government’s policies, as well as the economic situation we are in, which the Government are not trying to alleviate.

My hon. Friend the Member for Leeds West (Rachel Reeves) put this debate in the bigger picture by highlighting the fact that the £3 billion that the Government will save as a result of the proposed change will be used to help some of the richest people in the country. The big picture is that the richest in this country are getting richer, at a time when the living standards of those on modest or low incomes are going down. We have heard a number of attacks on the last Labour Government in this debate, but the reality is that the figures show that the living standards of those on low, modest or middle incomes went up. There was also an increase in the living standards of the wealthiest in the country, but we are now seeing the living standards of ordinary people—people on low or modest incomes—plummeting, while at the same time we see huge and escalating increases in the incomes of rich individuals and many corporations.

[Mr McKenzie]

We hear much from Government Members about the message that this Budget is sending the world—that Britain is open for business, and so on. What message does my hon. Friend think the Budget is sending to our pensioners up and down the country, and particularly those on incomes that they have worked hard for, by setting money aside and preparing for their pensions?

[Katy Clark]

The word “dignity” has been used a number of times in this debate. It is an important word, particularly given the proposed change, which has been put forward at short notice. We have had debates about pensioner income over many years in this place. We have heard a number of proposals, from parties in all parts of the House, that would change the financial position of those reaching retirement. However, a common theme has been the importance of giving as much notice as possible of any change, particularly when dealing with people’s incomes in retirement, so that people can make the changes necessary to cope with the changing world.

One of the problems with the proposed change, which will come into effect in 2013-14, is that it represents not a minor or technical change, as many Government Members have said, but quite a substantial drop in income at short notice for people on modest or medium incomes. My hon. Friend the Member for Livingston (Graeme Morrice) highlighted the impact on those who turn 65 in 2013-14, who could lose £323 a year, which represents a significant amount, not a technical change. Therefore, to answer my hon. Friend the Member for Inverclyde (Mr McKenzie), people in those income brackets will be very disappointed by the change. That is one reason I have highlighted the fact that the measure was not in the manifesto. If the Government think that it is an important part of their long-term pension reform, it should have been in the manifesto. It should have been consulted on and thought through, and a great deal more notice should have been given to the individuals affected.

[Charlie Elphicke]

A key concern of mine is to understand why there should be a higher personal allowance for senior citizens than for hard-pressed families who are struggling to get by. Why does the hon. Lady think that that is justified?

[Katy Clark]

I mentioned this in an intervention. At the time of the allowance’s introduction, a number of reasons were given, one of which was pensioners’ higher heating costs. A full explanation was given during those debates of the higher and additional costs that are associated with retirement. Those higher costs of living have a disproportionate impact on pensioners. In the debates on pensions that we have had over the past few months, a great deal has been said about the higher costs that pensioners face, and about the possibility of having a different form of indexation for pensions, given that pensioners tend to have different living costs from the rest of the population.

[Karen Bradley (Staffordshire Moorlands) (Con)]

I have listened carefully to the hon. Lady’s point about pensioners’ higher living costs, but does she not accept that allowances such as the winter fuel allowance reflect the Government’s acknowledgement of their different costs? A young mum at home with her baby, who would also need to heat her home, would not get that allowance.

[Katy Clark]

Many pensioners, and many among the general population, are disappointed that the Government have not lived up to their election promises on that allowance.

The point that I was making is that pensioners need more time to adjust. I welcome the increase in the personal allowance—I believe that there should be higher personal allowances for everyone—but if the Government are going ahead with this particular kind of proposal, they should give people many years’ notice so that they can prepare for the changes. Given the situation that pensions are now in, which I will go into in more detail if I have time, this is the wrong time to be clobbering pensioners in this way.

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

Are we not in this situation partly because of the failure of reform over the past 30 years? Despite the fact that people are living longer and longer, nothing has been done. We have now abolished the compulsory retirement age, which will enable many older people to carry on working and earning more income. Why was that not done under the previous Government?

[Katy Clark]

The hon. Lady is attempting to rewrite history. She will know that the previous Labour Government brought in a whole range of reforms to take account of the increase in the living age. My hon. Friend the Member for Wirral South (Alison McGovern) highlighted the fact that that increase is far from uniform, owing to health inequalities. Life expectancy has not increased so much among people on lower incomes and from lower socio-economic groups, for example.

[Ian Swales]

The hon. Lady mentions the need to give notice of the changes. Does she know how much notice was given of the freezing of the age-related allowance in 2010-11?

[Katy Clark]

Government Members keep trying to return to that point. As I have said, the freeze applied to all allowances, and it is not comparable to what we are debating. This is a specific debate about long-term Government policy towards pensioners and the long-term cumulative effect that this change will have.

As I say, this is the wrong time to come forward with changes of this nature. We heard a well-informed contribution from the hon. Member for Banff and Buchan (Dr Whiteford) on the situation faced by pensioners who rely on private savings. I suspect that many of us as constituency MPs have had a considerable number of representations from individuals who have planned their pension and retirement savings over many years on the assumption that higher rates of interest would apply, enabling them to live off the savings they had made over a long period. I very much hope that in 2013, when these changes come into force, the economic situation will be different, but I suspect that those pensioners will be in a similar position. That is another powerful reason why now is an incredibly bad time to make changes of this kind. In my view, they should have been introduced with far greater notice.

The Government should know that pensioners are being disproportionately affected by the policies they are pursuing. We hear a great deal from Government Members about their ambitious deficit reduction plan—so far, of course, we have only seen the deficit increase. What we are seeing locally, and I suspect they will be seeing it, too—[Interruption.] Government Members are well aware that they are borrowing more and that the deficit is going up. In their constituencies as well as mine, however, local people will be experiencing the start of draconian cuts in public services, which will have and are already having a disproportionate effect on those in retirement. Even before the current economic difficulties, we were all aware of the struggle councils were having in trying to provide the social services required for our changing demographic and our ageing population.

[Mark Garnier]

The hon. Lady really must get the point about the deficit right. The deficit has been reduced from more than £150 billion when this Government first came to power to, I think, £132 billion this year. She may be getting confused between deficit and debt, and Government debt is going up, but it is going up because we have such catastrophic public finances as a result of the previous Government.

[Katy Clark]

The hon. Gentleman is well aware that borrowing is going up. As I was saying, despite the fact that the Government are failing and have consistently failed to meet their own targets, the reality is that the cuts in public spending they have already made—and they propose more for the coming years—are having a disproportionate effect on the pensioner community.

[Stephen Williams]

Will the hon. Lady give way?

[Katy Clark]

I hope to come to a conclusion shortly, but I will give way for the last time.

[Stephen Williams]

The hon. Lady has twice said that pensioners are disproportionately affected by the collection of measures the Government are introducing to reduce the deficit. May I quote what Paul Johnson, the director of the Institute for Fiscal Studies, said about this particular measure? He said:

“Despite this morning’s headlines, this looks like a relatively modest tax increase on a group hitherto well sheltered from tax and benefit changes. From this Budget we calculate that pensioners will lose on average one quarter of one per cent of their income in 2014”.

How does she square that—the Opposition often like quoting the IFS—with pensioners being disproportionately affected by what the Government are doing?

[Katy Clark]

I think that the hon. Gentleman’s constituents will be very interested by his complacent approach. I suspect that he is well aware of the impact that the Government’s cuts are having on his constituents as well as mine, and well aware of the pain that his constituents are suffering. I am sure that he is also aware that pensioners rely disproportionately on social services and the public sector, and that the forthcoming cuts will make life particularly difficult for them.

16:00

A number of Government Members have tried to set the young against the old by suggesting that young people resent any benefit that pensioners receive. Throughout my life, I have observed exactly the opposite. I believe that young, middle-aged and elderly people think it important for us to value pensioners, to try to give them certainty, and to do what we can to ensure that they enjoy a reasonable standard of living. The Government will make pensioners’ lives more difficult at very short notice if they proceed with this measure, and I hope that they will decide not to do so.

[Nigel Mills (Amber Valley) (Con)]

It is a pleasure to speak in this debate, in which there has been a wide range of contributions. We have had a rerun of the Budget, Second Reading and most of yesterday’s debate. It would seem unreasonable for me not to make a wide-ranging contribution on this topic as well.

[Lyn Brown]

Will the hon. Gentleman be steering wide of the granny tax because he is ashamed of the policy of those on his Front Bench?

[Nigel Mills]

No, I will happily discuss the granny tax. I feel no shame about my Government’s policies. Unlike Opposition Members, I am not trying to airbrush out most of the last 12 years of history and pretend that all those disasters never happened. I am happy to address what the Government are doing.

We need to put the position in context. In the financial year that has just ended we were still spending £126 billion more than the tax revenue that was raised, and we expect to spend more than £90 billion more than tax revenue in the current tax year. That is not a healthy financial situation, and it is not a desirable position. We do not have enough money to go around doing many things that we would like to do, no matter how useful or socially valuable. The global financial situation is very difficult, and we must make difficult decisions. During the election campaign, Government Members told potential constituents “This will be a difficult Parliament. We will have to make cuts, not because we do not think the things we are cutting are good and not because we would not prefer to leave them as they are, but because we must try to sort out the horrible mess that exists.”

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

Did the hon. Gentleman say to his constituents “Elect me, and we will introduce a granny tax to fund a tax cut of £40,000 for 14,000 millionaires”?

[Nigel Mills]

Obviously I did not say that, because I would have been wrong if I had, but I did say that no section of the population would be spared the pain caused by our sorting out the mess that we would have to deal with. I would also have said that I considered the 50p or, more accurately, 52p tax rate an invidious measure which had been devised as a political trap, that it was a terrible tax policy, and that it would probably raise very little money.

The two independent studies that support the Budget have shown that the cost of lowering the rate to 45p is about £100 million a year. The saving from the so-called granny tax is approximately 10 times the size of that. If anything in the Budget is being funded by the granny tax, it is the reduction in personal allowances for the low earners in society.

[Charlie Elphicke]

Does my hon. Friend recall the former Labour Prime Minister Tony Blair saying back in 1997, “Elect us and we will destroy the private pensions system on which you rely for your retirement with a £150 billion impost”? I do not recall anything of that nature appearing in the Labour party’s manifesto.

[Nigel Mills]

I think my hon. Friend is suggesting that we should view the issue in the round—the issue, that is, of how we can encourage people to fund their own retirement and achieve the decent level of income that they want in a way that is not unaffordable for the taxpayer.

[Mr McKenzie]

I suspect that at the last election the hon. Gentleman did not tell his constituents that he would impose a granny tax on them, but that he did tell them that if the Conservatives were elected they would be a fair Government. Is it fair to impose this granny tax while also giving a tax benefit to millionaires? Will he go back to his constituents and tell them that this is a fair Government, therefore?

