House of Commons

Thursday 17th May 2012 Commons Chamber

Thursday 17 May 2012

The House met at half-past Ten o’clock

Prayers

Thursday 17th May 2012 Commons Chamber

[Mr Speaker in the Chair]

Oral Answers to Questions

Thursday 17th May 2012 Commons Chamber

The Secretary of State was asked—

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

1. What assessment he has made of the effect of changes to the feed-in tariff on the number of solar PV installations in the last 12 months.

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

In the last 12 months, there have been approximately 270,000 photovoltaic installations registered on the microgeneration certification scheme database, against a forecast of just 35,000 installations when the scheme was launched in 2010. Moreover, having substantially reduced the cost of each installation to electricity bill payers, the coalition is now in a position to significantly expand the ambition of the feed-in tariffs scheme.

[Diana Johnson]

Following the chaotic cut to the feed-in tariff, there has been a 90% fall in solar panel installations, and 6,000 jobs have gone in the industry, including more than 100 in my constituency of Kingston upon Hull North. Does not the Government’s mismanagement and this debacle mean that the industry could be strangled at birth? It also puts at risk investment in the renewables industry, which is so important to areas such as Hull.

[Mr Davey]

I am surprised the hon. Lady reaches that conclusion. Since the 21p tariff came in 10 weeks ago, there have been more than 26,000 installations with 86 MW of capacity, which is equivalent to the installation rate achieved in August 2011, when the tariff was at 43p. The installation rate in the period is 1.7 times what it was in the same period last year.

[Mr Philip Hollobone (Kettering) (Con)]

Feed-in tariffs are not the only way to encourage solar PV installations. Can more be done with building regulations, especially to encourage solar to be built in to new-build properties at the start?

[Mr Davey]

I am sure local authorities will look at that proposal, but the key thing is to ensure that our new, more stable and predictable regime supports the solar industry, as we believe it will. We need to ensure that the message goes out that the solar industry is back in business and on a sound footing. There will be many more solar installations compared with what happened under the solar installation regime we inherited from the Labour party.

[Caroline Flint (Don Valley) (Lab)]

Last week, just 900 installations took place and two thirds of businesses had empty order books, but my question is about the Government’s next round of cuts to solar, which is due on 1 July. Last night, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), tweeted:

“Having listened carefully to industry, we are looking at scope for pushing back a little the next proposed reduction in the #solar tariffs”.

The truth is that the Government have missed the deadline legally required to provide notice to Parliament for the next round of cuts to come into force. Is not the Government’s incompetence the real reason why they are backtracking?

[Mr Davey]

The right hon. Lady seems to think that we should not listen to the industry, but I do. We are considering tweaking the start date for the next tariff reduction—if we change it, it will be a tweak, not a massive change. She needs to understand that the changes that we have consulted on and are introducing will bring stability and mean that we have solar power for the many, not the few.

[Caroline Flint]

There will be laughs echoing outside the Chamber at the Secretary of State’s suggestion that the Government have been listening to the industry, but my question was about parliamentary procedure. Parliamentary procedure requires that due notice must be given in advance of the cuts being brought into force on 1 July. My understanding is that the Department has missed—legally—the deadline required. Will the Secretary of State therefore confirm whether the Department has missed the deadline required to give notice to Parliament? If it has, it is absolutely the truth that the Government cannot legally impose the cuts on 1 July. Why does the Secretary of State not just own up, end the uncertainty and commit to scrapping the next round of cuts on 1 July?

[Mr Davey]

The right hon. Lady started by saying that the industry will be laughing, but Paul Barwell, the chief executive of the Solar Trade Association, said in The Independent on 9 May 2012:

“The current 21p subsidy can actually give a return up to 10 per cent, tax-free, index-linked, for 25 years, making it one of the most attractive investments around.”

That is what the industry is saying. The Government will abide by all the procedures required by the House and lay the regulations when required.

[David Rutley (Macclesfield) (Con)]

2. What progress his Department has made on the introduction of the green deal.

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

3. What progress his Department has made on preparatory work on the green deal.

[Damian Hinds (East Hampshire) (Con)]

6. What progress his Department has made on the introduction of the green deal.

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

18. What progress his Department has made on the introduction of the green deal.

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

The green deal is a flagship policy for the coalition. We are making good progress towards the introduction of the green deal this autumn. We are determined to have a solid framework in place for this transformational scheme, which will enable the green deal market to grow right through to the next decade and beyond.

[David Rutley]

Macc2020, an active and energetic community group in Macclesfield, has effectively used a local energy assessment fund to stimulate take-up of the green deal among home owners and to promote local small and medium-sized enterprises associated with energy efficiency. Does my hon. Friend agree that that is the right approach given that economic development potential?

[Gregory Barker]

Absolutely. Macclesfield is a terrific example of community activity. That is exactly the kind of approach we want to see followed across the whole country. It will help get the green deal off to a strong start. It is great that my hon. Friend’s constituency is blazing a trail, and I congratulate everyone involved—perhaps he will do so in person on my behalf—on taking advantage of the DECC LEAF scheme to such good effect.

[Tom Brake]

I have had a very positive meeting on the green deal with Sutton Seniors Forum, Ofgem and the Minister of State, Department of Health, my hon. Friend the Member for Sutton and Cheam (Paul Burstow). One issue that arose was the importance of providing clear information to people, particularly senior citizens. What do the Government intend doing on that front?

[Gregory Barker]

We already have a lot of information on our website, but obviously the scheme has not been launched yet and we still have some way to go. The level of consumer information will be stepped up in the autumn to coincide with the launch, when there will be a call to action on the green deal. We are keen to ensure that pensioners and every other part of society are fully briefed on the opportunities presented by the green deal.

[Damian Hinds]

Like Macc2020, Energy Alton in my constituency has done a great job in blazing a trail for the green deal. What can be done now to ensure that local small businesses in East Hampshire benefit fully from the business opportunities?

[Gregory Barker]

My hon. Friend is right to raise the issues of small and medium-sized enterprises, which will be critical to delivering the green deal at a variety of levels in the economy. We have taken measures to reduce the barriers to SMEs, after working closely with them in preparing the green deal legislation, and we continue to engage closely with the small business sector.

[Amber Rudd]

My hon. Friend has been kind enough to visit Hastings on several occasions, as he is a neighbouring MP, and will be aware that many of my constituents live in housing association property. How will the green deal benefit residents in housing associations?

[Gregory Barker]

Absolutely. I know that my hon. Friend is a terrific advocate for Hastings, and I can assure her that social housing will be among the first to benefit from the green deal revolution. Dedicated funding within the £1.3 billion of energy company obligation subsidy will be focused on the most deprived areas of the country, so I would expect areas such as Hastings to be among the first to see the benefits. With her as its MP, I am sure it will.

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

Will the Minister explain what happened to the 30,000 people who applied for help through Warm Front last year? Despite an underspend, they did not get anything. Will he apologise to them for having to wait for this much heralded green deal and will it actually be delivered to the very poorest? I doubt it.

[Gregory Barker]

I am pleased to say that since I became Minister in the right hon. Lady’s place, the number of complaints about Warm Front has reduced substantially. She will know that there was a massive complaint bag about Warm Front while she was in office. We have not seen that since I entered office. Of course we will continue to run Warm Front though next year. It remains part of a suite of measures to tackle fuel poverty, and we remain committed to doing much more.

[Barry Gardiner (Brent North) (Lab)]

In the interests of transparency, will the Minister share with the House the benchmarks he has set for the uptake of the green deal scheme in the first to third years and what emissions reductions he has set as the benchmarks for the success of the scheme?

[Gregory Barker]

We have to get away from this target mania that existed under Labour and understand that this is not some sort of Stalinist five-year plan. We are unleashing the power of the private sector, and as a result we will be far, far more successful than any of these top-down Whitehall programmes initiated under the previous Government.

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

There is real concern that under green deal plans there is not enough money for fuel poverty. Will Ministers reconsider the possibility of recycling revenue from the carbon floor price and EU emissions trading scheme revenue into the ECO pot to top it up and to prevent the poorest customers from cross-subsidising rich customers?

[Gregory Barker]

The hon. Lady raises a serious point. I listened to what she said in the Energy Public Bill Committee, to which she made a constructive contribution, about how we should design the ECO and use it to tackle fuel poverty more effectively. More than half the £1.3 billion of ECO subsidy will be targeted at the fuel poor through various streams, which should go a long way to meeting her concerns about the need to ensure that the fabric of our housing and the improvements to it have the fuel poor at their heart.

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

I have listened carefully to what the Minister has said. The launch of the green deal is just five months away, yet we are still waiting for the secondary legislation to be published. Energy companies do not know whether they are going to be ready for the launch, no green deal assessors have been trained, no detail is available on the interest rate, and the Government’s wildly optimistic predictions on jobs and take-up are constantly being downgraded. The Minister said a moment ago that he did not believe in targets, yet only about 12 months ago he was saying that 14 million homes would be covered by the green deal by 2020. We now know that No. 10 is also worried about it, and is calling on the Cabinet Office to try to prevent this impending car crash. How will the Minister ensure that the interest rate is low enough to make sure that the green deal is a good deal for consumers?

[Gregory Barker]

I thank the hon. Lady for that speech. The fact is that the green deal is on track, and we will be publishing the secondary legislation very shortly; it will be done and dusted before the summer recess. We had an excellent meeting yesterday with the Prime Minister and the Deputy Prime Minister in which we reviewed the whole green deal programme, and I am glad to report that we are all on track.

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

4. What steps he is taking to help households with their energy bills.

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

The Deputy Prime Minister recently announced an agreement with energy suppliers to ensure that all consumers have good information on their supplier’s best tariff. This builds on previous actions by the Government to help people to control their bills, and complements Ofgem’s proposals in the retail market review to protect consumers. We are also encouraging consumers to harness their collective purchasing powers.

[Debbie Abrahams]

I thank the Secretary of State for his reply. In my constituency, 6,563 over 75-year-olds would benefit by £200 a year from being put on the lowest tariff. I appreciate what the Government are doing, but many of those people are unable to access online facilities easily. What else can the Government do to ensure that they benefit from these measures?

[Mr Davey]

Thanks to the deal that we have negotiated and that the Deputy Prime Minister has announced, those pensioners in the hon. Lady’s constituency will be written to every year by their energy supplier and advised of the best tariff for them. Furthermore, because of the warm home discount for which this Government have legislated, 600,000 of the poorest pensioners in the country are getting a direct discount of £120 off their energy bills. That is real action.

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

Will the Secretary of State commend the work of the Energy Saving Trust on reducing household bills? Will he also point it in the direction of reducing the cost of heating water, as a means of reducing overall energy costs, by heating only the water that a household needs to use each day?

[Mr Davey]

My hon. Friend is right to pay tribute to the work of the Energy Saving Trust. It does a huge amount of work on providing information, advice and support to a whole range of people, particularly the most vulnerable, and I am sure that it will have heard her welcome comments.

[Bill Esterson (Sefton Central) (Lab)]

If the Secretary of State is serious about the green deal, why will he not ensure that the energy companies have to put the 9,914 pensioners over the age of 75 in my constituency, and others around the country, on to the lowest tariff?

[Mr Davey]

I think the hon. Gentleman is mixing up the green deal with the action that we are taking to help people with their consumer bills. The warm home discount, which targets the 600,000 poorest pensioners, is one of the most effective ways of providing that help. Under the scheme proposed by Labour, some of the wealthiest pensioners would get the discounts, and I am afraid that that shows that it is no longer the party of the many.

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

I very much welcome the move to ensure that the market works as efficiently as possible, so that consumers pay no more than is necessary. Should we not make it clear to consumers, however, given the amount of investment that needs to be made in our energy infrastructure, that future generations will have to pay a higher price to ensure that we can keep the lights on in a low-carbon way?

[Mr Davey]

My hon. Friend is right to say that we face a big investment challenge in this country. That is why, in the Gracious Speech, Her Majesty announced that we would be legislating for electricity market reforms to bring forward that investment, but at the lowest possible cost.

[Jim Shannon (Strangford) (DUP)]

People have real concerns about energy prices. They also have real concerns about the amalgamation of energy companies—be they electricity, gas or oil companies—and the control of prices that results from that. What assurances can the Minister give us that the Government will always be the protector of prices for the consumer?

[Mr Davey]

The hon. Gentleman is right. Energy bills are a real concern for many households around the country. That is why we are taking the action we are. He refers to consolidation in the sector. That certainly happened under the last Government. What we are doing is trying to make sure we can get more competition into the sector. We have seen Ofgem’s proposals for dealing with liquidity in the wholesale markets, while the work I am leading on collective switching is intended to enable consumers to generate more competition. Competition is what we want to see.

[Tessa Munt (Wells) (LD)]

5. What discussions he has had with the Secretary of State for Communities and Local Government on the potential long-term community benefits of the Hinkley Point C nuclear power station and other major infrastructure projects.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

I have regular discussions with other Government Departments, including the Department for Communities and Local Government, on how to ensure that local communities hosting new nuclear power stations benefit in the long term from these large and nationally important projects. The Government will announce our conclusions shortly.

[Mr Speaker]

I call Tessa Munt.

[Tessa Munt]

rose—[Laughter.]

[Mr Speaker]

Was it something I said? I hope not. We look forward to hearing the hon. Lady.

[Tessa Munt]

Thank you very much, indeed, Sir.

The Minister will know of my concerns about the long-term impacts of both the Hinkley Point project and the National Grid’s proposals to put pylons across the Somerset Levels, when we would naturally prefer that it was done underground. Has the Minister had distinct discussions about the crucial importance of business rate retention for the benefit of the local communities? Will he meet me and representatives from local authorities in my area to discuss this further?

[Charles Hendry]

The humour arose because I inadvertently sat on the Secretary of State, which shows our commitment to work seamlessly together in this coalition! My hon. Friend makes an important point. We recognise that EDF has already committed about £90 million for a section 106 agreement, but we recognise, too, the need for greater signals for the long-term benefit of the community from those who deliver nationally important projects.

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

I will endeavour not to sit accidentally on either of my Front-Bench colleagues this morning. One of the claimed community benefits of Hinkley Point is the ability to create and maintain highly skilled jobs. Will the Minister give his reaction to the comments of Citigroup in response to the reports of construction costs at Hinkley increasing by 40%, suggesting that an already very challenging programme might be reaching the point of impossibility?