[Nigel Mills]

I certainly did say to my constituents that we would be a fair Government. I support fair tax measures. My hon. Friend the Member for Bristol West (Stephen Williams) quoted the IFS saying the granny tax was a

“a relatively modest tax increase on a group hitherto well sheltered from tax and benefit changes.”

While Opposition Members may not wish to believe the Government’s pronouncements, or even those of the Office for Budget Responsibility or the Office of Tax Simplification, perhaps they will believe those of the IFS.

We are not in a happy situation. I do not think any of us are happy about the types of Budget we are going to need to have throughout this Parliament and even perhaps most of the next one. There will have to be a series of measures on both taxation and spending that are going to hurt large parts of the population, while we try to tackle the deficit, which still amounted to £126 billion last year.

[Kate Green]

Something interesting and important was said a few moments ago: it is important that we design a system that encourages people to save and to look after themselves to a degree in retirement, and which rewards them for doing so. Does the hon. Gentleman agree that one of the problems with the granny tax is that people who have been able to make modest savings into small pension pots for their retirement, and who therefore perhaps now have an income of £12,000 or £13,000 a year, are seeing the effort they made to save completely wiped away? Is that not an injustice that is of particular concern if the Government want to incentivise saving for retirement?

[Nigel Mills]

I accept that that is an issue in respect of the granny tax proposal, but I suspect that the £5 billion tax raid which has been referred to and a whole series of other measures that have discouraged saving will have far more serious impacts. I am sure the hon. Lady would join me in welcoming the Government’s proposal to introduce the flat-rate individual state pension of, I think, £140 per individual, as that will help address the problem she mentioned.

[Charlie Elphicke]

Does my hon. Friend agree that the previous intervention was a real cheek? The party of the hon. Member for Stretford and Urmston (Kate Green) destroyed our pension system and raided our pension funds, and it also destroyed thrift by introducing means testing into the pensions system, thereby totally disincentivising any form or saving and personal responsibility whatever.

[Nigel Mills]

I wholeheartedly agree with all those sentiments.

[Rachel Reeves]

If the hon. Gentleman is such a strong advocate of saving, will he join me in expressing disappointment about the fact that this Government have abolished the savings gateway and the baby bond, and have watered down automatic enrolment so that it will be introduced at a later date, and for people earning higher incomes than envisaged under the last Labour Government?

[Nigel Mills]

The hon. Lady is tempting me to make an even more broad-ranging speech than I had intended, and if I were to talk about such matters, I suspect I might be in danger of being ruled out of order. Let me repeat that there are things that would be nice to have but that are unaffordable in the current situation. Difficult decisions have had to be taken and spending has had to be targeted where it is most needed.

Returning to the topic of the granny tax, I do not feel guilt—that is the wrong word—but I do strongly believe that we need to simplify our tax system. Setting up the OTS is a great measure that this Government have taken, and it has performed the tasks given to it incredibly well. Those of us who advocate tax simplification have to accept that whenever we try to simplify tax, it is likely that some people will win and others will lose out. At a time of budget constraint, there is no way of softening the blow on those who will be losers, so we are left with a choice between muddling on as we are, with a ridiculously complicated and clunky tax system, or trying to simplify it in the hope that in the long run we will end up with a far better system.

[Sheila Gilmore]

rose—

[Nigel Mills]

I have given way many times, so I shall not do so again.

I am not sure that the Government have quite gone down the model line by picking up on the key points made in the OTS report on pensioner taxation. However, if we consider the tax system for pensioners—with higher personal allowances for those over 65 and those over 75, the tapering or claw-back of money depending on how much income they have, as well as all the other different allowances—we can see that the situation is incredibly confusing.

[Elizabeth Truss]

Does my hon. Friend agree that one of the things we need to do at the moment is encourage employers to take on more staff? If we have a system such as the Chancellor proposes in the long term and is certainly looking at, whereby national insurance and tax are simplified, it will be much easier for employers to process those expenses and to take on new staff, and that will really help to get the economy going.

[Nigel Mills]

I entirely agree about a simplified tax system, and if we could have found a way of merging income tax and national insurance, taking away one complexity, that would have been a great step forward. The tax regime for pensioners—people in retirement—is far too complicated and we need to find a way of simplifying it.

[Fiona O'Donnell]

rose—

[Nigel Mills]

Not at the moment. I am sure that all hon. Members have seen pensioners in their surgeries who have suddenly been landed with a huge tax bill that they were not expecting because PAYE had not been deducted from a private pension or because they had different income levels from those they were expecting. All of a sudden these people are facing a bill of a £1,000 or more that they literally cannot afford, and through no fault of their own. So the whole spirit of trying to simplify the tax position for pensioners is exactly the right way forward. This measure is not the end of that; it will be the start of trying to get to a place where everyone can understand what their correct tax position will be and will not have to fill in myriad tax returns. People have to claim this age-related allowance, and that is slightly unusual. Normally, people expect their personal allowance to be an automatic thing, but people have to write to claim this, and that has always struck me as a strange anomaly.

The direction we are trying to take is clearly the right one. This measure is not something that any of us would have wanted to do, and I feel sympathy for all those pensioners, including my parents, who will lose money as a result of it. This is one of the many issues about which we do not just get grief from our constituents; we get grief about it from our own families every time we see them. I have to try to explain to my family why they have to put up with this pain. When we have got the personal allowance up to £10,000, the actual value of these increased allowances over that level will have been greatly reduced compared with the £3,000 difference that I believe the figure was at the start of this Parliament.

I do not think that anyone in this House is saying that as the basic personal allowance is rightly hiked up to £10,000, there is any way we can afford to hike the pension one up by the same amount—all anyone was ever expecting was for it to go up by some measure of inflation. As that benefit was to be so reduced by the end of this Parliament, we have to wonder whether or not the actual benefit to people would have been worth all the complexity, and all the hassle of maintaining these things and the delivery cost.

So I say to the Government that simplifying tax is right. This measure is one of those in the box marked, “Necessary, but unpleasant and not what we wanted to do”. We would all much rather find ways of giving our pensioners more income, but I am convinced that this is one of those things that we just have to do to take our tax system in the right direction and try to fix the deficit. However, I encourage the Government to examine all the other things in the Office of Tax Simplification’s report on tax and pensions and try to introduce some of them too, so that we get a fully developed and balanced reform, rather than just this start.

[Several hon. Members]

rose—

[The Temporary Chair (Hywel Williams)]

Order. I intend to call the Minister at 4.23 pm, so I ask hon. Members to keep their contributions short.

[Sheila Gilmore]

I am now totally baffled, because the hon. Member for Amber Valley (Nigel Mills) returned to the simplification issue, but what we heard earlier, when he perhaps was not in the Chamber, was an impassioned ex post facto rationalisation for this change given by the hon. Member for Ipswich (Ben Gummer) and, to a lesser extent, by the hon. Member for Stourbridge (Margot James). They sought to assure us that this really was not about simplification, and that it was all part of a master plan to deal with the problems of an ageing population and make the pensions system better for people. So I am now baffled as to which it is. Is it about tax simplification only or is it about a very thoughtful plan, which had not previously been mentioned? This is where I was also puzzled by what the hon. Member for Ipswich said, because nothing of what he said was said by the Chancellor; no obvious rationale on those terms was given by the Chancellor when he introduced this measure in his Budget speech, as he slipped it in as being “simplification”.

This is not part of dealing with the problem of an ageing population; there are other ways of doing that. If the money raised was to be used to help with pensions, it would be a different matter. If it were to be used to help people in my constituency who are struggling with increased care costs and who are not getting assistance with care because they do not meet the extremely high thresholds that are now being imposed, we would have to listen to the suggestion. However, the provision is about finding some extra money to fund the big tax cut that has been given to people with high incomes.

16:15

[Richard Harrington]

I am trying to follow the hon. Lady’s rationale and that of her colleagues about this change in the pension arrangements. Their argument is that this money is being used to fund wealthy people through the reduction from 50p to 45p, but would it not be just as logical to say that it is being used to fund the big increase in personal allowances, which benefits everybody?

[Sheila Gilmore]

I think it is important to see this in the context of the cut in the 50p rate.

I am also concerned about some of the attempts today to counterpose and, as usual, level down. It is fascinating. We heard earlier that if we were going to increase the allowances for young people and working people, it was not fair that older people who were already retired should have a higher threshold. Why do the Government always want to level down? Why do they feel, essentially, that they have to pit one group against another rather than saying that the unfairness lies in the high tax levels for working families? Let us not forget that many of those families have not benefited from the rise in the tax threshold because of the changes to tax credits.

Some of the apparently quite small measures that the Government are introducing are illogical. We keep being told that we want people to save and to benefit from savings and work, but yet again this measure undermines that. We have seen that, too, in the way in which working tax credit has been dealt with. We have heard about people with very low working hours who will lose a lot of working tax credit. Working tax credit was frozen, however, and was not increased in line with inflation when benefits were. That totally contradicts the Government’s own policies, because if we want to make work pay rather than benefits, why put up benefits in line with inflation but not working tax credit?

At lot of what is happening is illogical and it is important that we straighten things out and oppose this provision. I shall sit down now so that my hon. Friends can speak.

[Charlie Elphicke]

One key point is missing from this debate, and that is a memory on the part of the Labour party. We have heard a lot of cant from the Opposition and they have shown very little memory of the pensions raid back in 1997, which knocks the issue of age-related allowances into a cocked hat. It should be remembered that there was a £150 billion pension stealth tax at that time. Indeed, Ros Altmann, who was an adviser to Tony Blair, famously said that Labour “destroyed our pensions system”. The numbers involved as regards age-related allowances are small compared with that massive and unjustified smash-and-grab raid on our pension system, which destroyed the private savings culture that had been built up over so many years. Then, considering the insidious introduction of pensions means-testing, which was a massive attack on personal responsibility, it is extraordinary to hear arguments from the Labour party that the measures on age-related allowances somehow take away that personal responsibility, given that it introduced a whole system that systematically wrecked the taking of personal responsibility. We need to hear a bit more humility from the Labour party and a bit more of an apology.

[Lyn Brown]

Is the hon. Gentleman going to apologise to the pensioners in his constituency who he is lumbering with this tax? I wonder whether he has any humility at all about the decrease in the 50% tax that is going to fund it.

[Charlie Elphicke]

On the contrary, I am really delighted that we have delivered on the pensions triple lock guarantee. Some hon. Members might recall that back in April 2000—it was a long time ago so perhaps the hon. Lady has forgotten—the basic state pension rose by 75p. That was the kind of care and concern we saw for pensioners from the Labour party, whereas the Conservative party is ensuring that we have the highest ever increase in the basic state pension, in cash terms, of £5.30 a week.

[Julie Hilling]

I thank the hon. Gentleman for giving way because he makes this link between the 75p increase, which did not go down well at the time but was based on inflation, and this increase, which is of course also based on inflation. Pensioners will get no benefit whatever—no increase in their pension—from this amount. It simply compensates them for the rate of inflation. In fact, they will lose out because it is based on the consumer prices index, not the retail prices index. For most pensioners, the inflation they feel is much closer to RPI; indeed it is above that because of the way their expenditure has to be made.

[Charlie Elphicke]

The hon. Lady forgets that the way the triple lock works involves not just inflation but earnings. At the moment, earnings are not rising at a great rate of knots because of the massive economic mismanagement of the Labour party that this Government are trying to put right, and that is not being assisted by the chaos in the eurozone. Over time, however, earnings will outstrip inflation and I suspect that will happen in the latter part of this year, so that has a bearing on age-related allowances.

[Mr Marcus Jones (Nuneaton) (Con)]

Does my hon. Friend agree that there is some hollowness to the Labour party’s argument regarding the state benefit? After all, Labour prevaricated for many years from the early 1980s in relation to the link to earnings that was taken away in the early 1980s. They had 13 years to rectify that, but did not do anything about it. Now we have put the triple lock in place, they are criticising that. Which way does my hon. Friend think they want it— with pensioners better off, as they will be under the Conservative-led coalition, or with pensioners being worse off as they were under Labour?

[Charlie Elphicke]

Exactly so. My hon. Friend makes a powerful point. It is true that we took away the whole issue of the earnings link, but we restored it, whereas the Labour party sat by as a spectator, including in its time in government. Overall, the package for pensioners means that no pensioner will lose out in cash terms. It is a fair settlement and this Government have looked after pensioners extraordinarily well.

[Mr Gauke]

Clause 4 makes changes to age-related income tax personal allowances, supporting the Government’s longer-term aim of simplifying the tax system by creating a single personal allowance regardless of age. In light of the Government’s commitment to increase the personal allowance to £10,000, together with our commitment that older people will benefit from future increases in the personal allowance above their 2013 allowance once these are aligned, there will be no need to continue with this complication in the tax system. One of the Government’s key objectives for the tax system is to make it simpler and easier for everyone to understand.

[Elizabeth Truss]

Given that the UK is 94th in the world according to the World Economic Forum for the extent and complexity of our tax system, has my hon. Friend heard any proposals from the Labour party about how to make our tax rates more competitive or how to make our tax system simpler?

[Mr Gauke]

I have to say that I have not. What I have heard from the Labour party is their resistance to any of our attempts to make our tax rates more competitive or to simplify our tax system.

[Fiona O'Donnell]

Perhaps I can make a helpful point to the Minister. Does he think it simplifies the tax system for 30,000 Scottish families to have to fill in a tax return to be entitled to child benefit?

[Mr Gauke]

I will deal with that in my remarks on child benefit, which we will debate shortly. The idea of people having the same personal allowance whether they are 64, 65 or 75 seems to me perfectly sensible.

The changes made by the clause will help ensure that people get the allowances to which they are entitled, pay the right amount of tax and make it more straightforward for Government to administer, thereby minimising costs to the taxpayer. A 2009 report from the Public Accounts Committee commented that the age-related allowances were

“complex and hard for older people to understand and place too much emphasis on older people having to prove their eligibility, resulting in errors in claims and potential overpayments of tax”.

In March this year, the Office of Tax Simplification published its interim report, “Review of Pensioner Taxation”, which highlighted no less than nine complexities in relation to the age-related personal allowance. One of the main sources of complication is the taper, which we have heard about in the debate this afternoon. The taper removes an individual’s personal allowance where their income exceeds £24,000 at a rate of £1 for every £2 over this limit, up to the point at which their personal allowance is the same as that for an individual born after 6 April 1948. This creates a 30% effective marginal rate of tax for individuals on relatively modest incomes and brings people into the self-assessment system when, in most cases, they would otherwise have no need to complete a tax return.

For some, in particular people whose tax affairs have previously been entirely dealt with under the PAYE system through their working lives, and who have therefore had nothing to do with HMRC, this can be a challenge. They now find themselves having to complete forms and tax returns for HMRC because they may be affected by the taper when they reach the age of 65. The changes made by the clause, alongside the increases that we have made to the personal allowance, mean that we can now simplify the system of personal allowances. This will remove complexity and confusion for some taxpayers. But nobody will lose out in cash terms as a result of these changes.

Let me emphasise that point. As a result of these changes, nobody will lose out in cash terms. In fact, half the people over 65 in 2013-14 will pay no income tax at all and are unaffected by these changes. Those who are affected by the withdrawal of age- related allowances will benefit from a £1,100 increase in the personal allowance.

[Ian Austin (Dudley North) (Lab)]

The Minister said twice that nobody would lose out in cash terms. Can he tell us how many people will lose out in real terms?

[Mr Gauke]

The number affected is very clear. We have published it in the tax information impact note. It is 4.4 million people, as we have made clear throughout. But as I say, nobody loses out in cash terms, and the increase in the personal allowance is the largest increase ever.

[Richard Graham (Gloucester) (Con)]

We heard from the Opposition some extraordinary statements which included the phrase “levelling down”. Will my hon. Friend confirm for the benefit of all Members of the House that the changes made to the tax-free element of income affect 24 million workers and take another 850,000 workers out of income tax altogether? That is called levelling up, not levelling down.

[Mr Gauke]

My hon. Friend is absolutely right. What we are seeing, and what we have seen over the past few years while this Government have been in office, are rapid increases in the personal allowance. The main personal allowance is rapidly catching up with the age-related allowance, which gives us this opportunity to make the simplification, as we are doing.

Those who are affected by the withdrawal of age-related allowances will still see the total amount of deductions that they pay reduce significantly compared to those under the age of 65, because we are retaining the exemption from national insurance contributions for those of state pension age. So, for example, even under the freeze, a 69-year-old with an income of £18,000 in 2013-14 will pay less than half as much in tax and national insurance contributions as someone aged 30 earning the same amount.

16:30

Let us take another example. An individual earning £14,000 a year and born on or after 6 April 1948 and therefore not eligible for an age-related allowance will still pay less than half as much tax and national insurance in 2013-14 on employment income as the previous year when they turned 65 if male and 62 if female. This is the result of the increase in the personal allowance and because people of state pension age do not pay national insurance.

It is important to consider these changes to the age-related allowances in the context of the wider support that the Government offer to pensioners. It has been said today that pensioners have been disproportionately hit, but that is simply not true. The UK has 11 million pensioners right across the income distribution who receive the basic state pension. They benefit significantly from the Government’s decision to introduce the triple lock for the basic state pension and will continue to benefit year after year. The triple lock was one of the earliest actions of this Government. It ensures that each year the basic state pension will be uprated by the highest of inflation, earnings or 2.5%. That meant that from this April the basic state pension increased by the CPI inflation rate of 5.2%, an increase of £5.30 a week in a full basic state pension, the largest ever cash increase in the basic state pension.

Under the previous Government’s plans, which we inherited, the basic state pension would have increased not by inflation but by earnings, which this year was only 2.8%. That would have been an increase of only £2.85 a week. This means that the basic state pension is £170 a year higher in 2012 than it would have been under the plans of the previous Government. It is all very well saying that it is inflation; that was not how the previous Government were going to calculate it. It would have been by earnings, and on this occasion that would have been lower.

[Kelvin Hopkins]

The Minister may be too young to remember, but the Conservative Government under Mrs Thatcher abolished the Rooker-Wise amendment. The basic state pension would have been much higher now had that amendment been kept in place. What about raising the basic state pension in steps to where the pension would have been had the Rooker-Wise amendment never been abolished?

[Mr Gauke]

The Rooker-Wise amendment related to tax thresholds. As for indexation, we are using the higher of earnings or inflation or 2.5%. The plans we inherited were just earnings. That is an important point.

Despite difficult economic conditions, the Government continue to protect benefits for pensioners, including winter fuel payments, free bus passes and free prescriptions, to name but a few. Many pensioners are also benefiting from the Government’s decision to make funding available to local authorities to freeze council tax, and we also have the Warm Homes discount. The Institute for Fiscal Studies has submitted evidence to the Treasury Committee showing that pensioners are the group least affected by the tax and benefit changes implemented by the Government. It has given evidence that pensioners have benefited the most from the distributional impact of tax and benefit changes for some years. I assure the House that the Government are supporting, and will continue to support, pensioners.

[Richard Graham]

My hon. Friend raises some valid points about how much the Government have done for pensioners throughout the country, referring to all those crucial changes, such as the triple lock, the link back to earnings, and the retention of all the benefits that pensioners have. My constituents remember the sharp contrast between the rise in the basic state pension of 10% since the Government took office and the 75p offer from the previous Government, which, with collective amnesia, they seem to have entirely forgotten.

[Mr Gauke]

My hon. Friend is right to remind the Committee of that.

We must ask ourselves whether pensioners are disproportionately affected by Government policies. The answer is clearly no. The evidence is very clear on that. After the reforms, does the tax system treat pensioners unfairly? No. By definition, having one personal allowance across the board, regardless of age, is not unfair on pensioners. Is there a strong, principled case for different personal allowances based on age? We have not heard that case made today, other than the fact that Winston Churchill thought it was a good idea in 1925. The official Opposition’s policy is to tell everyone under 65 that they should have a lower personal allowance than those over 65.

Clause 4 supports the Government’s long-term aim of simplifying the tax system by creating a single personal allowance. It removes the complicated tapering system, making personal allowances easier to understand. In the longer term we will have a single, generous personal allowance for everyone while ensuring that no one is a cash loser. I ask the hon. Member for Leeds West (Rachel Reeves) to withdraw the amendment.

[Rachel Reeves]

If you believe what the Exchequer Secretary said, Mr Williams, you would think that pensioners would have come to Parliament today to thank the Government for everything they have done for them. The reality is that pensioners up and down the country feel seriously let down by the Government. In contrast to the out-of-touch speech we heard from the Exchequer Secretary, we have heard concerns from Opposition Members, including my hon. Friends the Members for Wirral South (Alison McGovern), for North Ayrshire and Arran (Katy Clark), for Livingston (Graeme Morrice) and for Edinburgh East (Sheila Gilmore), and we heard a contribution from the hon. Member for Banff and Buchan (Dr Whiteford). They stick up for their constituents, listen to them and understand their concerns that pensioners will lose £83 this year and those who will retire next year will lose £322, with very little notice, and that is after many other hits, including the increase in VAT, and despite the fact that pensioners face additional costs, such as heating, compared with other people, and that the Government have done so little to consult on these changes before they are introduced.