[Charles Hendry]

The hon. Gentleman nearly did sit on his right hon. Friend the Member for Don Valley (Caroline Flint). He makes an important point. We are in close conversations with EDF and other potential developers of nuclear plants and we recognise that they have to be delivered in a cost-efficient way. We do not recognise the figures in the Citibank report, but we will continue to work with the company to ensure that this low-cost, large-scale, low-carbon source of generation can be part of the future energy mix.

[Tom Greatrex]

I am grateful to the Minister for that response. I am sure he will also be aware of the evidence that Volker Beckers, the chief executive of RWE npower, gave to the Energy and Climate Change Committee earlier this week. He explained that the company was pulling out of the Horizon joint venture because continuing

“would have meant a downgrading and we could not afford to do that”.

Given the report from Moody’s suggesting that if EDF were to continue with Hinkley and, indeed, Sizewell, it would be at risk of having its credit rating downgraded, how concerned is the Minister about the prospects for nuclear new build in the UK?

[Charles Hendry]

The hon. Gentleman provides a partial quote, in that Volker Beckers also said that this was a result of German Government policy and of the constrained balance sheets that resulted from the nuclear levy in Germany, and that RWE is selling off £7 billion-worth of assets worldwide, making a further €2 billion-worth of cost reductions elsewhere. Essentially, this is part of a global restructuring of the company. We continue to believe that the measures we are putting in place through market reform—more detail will be published very shortly—will create the right environment for investment in our low-carbon infrastructure for the future, which is so critical for our energy security.

[Mr Tim Yeo (South Suffolk) (Con)]

Does my hon. Friend agree, however, that there is no prospect of a new nuclear power station at Hinkley Point or anywhere else in the UK until we have absolute clarity about the contracts for difference regime? That clarity must extend to the credit status of the counter-party, compliance with the EU state aid regime and the setting of the strike price. Will the Minister tell us when we will have that clarity?

[Charles Hendry]

I can give my hon. Friend the assurance that the clarity he seeks will be published very shortly, within the next few days. When we publish the Bill, we will publish a further technical update, which will provide much of the information for which he asks. We have been very keen that the Bill goes through the process of pre-legislative scrutiny, so that his Committee, the Opposition Front-Bench team and others can contribute actively to it.

[Mr Edward Leigh (Gainsborough) (Con)]

7. What steps he is taking to listen to a diversity of views on the causes of change in the Earth’s climate.

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

My Department considers many views on the causes of climate change, and I encourage my officials to take all available scientific evidence into account when developing policy. However, the fact that we are open to a range of views does not mean we ascribe equal value to each.

As with all scientific endeavour, climate science involves uncertainties, but it is considered very likely that human activities are the major cause of current climate change, and compelling evidence shows that climate change brings major risks for us all. It would be deeply irresponsible not to act decisively and urgently to deal with climate change in the United Kingdom and globally.

[Mr Leigh]

I am no scientist, and I do not know the truth about the controversies that are raging around global warming, although I note that Dr James Lovelock wrote recently that, in his view, temperatures had remained broadly constant over the last 12 years. I do not know whether that is right or wrong; what I do know is that before we spend trillions of pounds on reining in our competitive economy and desecrating our country with wind farms, we should actually listen to a range of views.

[Mr Davey]

I know that, as a former distinguished Chair of the Public Accounts Committee, the hon. Gentleman wants to take evidence and science into account, and that he understands risk and probability. The case for action is overwhelming, whether it is made by the Intergovernmental Panel on Climate Change or the Stern review.

[Mr David Hanson (Delyn) (Lab)]

8. What assessment he has made of the change in the number of solar panel installations since he announced changes to the feed-in tariff.

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

When we announced proposals to reform the feed-in tariffs scheme for solar PV at the end of October 2011, approximately 126,000 solar PV installations were registered on the microgeneration certification scheme database. Since then, an additional 190,000 installations have been registered. In the 10 weeks since the introduction of new tariffs for small-scale installations on 3 March, more than 26,000 solar PV installations have been registered. That is equivalent to the installation rate in August last year.

[Mr Hanson]

I hear what the Secretary of State says, and I heard what he said in response to my hon. Friend the Member for Kingston upon Hull North (Diana Johnson) and my right hon. Friend the Member for Don Valley (Caroline Flint), but I can tell him that in my constituency there has been a catastrophic collapse in the demand for feed-in tariffs. It has been particularly catastrophic for small businesses which have invested many thousands of pounds of their own money in what would have been a very positive regime. Will the Secretary of State clarify, very soon, what will happen after July, so that my constituents who have invested money in this scheme can ensure that they will still have their businesses in October and at the end of the year?

[Mr Davey]

We will respond to the consultation very shortly, but I can tell the right hon. Gentleman that installation rates are already increasing, although there was a downturn after the introduction of the new tariff. I think there is a sunny future for the solar industry.

[Kelvin Hopkins (Luton North) (Lab)]

We are soon to see a new generation of highly efficient solar panels, and we are also soon to see efficient domestic battery storage technologies. Combining that with a mass programme of insulation and a Severn barrage would remove the need for nuclear generation. Will the Government think again about the need for it?

[Mr Davey]

The uncertainty surrounding climate change, and surrounding all technologies, is such that it would be irresponsible not to pursue every possible low-carbon technology. The hon. Gentleman is right to suggest that renewables have a positive future, as does solar power. We propose to deliver an additional 620,000 installations at a cost of just £500 million by 2015—that is, to deliver nearly three times as many installations as were delivered under the old scheme, at a third of the price.

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

9. What recent discussions he has had with the Scottish Government on the effect of potential Scottish independence on energy policy.

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

I have had no recent discussions with the Scottish Government on the effect of potential Scottish independence on energy policy. The UK Government’s position on the independence debate is clear: Scotland is stronger in the UK, and the UK is stronger with Scotland in it.

[John Robertson]

I think that a few people will have been slightly disappointed by the Secretary of State’s answer. According to evidence given to the Select Committee on Energy and Climate Change by Peter Atherton of Citigroup Global Markets, investment in Scottish renewables in an independent Scotland would be “highly questionable”. Given that other companies are also saying that they are withholding investment, should not a referendum on Scottish independence be held now rather than later, for the good of energy in this country?

[Mr Davey]

The hon. Gentleman knows the position of Her Majesty’s Government. He knows that we would like a referendum to be held sooner rather than later. We are very committed to ensuring that there is investment in the UK’s energy infrastructure, whether it takes place in Scotland, England, Wales or Northern Ireland. However, some people are saying that uncertainty about an independent state is putting off some investors, and that is one reason for thinking that the independence referendum should be held sooner rather than later.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

10. What steps he is taking to reduce domestic energy bills.

[Karl MᶜCartney (Lincoln) (Con)]

13. What steps he is taking to reduce domestic energy bills.

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

17. What steps he is taking to reduce domestic energy bills.

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

The Government are committed to reducing domestic energy bills, and have put energy efficiency at the heart of their energy policy. The green deal will drive the take-up of energy efficiency measures in homes, helping to reduce energy bills. In addition, the roll-out of smart meters will further reduce energy use. Vulnerable customers will also benefit from the warm home discount, which is worth £1.1 billion over four years.

[Alec Shelbrooke]

My right hon. Friend will be aware from his constituency, as I am aware from mine, of the pressure that people are coming under with their fuel bills. Will he outline for my constituents, as well as everybody else’s, what the electricity reform Bill will do to help keep costs down?

[Mr Davey]

My hon. Friend is quite right to point to the fact that one reason for bringing forward electricity market reform and the energy Bill is to ensure that we meet this country’s energy infrastructure needs, which are huge, as we see 20% of power plants coming offline over the next decade and the need to make the transition to low-carbon energy. That is a huge challenge, which could be very expensive for consumers. One of the reasons we need to reform the electricity market is therefore to ensure that that infrastructure investment can be made at the lowest cost imaginable.

[Karl MᶜCartney]

Can my right hon. colleague update the House on his Department’s progress in cutting red tape for small energy suppliers to help increase competition in the market and thereby keep prices down for my constituents in the city of Lincoln?

[Mr Davey]

I am grateful to my hon. Friend for that question. There are two things I would point him to. We are helping small suppliers to compete by increasing the customer threshold for participation in schemes such as CERT and CESP—the carbon emissions reduction target and the community energy saving programme—and the warm home discount scheme. Ofgem is currently consulting on proposals for a mandatory auction in the wholesale electricity market to improve liquidity, and has recently completed a consultation on tariff simplification. All these measures will, we believe, help small suppliers in my hon. Friend’s constituency and elsewhere.

[Graham Stringer]

Will not the biggest impact on reducing domestic energy bills be achieved by bringing shale gas online as quickly as possible?

[Mr Davey]

I do not think so. We had a seminar at No. 10 recently, which the Prime Minister participated in, along with myself and the Business Secretary. We heard from experts in the shale gas industry who had been working in America and looking at the major opportunities in places such as Ukraine and China. They were clear that it would take some time for shale gas to be exploited in the UK. They were also clear that we needed strong regulation to proceed and that the shale gas reserves in this country are not quite as large as some people have been speculating.

[Andrew George (St Ives) (LD)]

Given that so few large companies took part in last week’s big switch, does my right hon. Friend agree that we should be concerned about the responsiveness of large companies to customers’ concerns? What can the Government do to ensure that all companies engage with any such initiative in future?

[Mr Davey]

At least three of the big six were involved. I thought that the way in which the reverse auction was conducted by the consumer association Which? was a real success, and I am delighted that my hon. Friend noticed it. It brought a saving of £25 million to consumers who were part of that collective switch, with an average saving of £120. It was therefore a success, and I want to see more energy companies getting involved in such schemes.

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

11. When he expects to conclude the assessment of bids for funding of carbon capture and storage projects.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

Bidders were required to register their interest in the carbon capture and storage commercialisation programme with the Department by 13 April, and must submit bids by 3 July. Once bids are submitted, a full and thorough assessment will be carried out, and decisions on which projects to support will be taken in the autumn.

[Thomas Docherty]

I am grateful for that answer. Obviously the Minister will know that we in the UK have vast reserves of untapped coal, including much in Fife. Will he try to ensure that the opportunity for clean-coal technology is not lost in the current process, and will he find the time to come to Fife and see our technologies first hand?

[Charles Hendry]

I would always be delighted to find a chance to go to the hon. Gentleman’s constituency. As he knows, I fought Clackmannan in the 1983 election. They did not see the need for my presence there at that time, but finding other reasons to go back would be a great pleasure. We see this issue as an important part of coal policy, and we want it to provide a long-term future for coal in the energy mix. There are tremendous resources around the United Kingdom, and the work being done in his constituency and elsewhere is important to that process.

[Mr Mark Spencer (Sherwood) (Con)]

22. The Minister also fought a seat in Mansfield, very close to Thoresby colliery. If he wants to come half way up the country, he might come to see the good work going on at Thoresby colliery. I hope that he can assure the House that when the clean coal technology is developed, it will give this country a great future of energy reserves.

[Charles Hendry]

I did eventually work out that fighting mining seats was not the best way to get elected to this House; it is more accurate to say that they fought me, rather than I fought them. Many areas around this country have tremendous resources that can benefit from this technology and, in addition, great technological skills that we can bring forward in this process. This is a world-class, world-leading competition, and it is a very exciting time for this industry.

[Mr Speaker]

The Minister of State is a self-effacing fellow. If memory serves me correctly, although he was unsuccessful in Mansfield he did lose in 1987 by only 56 votes, and I think the House ought to know that.

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

I welcome the progress on carbon capture and storage, a technology with great potential. Will the Minister also update us on another clean coal technology being pioneered in Newcastle, underground coal gasification?

[Charles Hendry]

I have yet to be tempted to fight a seat in Newcastle, but these opportunities may still happen. I was grateful for the chance to meet the hon. Lady and some of the team from Newcastle university—they and others are doing very important work in this area. We are still looking at some of the work, and I have a meeting coming up with one of the major global companies, Linc Energy, to try to understand more fully and effectively the work that it is doing in this sector. We think that it can be a player, but it is not in the forefront for the first stage of carbon capture and storage projects, because of the current stage of the technology.

[Tony Baldry (Banbury) (Con)]

It is estimated that carbon capture and storage technology could support an amazing 100,000 jobs by the end of the next decade, so does my hon. Friend agree that speed is very much of the essence if we are to maximise the huge opportunities that this technology offers?

[Charles Hendry]

I agree strongly with my hon. Friend, and the reason why we have brought forward this competition with the speed that we have—three months for submissions to be made and another three months or so before the final outcome is known—is the importance of speed. Work is going on around the world to try to deal with this. We think that with £1 billion up front and £125 million for research and development, and through our new market reform structure—a long-term mechanism for supporting that industry—we can move this from being a few pilot projects to an industry.

[Dr Julian Huppert (Cambridge) (LD)]

12. What support he plans to provide for Cambridge retrofit and other schemes to improve the energy efficiency of existing buildings.

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

I am very glad to report that my Department is already working closely with the Cambridge retrofit project, which is just the sort of ambitious city-wide retrofit programme the green deal is designed to support.

[Dr Huppert]

I thank the Minister for that comment. The Cambridge retrofit is an excellent programme that will make a huge difference. How will the Government ensure stability of energy and climate policies in the long term, so that investors are willing to put finance into major schemes such as the Cambridge retrofit?

[Gregory Barker]

My hon. Friend raises a good point. We know what investors want. They want TLC—transparency, longevity and certainty. Unlike previous short-term or stop-go policies, such as the carbon emissions reduction target and the community energy saving programme, the green deal is designed to run well into the 2020s, giving investors exactly the sort of longevity and certainty they need.

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

14. What discussions he has had with the chair of the Environment Agency on induced hydraulic fracturing.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

I very much welcome the comments made by the chair of the Environment Agency. I believe he is correct in assessing that, subject to rigorous regulation and monitoring, hydraulic fracturing can safely be used in the UK for shale gas exploration. I also agree on the need to proceed with caution. Fracking should be carried out only under close regulatory control, to ensure that risks are minimised and the environment is fully protected.

[Mr Sheerman]

It is a relief to know that mentioning the abbreviation “fracking” is within the House rules. Many of us believe that fracking has real potential for energy security, and although we should proceed with it carefully, it could be of huge benefit to this country. Please, do ignore some of the siren voices in the environmental lobby and get on with doing it in a cautious but determined way.

[Charles Hendry]

The hon. Gentleman is absolutely correct, because we cannot ignore what is happening elsewhere around the world. The gas price in the United States is now one quarter of that in Europe and one seventh of that in Asia, so this is a game-changing technology. However, our commitment is absolutely clear: for this to go ahead, we have to have the tightest regulatory controls and the greatest focus on environmental protection. This is a densely populated island, we have to have public support for this technology going forward and we intend to go about this in a very constructive way, involving all the expert opinion we can.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is there not another side to all this? Does not the process use a vast amount of water and involve chemicals as well? It runs counter to all this green deal talk that we hear so often. Will the Minister ensure that all those reservations are taken fully into account?

[Charles Hendry]

Let me give the hon. Gentleman an absolute assurance that all those issues will be completely taken into account. The fluid used is 99% water and there are already very strict controls on how it is used and on what happens after it has been through the process. There are very strong regulations, too, on how the fracking activity is separated from the water table and they are often several thousand feet apart. All those issues will be considered with the greatest care before we go forward. We believe that this technology has real potential, but it must be used in the safest possible way.

[Simon Wright (Norwich South) (LD)]

15. What steps he is taking to support combined heat and power biomass gasification plants.

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

We see a big role in the future for combined heat and power gasification plants. The coalition has introduced the renewable heat incentive to support exactly that type of technology and will shortly publish details of future subsidies for renewable electricity under the renewables obligation. Furthermore, DECC’s UK renewable energy road map clearly sets out the actions we are already taking to remove non-financial barriers to deployment.

[Simon Wright]

The university of East Anglia campus in my constituency is able to receive considerable heat and power from its unique biomass gasification plant, which is the first of its kind in the UK. When sustainable syngas cannot be produced due to the maintenance cleaning cycle, the boiler switches to natural gas. However, dual fuel plants are ineligible to receive renewable heat incentive payments. Will the Minister consider whether the RHI guidance could be made more flexible further to encourage investment in innovative low-carbon technologies?

[Gregory Barker]

My hon. Friend raises a good point and we are keen to be as flexible, pragmatic and ambitious as possible. I can confirm that the Government will explore the inclusion of dual fuel biogas and fossil fuel installations within the RHI and I thank him for his idea.

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

16. What his policy is on investment in new nuclear power.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

New nuclear power will have a vital role to play in our energy mix alongside other low-carbon forms of generation provided it can be delivered in a way that provides value for money for consumers and that is consistent with the coalition Government’s commitment to no public subsidy.

[Joan Walley]

I thank the Minister for that reply. Given the uncertainties about future investment, will he give us again an absolute assurance that if it is to be delivered, there will, as the coalition agreement requires, be no subsidy and no hidden subsidy, either?

[Charles Hendry]

I refer the hon. Lady to the statement we made in October 2010 about exactly how we define subsidy and what would be meant by that commitment. We are absolutely clear that this technology must stand on its own feet. The process for taking it forward is designed to ensure that that is the case and it will be very transparent. We recognise that higher costs are associated with low-carbon technologies than with high-carbon technologies, but we remain firmly committed to that statement.

[Harriett Baldwin (West Worcestershire) (Con)]

19. May I put on record, Mr Speaker, our admiration of your awesome knowledge of electoral history? Nuclear power is an important source of stable energy in this country and press reports about the ability to continue to have 20% of our power coming from nuclear energy have been worrying. Will the Minister repeat his reassurances that 20% of our energy will continue to come from nuclear power?

[Charles Hendry]

Your knowledge, Mr Speaker, is sometimes not so much awesome as scary and I find that you know more about my electoral history than I do.

I can give my hon. Friend that assurance. We believe that the initial role of new plants will be to replace the old plants that are coming out of commission. We do not have a set Government target for delivery, but the industry thinks that it can deliver 16 GW of new nuclear power by 2025. We have identified the eight sites where that will go forward and, taking forward the work of the previous Administration, we have created the most attractive regime anywhere in Europe for new nuclear investment.

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

20. The Minister has mentioned the target of 16 GW by 2025 that the industry states it can provide, but the industry clearly is not in a position to provide that given recent developments. What work has he undertaken to revise his estimate, particularly in relation to the national planning statements, of the number of gigawatts that will be provided over the coming period through nuclear power?

[Charles Hendry]

I would take the hon. Gentleman to task on this. The two consortia that continue to go forward as planned—the EDF-led one and the one in Cumbria—are looking at 9.7 GW. The Horizon one—I have strong hopes that new investors will come in and take forward that programme—will deliver an additional few gigawatts as well. I firmly believe that, following on from the work of the previous Administration, we have created a very attractive regime for people from around the world to look to be part of the nuclear renaissance in the United Kingdom. We cannot do this without international investment and we recognise that we need to create the right framework for that to come forward.

[Alex Cunningham (Stockton North) (Lab)]

21. What steps he is taking to help households improve their energy efficiency.

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

The launch of the green deal this autumn will put in place the biggest and most ambitious energy efficiency programme Britain has ever seen. Furthermore, we anticipate that our electricity market reforms will create further opportunities for large-scale investment in energy efficiency projects.

[Alex Cunningham]

Last year, nearly 30,000 households that applied for help through Warm Front were turned down even though the budget had an underspend of more than £50 million. Will the Minister take this opportunity to apologise to all the families who were left in the cold last winter because of his Department’s incompetence?

[Gregory Barker]

We need to send a very clear message from this House that Warm Front remains open. Certainly, the scaremongering from the Opposition last winter that Warm Front had closed and was no longer available was extremely unhelpful. That was coupled with a very mild winter, but one message that I want to get over is that Warm Front remains open and that those who think they can benefit from it should definitely apply.

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

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

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

As the hon. Gentleman will know, my Department’s key objectives are to have secure, clean and affordable energy and we have been working hard on those objectives. The energy Bill measures to reform the electricity market are very important for that. We hosted the clean energy ministerial very recently, which was attended by Ministers from 23 leading economies, and we worked together on clean energy technologies. I was particularly pleased to see that Professor John Hills’ report—the independent review of fuel poverty—was published.

[Gregg McClymont]

I thank the Minister for that answer. Last week it was Centrica and this week it was Scottish and Southern Energy announcing record profits at a time when household bills continue to rise. In those circumstances, why will not the Government insist that the big six must write to customers telling them what is the cheapest tariff rather than directing them to the phone or the internet, where there is no guarantee that they will get the right information?

[Mr Davey]

I do not think the hon. Gentleman has been listening. The Deputy Prime Minister announced the deal we have struck with the six big energy providers. They are now committed to writing every year to their customers telling them what is the best tariff for them.

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

T2. Under the previous Labour Government the number of households living in fuel poverty rose to almost 6 million. What are this Government doing to help the poorest households in my constituency?

[Mr Davey]

We are doing a huge amount, from the warm home discount to the push on collective switching. My hon. Friend will know that today’s figures on fuel poverty show a fall of 0.75 million, but we should not celebrate that because those figures are based on the current measure of fuel poverty. If they were recalculated using the methodology proposed by John Hills, the fuel poverty figures would stand still. There can be no room for complacency; we have to redouble our efforts to tackle fuel poverty.

[Caroline Flint (Don Valley) (Lab)]

This week, we learned that the Foreign Secretary—for whom I understand the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) was once the chief of staff between elections, just to add to his biography which we are learning about today—does not think the Government are doing enough to support the low-carbon economy. I absolutely agree with him. We also learned that the Energy Secretary and the Business Secretary wrote back urging caution. It was bad enough when the Chancellor was talking down the green economy, but for him to be joined by the Energy Secretary absolutely beggars belief. Is not the Foreign Secretary right that unless Britain shows strong leadership on the green economy, there is no hope of securing international agreement on climate change?

[Mr Davey]

Unlike the right hon. Lady, I have read the letter from the Foreign Secretary and I wrote the letter to the Prime Minister. They are very positive about what we want to do on low carbon technologies and climate change in this country and abroad. We are leading the way.

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

T4. Despite assurances from my hon. Friend the Minister, small double-glazing companies in my constituency still feel that they are being elbowed out of green deal work by larger national companies. What more can my hon. Friend say to reassure small and medium-sized enterprises in Sittingbourne and Sheppey that they will be able to access green deal work?

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

Of course, the green deal has not actually started yet; it will not be launched until the autumn and we have yet to see the full framework, but I can assure my hon. Friend that we have already taken several steps to make it easier for SMEs to engage in the green deal across the board. We shall continue to work with SME working groups to ensure that there is maximum availability of the green deal and the ECO—the energy company obligation—for SMEs, who will be vital for their delivery.

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

T5. The Minister will be aware that although the ECO will be delivered in Scotland by the Scottish Government, the underlying legislation applies to England, Wales and Scotland. Given concerns about how the green deal will be implemented, what steps are the Government taking to ensure that my constituents and those of other Scottish MPs get full benefit from the ECO when it is finally brought into effect?

[Gregory Barker]

The hon. Gentleman will know that we are still finalising the details of the ECO, but I should be happy to meet him to reassure him that the scheme really will benefit the whole country.

[Julian Sturdy (York Outer) (Con)]

T6. As high energy bills continue to affect local households in my constituency, can the Minister outline what the Government are doing to improve the UK’s long-term energy security problems? If energy security is not addressed—I stress that it is a long-term issue—energy bills will continue to soar.

[Mr Davey]

My hon. Friend is exactly right. Later this month when we publish the energy Bill, he will see that we have very ambitious electricity market reforms to deliver, among other things, energy security in the future. We need investment of £110 billion in our energy infrastructure over the next decade. That is a real task, and we need to make sure that there are incentives to bring forward that low-carbon investment.

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

T8. Speaking in the House on 9 February, the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker) said he expected to see“steady growth in the number of people who will be employed”—in the solar industry—“until 2015 and beyond.”—[Official Report, 9 February 2012; Vol. 545, c. 479.]Why then have 6,000 people in the solar industry lost their jobs since last summer?

[Gregory Barker]

We have now put the whole solar industry on a much more stable foundation. We shall shortly be publishing our plans for a feed-in tariff system that really can go forward into the next decade and beyond, with a real sense of ambition. It is affordable, it is ambitious and it will bring real clarity to the industry.

[Dr Julian Huppert (Cambridge) (LD)]

T9. Earlier, the Secretary of State mentioned the excellent Which? big switch scheme to save people money. What I particularly like about it is the fact that it is based on co-operative action—individuals choosing voluntarily to work together rather than a statist top-down approach. Does my right hon. Friend share that view and what support was he able to give?

[Mr Davey]

I am grateful to my hon. Friend for his question. He will know that when I was at the Department for Business, Innovation and Skills, I stimulated a huge amount of research and work on collective purchase and co-operative principles so that together we can purchase not just energy but other things more cheaply. I asked if the Department had any detailed research, because I thought the previous Government, who were supposed to be in favour of collective and co-operative principles, might have done some—they had not.

[Barry Gardiner (Brent North) (Lab)]

In his preparation for COP 18, what analysis has the Secretary of State made of Professor Sir David King’s proposals for common but differentiated cap and trade schemes, using the human development index as an appropriate measure?

[Mr Davey]

We are taking forward a lot of analysis, not just on that scheme, but on a number of other things. COP 18 in Doha at the end of the year will be really important; I met the Deputy Prime Minister of Qatar recently, to discuss how we can make sure that it is a successful set of discussions.

[Jeremy Lefroy (Stafford) (Con)]

T10. What discussions is my hon. Friend having with energy-intensive industries such as ceramics and steel, which are key employers and exporters, to ensure that their prices are competitive with countries such as Germany and France?

[Gregory Barker]

We are very much engaged with all the energy-intensive industries, because we are absolutely determined in DECC to ensure that decarbonisation does not lead to de-industrialisation. On the contrary, if we are smart the low-carbon transition should enhance our competitive position. But that does mean being sensitive to the burdens that we place on manufacturing industry. We are starting with a package of compensation worth £250 million for energy-intensive industries, but that is only the beginning of a much more nuanced and ambitious policy.

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

Will the Secretary of State join me in congratulating Brighton energy co-op on its launch last night of the first community generation scheme in Brighton? What is he doing to ensure that the electricity market reform proposals will properly support community energy schemes, particularly those by co-ops, housing associations and local authorities?

[Mr Davey]

I can congratulate the scheme in the hon. Lady’s constituency. It shows that under the new regime of solar feed-in tariffs that we have introduced, there are still many communities that are going forward and making those investments. That belies much of the criticism we have heard in the House today. I can assure the hon. Lady that we want to continue to encourage such community schemes in our future policies. Quite a lot of those schemes will still get the more standard and common renewable obligation approach support. Some of those community schemes will not have to go to the larger-scale contracts because of the difference in the electricity market reform.

[Mr Charles Kennedy (Ross, Skye and Lochaber) (LD)]

Will Ministers redouble their consistent and very welcome efforts of the past couple of years in support of the onshore manufacturing sites for offshore wind turbine production—not least sites like Kishorn in my area, which I raised with the Minister’s predecessor—which have lost out in enterprise zone status, and therefore find themselves at a bit of a competitive disadvantage over the next five years? I am sure that a summer recess ministerial visit to Kishorn and the west highlands would be most welcome and would boost morale.

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

My right hon. Friend will, I am sure, be delighted to know that I am already planning that. We are looking at a visit to Nigg before going on to Shetland and doing other parts of Scotland at the same time. I am delighted to have the chance to take part in that process. We should absolutely celebrate the way that some of our great, historic industrial facilities, built for the oil and gas industry, have been given new opportunities and a new lease of life, as they start to build the infrastructure that will be necessary for our renewable future.

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

Have Welsh Government Ministers requested at any point that they should have the final say in whether fracking developments take place on Welsh soil?

[Charles Hendry]

As the hon. Gentleman will be aware, decisions on energy infrastructure matters for Wales are made on a nationwide basis. We know that that is what the industry looks for. But of course, in that process there has to be local authority planning consent for the specific project. There has to be approval by the Environment Agency and its equivalents in Wales and Scotland, if the project is taking place there, and by the Health and Safety Executive. All the appropriate bodies are involved in that process.

[Ian Swales (Redcar) (LD)]

I welcome the current carbon capture and storage competition. As the Tees Valley has 18 of the top 30 UK carbon emitters, I am sure the Minister will agree that its bid has a lot to commend it. Will he ensure that the needs of heavy industry are given due weight alongside the needs of energy generators?

[Mr Davey]

I am grateful for my hon. Friend’s question. I know he does a huge amount to support industry in his constituency. I can tell him that in the competition that we announced at the beginning of last month, we were very clear that we wanted to encourage clustering, so after listening to the industry we were encouraging change. Bigger pipes are needed, so that more than one power plant can take part in those schemes with other industries that emit a lot of carbon.