The fact is that this tax raid on pensioners is being used to fund a tax cut for millionaires—a tax cut worth £40,000 for 14,000 millionaires. That shows where the priorities lie for Government Members. The priorities for Opposition Members lie with ordinary families, young people and pensioners, who are feeling the full impact of the Government’s policies. All Members now have a chance to show where their priorities lie; are they with millionaires or with pensioners? Will Government Members listen to the leadership of their former leader, Winston Churchill, who introduced the age-related allowance in 1925, or to their current leadership, the Prime Minister and the Chancellor, who are making a tax grab on pensioners? It is up to Government Members to decide how they will vote, but pensioners up and down the country will be watching this afternoon to see where their priorities lie, because the reality is that the Government are introducing these reforms because they want to help millionaires and hurt pensioners. We will vote for amendment 65 and against clause stand part.

16:38

Three hours having elapsed since the commencement of proceedings, the debate was interrupted (Programme Order, 16 April).

The Chair put forthwith the Question already proposed from the Chair (Standing Order No. 83D), That the amendment be made.

The Committee proceeded to a Division.

[The Temporary Chair (Hywel Williams)]

I ask the Serjeant at Arms to investigate the delay in the No Lobby.

16:38

Division 525

Ayes: 231

---

Labour: 218
Scottish National Party: 6
Conservative: 2
Social Democratic & Labour Party: 1
Plaid Cymru: 1
Liberal Democrat: 1
Alliance: 1
Green Party: 1

Noes: 298

---

Conservative: 256
Liberal Democrat: 41

The Chair then put forthwith the Question necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Question put, That the clause stand part of the Bill.

16:54

Division 526

Ayes: 299

---

Conservative: 256
Liberal Democrat: 42

Noes: 230

---

Labour: 219
Scottish National Party: 6
Social Democratic & Labour Party: 1
Plaid Cymru: 1
Conservative: 1
Alliance: 1
Green Party: 1

Clause 4 ordered to stand part of the Bill.

Clause 8

High income child benefit charge

[Mr Christopher Chope (Christchurch) (Con)]

I beg to move amendment 9, page 4, line 33, leave out ‘high’ and insert ‘higher’.

[The Temporary Chair (Hywel Williams)]

With this it will be convenient to discuss the following:

Amendment 10, page 4, line 34, at end add

‘for recipients of child benefit’.

Amendment 75, page 4, line 35, at end add—

‘(2) Schedule 1 will not come into effect until a study has been carried out into ways of mitigating the impact of the Schedule on families with only one earner, compared with families with two earners, and placed in the Library of the House of Commons.’.

Clause stand part.

Amendment 11, in schedule 1, page 131, line 7, leave out ‘high’ and insert ‘higher’.

Amendment 12, page 131, line 8, leave out ‘high’ and insert ‘higher’.

Amendment 25, page 131, line 10, leave out ‘£50,000’ and insert ‘£60,000’.

Amendment 26, page 131, line 11, leave out

‘one or both of conditions A and B are’

and insert ‘condition A is’.

Amendment 13, page 131, line 12, leave out ‘high’ and insert ‘higher’.

Amendment 27, page 131, leave out lines 19 to 24.

Amendment 28, page 131, line 24, at end insert—

‘(5) A person (P) is not liable to a high income child benefit charge if the total adjusted net income for the year of that person and any partner does not exceed £100,000’.

Amendment 77, page 131, line 24, at end insert—

‘(5) A person (P) is not liable to a high income child benefit charge if the total adjusted net income for the year of that person and any partner does not exceed £100,000, subject to any child or children in respect of whom child benefit is claimed being resident in the United Kingdom notwithstanding the European Communities Act 1972.’.

Amendment 14, page 131, line 26, leave out ‘high’ and insert ‘higher’.

Amendment 29, page 131, line 29. leave out from ‘met’ to end of line 30.

Amendment 30, page 131, line 31, leave out ‘and B’.

Amendment 31, page 131, line 32, leave out from ‘is’ to end of line 13 on page 132 and insert ‘100%’.

Amendment 32, page 132, line 14, leave out from beginning to end of line 2 on page 133.

Amendment 33, page 133, leave out lines 16 to 26.

Amendment 34, page 133, line 29, leave out ‘another’ and insert ‘a higher’.

Amendment 35, page 133, line 30, leave out from ‘681B(1)(a)’ to end of line 33.

Amendment 36, page 133, leave out lines 36 to 39.

Amendment 37, page 134, leave out lines 3 and 4.

Amendment 38, page 134, leave out lines 10 to 12.

Amendment 15, page 134, line 28, leave out ‘high’ and insert ‘higher’.

Amendment 39, page 134, leave out lines 34 to 37.

Amendment 16, page 135, line 9, leave out ‘high’ and insert ‘higher’.

Amendment 40, page 135, leave out lines 13 to 23.

Amendment 41, page 135, leave out lines 37 to 40.

Amendment 17, page 135, line 38, leave out ‘high’ and insert ‘higher’.

Amendment 18, page 136, line 9, leave out ‘high’ and insert ‘higher’.

Amendment 42, page 136, leave out lines 13 to 23.

Amendment 19, page 136, line 35, leave out ‘high’ and insert ‘higher’.

Amendment 20, page 136, line 38, leave out ‘high’ and insert ‘higher’.

Amendment 21, page 136, line 45, leave out ‘high’ and insert ‘higher’.

Amendment 22, page 137, line 13, leave out ‘high’ and insert ‘higher’.

Amendment 23, page 137, line 22, leave out ‘high’ and insert ‘higher’.

Amendment 24, page 137, line 26, leave out ‘high’ and insert ‘higher’.

Schedule 1 stand part.

[Mr Chope]

I rise to speak to amendment 9 and the other amendments in the group, standing in my name and that of my hon. Friend the Member for Gainsborough (Mr Leigh). We face a rather unsatisfactory state of affairs, because the guillotine will fall at 6 o’clock, which means that we have precisely 52 minutes to discuss the whole of clause 8 and schedule 1, which deal with child benefit and will affect 1.2 million families up and down the country, potentially yielding £1.5 billion for the Exchequer. How can one do justice to the complexity of what the Government are proposing in this short space of time?

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

indicated assent.

[Mr Chope]

I see the hon. Lady on the Opposition Front Bench agrees with me about that.

Perhaps it is appropriate to start by reminding the Committee of what our right hon. Friend the Prime Minister said on 26 May 2009. He said that he had accepted, as Conservative party policy, that

“The House of Commons should have more control over its own timetable, so there’s time for proper scrutiny and debate.”

He said that

“there should be much less whipping during the committee stages of a Bill,”

because

“that’s when you really need proper, impartial, effective scrutiny—not partisan point-scoring and posturing.”

It is against that background that I enter into this debate with confidence.

The Government’s proposals will, by their own admission, result in more complexity and less simplicity, which is completely at odds with their avowed intent on tax policy. The administrative costs alone will exceed £100 million, and 650 extra staff will have to be taken on to administer what is effectively the removal of child benefit from 1.2 million families.

[Kelvin Hopkins]

I agree with the hon. Gentleman entirely. I recall when child benefit was first introduced in the 1970s, and I have to point out to those on the Government Front Bench that, throughout the Thatcher and Major Governments, no attempt was made to get rid of that universal benefit. We should stick with universality in this case.

[Mr Chope]

The hon. Gentleman is absolutely right. Even during the International Monetary Fund crisis in the mid-1970s, things never got so tough that the Government of the day felt the need to interfere with child benefit. It was a reflection of the fact that families with children had higher costs than those without.

The proposals will create all sorts of perverse incentives, and the people who want to try to avoid the measures will have a field day. This has been well covered by the Treasury Select Committee’s recent report, as well as by the Chartered Institute of Taxation and other expert bodies. The fundamental issue is the proposals’ lack of fairness, as between one family and another.

[Mr Stewart Jackson (Peterborough) (Con)]

The Centre for Social Justice says that the Government’s policy

“could threaten a new wave of family instability and breakdown”,

and that it

“flies in the face of their commitment to ‘shared parenting’.”

Does my hon. Friend find it incongruous that that policy is being pursued at the same time as the Government are failing to honour their commitment to introduce marriage or family tax breaks in this or future Budgets?

[Mr Chope]

My hon. Friend makes a really good point, which was also covered in the recent Adjournment debate on this subject, which received what I can describe only as a rather woolly response from the Exchequer Secretary to the Treasury, my hon. Friend the Member for South West Hertfordshire (Mr Gauke). He said that, basically, something was going to happen in this Parliament but the Government were not quite sure what or when. That was not good enough. We need an opportunity to look at the whole issue of transferrable tax allowances, and allowances in the tax and benefit system that recognise the family and marriage.

Returning to the issue of fairness, two people on £50,000 a year with children will not have to pay the high income child benefit charge, whereas a family with children with one person earning over £60,000 will have to pay it.

[Steve Brine (Winchester) (Con)]

On the issue of fairness, would my hon. Friend have any truck with the idea of limiting child benefit to, say, the first two or three children, regardless of the parents’ income, which would retain the universal element?

[Mr Chope]

There is a whole host of ideas going round. There was a time when no child benefit or allowance was payable for the first child, on the basis that parents should take responsibility for that child and bear the costs themselves, but, if they had any more, they could expect the state to help them. My hon. Friend’s point illustrates further the fact that this measure should have been the subject of proper consultation and draft clauses, so that we could have had a debate on it in the wider context of universal benefits. Instead, it was announced at the party conference and implemented in this way.

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

Is not one of the benefits of a universal system of child benefit the fact that everyone in society who has children feels part of that society and that welfare state? The proposal will breed resentment not only between the haves and the have-nots but between the haves and those whose family situation fits the new system.

[Mr Chope]

The hon. Gentleman makes a good point against these provisions. On the issue he raises, it would be worth reminding ourselves that the Christian organisation CARE has produced a useful document, “The Taxation of Families 2010/11”, which considers whether current tax burdens are fair. It looks at the relative position of households up and down the income distribution scale in the United Kingdom. For a family on £51,543 a year, who represent 150% of the reference wage, a single person with no children is better off than 94% of the population, a one-earner couple with no children are better off than 81% and a lone parent with two children are better off than 80%. Yet a one-earner couple with two children are better off than only 63% of the population and a two-earner couple with two children are better off only than 69%. That shows that targeting families with children for this tax exacerbates the unfairness rather than ameliorating it—running directly against the principles of fairness, equity and justice.

17:15

[Kate Green]

I congratulate the hon. Gentleman on his amendment and on his arguments in support of it. Does he agree that because of the failure to consult, we do not know the answer to the question of how this policy will play out between women and men? Currently, child benefit is paid to the mother as the maintainer of children, but she may now come under pressure from her partner to forgo that child benefit so that his tax bill is not affected. That means an injustice between women and men; and, more importantly, it affects the amount of money spent on children.

[Mr Chope]

The hon. Lady is absolutely right: that is another of the behavioural consequences, the full implications of which are not yet apparent.