[Ian Lavery (Wansbeck) (Lab)]

Coal will continue to provide between 27% and 50% of electricity in the UK for the foreseeable future. Can the Minister explain what Government support will be given to the British deep-mined coal industry to prevent it from extinction in the next few years?

[Charles Hendry]

The most important thing that we can do for the coal mine industry is to show that there is a continuing role for coal in the generating mix. We are all clear that we cannot have unabated coal in the mix in the future, and new plants will need to be equipped with carbon capture and storage technology. That is why the competition that we are launching here to put the United Kingdom at the forefront of the development of CCS technologies offers the best possible future for coal to have a long-term role in the energy mix going forward.

[Andrew George (St Ives) (LD)]

Further to the question asked by the hon. Member for Sittingbourne and Sheppey (Gordon Henderson), Warm Front was, in my view, undermined by the extortionate charges of a small cartel of suppliers. Given that only 22 companies are so far among the providers for the green deal, can the Minister assure us that local fitters and local suppliers can be part of the programme, so that costs are competitive?

[Gregory Barker]

My hon. Friend has hit the nail on the head. Previous programmes were monopolistic, did not offer real choice and were not open to real competition. The green deal will change all that. We are going to have genuine competition, real choice and real ability for local players to come into this exciting market.

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

The Secretary of State knows that if we are to get energy security and diversity, we have to invest now in big infrastructure projects, but he knows also that nimbyism, often so rampant in the questions put in this Chamber, is a great barrier to planning permission. What is he going to do about planning for decent infrastructure to achieve those objectives?

[Mr Davey]

The hon. Gentleman knows that this House passed a relevant national planning statement and that the Department for Communities and Local Government produced the national planning policy framework. The hon. Gentleman must recognise that there is a balance to be struck between the need to make sure that the local democratic voice is heard and the need for the types of investment that both he and I support. There is a balance, but we are determined to ensure that, with electricity market reform, we get the investment needed in this country.

Business of the House

Thursday 17th May 2012 Commons Chamber

11:31

[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 next week will be:

Monday 21 May—Remaining stages of the Local Government Finance Bill.

Tuesday 22 May—Remaining stages of the Financial Services Bill, followed by Third Reading of the Civil Aviation Bill.

Wednesday 23 May—Second Reading of the Electoral Registration and Administration Bill, followed by a European document relating to the proceeds of crime.

Thursday 24 May—Motion on the Whitsun recess Adjournment.

[Ms Eagle]

I thank the Leader of the House for his announcement of next week’s business, and I congratulate my hon. Friend the Member for North East Derbyshire (Natascha Engel) on her re-election unopposed to the Chair of the Backbench Business Committee.

Analysis of last week's Queen’s Speech has demonstrated that this Government have already run out of ideas. Of the 19 announced Bills, three are carry-overs from the previous Session, and now we learn that the passage of as many as five of the new Bills might be delayed until the next Session, making this by far the slimmest Queen’s Speech in living memory. Will the Leader of the House tell us why?

Today is the international day against homophobia and transphobia, and it is right that we mark it in this House. There are five countries where people can be sentenced to death for being lesbian or gay, and 76 where it is still illegal. We should pay tribute to all those who are bravely campaigning for equality around the world.

Will the Leader of the House arrange for the Equalities Minister to make a statement on the Government's proposals for equal marriage? This weekend, the Defence Secretary said that it was “not a priority”, and the Under-Secretary of State for Education, the hon. Member for East Worthing and Shoreham (Tim Loughton), said that he is “totally opposed”, but across the country there are couples who want to know whether to have a civil partnership, or to wait until the law is changed. What they do not want is to be in limbo while Conservative MPs fight among themselves and the Government prevaricate. The Prime Minister has said it is an important matter of equality. I agree. Will the Government now commit quickly to introducing legislation on equal marriage?

The whole House will be concerned about the eurozone crisis. On Monday, the Chancellor said

“the open speculation from some members in the eurozone about the future of some countries in the eurozone…is doing real damage across the whole European economy”—

only for the Prime Minister to indulge in precisely that speculation two days later. The Government’s plan A has pushed us back into recession. It has failed in Britain and it is now failing across Europe. Instead of manoeuvring to blame Europe for his failed economic policy, the Prime Minister should be pushing for a solution to the eurozone crisis.

At the election, Government Members promised not to cut front-line services, but that is exactly what the Home Secretary has done. More than 5,000 police officer jobs have been cut. When she spoke to the Police Federation conference yesterday, the right hon. Lady insisted the podium be shifted, because she did not want to be filmed in front of a conference slogan opposing police cuts. She can shift the podium and the camera angle, but she cannot shift the responsibility. Will the Leader of the House arrange for the Home Secretary to make a statement on police numbers so that she can explain what happened to their manifesto promise not to cut front-line staff?

While the Home Secretary is at it, she could also explain the ongoing immigration shambles at Heathrow. Every week we hear reports of thousands of people stuck at immigration and passengers queuing for hours while immigration desks are closed. It takes something when even Joan Collins feels the need to tweet from the queue that the Home Secretary should get a grip. And it is not just the Home Secretary; the Immigration Minister’s justification for the shambles at Heathrow’s border control was that it was the result of the wrong type of wind. What is it about this Government and the weather? First they blamed the economy’s performance on the snow, then the excuse was the wrong type of rain, and now we have the wrong type of wind. May we have a statement on the ministerial code? Does the Leader of the House intend to amend the code to say that Ministers are responsible unless they can blame the weather or, perhaps, their special advisers?

At Justice questions this week neither the Secretary of State nor his deputy were present. The ministerial code states that Ministers are accountable to this House, so they should at least turn up for departmental questions rather than leaving it to junior Ministers and Whips to do their work for them. Will the Leader of the House undertake to make sure that senior Ministers are present for oral questions in future?

Justice Ministers dodge their responsibilities to the House, the Home Secretary refuses to take responsibility for her police cuts, the Immigration Minister refuses to take responsibility for the shambles at Heathrow and the Chancellor refuses to take responsibility for a double-dip recession made in Downing street. What a way to start the new parliamentary Session.

[Sir George Young]

May I begin in a conciliatory way by congratulating the hon. Lady on her promotion to the chair of her party’s national policy forum? We hope that she can do that without becoming a part-time shadow Leader of the House. I know that she will bear in mind what her leader said on 10 January:

“in these times, with less money, spending more on one thing means finding the money from somewhere else.”

That is something her colleagues seem to have forgotten. Her previous job was shadow Chief Secretary to the Treasury, so she will want to bring some financial discipline to her party’s policies if they are to have any credibility with the electorate.

The hon. Lady asserted that there were not enough Bills in the Queen’s Speech. If she looks at earlier Queen’s Speeches, she will find that the number of Bills introduced in this Session is not dissimilar to the number introduced in the 2005, 2006 and 2007 Sessions. She will also find that three Bills are being carried over from the previous Session. We are not going to do what the previous Government did, which was to bring so much legislation to the House that they were unable to process it properly. As I have said before, the House is not simply a legislation factory. We are not going to make their mistake of imposing too many ill-considered and ill-drafted Bills on the House.

The hon. Lady mentioned that today is a day to celebrate equality. Had Mr Speaker been in the Chair, I would have commended the article he wrote for today’s copy of The Independent. Today is international day against homophobia and transphobia. The Government are strongly committed to advancing equality and want to ensure that public services are accessible to all and free from discrimination. She will know that we have lifted the ban on civil partnerships taking place on religious premises and are currently consulting on how to implement equal civil marriage. We are continuing to remove barriers and tackle prejudice.

On the economy, the hon. Lady will know that we are about to debate economic matters on an amendment tabled by the Opposition, but I have to say that her policies would increase this country’s debt and provide no solution to its problems whatsoever.

On policing, I remind the hon. Lady that before the election the then Home Secretary was asked whether he could guarantee police numbers, and he said “No.” I remind her also that the Labour party has now endorsed cuts of £2.1 billion to the police budget, and the official Association of Chief Police Officers response, from Chief Constable Peter Fahy, stated that

“the effectiveness of policing cannot be measured by the number of officers alone but by reductions in crime and increases in public confidence.”

It is an inconvenient truth for the hon. Lady that, although she might suggest that crime is going up, official figures show that police-recorded crime has fallen by 3%.

Turning to immigration, I note that we inherited a shambles at the UK Border Agency, which we are putting right. The hon. Lady will welcome the Immigration Minister’s announcement before the Home Affairs Committee of an additional mobile unit at Heathrow to cope with the delays to which she refers.

I am astonished that the hon. Lady mentions the absence of the Lord Chancellor from oral questions. She was a Minister herself, and she will know that occasionally Ministers have responsibilities other than in the House. The Lord Chancellor, in line with precedent, wrote to Mr Speaker and to the shadow Lord Chancellor to explain that he would not be at oral questions but at an international legal forum in Russia. I am sure that he would have preferred to have been here, because he enjoys his time at the Dispatch Box, but I commend the performance of my hon. Friend the Member for North West Cambridgeshire (Mr Vara), who was an understudy for the Lord Chancellor and not only kept the balls away from the wicket but swept many of them to the boundary.

Finally, I say to the hon. Lady that it is a fortnight since the Labour party candidate was defeated in the election for Mayor of London, and less than two months since the hon. Lady’s party lost Bradford West, so any triumphalism on her part is very premature.

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

A new report by a former president of the British Veterinary Association states that more than 25% of meat sold in our shops comes from animals that have not been stunned before slaughter. That figure exceeds easily the needs of our communities with special religious requirements, and it suggests that some abattoirs are cutting corners and costs. May we please have a statement from the Department for Environment, Food and Rural Affairs on the measures in place to protect our animal welfare laws, and on whether any new measures are needed to ensure that we enforce them properly?

[Sir George Young]

My hon. Friend raises an important and sensitive issue. Obviously, ideally, all animals should be stunned before slaughter, but she will recognise that there are religious issues here and that people have a preference to have their meat presented differently. We will, however, consult on measures to improve the welfare of animals slaughtered in accordance with religious rites when we consult on measures to implement regulation 1099/2009, which comes into effect on 1 January next year. The regulation deals specifically with the protection of animals at the time of killing, so there will be an opportunity for my hon. Friend to influence the decision-making process later this year.

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

rose—

[Sir Bob Russell (Colchester) (LD)]

We’re all on your side.

[Chris Bryant (Rhondda) (Lab)]

Come and join this side, then.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Mr Bryant, please, can we just calm down a little? Both sides get irritated and no one wants to see anyone irritated. Can we offer the hon. Lady our congratulations as well?

[Natascha Engel]

Thank you very much, Mr Deputy Speaker.

I thank the Leader of the House for the announcement of the pre-recess Adjournment debate next Thursday. Had the Backbench Business Committee been in existence at that point, I am sure we would have looked at scheduling a pre-recess Adjournment debate on that day, given that the previous pre-recess Adjournment debate was on assisted suicide. I am therefore grateful to the Leader of the House for doing that.

I pay tribute to the outgoing members of the Backbench Business Committee: the hon. Members for Kettering (Mr Hollobone), for Shipley (Philip Davies) and, especially, for Wellingborough (Mr Bone). Without them, the Committee would not be what it is today, and I am sad to see them leave, but I welcome the hon. Members for Nuneaton (Mr Jones) and for Harrow East (Bob Blackman)—and indeed the hon. Member for Southend West (Mr Amess), who is the greatest champion in the House of the pre-recess Adjournment debate, so next week’s will be a fitting start for him. Given that the Committee is still entirely English in composition, I hope that by the end of the Session we can look at having membership from the minority parties in order that we can become a UK Backbench Business Committee instead of being solely English.

[Sir George Young]

May I repeat what I said last night in congratulating the hon. Lady on her re-election? I am grateful to her for endorsing our decision to have a conventional pre-recess Adjournment debate next Thursday, to which my hon. Friend the Deputy Leader of the House will respond. She paid tribute to the outgoing members of the Backbench Business Committee. I am not sure whether it would enhance her reputation if I endorsed that, because the whole point of the Committee is to choose subjects that the Government would not normally have chosen, and it certainly did that under the previous regime. I look forward to working with her and newly elected colleagues during this Session, and to taking forward some of the ideas that we have shared about how we get some certainty into some of our conventional debates. I think she will understand that her party is slightly better placed than mine in being able to put Scottish Members on to the Committee. However, we have changed the Standing Orders to enable other Members to attend, and I hope that that is a move in the right direction.

[Sir Bob Russell (Colchester) (LD)]

In a written parliamentary answer dated 8 March, I was told by the Independent Parliamentary Standards Authority:

“Under our publication scheme, we proactively publish the minutes of meetings of IPSA’s Board.”—[Official Report, 8 March 2012; Vol. 541, c. 839W.]

Thirty minutes ago, under the heading “Transparency—Minutes of board meetings”, the IPSA website revealed that the last recorded publicly accessible minutes were for its meeting on 30 January. Knowing how keen IPSA is on every i being dotted and every t being crossed, either it has not met for three months or it is not honouring what it should. Bearing in mind that a public consultation is going on as to what the public feel is the role of an MP, should we, as MPs, not have a debate on this?

[Sir George Young]

My hon. Friend is a member of the Speaker’s Committee for the Independent Parliamentary Standards Authority, and he will know that on Tuesday morning there is a meeting between SCIPSA and IPSA—I am sorry about all these initials—where he will have an opportunity to put to the chairman of IPSA the question he has put to me. The chairman of IPSA will now have notice of what is coming and will have in his breast pocket the answer to the question, with specific details of when his board last met.

[Mr Dennis Skinner (Bolsover) (Lab)]

Whatever happened to the Tory announcement of the school building programme? Several months ago, the Secretary of State for Education, in an answer to me about Tibshelf school in my constituency, said that the statement would be made and that Tibshelf would almost certainly be one of the schools selected. Several months have passed and nothing has happened. Is this programme in the long grass with the equality programme, care of the elderly, building houses, the green deal, and all the rest of it?

[Sir George Young]

We intend to announce this month which schools will be rebuilt through the priority school building programme. It has been necessary to make specific checks, with site visits, on the condition of all the schools that applied, and we want to get it right. An announcement will be made shortly, and the first schools that are rebuilt through this programme will open as scheduled in 2014.