One has to ask why we are going down this road. The justification for it—the avowed policy objective—is this:

“In order to address the fiscal deficit, the Government believes that it is right to ask those on higher incomes to contribute more.”

The Government’s proposal, however, asks those on higher incomes with families and children to contribute more, while those on higher incomes without children are not asked to contribute more. I do not see how that can be fair.

In case anyone thinks this is an issue discussed only among academics, let me say that it certainly goes very close to the heart of many of my constituents. I shall quote briefly from a letter that I received since the Budget from a constituent living in Christchurch. He starts off:

“I am writing to express my utter disgust and outrage at your party’s stance on child allowance announced in the budget last week.”

He explains that he and his wife choose to work hard, believing that they have a responsibility

“to look after ourselves and to help to generate wealth for the wider community”

by contributing their utmost to industry. He says that he has an income of £60,000 and that his wife earns £12,000, providing a combined income of £72,000. As he puts it:

“under your disgusting new Tax rules we will lose the child benefit for our two children. However, in a household with two working parents earning £40,000 each, combined income of significantly more…that family gets to keep their benefit.”

[Mr Edward Leigh (Gainsborough) (Con)]

rose—

[Mr Chope]

Before I give way to my hon. Friend, let me read the last paragraph:

“I ask for your commitment to continue your fight against this latest most disgusting taxation scheme on child allowance and rally your fellow back benchers against the current disgraceful and unethical budget.”

[Mr Leigh]

That voter in Christchurch—probably a Tory voter—sums up one of the problems. Why are the Government advancing a proposal that is laser-guided to attack the core Conservative vote—families that earn between £50,000 and £100,000? What sort of politics is that?

[Mr Chope]

I hope that, unlike in previous debates—yesterday in the context of an amendment I tabled to clause 1, and on Second Reading—the Minister will have time to respond to the powerful point that my hon. Friend makes.

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

If the hon. Gentleman is not successful with his amendment, will he take his constituent’s advice and ask his colleagues to vote against the proposal in its entirety?

[Mr Chope]

If I am given the opportunity, and if I do not succeed in persuading the Government of the merits of amendment 28 in particular, I shall feel obliged to vote against both the clause and the schedule. I think that by then we shall have done everything possible to try to persuade the Government to change their mind., and if they do not want to change their mind, I shall feel duty bound to express my view in the Lobby accordingly.

The Treasury figures show that there are 840,000 households with children in which at least one person earns over £60,000 a year. I have proposed that everyone earning over £60,000 a year should pay a standard tax increment of about £1,000, which would generate about £2 billion. The 840,000 people in households with children would be only £300 better off, or a bit more, depending on how many children they had. There are approximately another 1.1 million people with taxable incomes of over £60,000 who do not have children. If everyone earning over £60,000 paid an extra £1,000, we would not have to bother with this very partial project of penalising families with children.

I am not suggesting that as a definite solution. I should much prefer, for example, to reduce our contribution to the European Union. [Hon. Members: “Hear, hear.”] However, it would at least be fairer and more consistent with the Government’s avowed intent that those on higher incomes should contribute more to deficit reduction.

Amendment 9 proposes that the

“High-income child benefit charge”

in clause 8 should be described as a higher-income charge. I do not think it accurate to describe someone earning over £50,000 a year as having a high income—although such people may have a higher relative income, as is apparent from the CARE figures that I gave earlier. Funnily enough, HMRC’s own Budget document refers to

“Child Benefit: Income Tax Charge for Those on Higher Incomes”.

I hope that my hon. Friend the Minister will accept that the charge in clause 8 should also be described as a “higher” rather than a “high” income charge. Under the heading “Policy objective”, the document states:

“In order to address the fiscal deficit the Government believes that it is right to ask those on higher incomes to contribute more.”

Obviously mine is a small amendment in comparison with the more substantial ones. If the Government are unwilling even to concede that point, it shows that the degree of stubbornness in the Treasury is even greater than many of us thought.

Is the high-income child benefit charge classified as a tax? I tabled a question to that effect that was due to be answered on Monday, and have just received a written answer from my hon. Friend the Minister—it should have been given then, but I understand the reason for the delay—which states:

“Classification is a matter for the independent Office for National Statistics.”

Effectively, we are talking about a new tax on people with particular incomes, rather than about removing child benefit from them. I have every belief that, in due course, the Office for National Statistics will classify this as a tax.

The Government have been keen to emphasise the need to cut expenditure, and not so keen to introduce tax increases. That may be why they have been rather coy about admitting that this will probably be a tax increase for definition purposes rather than a cut in benefit. My amendment 28, on which I hope we shall have an opportunity to vote, would ensure that there was no unfairness in the treatment of families with identical incomes. The single-parent trap and the couple penalty would be avoided, and the objective that taxes must be fair and simple would be met. This tax is neither fair nor simple.

We were discussing the granny tax earlier, and I would describe the measure now under discussion as a tax targeted at mummies and daddies in the squeezed, hard-working middle. People on equivalent incomes without parental responsibilities have nothing extra to pay and some households on joint incomes with children will also pay nothing, whereas single parents earning over £60,000 will pay a minimum of £1,300 a year more than before, and some of them will pay a lot more than that. This cannot be right. I hope the Minister will say the Government have had second thoughts and are minded to withdraw their proposal.

[Cathy Jamieson]

I will be as brief as possible, as I am aware that there is not much time left.

There are two key issues: the principle of what child benefit is supposed to be for, and the practical implications of the Government’s proposals. I want to emphasise the word “child” because we have lost sight of the fact that we are talking about children. The Child Benefit Bill introduced in May 1975 by the then Labour Government, with all-party support, was intended to offer a universal, non-means-tested, cash-free tax benefit for the good of all children. At its simplest, it was designed to ensure that mothers had money paid regularly into their purses, giving them at least some form of stable income, and that the money would be used for their families.

[Steve McCabe]

Like the hon. Member for Christchurch (Mr Chope), a constituent of mine, Mrs Morris, contacted me. Her family’s income falls just above the threshold. They have four children to feed and clothe, and a mortgage, bills and fuel costs to pay, and they are going to lose £3,000 as a result of this measure. How can any reasonable person say that is fair?

[Cathy Jamieson]

My hon. Friend makes a very interesting point, and I shall come on to address the effect of this measure on many families on that borderline.

Many Members will have come from, or know, families for whom child benefit—or the family allowance, as it was called in days gone by—was a lifeline. No doubt some on the Government Benches will characterise our position as Labour trying to give more cash to high earners.

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

indicated assent.

[Cathy Jamieson]

But that argument simply does not wash from a Government and a Minister who have continued to support a tax cut to millionaires while millions of ordinary people, including Mrs Morris and many people in my constituency, are feeling the pinch. Article 27 of the UN convention on the rights of the child, which the UK has signed, outlines an obligation to assist parents in meeting the material needs of their children.

[Mark Reckless (Rochester and Strood) (Con)]

Yesterday, the Prime Minister pointed at the Opposition Benches and said Labour MPs would be voting to give themselves a benefit, yet just after the Budget the Leader of the Opposition said to the Cabinet that they were getting rid of the 50p top rate of income tax to help themselves. Can we not all accept that we on the Government Benches are getting rid of the 50p rate to try to improve the economy, and Labour Members are trying to protect universal benefits and the welfare state as they have understood it?

[Cathy Jamieson]

I was hoping that the hon. Gentleman was going to respond to my point about children, but that is obviously not the case.

It is expected that the revised proposal will affect about 1.2 million families. Some 790,000 couples and 30,000 lone parents will lose the full amount of their child benefit. A further 330,000 couples and 20,000 lone parents will lose a proportion of their child benefit. The average loss will be about £1,300.

When these proposals were first announced, I tabled a parliamentary question asking for an estimate—not an exact figure—of the number of people earning between £50,000 and £60,000 who are in receipt of child benefit in each parliamentary constituency. I received the answer two days ago. It was short and simple: this information is “not available.” Surely that is exactly the sort of information that should be available in advance of such proposals being made to help MPs judge the impact of Government policies on their constituencies.

17:30

[Kate Green]

Does my hon. Friend agree that if the Government do not even know that simple fact, they are even less likely to know how many people have incomes that vary and fluctuate between £50,000 and £60,000, and that that is going to introduce yet further complexity for those families in the course of the year?

[Cathy Jamieson]

Again, my hon. Friend makes an extremely important point, which I hope to discuss in relation to how the clawback will operate. Will the Minister commit to provide that breakdown by parliamentary constituency and make it available, as a matter of urgency, in the House of Commons Library?

It has appeared at various times during the debate that the announcement of the changes was designed more to appeal to the Tory party conference than as a plan to be actually implemented. Suggestions have been made that the Chancellor perhaps did not even believe that he would have to implement it. I do not know whether that is true, but this appears to be yet another part of what the Leader of the Opposition described as an “omnishambles”. In Scotland, we would say that the Government’s plan is a bit of a boorach, which translates as a mess or a muddle.

This boorach is, once again, entirely of the Government’s own making. On the clawback, those with incomes above £50,000 will have their child benefit withdrawn at 1% for each £100 of income from January 2013. There is to be no child benefit entitlement for families where any earner has an income of more than £60,000. Some of the changes being proposed might be small steps forward, but they do not change the fundamental unfairness. To return to the point made by my hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) about his constituent Mrs Morris, a couple with children where one earner is on £60,000 and another is on £10,000 will lose all their benefit, whereas a dual-earner couple on £50,000 each will potentially keep it all.

As the hon. Member for Christchurch (Mr Chope) said, the implementation of this approach will be complex. New computer systems and new staffing will be required. The Government have estimated costs of between £8 million and £13 million for the computer systems’ development and running costs alone, plus £100 million for staff resources. Interestingly, they have estimated that £5 million will be spent on customer information. I do not know exactly what customer information they intend to provide, but I hope that it will be explained in plain English. Over the years I have grown to mistrust Bills that have one-line clauses and multi-page schedules.

Schedule 1 is certainly not set out in customer-friendly wording. An MP sitting in an advice surgery trying to look through it to check out whether or not their constituents have an entitlement would have to go through seven pages. After several lines defining person “P”, person “Q” and whether or not “Q” is the partner of “P” throughout the week, they would find new section 681C, which provides an equation to work out whether someone would be entitled or not. That is not very customer friendly. There is a serious point as to whether the clawback mechanism is fair and workable.

[Mr Mark Spencer (Sherwood) (Con)]

Will the hon. Lady explain to the taxpayers of Sherwood in Nottinghamshire who are working more than 50 hours a week and probably earning only £20,000 as a family, why they should pay tax to support someone earning in excess of £60,000?