[Mr Laurence Robertson (Tewkesbury) (Con)]

Is the Leader of the House aware that the 44th meeting of the British-Irish Parliamentary Assembly took place in Dublin on two days this week, attended by many right hon. and hon. Members from this House and another place, and from the Irish Parliament, including the Taoiseach? Today the Dáil is debating that meeting and hearing reports of our discussions on trade, transport, Northern Ireland, and environmental policies. Would it be helpful to this House, and perhaps to another place, if time were made available for us to report on the proceedings of the British-Irish Parliamentary Assembly?

[Sir George Young]

I applaud the work that my hon. Friend does as Chair of the Northern Ireland Committee and his involvement in the group he mentions. If the Committee did a report on these issues it could provide a route for their finding their way into a debate through the Liaison Committee. Alternatively, he could apply to the newly established Backbench Business Committee for a debate on the subject, or he might find it possible to speak about it at next Thursday’s pre-recess Adjournment debate and get a response from my hon. Friend the Deputy Leader of the House.

[Ann Clwyd (Cynon Valley) (Lab)]

I am sure that the Leader of the House will agree that good communications between Members and their constituents are important. For the past three days, the telephone in my constituency office has been out of action. I do not know whether anybody else has faced the exasperation of trying to contact BT recently. I spent three quarters of an hour on the telephone yesterday, trying to get hold of somebody to talk to about the problem. My office has spent three days trying to get hold of a person to correct the fault. BT was privatised by the Conservative Government in 1984. It made a profit last year of £2.4 billion. Surely somebody can look at this problem, given the difficulties it is causing Members and their constituents.

[Sir George Young]

I am sorry to hear of the problems that the right hon. Lady faces in her constituency office. I have always found Clova Fyfe, who works for BT, enormously helpful in solving constituency problems. I will bring to her attention the difficulties that the right hon. Lady faces in her constituency office and see whether they can quickly be put right.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

A lot of Members want to catch my eye and I want to call them all, so speedy questions and shorter answers are required.

[Karen Bradley (Staffordshire Moorlands) (Con)]

I am sure that I am not alone in having a significant amount of constituency casework concerning the family courts system and the failings that my constituents find in dealing with that service. Will the Leader of the House find time for an urgent debate to reassure my constituents that all that can be done is being done to reform that system?

[Sir George Young]

My hon. Friend will know that we will introduce a children and families Bill that will address some of the issues about which she is rightly concerned. It will, we hope, create a time limit of six months for the completion of care cases, and will focus on issues that are essential in deciding whether a court order is made. There will be other issues in the Bill, but I would be testing your patience, Mr Deputy Speaker, if I read them out. This matter is a priority for the Government and it was in the Queen’s Speech.

[Lindsay Roy (Glenrothes) (Lab)]

May we have a debate in Government time about military procurement, and in particular about how robust the tendering process is and how due diligence is progressed? In part, this request was prompted by the experience of a company in my constituency that makes military garments. It tendered a significantly lower contract price than a Spanish company called Iturri. Iturri won the contract and then offered to subcontract the entire business to the company in my constituency at the significantly lower price.

[Sir George Young]

I take it that it was a contract in which the Ministry of Defence was the prime purchaser.

[Lindsay Roy]

indicated assent.

[Sir George Young]

I will raise the issue with the Secretary of State for Defence to see whether there has been any irregularity, and ask him to write to the hon. Gentleman.

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

May we have a debate on trade? For 13 years under the previous Government, the automotive sector was in a trade deficit. In just two years, that has become a trade surplus. Given the good news today of Vauxhall Motors’ further investment in UK manufacturing, it is important that the House holds such a debate so that it understands how we are rebalancing the economy.

[Sir George Young]

I am grateful to my hon. Friend. I notice that the hon. Member for Wallasey (Ms Eagle) did not mention the good news at Ellesmere Port, which has secured 2,100 jobs and paves the way for another 700 as the plant moves from two shifts to three. My hon. Friend makes a good point that emphasises our success in rebalancing the economy away from an over-reliance on financial services, back to manufacturing. He makes the point that a number of major motor manufacturers are investing in this country. Crucially, some of the components suppliers are also moving back to the UK, so we are getting the benefit of the whole supply chain.

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

I am sure that the Leader of the House will want to listen to the catalogue of disasters that has affected my constituent, Mr Garnett Smith. He has a problem with HMRC, which keeps taking money from two separate employer relationships that he has. On 31 January, I wrote to HMRC and the Exchequer Secretary to the Treasury. By 18 April, there was no reply so I chased it up. I was told that I would have a reply on 20 April, but there was no such reply. I contacted the Exchequer Secretary again on 8 May and was told that an electronic copy was coming. On 16 May, there was still no response. My constituent is still having money withdrawn from his account. Will the Leader of the House please ask a Treasury Minister to come to the House to explain whether his Department is incompetent or just does not care about my constituent?

[Sir George Young]

Of course Treasury Ministers care about the hon. Lady’s constituents. The Chancellor of the Exchequer will be at this Dispatch Box in a few moments’ time. Rather than waiting for a debate, if she lets me have her constituent’s details I will see that the appropriate Treasury Minister gets on to the case. If there is an injustice and money is being wrongly withdrawn from an account, we will see that it is stopped straight away.

[Jason McCartney (Colne Valley) (Con)]

The Government are investing heavily in rail infrastructure across the north, with the electrification of the trans-Pennine route. The big decision is coming up on the funding of the northern hub rail investment programme, which would stimulate 20,000 to 30,000 jobs across the north. May we have yet another debate on the fully funded northern hub project, focusing in particular on the support that the scheme is getting from local enterprise partnerships and the private sector?

[Sir George Young]

That is an important project. My right hon. Friend the Secretary of State for Transport spoke in the debate yesterday on transport-related issues. I cannot promise another debate in the near future. My hon. Friend will know that we have agreed to fund Network Rail up to a maximum of £130 million to implement the package to which he refers. The investments to increase capacity and speeds on the Sheffield to Manchester line, and to increase speeds on the Manchester to Bradford via Rochdale and Halifax line and the Manchester to Preston via Bolton line are subject to value for money being confirmed, but they are a demonstration of our commitment to infrastructure, particularly in my hon. Friend’s part of the country.

[Chris Bryant (Rhondda) (Lab)]

On 15 March, the Government tabled a series of changes to the immigration rules. Some of them are perfectly sensible, but some of us fear that others of them will lead to a new generation of domestic workers living in virtual servitude. They will come into force if, after 40 days, no motion has been tabled in this House to oppose them. We have prayed against them. I know that the Government have difficulty working out when 40 days will lapse, but they will lapse tomorrow. The Government have therefore failed to provide an opportunity for us to debate the matter. Will the Minister for Immigration delay the implementation of the changes until we have had a proper debate?

[Sir George Young]

The procedure that we have adopted is exactly the same as that which the hon. Gentleman adopted when he was Deputy Leader of the House.

[Tim Farron (Westmorland and Lonsdale) (LD)]

The decision of the right hon. Member for Neath (Mr Hain) to reorder his priorities may or may not be a welcome development for the Leader of the Opposition, but it is a welcome development for those of us who are concerned about making the best use of tidal and hydro energy schemes. Will the Government make time for a debate in the House on the need for investment, both private and public, in tidal and hydro barrage schemes, not just in the Severn estuary, but at Morecambe bay, so that we can create clean, green energy on a massive scale, as well as thousands of jobs?

[Sir George Young]

Those are important issues and are part of our agenda to diversify the supply of electricity generation. We had a debate yesterday on Department of Energy and Climate Change-related issues and we have just had questions to the Secretary of State for Energy and Climate Change and his team of Ministers, so I cannot promise another immediate opportunity to address these issues. Later in the Session, there will be a Bill on electricity market reform, which may be an opportunity for my hon. Friend to develop his theme.

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

The Leader of the House and the shadow Leader of the House have noted that today is the international day against homophobia and transphobia. Will the Leader of the House arrange for a debate on tackling homophobic bullying in schools, because my constituents report that it remains a significant problem?

[Sir George Young]

That is an important issue. I wonder whether it would be appropriate for the hon. Lady to make an early application to the Backbench Business Committee to see whether we could have a debate on bullying in schools and the particular type of bullying to which she has referred. We can be proud that the UK has been recognised as the No. 1 country in Europe for lesbian, gay, bisexual and transgender rights by the International Lesbian and Gay Association.

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

May we have a statement on how this Government are helping hard-pressed households by freezing council tax? That is something that the last Labour Government completely failed to do. Indeed, council tax more than doubled during their time in office. I am pleased that it is not only the Government who are delivering on council tax pledges, but my district council of North West Leicestershire, which is freezing council tax for the third successive year.

[Sir George Young]

I am grateful to my hon. Friend for reminding the House that the compounded saving of two years’ freeze is worth up to £147. I pay tribute to those local authorities that have been able to make sometimes difficult decisions to pass those benefits through. He also contrasts the record of the coalition Government in our first two years with the record of the previous Labour Government, under whom, as he said, council tax doubled.

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

Has the right hon. Gentleman seen the report by three independent housing organisations on the emerging housing crisis? The report confirms that, last year, only 109,000 homes were completed, which is much less than the 140,000 homes completed on average under the previous Government, and less than half the number that the Government know would meet demand. Homelessness is also on the increase—it is up 27%—and more than 600,000 are affected by overcrowding. Home building, therefore, is a win-win situation: it will increase growth, which the Prime Minister will talk about today. Will the Leader of the House provide Government time for a debate on housing and how we achieve better economic growth?

[Sir George Young]

As a former Housing Minister, I take a close interest in this matter and have seen the report to which the hon. Gentleman refers. We inherited a not very positive record from the previous Government: the lowest peacetime house building since the 1920s. I am sure he will welcome our affordable homes programme, which is set to exceed expectations and deliver up to 170,000 affordable homes and a £1.3 billion investment to get Britain building. I hope he will also welcome what we have done to enable planning decisions to be made more quickly, to make public land available to house builders, and to help first-time buyers. I hope, too, that he will welcome our fiscal decisions, which, crucially, enable interest rates to remain low, helping first-time home buyers.

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

Earlier this week, the Minister of State, Department for Education, the hon. Member for Brent Central (Sarah Teather), who has responsibility for children and families, responded to the Green Paper on special educational needs, which is an area of policy that has been ignored for far too long. Parents must battle for their children’s rights to receive the education they need. May we have a debate on this important area of policy so that we can push progress much more quickly?

[Sir George Young]

I would welcome such a debate. The Government are committed to a draft Bill on that matter, so there will be an opportunity to take things forward. We want to ensure that services for disabled children and young people, and those with special educational needs, are planned and commissioned jointly by local authorities and clinical commissioning groups. We want to give children who have challenges a much squarer deal than they have at the moment. When the Bill is introduced, there will be an opportunity to outline Government policy.

[Anas Sarwar (Glasgow Central) (Lab)]

I am sure all hon. Members would like to join me in congratulating the Glasgow Labour party on its success in the Glasgow city council elections last week, which helped to crash the Scottish National party separatist juggernaut into the ditch. One reason for that success was the innovative policies that Glasgow Labour introduced, including a £25 million jobs guarantee scheme. Given the ongoing crisis of youth unemployment, may we have an urgent debate in the House on that issue?

[Sir George Young]

If the hon. Gentleman looks at the amendment to the Queen’s Speech that has been tabled, which we are about to debate, he will see that unemployment is specifically mentioned. The answer—this is probably the first time I have been able to say this—is that yes, I can grant a debate on the subject to which he just referred, and it will start in about 20 minutes’ time.

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

Please may we have a debate on encouraging entrepreneurialism in young people in schools and colleges? Last week, I was a dragon at a “Dragon’s Den” event at Harrogate college and was impressed by the ability, pitches and enthusiasm of the young people I met. Across our country, young people just need the opportunity in our education system to understand the excitement and rewards of a career in business.

[Sir George Young]

I commend what my hon. Friend has done, but I cannot think of anyone less like a dragon than him. It is important that schools do more to prepare children for the financial challenges in life. Some schools have started schemes whereby pupils are given a relatively small sum of money and challenged to grow it—there have been real successes from that, and there is an encouraging increase in self-employment among young people. I applaud my hon. Friend’s initiative in encouraging young people in his constituency to become attuned to financial matters, and I hope that many of them turn out to be budding entrepreneurs.

[Mr John Spellar (Warley) (Lab)]

On Tuesday, my right hon. Friend the Member for Cynon Valley (Ann Clwyd) raised the issue of how the principles of the Rehabilitation of Offenders Act 1974 are being undermined by Criminal Records Bureau checks, because people’s lives are being blighted for ever by offences or even cautions that took place years and sometimes decades earlier, often in people’s unruly youth. In view of the utterly complacent reply my right hon. Friend received from the hon. Member for North West Cambridgeshire (Mr Vara), who was answering as a Minister, may we have a debate to expose and hopefully remedy this ongoing injustice?

[Sir George Young]

The rehabilitation of offenders legislation has, I believe, recently been reviewed, but I will take on board the point the right hon. Gentleman makes and see whether further tweaks are needed to ensure that people are not unjustly penalised, when they seek employment, for relatively trivial offences that happened some time ago. I will raise the matter with the Home Secretary.

[Mr Matthew Offord (Hendon) (Con)]

Given that elected politicians in the Democratic Republic of the Congo have rejected £790 million of UK aid, claiming that it is a guilt payment so that British companies can secure access to offshore mining interests, may we have a debate on the commitment to spend 0.7% of gross domestic product on overseas aid?

[Sir George Young]

The commitment to international aid spending was discussed at some length by hon. Members on both sides of the House on Tuesday, in a debate to which my right hon. Friend the Secretary of State for International Development responded. On the specific issue my hon. Friend mentions, I am not sure it would be right to withhold support to the DRC—the aid we give reaches very poor people, who would be deprived of the assistance they need—but I will draw his concern to the attention of my right hon. Friend.

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

The Leader of the House will be aware that small and medium-sized businesses in my constituency are eager to respond to the Government challenge to export more to Brazil, Russia, India and China, but has he also seen Lord Digby Jones’s remarks that UK Trade & Investment, which is an arm of the Foreign Office, has been devastated? What help can we give small and medium-sized businesses in constituencies such as mine to help them to export to BRIC countries?

[Sir George Young]

UKTI has not been “devastated”. I was in touch with it recently when it held a seminar specifically for small and medium-sized enterprises that wanted to export. The seminar was well attended and found to be of great value by those who came along. I could not praise more highly the input of UKTI to that initiative. I would encourage hon. Members who have not already done so to contact UKTI and have a similar seminar in their constituencies.

[Harriett Baldwin (West Worcestershire) (Con)]

Another hidden and scandalous form of discrimination in this country is the reluctance of businesses—often small businesses—to hire women of child-bearing age because they fear that they will take maternity leave. May we therefore have a debate on shared parental leave and the importance it will have in ensuring that that form of hidden discrimination ends?

[Sir George Young]

I applaud what my hon. Friend says. It is indeed the Government’s policy to move towards more flexible parental leave so that parents can share caring responsibilities. We are working with businesses to create a more flexible system of parental leave. Under our proposals, parents will be given the choice to determine how they take leave for child care. They will be able to divide the majority of the leave into blocks to suit their work needs, and to split leave between them. I hope that will remove some of the barriers to which my hon. Friend refers.

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

Last year, I raised with the Leader of the House the tragic case of Joe Arthur, my constituent who was killed while on holiday in Greece in 2006, and the family’s fight for justice. This week, the family have again been out to Greece, and yet again the trial has stalled. Will the Leader of the House arrange for me to meet urgently a Foreign Office Minister to discuss what further assistance can be offered to the family, because that situation simply cannot be allowed to continue?

[Sir George Young]

I am very sorry to hear of the problems that confront the hon. Lady’s constituents. It so happens that a constituent of mine was killed in Greece last year, and their family is having exactly the same problems of finding out when the trial is to be held and what status and role they will have in the proceedings. I will raise the matter with a Foreign and Commonwealth Office Minister and ask him to contact her and see what assistance we can give to the family in the tragic circumstances she has just mentioned.

[Philip Davies (Shipley) (Con)]

I very much support the Government in putting public sector pensions on an affordable and sustainable footing. In that spirit, may we have a debate on the pension contributions of judges? Judges are being asked to make a contribution of just 2% towards their pension, which is neither affordable nor sustainable. Surely my right hon. Friend agrees that it is wrong that judges pay less in total towards their pensions than other public sector workers, who are being asked to pay increased contributions?

[Sir George Young]

There will be an opportunity to debate this matter. We are committed to introducing legislation on public service pensions, which will certainly embrace judges, and my hon. Friend will have an opportunity to propose the necessary amendments to the legislation, if he finds we have not responded. We are aware of this issue, however, and there will be a Bill designed to address it.

[Bill Esterson (Sefton Central) (Lab)]

Yesterday, the Prime Minister was asked about the cut in the number of front-line police officers but answered by talking about the proportion. Will the Leader of the House impress on his colleagues the importance of answering the question asked, not the one they would rather have been asked? Next time, therefore, the Prime Minister might give the right answer, which, to clarify, is more than 5,000.

[Sir George Young]

With respect, that is a game that we can play as well, having listened to previous Prime Ministers for 13 years. One of my colleagues actually wrote a book compiling not only the failures to answer questions but the inaccurate answers that a previous Prime Minister gave. The Prime Minister always answers questions as accurately, honestly and openly as he can, and I would rebut any criticism of his performance at the Dispatch Box.

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

Despite having the Scottish Parliament and the Welsh and Northern Ireland Assemblies, we continue to have Scottish, Welsh and Northern Ireland questions in the House, which are often dominated by English MPs asking questions provided by the Whips Office. If we are to continue with this, is it not time to have English questions, too, so that English MPs can raise questions important to the English people?

[Sir George Young]

The principle of oral questions is that the House should have the opportunity to hold Secretaries of State and Ministers to account. That is why there are separate Northern Ireland, Scotland and Welsh questions. English Ministers, of course, have to answer for English-related matters when at the Dispatch Box. If the House wants to hold the Government to account, the best way to do it is by a series of departmental questions, which is what we have now.

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

Following the publication of the BBC Trust’s latest savings plans, will the House have an opportunity to debate the plans, particularly the plans for local radio? I ask because there are many excellent local services, including Radio Humberside in my constituency, and this week, the radio show, “Beryl and Betty”, with Beryl Renwick, aged 86, and Betty Smith, aged 90, won the Sony gold award for excellence.

[Sir George Young]

The BBC is an independent organisation and is responsible for allocating its funds and finding savings. If the hon. Lady wants to apply to the Backbench Business Committee for a debate on how the BBC is organised, I am sure she will get a warm reception from its newly elected members.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Earlier this week, the all-party group on pharmacy published a report after a six-month inquiry into prescription medicine shortages. The difficulty is that patients cannot always get them. May we have a debate, or at least a ministerial statement, to find out what the Government propose to do about this awful situation?

[Sir George Young]

I applaud my hon. Friend’s work as vice-chairman of the all-party group, which I understand was founded by the Deputy Leader of the House. About 900 million prescriptions are issued each year for about 16,000 medicines, some of which, as my hon. Friend said, are in short supply. The Government will want to respond to the report. Contingency arrangements are in place whereby if a pharmacy cannot get a medicine from the wholesaler, it can go direct to the supplier. We do all that we can to prevent shortages, but as I said, we will want to respond to the suggestions in his report.

[Jessica Morden (Newport East) (Lab)]

Please may we have a chance to debate the Government’s thoughts on regional pay? Last week, the Welsh Government produced an excellent response to the Government’s consultation, and it would be fantastic to have an early opportunity to articulate just how unfair, divisive and damaging these proposals will be for areas such as Newport in my constituency.

[Sir George Young]

It might be in order for the hon. Lady to raise that issue on the amendment that her party has tabled to today’s debate. The Government are consulting on the matter, and I welcome the contribution to that process to which she referred. I think that the consultation ends later this year, at which point it might be sensible to have a debate to indicate where the Government are going, having initiated the consultation process, and to see whether there is a case for differential rates of pay in the public sector to reflect regional cost variances.

[Glyn Davies (Montgomeryshire) (Con)]

There is an encouraging increase in the number of organs being made available for transplant, particularly organs such as kidneys, from live donors. Today, an 83-year-old man made a successful kidney donation. Will the Leader of the House ensure an early opportunity for us to discuss this matter and build on the willingness of these wonderful people to donate during their lifetimes?

[Sir George Young]

It so happens that Nicholas Crace, the man to whom my hon. Friend refers, is a constituent of mine living in Overton, and I applaud what he has done. I hope that all hon. Members carry a donor card so that if any accident did befall them, they might be of some help to others. I cannot promise an early debate on this important issue, but again it might be a subject for a Backbench Business Committee or Adjournment debate.

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

May we have a debate on consumer protection? The Leader of the House will be aware that many of our constituents the length and breadth of the country would like to come to the capital to celebrate the Queen’s jubilee, but the costs are prohibitive—nowhere more so than on Dolphin square, where many hon. Members reside, where people are now charging £275 for one night’s accommodation. That is double what they normally charge. It is exploitation and should be condemned from the highest level of Government.

[Sir George Young]

I understand the concern of the hon. Gentleman’s constituents, who find they might be priced out of coming to London for some of the jubilee celebrations or Olympics. There will be an opportunity next Thursday to cross-question Ministers in the Department for Business, Innovation and Skills, who have responsibility for consumer protection, on this issue. I will, however, raise the matter with my right hon. Friend the Business Secretary to see what action we can take to help.

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

Grahame Maxwell, chief constable of North Yorkshire police, was only the second chief constable in British policing history to be found guilty of gross misconduct. This week, he walked away with a payout of £250,000. As part of the Government’s excellent policing reforms, may we have a new rule—if a police chief is found guilty of gross misconduct, he should be kicked out and receive no money?

[Sir George Young]

I shall raise that with the Home Secretary. Whether people should lose, in some cases, pension entitlement for committing a crime is an issue across the public sector. I will raise this specific issue with my right hon. Friend the Home Secretary, however, and see whether we have any plans to change the regime.

[Nick Smith (Blaenau Gwent) (Lab)]

On Monday, the Defence Secretary confirmed that the number of British troops would fall from 102,000 to 82,000 by 2020. A decision on where the axe will fall is expected soon. The people of Wales are rightly alarmed at the prospect of losing 1st the Queen’s Dragoon Guards—the Welsh cavalry—which is the UK’s most senior front-line force. May we have an urgent debate so that all Members can feed into this review?

[Sir George Young]

The Secretary of State indicated, I think, that the total Army numbers would be about 120,000, of which about 80,000 would be regulars and 40,000 reserves. The exercise of configuring individual units and regiments is under way, and I know that my right hon. Friend will want to keep the House informed. There are regular debates on defence, and a set-piece debate is sometimes provided by the Backbench Business Committee, so there might be an opportunity to discuss the matter on one of those occasions.

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

There are 25,000 more people in work in the west midlands than there were a year ago, but one of the key problems for people getting into employment is affordable and accessible child care. May we have a debate on what the Government are doing to improve accessibility to child care so that people in families can get back into work?

[Sir George Young]

This is an important issue. My hon. Friend will know that we have increased the entitlement to free education and care for three and four-year-olds to 15 hours a week and extended it to disadvantaged two-year-olds. He will also know that under universal credit—I am delighted to see my right hon. Friend the Secretary of State for Work and Pensions here—there will be greater support for child care when we remove the so-called 16-hour rule and enable those working less than 16 hours a week to access child care.

[Bob Blackman (Harrow East) (Con)]

In a few weeks’ time, London will play host to the Olympics and Paralympics, which we will all celebrate. During the games, it will be the 40th anniversary of the Olympics’ darkest hour when, in 1972, 11 members of the Israeli team were brutally murdered. So far, the Olympic movement has failed to honour their memory or provide closure for their families. Will my right hon. Friend allow a statement to be made to the House on this matter? There is widespread support across the House for a one-minute silence to be held during the games to commemorate those who were murdered.

[Sir George Young]

My hon. Friend raises an important matter in reminding us of the tragedy that took place 40 years ago. I would like to raise his suggestion with my right hon. Friend the Secretary of State for Culture, Olympics, Media and Sport and, possibly, with Lord Coe, who is in charge of the arrangements. Any commemoration involving a period of silence in the House would be a matter for Mr Speaker, who I am sure will read the record of what my hon. Friend has just said.

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

Will my right hon. Friend find time for a debate on saving our historic lidos and on involving our communities in that process? I should very much like to see such activity taking place in relation to the Saltdean lido in my constituency.

[Sir George Young]

I commend my hon. Friend’s initiative in saving the lido in Brighton. I cannot promise a debate on the matter, but I will ask the Secretary of State for Culture, Olympics, Media and Sport whether there is a role for him to play in this movement. My hon. Friend might also like to contact the Backbench Business Committee about holding a debate, as I am sure that there are other hon. Members who share his concern.

[Jeremy Lefroy (Stafford) (Con)]

May we have a debate on the importance of collaboration between universities and business in supporting growth? Staffordshire university has just been specially commended by the Higher Education Funding Council for England for its work led by Sandra Booth and her team.

[Sir George Young]

I commend what is happening in my hon. Friend’s constituency. It is important for universities to be in touch with business so that they can focus their courses on the skills that industry needs, and I am delighted to hear of the collaboration taking place in Staffordshire.

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

May we please have a statement on the UK system of measurement, to enable the Government to confirm—I hope—that this country will continue to have the freedom to use the traditional imperial system of weights and measures, and not be forced any further down the road of compulsory use of the metric system, which has been recently suggested by a former Leader of the House of Commons, the noble Lord Howe?

[Sir George Young]

In this case, there is no solidarity between the Leaders of the House, and I can assure my hon. Friend that the Government are committed to retaining imperial units in all the areas in which they are currently legal units for trade. This includes retaining imperial units for use in dual labelling for as long as people find them useful.

[Mr Marcus Jones (Nuneaton) (Con)]

Having owned several Vauxhall Astras in the past, I am delighted to hear of the commitment by General Motors to retaining and creating jobs in Ellesmere Port. However, with car manufacturing now firmly in the ascendancy, I fear that we might have the potential for a skills gap. May we therefore have a statement from the Education Secretary to tell us what more the Government can do to promote manufacturing in schools so that we can enthuse more young people to take up such careers?

[Sir George Young]

I applaud my hon. Friend’s suggestion that we reawaken in young people an interest in a career in manufacturing. I know that the Minister for Further Education, Skills and Lifelong Learning, my hon. Friend the Member for South Holland and The Deepings (Mr Hayes) will be interested in taking this dialogue forward. I commend the number of Vauxhalls that my hon. Friend the Member for Nuneaton (Mr Jones) has had, although I am not sure why he needed so many. Today’s announcement by General Motors of the move from two shifts to three is indeed good news for Merseyside, as is the confirmation that the new Astra will be built in the UK.

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

May I add my congratulations to the hon. Member for North East Derbyshire (Natascha Engel) on being returned unopposed to the chairmanship of the Backbench Business Committee? May I also ask the Leader of the House for an early debate in Government time on guidance on how the national planning policy framework is to be applied by local councils? There seems to be a lot of confusion among planning authorities over the circumstances in which a planning application may be called in, and I do not think that the questions of regional and national importance are fully understood. An early debate on this matter would be most helpful.

[Sir George Young]

We had a debate on the national planning policy framework in the last days of the previous Session, so I cannot promise another in the near future, but my hon. Friend raises an important issue which I will share with Ministers at the Department for Communities and Local Government. I will also ask the Secretary of State to write to her to try to address the particular concern that she has raised.

[Mike Crockart (Edinburgh West) (LD)]

May I ask the Leader of the House to arrange for a statement from a Minister in the Department for Work and Pensions on any ongoing improvements to the work capability assessment and its related appeals process? With official figures showing that only a third of appeals are successful, rising to 70% for those helped by citizens advice bureaux, and with six to 12 months’ delays in receiving the results of appeals, far too many of my constituents are still being left without support, for entirely dubious reasons.

[Sir George Young]

I understand my hon. Friend’s concern. He will be aware that my right hon. Friend the Secretary of State for Work and Pensions is in his place, and that he will respond to the debate later today. Perhaps he will refer, in his wind-up speech, to the Harrington reviews that are now under way, and that have been set up specifically to address the issues to which my hon. Friend refers. I know that my right hon. Friend will do what he can to allay those concerns.

Point of Order

Thursday 17th May 2012 Commons Chamber

12:25

[Caroline Flint (Don Valley) (Lab)]

On a point of order, Mr Deputy Speaker. Yesterday, in response to a question from my hon. Friend the Member for Ynys Môn (Albert Owen), the Energy Secretary said:

“Let me give the hon. Gentleman one exact policy, for which Labour never legislated: the warm home discount”.—[Official Report, 16 May 2012; Vol. 545, c. 561.]