[Cathy Jamieson]

That is an important point and I will address it straight away. We have to decide whether or not we believe that child benefit is a benefit that should be paid for the good of children. What we are seeing in this measure is an unfair system, which is not providing for children; it is introducing a new form of taxation, as has rightly been pointed out, and people will be facing huge problems.

I was going to deal with my next point later, but I shall say now that individuals with an income in excess of £50,000 are going to be required to inform Her Majesty’s Revenue and Customs as to whether they or their partner are in receipt of child benefit. It is not clear what would happen where someone either does not know or claims not to know whether their partner is receiving child benefit. In the absence of a legal obligation on partners to share information on benefit receipt, it is unclear what the tax authorities are going to do. Perhaps the Minister will enlighten us.

[Helen Goodman (Bishop Auckland) (Lab)]

My hon. Friend is making an extremely important and interesting point. Is she saying that this measure threatens the independent taxation of women?

[Cathy Jamieson]

My hon. Friend makes a very good point. As I have outlined, the problems could be similar if both partners had an income in excess of £50,000. The charge would then apply to the partner with the higher income, and to avoid it being applied twice the partners would presumably have to share information with each other on their incomes and co-ordinate responses in their respective self-assessment forms or HMRC would have to implement some mechanism to link together individuals’ tax records to decide which partner was liable for the charge.

As was mentioned earlier, there would potentially be further difficulties if somebody who did not expect to come within the income bracket for the child benefit charge discovered at the end of the tax year that their income exceeded the limit. It can be quite common for self-employed people to find on preparing their accounts that their income was greater than expected. HMRC would then apply the charge retrospectively, but in order to do so it would need full details of the person’s cohabitation history for the year end. I gently tell the Minister that the potential for disputes is fairly obvious. The living together as husband and wife test is an established feature of the social security system, but we all know from the people who come to our constituency surgeries the problems that emerge. Its extension to the tax system raises a huge range of other issues. Whether a partnership exists will have to be determined on an ongoing basis throughout the year, rather than just at a single point of time, and individuals might not be aware of the need to report changes in their personal circumstances to the tax authorities.

We have already heard that there is a danger that the plan will encourage people to deny the status of their relationship to avoid the child benefit change, which will effectively introduce a couple penalty. That could be a disincentive for a lone parent considering moving in with a higher income person and could create an incentive for couples to split up when one partner has a high income. For people with several children, partnering decisions could have significant financial implications.

[Fiona O'Donnell]

Has my hon. Friend, unlike the Government, considered the fact that in families where one parent chooses to stay at home and raise their family, that parent will now be forced into seeking employment? In this market, that will not be feasible.

[Cathy Jamieson]

My hon. Friend makes a significant point and that is part of the fairness test, which I do not think has been met. The Centre for Social Justice has been very critical of this aspect of the Government’s plans, which it argues could

“threaten a new wave of family instability and breakdown…which flies in the face of their commitment to ‘shared parenting’.”

[Mark Garnier]

I am not entirely unsympathetic to a great many of the hon. Lady’s points, but what she is describing has a great deal to do with the complexity of the tax system as a whole. That tax system doubled in complexity under her Government.

[Cathy Jamieson]

With respect to the hon. Gentleman—he said he had some sympathy with my points, so I do not want to be entirely negative in response—we will not solve the complexities of the taxation system by adding even more complexities that are unfair to families and will affect children negatively.

Let me put one final issue on the record. People who are not in work and who receive child benefit for a child under 12 receive national insurance credits to enable them to build up entitlement to state pensions. The Government’s original announcement led to concerns about the impact on future pension entitlements of women, in particular, if families stopped claiming child benefit. The Government said from the outset that no one would miss out on national insurance credits as a result of the child benefit changes, but it is unclear how they proposed to ensure that. Under the latest proposals, people who are entitled to child benefit and families affected by this charge may elect not to receive it, but a claim for child benefit will still need to be made in order to receive national insurance credits. Information published by HMRC confirms that.

I am extremely conscious of the time so I will not say anything more, other than that I think that everybody should listen carefully to the debate and to the points that have been made. When Members consider how to vote, they should consider both the principles involved of support for families with children as well as the layers of complexity and confusion there will be if the proposal goes through.

[Mr Stewart Jackson]

I had not intended to speak in this debate so I shall keep my remarks brief. I do not have at my fingertips the comprehensive figures that my hon. Friend the Member for Christchurch (Mr Chope) gave; he made some cogent and powerful points. From my point of view it is always a very risky endeavour when a political idea is fleshed out to become a fiscal policy of any Government. The remarks made just after the general election at the Conservative party conference were really an aspiration that is now being turned into a policy. I believe that this policy is a fiscal time bomb that will blow up in the faces of this Government. I also believe that what we are doing—[Interruption.]

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. The hon. Gentleman is speaking.

[Mr Jackson]

I defer to the parliamentary private secretary to the Financial Secretary, my hon. Friend the Member for Reading West (Alok Sharma). [Interruption.] At least he is at the moment.

The hon. Member for Denton and Reddish (Andrew Gwynne) made a very important point about crossing the Rubicon of undermining the universality of child benefit. The same point was made earlier by my hon. Friend the Member for Christchurch. Some time ago, the Child Poverty Action Group said this about child benefit:

“A benefit which goes to virtually all children is of course expensive. But it can also be argued that it is more likely that such a benefit will have ‘substantial and wide-ranging support’, and may be difficult to abolish; provision for the poorest children only, whilst cheaper, is often more precarious.”

Specifically, intergenerational redistribution and the value placed on children are universal values that we are seeking to undermine.

[Harriett Baldwin]

What would my hon. Friend say, though, about the example of two wealthy Americans who have four children born in this country who receive child benefit tax-free from the UK Treasury, but have to pay tax on it to the internal revenue service?

[Mr Jackson]

My hon. Friend makes a valid point and I accept her argument, but we need to look at this proposal within the context of the wider proposals in the Budget. We are rightly reducing the top rate of tax and corporation tax, so for those in the upper 20% income range we have introduced fiscal policies through which we seek to support entrepreneurship and business, supporting those higher-rate earners. We are also proud to be taking a substantial number of poorly paid working people out of tax. My concern is that we are not extending those same tax breaks to the squeezed middle and it is a very important message that we are sending. I accept that the Chancellor has tackled the specific issue of the cliff-edge effect, but he has not done enough to secure my vote in terms of the discrepancy regarding the one taxpayer in a two-person household.

[Mark Reckless]

A rather larger category than that mentioned by my hon. Friend the Member for West Worcestershire (Harriett Baldwin) is the very minimum of £62 million a year—and I suspect much more—that is paid to children who are resident elsewhere in the European Union where costs are much cheaper, many of whom have never even visited the UK.

[Mr Jackson]

My hon. Friend makes an extremely apposite point. If we really are all in this together, it beggars belief for my constituents and his that we are talking about looking after the interests of people on low or median incomes but are remitting abroad, within the European Union, anything between £40 million and £75 million in various benefits for people and families who do not even live in this country.

It would not be fair not to mention that the Chancellor has sought to ameliorate the concerns that various Members across the House have expressed about this policy and I give him due credit for that. Unfortunately, however, I think this policy will go badly wrong and will have a specific impact on aspirational, ambitious families and will breach the basic tenet of universality in child benefit. For that reason, I cannot and will not vote for it.

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. I must call the Minister at 5.48.

17:45

[Helen Goodman]

There are four problems with the proposal that the Government are putting to the Committee this evening. First, it is unfair. The hon. Member for Christchurch (Mr Chope) made it clear that it is unfair as between family patterns of income, unfair as between men and women, and unfair as between those who have children and those who do not.

Secondly, the proposal is illogical. Because it is unfair as between those who have children and those who do not, it would be more sensible, in order to have a fairer approach, to address the fact that personal allowances are paid to people on very high incomes. If the Minister is concerned about people on very high incomes, he would do better to shave the personal allowances of people on such incomes, but far from doing that, what he did was cut income tax for those people. That is illogical.

Thirdly, the proposal adds to complexity. I hope the Minister can explain to the House how he will maintain the independence of women’s taxation, given the information-sharing requirements of the new system.

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

The point about women’s tax and independence is extremely important. Does my hon. Friend agree, following also the point made by the hon. Member for Christchurch (Mr Chope), that the likely behavioural impact of the changes, which could include women being encouraged or coming under pressure not to work, is that they would contribute to higher female unemployment, which we know is at its highest since 1987?

[Helen Goodman]

I am grateful to my hon. Friend. I was coming to that point. I want the Minister to address specifically the point about independent taxation of women. He was shaking his head earlier. I hope he will explain from the Dispatch Box in two minutes’ time how he can maintain it. My hon. Friend is right. As I said, there is an issue, thirdly, of complexity being added to the system.

Finally, the proposal is completely uneconomic. It will be bad for work incentives. People will think, “No, I’m not going to do extra hours.” There will be arguments in families about who does what. It will also mean that some people will refuse promotions. This is no way to make the British economy more efficient.

[Mr Gauke]

We are somewhat short of time. There are two reasons why we may not be able to do the measure justice. First, the Opposition tabled an urgent question, which took an hour out of our debate—[Interruption.] They may groan, but they did. We had agreed that there would be no statements today to allow us to have a proper amount of time. Secondly, the Opposition included in the debate both the clause and the schedule. They need only have put the clause in for us to have the debate. As a consequence, the schedule will not be scrutinised in the Public Bill Committee.

Clause 8 introduces a tax charge on a child benefit recipient or their partner if their income is above £50,000. The changes that we are introducing in the Bill ensure a balance between reducing the cost to the Exchequer of child benefit and ensuring that those on low incomes are not affected. Opposition Members like to forget that the reason why we are making very difficult decisions is the state of the public finances that we inherited. We must ensure that the measures that we take are both fair and reasonable. It is only right and proper that we ask those with the broadest shoulders to bear the greatest burden. That is why the measure and others announced by my right hon. Friend the Chancellor at the Budget—

[Mark Reckless]

The Minister said that the charge would apply if “their” income was above £50,000. That would be correct if he accepted the amendment of my hon. Friend the Member for Christchurch (Mr Chope). But actually it applies if his or her income is above £50,000. But on “their” income, they can carry on up to £100,000 as long as the amount is split equally between them.

[Mr Gauke]

The focus on doing this through the tax system and on having one taxpayer above a certain threshold enables us to avoid the position whereby we would have to put every child benefit claimant through the tax credit system and apply a means-tested system to 8 million different cases, creating a substantially greater administrative struggle for both Government and many individuals. That is why we have taken that particular point.

[Several hon. Members]

rose—

[Mr Gauke]

I will take interventions, but I am sure that Members realise that they are eating into time to answer questions asked during the debate.

[Mr Leigh]

Unfortunately, we are introducing more and more complexity. For example, the new charge must be paid by the higher earner, who might not be claiming child benefit when the lower earner is claiming, even though the lower earner is not legally obliged to inform the higher earner whether he or she is claiming child benefit. This is an absurdity, making our tax system even more complex.