He repeated the same point earlier this morning in Energy and Climate Change questions. The truth is that it was the Energy Act 2010, which was passed by the last Labour Government, that enabled the warm home discount scheme to be set up. Will you advise me on how the House can get such matters corrected on the record, to ensure that nobody is left ignorant of the true state of affairs?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I can say that that is not a point of order for the Chair, but the right hon. Lady has corrected the record in the statement that she has just made.

Debate on the Address

Thursday 17th May 2012 Commons Chamber

[6th Day]

Debate resumed (Order, 16 May).

Question again proposed,

That an humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Jobs and Growth

Thursday 17th May 2012 Commons Chamber

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I inform the House that the Speaker has selected the amendment in the name of the Leader of the Opposition. Standing Order No. 33 provides that, on the last day of the debate on the motion for the Address to Her Majesty, the House may also vote on the second amendment selected by the Speaker. The Speaker has selected the amendment in the name of Angus Robertson for that purpose. The vote on that amendment will take place at the end of the debate, after the amendment in the name of the Leader of the Opposition has been disposed of.

12:27

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

I beg to move an amendment, at the end of the Question to add:

‘but regrets that whilst the UK economy is in recession, long-term unemployment is at its highest level since 1996 and one million young people are out of work the Gracious Speech contains no measures to address this crisis; notes that Britain will pay a long-term price for a prolonged period of slow growth and high unemployment; further notes that France, Germany and the Eurozone as a whole are not in recession while in the USA, where the Government has to date taken a more balanced approach to support economic recovery, the economy is now one per cent bigger than before the global financial crisis, while the UK economy is now 4.3 per cent smaller; recognises the criticism expressed by business leaders that your Government has not come forward with an adequate plan to boost economic growth; believes that cutting spending and raising taxes too far and too fast is self-defeating as slow growth and higher unemployment means that your Government is now set to borrow £150 billion more than planned; and calls on your Government to introduce a fair and balanced deficit plan, with measures to stimulate economic growth and job creation which are essential to get the deficit down, including a tax on bank bonuses to fund a guaranteed job for every young person out of work for more than a year, a temporary cut in VAT, a national insurance holiday for small firms taking on extra workers, and bringing forward infrastructure investment to strengthen the economy for the long-term.’.

It is a great honour to open the final day of this Queen’s Speech debate, and to do so in this very special diamond jubilee year. But I have to say how disappointing it is, with our economy now pushed into recession, the eurozone crisis deepening, and businesses and families up and down the country crying out for a plan for jobs and growth, that we are today debating what is widely regarded to be a disappointing and directionless Queen’s Speech programme from a Tory-led coalition that has, frankly, lost its way.

What a change this is from two years ago. When the Chancellor of the Exchequer spoke in the debate on the Government’s first Queen’s Speech, four weeks after the general election and two weeks before his first Budget, he was bursting with hubris. He was so sure of himself that, when the then shadow Chancellor, my right hon. Friend the Member for Edinburgh South West (Mr Darling), and many other hon. Members on this side of the House asked whether the Chancellor planned to bring forward immediate and deep tax rises and said that spending cuts might choke off the recovery, the Chancellor dismissed those concerns out of hand. He was confident that his plan would

“deal with our debts, set our country on a brighter economic course and show that we are all in this together.”—[Official Report, 8 June 2010; Vol. 511, c. 206.]

What a difference two years makes.

“We are all in this together”: we do not hear that line any more—not from a Chancellor whose Budget decisions have hit middle and lower-income families harder than those on the highest incomes. His Budget decisions have hit women harder than men and families with children harder still. The Institute for Fiscal Studies confirms that his Budgets have been regressive and will see child poverty rise. Last month’s omnishambles of a Budget included decisions to raise taxes on caravans, charity donations, church repairs, pensioners, pasties and petrol, but to have a top-rate tax cut only for the richest—a £3 billion tax cut, which will give 14,000 of the richest people in our society earning over £1 million an average tax cut of £40,000 a year. Millions are paying more in tax to pay for a tax cut for millionaires. No wonder the Chancellor and the Prime Minister can no longer bring themselves to say that “We are all in this together”.

Let me remind the Chancellor of what the chair of the Conservative Association in Harlow said last week:

“The voters are disillusioned with Cameron himself. They don’t like the fact that he did not keep the 50p tax. People feel he is not working for them.”

Apparently, the Chancellor was advised precisely not to cut the top rate by his own Downing street pollster, Mr Andrew Cooper. Let me say to the Chancellor that, in my experience, disregarding the wise advice of someone called Cooper can be a very dangerous course to take.

[Mark Pritchard (The Wrekin) (Con)]

Given the right hon. Gentleman’s closeness to the new French President Mr Hollande and given that the shadow Chancellor mentioned the top rate of tax, does he think that the dash for growth will be enhanced or hindered by the introduction of a 75p top rate?

[Ed Balls]

I do not think that introducing a 75p tax rate in Britain would be the right thing to do at all. That is not our policy, but I do not think that cutting the top rate from 50p to 45p will be good for jobs, growth or fairness either.

[Richard Harrington (Watford) (Con)]

I am listening with some perplexity to how the shadow Chancellor referred to the Budget as one for rich people, because I have calculated that in my Watford constituency, nearly 4,000 people have been taken completely out of tax by the increase in the personal allowance. I am sure that the right hon. Gentleman will join me in congratulating the Chancellor on such an excellent measure.

[Ed Balls]

The hon. Gentleman might need to go back to the drawing board because the Institute for Fiscal Studies has shown that last month’s measures will, as a result of cuts to tax credits, mean tax rises for the average family with children in his constituency—and that is even before taking the rise in VAT into account and it does take the personal allowance rises into account. The fact is that taxes have gone up for low-income families, they are going up for the middle classes, and it is only the highest earners in the hon. Gentleman’s constituency that are getting the tax cuts.

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

Is it not true—the shadow Chancellor is a straightforward man—that the previous Government set out a trap for this Government, not really wishing for a rise to 50%, but carrying it out just before the last election in a crude attempt to catch this Government out?

[Ed Balls]

I am always a close student of the hon. Gentleman, and I noted that he did not advocate the reversal of the 50p rate as the right thing to do, so I am not sure what his constituents thought about that. I recently read some of his other remarks. In March, for example, the hon. Gentleman said:

“The Chancellor has been consistently advised of the importance of macro-measures to stimulate growth in the private sector. So why are these not being implemented?”

Why, indeed? He continued by saying that the Prime Minister

“needs to wake up and smell the coffee. This is a major setback for the Conservative party.”

That is quite right.

[Mr Binley]

rose—

[Ed Balls]

If the hon. Gentleman wants to intervene again, I have plenty more!

[Mr Binley]

I know he has. Now will he answer my question?

[Ed Balls]

The right thing to do after the financial crisis was to do things in a fair way. That is why the 50p tax rate was right at the time. The reason why the Budget has gone down so badly is that lowering the 50p rate was seen as so unfair. The hon. Gentleman was right just a few days ago when he said in his blog that the Government have a communication problem and are over-confident. He said:

“The manner in which Downing Street fires out policies and expects us to agree and applaud without question certainly smacks of a sense of superiority.”

Quite right again—a very interesting remark.

[Several hon. Members]

rose—

[Ed Balls]

Let me make some more progress; I will allow more interventions in a few moments.

As for the Chancellor’s promise of “a brighter economic future”, it is not just that his economic plan has been so unfair, but that it has failed completely. On the recovery being secured, our economy has not only flatlined for 18 months, but has contracted. As to a private sector-led recovery, confidence is down, business investment has been revised down and since June last year, we have lost more than 100,000 public sector jobs, but the private sector has created only half that number of private sector jobs. As for the Chancellor’s absurd claim that Britain is a safe haven, we are in recession. What kind of safe haven is that?

The Chancellor will try to claim today that it is the eurozone crisis that has blown him so badly off course. I will return to the eurozone crisis in a moment, but trying to blame that crisis for the UK recession flies in the face of the facts. This is what the Chancellor said in his autumn statement:

“if the rest of Europe heads into recession, it may prove hard to avoid one here in the UK.”—[Official Report, 29 November 2011; Vol. 536, c. 799.]

But it is the eurozone that has avoided recession and the UK that has plunged back into it. [Interruption.] Even The Sun—not known as a big supporter of Labour, but a big supporter of the Chancellor over the last few years—wrote only yesterday—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Government Front-Bench Members can do a little better by listening to what is being said. I am sure that they will want to listen to the shadow Chancellor in the same way that they will want Members to listen to the Chancellor later.

[Ed Balls]

They should listen to The Sun, Mr Deputy Speaker. It said yesterday:

“George Osborne can no longer blame Eurozone woes for our double-dip recession.”

It is a recession made in Downing street—even The Sun agrees with that.

[Brandon Lewis (Great Yarmouth) (Con)]

While the shadow Chancellor is busy doing down the British economy, will he not equally recognise the fact that in areas like Great Yarmouth, which Labour left as one of the most deprived in the country, we are seeing hundreds of millions of pounds of investment from and in local companies, put in by organisations and countries like Japan, so that the jobs are growing in the enterprise zones?

[Ed Balls]

In the hon. Gentleman’s constituency, youth long-term unemployment is rising, long-term unemployment generally is rising, families’ taxes are rising and only the top-rate taxpayers are seeing a tax cut. Investment was revised down last year and the year before that, and our economy is in recession because of the policies that the hon. Gentleman continues to support. I think he owes his constituents an apology.

What should we make of setting our economy on a brighter economic course and the observation that “We are all in this together.” Even on his claim that he would “deal with our debts”, the Chancellor is failing that test, too. No growth since the spending review and rising long-term unemployment mean that he is now borrowing £150 billion more than he planned. This is more borrowing than in the plans he inherited, and his pledge to balance the books by 2015 is in tatters. At the end of this Parliament, our national debt will not be lower than the level he inherited, but higher than the level he inherited.

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

The shadow Chancellor has used many quotes in his opening speech, so let us see whether he agrees with this one from Mervyn King, the Governor of the Bank of England, whom Labour appointed. He said that this Government demonstrated a

“textbook response to the situation”—

the economic mess we inherited from the previous Government.

[Ed Balls]

The Governor of the Bank of England was confident two years ago that the Chancellor was making the right calls on the pace of deficit reduction. Unfortunately, it has turned out that the Governor of the Bank of England and the Chancellor of the Exchequer have both got that wrong. We had gone back into recession even before the eurozone crisis. Let us consider recent entries from the website of the hon. Member for North West Leicestershire (Andrew Bridgen). They show him “criticising cuts” to “local health centres”, and reveal his wish to “Save Moira Fire Station” and for the “replacement” of local bus services. I am not sure that all that is entirely on message. Yet the Chancellor and the Prime Minister are still clinging to the view that they are right and everyone else is wrong. In his speech today, the Prime Minister seemed to be trying to claim that the choice between austerity and growth was a myth. [Interruption.] I think that the Chancellor should listen to this, because I am about to explain why he has got it so badly wrong. He should listen and learn, Mr Deputy Speaker, listen and learn.

If the Prime Minister meant that we should not choose between policies for growth and policies for deficit reduction, he was right. I agree. In fact, that is exactly what Lord Mandelson and I argued in our joint article in Monday’s Guardian. We argued for action now to boost jobs and growth, alongside tough medium-term deficit reduction plans. But that is not what the Prime Minister was saying today. He and his Chancellor are still clinging to the mistaken and, now, increasingly discredited view that cutting spending and raising taxes faster to cut the deficit is the route to economic growth, when all the evidence is to the contrary. Trying to cut the deficit faster has not boosted growth in recession; it has choked off confidence, unemployment is up, and we are borrowing more than he planned, not less. If the Prime Minister is really claiming that he is on the right course, he is even more complacent and out of touch than I thought.

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

Does the right hon. Gentleman not agree that economic policy is about credibility? Would he not have more credibility if he told us how he would cost his so-called plan for jobs and growth?

[Ed Balls]

Credibility is about getting things right, not about getting them wrong. We were told that we were out of the danger zone and that the recovery had been secured, but what has happened? Plan A failed in Britain and in the eurozone too, and it is the very plan that the Chancellor has been urging on us. What did he say to The Daily Telegraph in August last year? He said:

“Britain is leading the way out of this crisis”,

and

“The eurozone must follow our lead and act decisively”.

The Prime Minister is off to the G8 summit this weekend. The only countries in recession that will be represented there are Italy and Britain. How are we leading the way? The fact is that the austerity policies that are failing in Europe are the very same policies that have failed in Britain, and which the British Government have been urging the German Government to urge the eurozone to stick with. That is the reality.

Opposition Members have consistently argued that it will not work for all countries to try to reduce their deficits at the same time, that tough medium-term plans to cut the deficit will work only if Governments also put in place a plan for jobs and growth, and that a time when a global hurricane is brewing is precisely not the time at which to rip out the foundations of the house here in Britain.

[Richard Fuller (Bedford) (Con)]

rose—

[Penny Mordaunt (Portsmouth North) (Con)]

rose—

[Ed Balls]

I will give way first to the hon. Member for Bedford (Richard Fuller). We have nothing in the file for him, because unfortunately we were unable to find anything interesting that he had said during the last two years.

[Richard Fuller]

I appreciate the compliment from the right hon. Gentleman, who has often demonstrated that he does not have a sound grip on economics. He is continuing to say something that I do not think is correct: he is continuing to compare austerity policies with growth policies. Does he not accept that growth is an outcome, which all policies are intended to achieve, and will he have the honesty to answer the question put to him by my hon. Friend the Member for Halesowen and Rowley Regis (James Morris) and cost his plans?

[Ed Balls]

The right course is to take a balanced approach that combines medium-term deficit reduction with getting jobs and growth moving. The problem with austerity is that it chokes off jobs and growth and ends up costing more in spending, more in unemployment and more in borrowing. We have set out a clear alternative. We have said “Repeat the bank bonus tax, and use the money to create jobs.” We have said “Rip up the failed national insurance cut introduced by the Chancellor, and use the money for a tax cut for small businesses.” We have said “Yes, cut VAT by £12 billion for a year to get the economy moving.” We have not said how many shovel-ready infrastructure projects can be launched, because we do not have the details.