[Mr Gauke]

I recognise that not everyone wants to address the matter and that there are those who do not want to change the position whereby people earning £20,000 or £25,000 a year are paying taxes to fund child benefit for substantially wealthier families, and I realise that arguments are made to defend that. But if we are to do something about it, we have a choice. Do we do this through a tax credit system, which means putting everybody through that system, and doing it on a household basis, or do we try to find an alternative way of doing it that reduces the administrative demands? I do not deny that there is complexity in this method, but relatively, we believe that this is the simpler way of doing it.

[Dr Whiteford]

It is misleading to insinuate that poorer families are subsidising better-off families. If there is a need to address income inequalities, why should people who have children pay the price of that rather than people who do and do not have children according to their means?

[Mr Gauke]

The only benefit received by those in the top 10% of earners, which includes all of us, is child benefit, if they have children. That is the only benefit that we receive, so it is the only one that can be reduced or withdrawn. That is why we have this approach. It is perfectly fair that steps are taken to remove child benefit from those households that contain people in the top 10%.

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

Has the Minister heard of progressive taxation? That would be a concrete way of clawing back money from those who can afford it. The danger of the Government’s approach arises when everyone has a service and everyone stands up to defend it. As soon as one starts to chip away at it, it is undermined, and the poorest lose out most.

[Mr Gauke]

We do have progressive taxation, and under this Government the top 1% of earners pay 27.7% of all income tax at a higher rate than at any point in our history. While considering the universality of child benefit, what is being done was not our first choice, but given the position that we were left in it was necessary. When a Government need to raise revenue it makes sense to turn to a measure with a broad base where a significant number of recipients are not reliant on the additional payments they receive, and child benefit is just that sort of payment. That is why my right hon. Friend the Chancellor said that we would seek to withdraw child benefit from higher rate taxpayers. We always said that we would consider how to implement the measure, and we have been clear that a complicated new means test is not a sensible way forward. Instead, we should look to the existing systems and processes to ensure that we can achieve this goal.

[Mr Laurence Robertson (Tewkesbury) (Con)]

I am still confused about why we cannot assess all the incomes in a household in the same way as when we quite correctly limit the benefits a household can claim to £26,000. What is the difference?

[Mr Gauke]

For those who are in the tax credit system, we currently make an assessment of household income. If a person is not in the tax credit system, we do not make an assessment of household income and so have information only on individual income. Were we to try to do this on the basis of household income—I understand the argument made by hon. Members that that is the right thing to do—we would have to accept that that would involve putting everybody claiming child benefit, all 8 million, into the tax credit system which would be a substantial administrative burden on the state and on those individuals.

A number of points have been made in the course of the debate. Let me see whether I can pick up on those, rather than addressing every amendment. My hon. Friend the Member for Christchurch (Mr Chope) argued that the provision should apply only to a household income of £100,000 or more. Not only would that result in the administrative challenge I have set out, but it would cost an additional £900 million, which would be unaffordable as well as impractical.

The hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) asked about providing information at constituency level. We can release the information by region, but the survey data are simply not good enough at constituency level. I can say that 63,000 people in Scotland will gain as a result of the changes we announced in the Budget, compared with the previously announced policy. She asked what the £5 million for customer information will pay for. It includes provision for an online calculator and guidance for customers, and a letter that will go out in the autumn to all individuals above the higher rate threshold. We will also be updating existing guidance and testing it with customers, and there will be marketing spend to highlight the policy.

My hon. Friend the Member for Christchurch asked why the legislation refers to “high” rather than “higher”. He is right that “higher” is mentioned in some of the other documentation, but the point, which parliamentary counsel considered, is that “higher” begs the question, “higher than what?”, so we used “high”.

[Fiona O'Donnell]

Will the Exchequer Secretary give way?

[Mr Gauke]

I have only one minute remaining and want to address the concerns raised during the debate, so I will not give way.

The question was raised of classification and whether or not this was a tax. As my hon. Friend the Member for Christchurch said, that will depend on the Office for National Statistics assessment. Let me deal with the question the hon. Member for Kilmarnock and Loudoun asked. Independent taxation will still apply, each partner will still have their own personal allowance and tax rate bands, and the amount of child benefit, even if it is received by the taxpayer’s partner, will not increase the amount of income liable to tax. Where there are two high earners in a household and they do not want to tell each other their incomes, there will be a mechanism whereby they can find out whether they have a higher or lower income but without the full details.

Mr Hoyle, my time is up. As I have said, the Government have had to make difficult decisions. In order to continue to provide child benefit, we must do so in a sustainable manner. At the current cost that is not the case. We have increased the threshold to £50,000 and put in a taper. This all mitigates some of the concerns that hon. Members have raised, but the budget deficit left by the previous Administration is the challenge we must overcome if we are to avoid a far worse predicament.

[Mr Chope]

I thank everybody who has participated in this spirited debate. Having heard the Minister’s explanation in relation to amendment 9, I will seek to withdraw it. Hopefully, we can have a vote on amendment 28, which deals with the injustice whereby a single-earner family earning £60,000 will lose their child benefit while a family with two people earning £50,000 will retain it. This issue will come back to haunt the Government, I fear. That sometimes happens when policies are drawn up on the back of a fag packet. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

18:00

Proceedings interrupted (Programme Order, 16 April).

The Chair put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83D).

Amendment proposed: 75, page 4, line 35, at end add—

‘(2) Schedule 1 will not come into effect until a study has been carried out into ways of mitigating the impact of the Schedule on families with only one earner, compared with families with two earners, and placed in the Library of the House of Commons.’. —(Cathy Jamieson.)

Question put, That the amendment be made.

18:00

Division 527

Ayes: 234

---

Labour: 218
Conservative: 6
Scottish National Party: 6
Social Democratic & Labour Party: 1
Plaid Cymru: 1
Alliance: 1
Green Party: 1

Noes: 289

---

Conservative: 252
Liberal Democrat: 40

Schedule 1

High income child benefit charge

Amendment proposed: 28, page 131, line 24, in schedule 1, at end insert—

‘(5) A person (P) is not liable to a high income child benefit charge if the total adjusted net income for the year of that person and any partner does not exceed £100,000’.—(Mr Chope.)

Question put, That the amendment be made.

18:14

Division 528

Ayes: 240

---

Labour: 220
Conservative: 10
Scottish National Party: 6
Social Democratic & Labour Party: 1
Plaid Cymru: 1
Alliance: 1
Green Party: 1

Noes: 283

---

Conservative: 243
Liberal Democrat: 39

Question put (single Question on successive provisions of the Bill), That clause 8 stand part of the Bill; and that schedule 1 be the First schedule to the Bill.

18:27

Division 529

Ayes: 283

---

Conservative: 244
Liberal Democrat: 38

Noes: 231

---

Labour: 217
Conservative: 5
Scottish National Party: 5
Social Democratic & Labour Party: 1
Plaid Cymru: 1
Alliance: 1
Green Party: 1

Clause 8 ordered to stand part of the Bill.

Schedule 1 agreed to.

The occupant of the Chair left the Chair (Programme Order, 16 April).

The Deputy Speaker resumed the Chair.

Bill (Clauses 1, 4, 8, 189 and 209, Schedules 1, 23 and 33) reported, without amendment (Standing Order No. 83D(6)), and ordered to lie on the Table.

petition

Thursday 19th April 2012 Commons Chamber

18:38

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

I rise to present this petition from Mr Christopher Warren and Mr Duncan Hounsell, supported by more than 2,000 residents who live in and around Saltford in the county of Somerset. It asks for the Saltford railway station to be reopened to the great advantage of local people for commuting and for their business life.

The Humble Petition of the users of Saltford station and others

Sheweth,

That the Petitioners believe that re-opening Saltford station alongside the electrification and re-signalling programme that is due to take place on the mainline would be cost effective for the Department for Transport and would be beneficial for train users, and further that the re-opening of the station would enhance the case for the Greater Bristol Metro.

Wherefore your Petitioners pray that your Honourable House shall urge the Government to take all possible steps to ensure that Saltford station is re-opened when reviewing the First Great Western rail franchise.

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

[P001019]

Armed Forces Covenant

Thursday 19th April 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Angela Watkinson.)

18:39

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

Following a successful campaign by the British Legion—which I am pleased to say was supported by Labour—the House welcomed the announcement last May by the former Secretary of State for Defence, the right hon. Member for North Somerset (Dr Fox), that there was to be an armed forces covenant which would be enshrined in law.

The duty to provide for the welfare of our armed forces goes back to the time of Queen Elizabeth I. In 1593 an Act was passed for the Necessary Relief of Soldiers and Mariners, and centuries later the debt owed by the state to our military personnel, who guard our treasured freedom with their very lives, has never diminished. The fact that in recent years our forces have been actively engaged in conflict throughout the globe, which continues to this day in Afghanistan, has given a heightened impetus to working for better terms of service for the armed forces, and making substantial improvements to their welfare and that of their families.

Labour is proud of its record of achievement in defence matters. Under the last Labour Government, the defence budget increased by 10% in real terms. In the course of modernising our armed forces, Labour published, in 2008, the Service Personnel Command Paper and the Report of Inquiry into National Recognition of our Armed Forces. The aim was to develop cross-departmental measures to improve welfare provision and support for the forces, as well as evaluating the relationship between the armed forces and society. The resulting recommendations included proposals for a more systematic approach to homecoming parades, the creation of a British armed forces and veterans day, annual public outreach schemes, and civic education in secondary schools.

At the same time, the Conservative party and the Liberal Democrats both commissioned reports on the state of the military covenant, and many of the subsequent recommendations formed key pledges in their respective manifestos for the 2010 general election. However, the new coalition Government’s progress towards developing an armed forces covenant was overshadowed by the publication in October 2010 of the strategic defence and security review, which produced not just severe cuts in equipment programmes—for instance, the decommissioning of HMS Ark Royal and the scrapping of the Harriers—but massive cuts in personnel. At the time 17,000 job losses were announced; the number has subsequently increased to at least 22,000, but remains uncertain. The report of the independent Task Force on the Military Covenant was published in December that year, and its recommendations ultimately led to the announcement of the Government’s intention to enshrine the armed forces covenant in law.

It is now 11 months since the covenant was announced, but although an interim report has been produced, it has not been presented to the House. Can the Minister confirm that the House will receive the promised annual report on the implementation of the covenant, and that it will be presented to the House by November this year?

The shadow Defence Minister, my hon. Friend the Member for West Dunbartonshire (Gemma Doyle), recently raised the issue of funding for accommodation with the Minister during Defence questions. That issue is of great concern to forces personnel and their families. Although the Government have put £100 million into the budget for accommodation, they have already frozen funding for service accommodation for three years up to 2013. That means a total saving of £141 million, and will result in a net cut of £47 million. Can the Minister explain those figures, which clearly do not add up?

The announcement of the doubling of the welfare grant and the increase in council tax relief to 100% is good news for our armed forces personnel and their families. However, in order that neither members of the services nor their families are disadvantaged, will the Minister say when the moneys identified by Labour in the Department for Education’s budget, and agreed by the Secretary of State for Education, will be made available so that the education service premium of £250 is not removed from children whose parents, sadly, have been killed in action?

In the 2010 comprehensive spending review, the Government announced that public sector pensions and benefits would be uprated using the consumer prices index measure rather than the retail prices index, and that that would be a permanent change. As a result, a disabled double-amputee aged 28 at corporal level would lose £587,000 by the age of 70, and a senior non-commissioned officer’s widow would lose £750,000 over her lifetime. Have these people not already lost enough? While it may be necessary to use the CPI measure to calculate the upratings in a time of recession, these examples show that there is no justification for denying our forces and their families their rights and is not in keeping with the spirit of the armed forces covenant.

The armed forces covenant obligation involves the whole of society, including voluntary and charitable bodies, private organisations and individuals. Will the Minister say how other Government Departments are implementing their obligations under the covenant? Further, will he say which charitable organisations he is working with in order to meet the obligation?

The armed forces covenant states:

“Those who serve in the Armed Forces, whether Regular or Reserve, those who have served in the past, and their families, should face no disadvantage compared to other citizens in the provision of public and commercial services.”

While the obligation is a duty for the whole of society, the Government must take the lead. Those to whom we owe such a great debt should not be disadvantaged by the cost of the national debt. Without them, we may not have had the freedom to be able to hold this debate today. Labour will work responsibly and in co-operation with the Government on all aspects of national security and the welfare of our armed forces, but we will also continue to challenge the Government to ensure that the obligations under the armed forces covenant are met.

18:47

[The Parliamentary Under-Secretary of State for Defence (Mr Andrew Robathan)]

I congratulate the hon. Member for North Tyneside (Mrs Glindon) on securing this debate on the armed forces covenant. I have discussed the subject rather a lot over the last two years, so I know a certain amount about it.

I am delighted by the hon. Lady’s new-found interest in the covenant, and I am only sorry that she trotted out some old, incorrect and rather party political figures and arguments, because I had hoped that we could move on and discuss the positive achievements of the covenant. May I also correct her on the following point? We did not introduce the covenant into law because of any campaigns by anybody. It was a manifesto commitment, which was reiterated by the Prime Minister shortly after we took office.

[Mrs Glindon]

However, will the Minister acknowledge the part that the British Legion played?

[Mr Robathan]

I talk to the British Legion the whole time, of course. Indeed, I saw the chief executive on Monday at a conference. We work very closely together, although I am sorry that the Labour party has said that they will be issuing joint press releases, as I think it is important—[Interruption.] Well, I have a document which I can show any Member who might want to look at it. It is important that all charities remain outside the party political arena, and that they are not in any way hijacked by a political party.

Much has been said about the covenant, but I believe that actions speak louder than words, which is why we have placed in law a requirement for the Defence Secretary to report annually to Parliament, clearly setting out what has been achieved and how we are performing. Despite the hon. Lady’s criticisms, I think we are doing rather well, but there is still work to be done. As I have said innumerable times, we are building on the work of the last Government’s Command Paper; I do not think there is any disagreement on that.

The Prime Minister chaired the inaugural ministerial committee meeting on the armed forces covenant, which I believe took place last month, although it could have been at the end of February. I regularly discuss the covenant with the Minister of State, Cabinet Office, my right hon. Friend the Member for West Dorset (Mr Letwin), who is the Minister for government policy and is leading cross-departmental work. Indeed, I spent about an hour with him not more than three hours ago. It is also very encouraging to see how communities throughout the country are producing their own community covenants, including in the hon. Lady’s own constituency. I congratulate them on that, because it is an important step forward.

A key principle of the covenant is to tackle disadvantage incurred as a result of service. That is why, today, in a joint announcement with Royal Mail, we have launched a practical initiative to help those who are serving overseas by giving them the opportunity to apply for credit from UK institutions and to shop online. In the past, service personnel have experienced difficulty if they were living overseas due to the absence of a credit score or reference search based on a traditional UK address. From now on, British forces post office addresses will be recognised. That is the kind of relatively minor Government action, working with others, which makes a real difference to the lives of our service personnel and their families.

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

rose—

[Mr Robathan]

I am sorry, but I will not give way.

Disadvantage can take many forms but let us not forget that members of the armed forces are also members of the community they serve, and it is only right that they should play their part in the very necessary changes we have had to make to reduce the deficit. Armed forces pay is frozen, as is that of all public sector workers, with the exception of those earning £21,000 or less, to whom we have given £250 in each of the two years of the pay freeze. I am glad to say that pay has also increased incrementally each year for those who are not at the top of their pay scale, and so serving personnel are getting increases, but not an overall increase in the pay scale. That protection was introduced for the armed forces to ensure they were not disadvantaged by their lack of contractual entitlement. This is in accordance with the principles of the armed forces covenant and has meant that most service personnel will have received an increase to their pay during the pay freeze period. I am sure that all hon. Members wish that the same was true of us, too.

I have said to the House before that I did not enter Parliament to make members of the armed forces redundant, especially when we are asking them to do so much in Afghanistan, as we are now. However, we inherited a massive black hole in the Department’s budget, as has now been accepted by the Labour party. That was unsustainable, and something needed to be done and quickly. The strategic defence and security review of October 2010—the first in 13 years—set the requirement for the future. It included removing out-of-date capabilities and it made room to ensure that we can afford those capabilities needed for the future. The second and final tranche of redundancies for the Royal Navy and Royal Air Force will conclude in June. The Army will conduct a further tranche and detailed planning is being undertaken. Believe me, this is a painful process that none of us enjoys. As was clearly stated by my right hon. Friend the Member for North Somerset (Dr Fox) when he was Defence Secretary, no one currently serving in Afghanistan or on notice to deploy will be made redundant unless they have asked, and are subsequently selected, to be included in the list.

The Government published, in December 2011, the interim report on the armed forces covenant, to which the hon. Lady referred, and I urge the whole House to read it. It was an interim report because the covenant had been in existence for only a few months, and therefore we could not have a whole year’s report. “Transition” is covered in chapter 10, as is “Housing after Service”. The Minister for Housing and Local Government, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), has recently consulted local authorities on how former service personnel are managed on the local authority housing list. He will announce the findings of that consultation in due course.

On 21 March, my right hon. Friend the Chancellor announced three new measures to help service personnel. On housing, an extra £100 million has been made available to improve service accommodation. In addition, a much-welcomed doubling in the funding available for families’ welfare while their loved one is away will allow units to fund activities beyond those already announced. It underlines our commitment to those who serve with such selfless devotion to duty, safe in the knowledge that we are looking after their families while they are away.

[Mrs Glindon]

May I refer the Minister back to the figures that I mentioned in my speech? If the £100 million will not be devalued, does that mean that the three-year freeze will be reduced to a two-year freeze so that that £47 million will not be lost?

[Mr Robathan]

We are continuing to refurbish bathrooms and kitchens, for instance, but we are not doing the wholesale modernisation as that has been stopped by the freeze. That £100 million will go towards improvements and the modernisations that will go forward, but there is a freeze. There is a freeze for one simple reason: to quote the Chief Secretary to the Treasury in the previous Government, “there is no money”. It is no good saying that we should spend more when we do not have any money.

[Dr Julian Lewis (New Forest East) (Con)]

Will my right hon. Friend give way?

[Mr Robathan]

No, I am afraid that I will not.

Thirdly, council tax relief has been doubled to just under £600 for a typical six-month tour. That ensures that those who are doing so much to maintain our national security benefit the most. Although it is now old hat to say it, I repeat the fact that doubling the operational allowance for an operational tour means that every member of the armed forces who comes back from a six-month tour in Afghanistan comes back with approximately £5,600, tax free, in his or her pocket. That is particularly good business for travel agents and car salesmen, I think, but it is a great gift and they deserve the money that they get. We are very pleased with that and I can assure the hon. Lady that when I have been in Afghanistan—one sometimes gets the odd ear-bending, if I can put it that way—I have heard that people are grateful for that large lump sum, which is deserved, when they come back.

One of the most important aspects of the covenant is the way we treat those who have been injured or suffer from a debilitating health problem as a result of what we have asked them to do. Medical treatment in the battlefield is second to none and what was once an injury that would take a life is now much more survivable. Outstanding care continues at the Queen Elizabeth hospital and at Headley Court, where the determination of our people to get back to as normal a life as possible is impressively displayed. When one meets amputees who are going to climb Kilimanjaro, one is genuinely humbled. I know that that word is much over-used, but it really is very impressive.

Some, sadly, will need a lifetime of care and we are committed to providing it. My hon. Friend the Member for South West Wiltshire (Dr Murrison) has produced two excellent reports and we are taking forward his recommendations, particularly those in his “Fighting Fit” report on the mental well-being of our people. I am pleased to say that the Minister of State, Department of Health, my right hon. Friend the Member for Chelmsford (Mr Burns), has recently announced continued funding for the 24-hour helpline that was one of the recommendations. If anybody would like to ring it, as I have, they will discover that the person at the other end of the line knows what he or she is talking about and gives good signposting to those with mental health issues.

We are also working to introduce a veterans’ information service. It will routinely contact service leavers 12 months after they are discharged to establish whether they have any health needs that require attention. The “Fighting Fit” report refers to the service as something of a safety net to help veterans once the support structures available to them during their service lives are no longer readily accessible. To get it right, it is essential that we can easily identify ex-service personnel, so we are working with the Department of Health to ensure that a veteran’s status is properly recorded on his or her records. Equally, however, we must recognise that some who leave the services do not wish to have such a status recorded, and it is right to respect their individual wishes.

The hon. Lady particularly asked whether we will publish a covenant this year and we will do so in the autumn—in November, I would expect—not least because it is a statutory requirement and we believe firmly that we should obey the laws that we have passed.

The armed forces covenant remains work in progress, but it definitely is progressing. We have already made significant gains and we are fulfilling our commitments made in the programme for Government. Much more is set out in the interim report to which the hon. Lady has referred, which I am sure she has read. However it is wrong to suggest that every time we have to make a difficult decision to repair the damage caused by the previous Administration, it is somehow a breach of that commitment. The covenant defines the principles of removing disadvantage and allowing special provision in some circumstances in the access to public and commercial services. This has set a framework for policy making and delivery across Government and will improve the support available for the armed forces community. Those who serve and those who have served deserve nothing less, even in the difficult times we face today.

Question put and agreed to.

18:59

House adjourned.