The Prime Minister says that you cannot borrow your way out of a debt crisis, but unless you grow, your debts get bigger and your deficits get worse. That is what the Chancellor has proved over the last two years. It is not only the Labour party that is advancing that argument. Only last week, the managing director of the International Monetary Fund said:

“We know that fiscal austerity holds back growth and the effects are worse in downturns... so the right pace is essential”.

Even the head of the European Central Bank is now pressing for a jobs and growth plan.

The Prime Minister and the Chancellor must wake up to the fact that our economy has not grown on their watch for a year and a half. Instead of trying to divert the blame for their failure and using the eurozone as an excuse for Britain's problems, they must admit that they got it wrong—that they gave the eurozone the wrong advice—and start pushing for the right solution to the eurozone crisis. I agree that there should be a proper role for the European Central Bank and a greater emphasis on fiscal burden-sharing, but there should also be a change of course on austerity, because only a balanced plan that puts jobs and growth first will succeed in getting the deficit down. When the International Monetary Fund, the OECD, the European Commission, the European Central Bank and even the United States are urging policies for jobs and growth, this Chancellor and this Prime Minister are looking increasingly isolated and out on a limb.

[Penny Mordaunt]

Since April 2010, in my constituency the number of job vacancies has risen by 316%, the number of apprenticeships has doubled, the number of jobseeker’s allowance claimants has fallen by 12%, and the number of claimants aged between 18 and 24 has fallen by 15%. Those are the facts. I understand why the right hon. Gentleman does not want to give Ministers any credit for that, but will he stop talking down the businesses and entrepreneurs in Portsmouth who have made it possible?

[Ed Balls]

I am sure that the hon. Lady and I can agree on one thing. There has been a 130% rise in long-term youth unemployment—unemployment lasting more than six months—in her constituency over the last year. [Interruption.] It is up by 129% in her constituency, and that is really worrying. Constituencies of Members on both sides of the House saw the damage done by long-term youth unemployment in the 1980s, and we should act to prevent a repeat of that rather than being complacent.

[Stephen Hammond (Wimbledon) (Con)]

Twice so far in his speech, the right hon. Gentleman has said that the problems in the UK are nothing to do with the eurozone. Will he therefore disown the remarks of the shadow Chief Secretary, the hon. Member for Leeds West (Rachel Reeves), who said last week that the eurozone was having a major impact on British businesses and British families?

[Hon. Members]

“Yes? Yes?”

[Ed Balls]

Calm down. Calm down, or we will start a debate about Remploy.

Of course the eurozone crisis is very serious and very dangerous for our economy and for all economies. That is why our Prime Minister and Chancellor should be at the table leading debates about the solution rather than carping on the sidelines, sitting like a teenager in the front of the car with headphones on while the crisis happens around them.

These are the facts. Last year, eurozone growth was faster than British growth and was revised up. Our growth was slower and was revised down. Last year, it was only the eurozone that prevented the British economy from going into recession earlier. Our domestic economy, excluding exports, was actually in recession for pretty much all of last year. The eurozone economy was growing when the British economy went into recession. Even today, the eurozone is not in recession and the British economy is. [Interruption.] The welfare Secretary has made a career of blaming Europe for everything that goes wrong in Britain, but I am afraid that this is a recession made in Downing street.

The Chancellor will also try to claim today—[Interruption.] Calm down. The Chancellor will also try to claim today that all this pain will be worth it in the end. However, we are paying a long-term price for the failures that we now see around us—the national debt higher; living standards down; long-term youth unemployment becoming entrenched; more than 24,000 companies out of business since he became Chancellor; investment plans cancelled or diverted overseas; our economy weaker; and capacity lost. I very much fear that when the economy finally recovers, as it eventually will, it will be more prone to inflationary pressures than otherwise, because of the failures of this Chancellor.

[Mr Marcus Jones (Nuneaton) (Con)]

The right hon. Gentleman has mentioned exports. Does he not welcome the growth in exports and the new jobs being created at Jaguar Land Rover, Vauxhall, Nissan and Toyota, to mention but a few? Is he not sorry, and should he not say sorry to the British public, that 1.7 million manufacturing jobs were lost in this country on his party’s watch? Companies such as LDV, Peugeot and Rover closed down manufacturing while he was in government.

[Ed Balls]

Of course I welcome the improvements that we have seen in manufacturing, and I think we could have a cross-party consensus that the previous Government’s decision to set up the Automotive Council and provide long-term strategic leadership has made a huge difference to the prospects for car investment in our country. Nissan; Rover—we made great progress. That progress is being continued, and we should all welcome that. However, I have to say, for all the complacency that we just heard in that intervention, is it any wonder that business organisations—[Interruption.] Government Members should listen.

[Graham Jones (Hyndburn) (Lab)]

Would my right hon. Friend include the car scrappage scheme as well?

[Ed Balls]

The car scrappage scheme, the cut in VAT and the action to support Northern Rock and RBS were important decisions that stopped our economy going into depression. They were all opposed by the Conservatives. That is the reality.

[Mr Marcus Jones]

Will the right hon. Gentleman give way?

[Ed Balls]

No. [Laughter.] Go on then.

[Mr Jones]

I am grateful to the right hon. Gentleman. He seems to be enthused about the car scrappage scheme and what a roaring success it was. Will he therefore explain why Jaguar Land Rover sold about 12 additional cars as a result of that fantastic policy?

[Ed Balls]

We were very proud of the investment that Jaguar Land Rover put into the west midlands as a result of the progress made and the support from Advantage West Midlands.

[Mr Jones]

rose—

[Ed Balls]

I think hon. Members will find that businesses in the west midlands will all agree that the abolition of Advantage West Midlands was one of the most stupid and short-sighted decisions made by this Government so far.

[Mr Jones]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. You have done very well so far, Mr Jones. Don’t overstep it.

[Ed Balls]

The economy is in recession and they hate it, and so do business organisations up and down the country. Is it any wonder that businesses have been so disappointed and upset by the Queen’s Speech of just two weeks ago? Let me quote the director general of the British Chambers of Commerce:

“There is a big black hole when it comes to aiding business to create enterprise, generate wealth and grow.”

Quite right, Mr Deputy Speaker.

There will be some parts of the Queen’s Speech dealing with Treasury matters which we will support. On banking reform, we will look forward to supporting legislation to strengthen capital ratios and promote competition, although it is now nine months since the final report of the Vickers commission, and we are still waiting for a response from the Chancellor of the Exchequer. However, after 18 months of flatlining, with our economy now in recession and business investment depressed, the question I ask—it is the question British business is asking too—is this. Where is the plan in the Queen’s Speech to restore confidence and promote business investment and jobs in Britain?

With net lending falling month on month—according to the Bank of England it has been down every month for over two years now—where is the action in the Queen’s Speech to promote small business lending? With youth unemployment now at a record high, and with yesterday’s figures confirming that long-term unemployment among young people is still rising, where is the legislation in the Queen’s Speech to get our young people back to work? Where is the legislation to repeat the bank bonus tax to fund a jobs guarantee for young people—or, for that matter, to cut taxes for small businesses hiring new workers, or to help the construction sector with a temporary cut in VAT? Our economy has ground to a halt and our construction sector is in great distress. Where is the plan to support jobs and growth by bringing forward new infrastructure projects? Where is the legislation to make our economy stronger and fairer for the future? Stronger corporate governance; a business investment bank; progress on high-speed rail; reforms in our universities to promote innovation—all are completely absent from this Queen’s Speech.

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

Does my right hon. Friend agree that young people in Scotland are facing the double whammy of a coalition Government who are complacent and a Scottish National party Government who are cutting further education funding?

[Ed Balls]

I understand my hon. Friend’s concerns at the lack of a youth jobs plan in Scotland. We can understand that from the Conservatives, because they abolished the future jobs fund, but people will find it hard to understand why the Scottish National party Administration in Scotland have failed so woefully to do anything to tackle the challenge of youth unemployment.

[Graham Evans (Weaver Vale) (Con)]

The right hon. Gentleman referred to investment in this country in manufacturing. Does he agree with General Motors, which has specifically thanked the Government for making the UK a great place to invest in manufacturing and business? Indeed, General Motors has announced today that it will be manufacturing the new Vauxhall Astra at Ellesmere Port, very close to my constituency, providing 700 new jobs and securing thousands of jobs in the supply line. Does he welcome that?

[Ed Balls]

Of course I welcome that. It is good to have more jobs in Britain. The thing that worries me is the 164% rise in long-term youth unemployment in the hon. Gentleman’s constituency. That is a very great concern.

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

rose—

[Ed Balls]

I will make some progress.

Is it not the reality that we have an economy in recession and a Queen’s Speech that entirely failed to deliver on growth, jobs and investment? The Chancellor’s economic strategy is now in tatters, but have we had any admission in recent weeks that he got it wrong? We have had none. The Foreign Secretary says that British business needs to work harder, but it is this Chancellor who needs to work harder to get things right.

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

rose—

[Ed Balls]

I will not give way.

Let me say this to the Chancellor. We all know why he has wanted to be a part-time Chancellor: in order to make room for his other role as the Conservative party’s part-time political strategist. But with the Budget botched, the Queen’s Speech a flop, the local elections a disaster for his party, and the economy back in recession, it is now dawning on all of us—I think it is dawning on many Conservative Members too—that he is not a very good Chancellor and not a very good political strategist either. Although should we really be surprised? This is the Chancellor who claimed to his colleagues that hiring Andy Coulson would be a triumph; that taking away child benefit from middle-incomes families would be a masterstroke; that saying that the economy was “out of the danger zone” was smart forecasting; and that cutting the top rate of tax in this Budget would wrong-foot Labour, and outfox his leadership rival Boris Johnson too. With judgment like that, perhaps the Conservative party does not need just a new political strategist; perhaps it needs a new Chancellor too.

[Andrew Selous]

Will the right hon. Gentleman give way?

[Ed Balls]

No, I will not.

What an eight weeks it has been! The transformation has been startling, with the Chancellor’s long-held dreams turning to dust. He dreamed that his brilliant economic plan would bring unprecedented growth and finally deliver a Tory majority in 2015, and that a grateful Prime Minister would then stand aside, as he was finally cheered into 10 Downing street. How far away those dreams seem now!

[Andrew Bridgen]

Will the right hon. Gentleman give way?

[Ed Balls]

I will not.

Last month YouGov asked 1,800 people whether they thought the Chancellor was very well suited to the job of Prime Minister. How many said yes? Just 1% did—18 people only. The question we must ask is this: who on earth were those 18 people? After that Budget, they must be vegan, health freak, cyclist millionaires who passionately hate cars, pasties and caravan holidays, and think that pensioners get a cushy deal. So, other than Steve Hilton, who are the other 17? Is this not the truth: that the Chancellor’s plan has failed, and he has been exposed not simply as unfair and out of touch, but as incompetent? This part-time Chancellor needs a new economic plan for jobs and growth. This part-time political strategist urgently needs a relaunch for him and for the Prime Minister. This Queen’s Speech delivers neither a new economic plan, nor an urgent relaunch. He and the Prime Minister should go back to the drawing board and think again.

13:00

[The Chancellor of the Exchequer (Mr George Osborne)]

I rise to support this Queen’s Speech, and I will say something about the Treasury Bills on banking and pensions that feature in it. But first I had better address, head on, the complete nonsense we have heard for the past 30 minutes. Given the claim by the right hon. Member for Morley and Outwood (Ed Balls) that the eurozone has had no impact on the economic difficulties in Britain, and his claim that his 13 years in government did nothing to lead to the debt and the deficit that this Government are trying to clear up, it is no wonder that there were some rather long faces on the Opposition Benches—[Hon. Members: “Where?”] Over there.

My hon. Friend the Government’s Treasury Whip has just received a text from a Labour Whip saying, “Please, please come to the Chamber for the start of the final day of the Queen’s Speech debate. Ed Balls is opening for us and really needs his support.”

[Lyn Brown (West Ham) (Lab)]

rose—

[Mr Osborne]

I give way to the lady who sent the text.

[Lyn Brown]

May I explain to the hon. Member for Chelsea and Fulham (Greg Hands), who is sitting over there, that we have a very different and more effective way of whipping those on our Benches than he clearly has on his? Finally, as with everything to do with the economy, the Chancellor needs to pay more attention to detail, because that was not the right reading of the text. Indeed, it was not accurate, like much else he does.

[Mr Osborne]

The Labour party certainly does have a different whipping operation: it sends all its information to the other political parties.

Let us get back to discussing the economy. The central argument that the shadow Chancellor was trying to make, and the argument he makes in the amendment, is that the British economy is not as strong as the German economy—that is what we are all being asked to vote on tonight. He is absolutely right about that. The British economy is not as strong as the German economy, and I will tell hon. Members why. It is because for the past decade, in the good years, Germany fixed the roof when the sun was shining and he did not when he was in government.

I will tell hon. Members what happened when the right hon. Gentleman was in government. Over the decade before the crash, Germany maintained its share of world exports while Britain’s share almost halved; Germany was selling more than £10 billion of goods a year to China while Britain was exporting one fifth of that—indeed we were exporting more to Ireland than to Brazil, India, China and Russia put together; and Germany’s manufacturing sector grew by 34%, whereas our manufacturing sector not only did not grow but halved as a share of our total output, while our over-leveraged banking sector grew by 100%. Germany, after years of sustainable economic growth, entered the financial crisis with a budget surplus. Britain, in the years that he was in charge, led a debt-fuelled consumption that drove an expansion in deficit and in debt. Under Labour we entered the financial crisis with the largest budget deficit in the G7 and left it with the largest in the G20.

Instead of making us more like Germany, the right hon. Gentleman made us more like Greece when he was in the Treasury. Britain’s economy became over-borrowed, unbalanced and unsustainable. The person more responsible for that than anyone else active in politics today, the person who encouraged the borrowing, dismantled the banking regulation and gambled the futures of 60 million people on the City of London, is sitting right over there—the shadow Chancellor. It is the people on this side of the House who are clearing up the mess he left behind.

[Andrew Selous]

Does the Chancellor agree that one of the infrastructure failures left by the previous Government was the lack of direct flights from this country to the big, growing cities of China—there are many more flights from German cities to China—and that the Government will put that right in due course?

[Mr Osborne]

I certainly think that a lack of airport capacity is a challenge for this country, but one of the good things that may emerge from the bmi merger is that more slots may become available at Heathrow to open up routes to those cities in China. My hon. Friend makes the very good observation that we have to do much more to expand our exports and our links with the Chinas and Indias of this world. One of the good things that has happened in the past few years is that our exports to China and India are up by a third, and we need to see more of that.

In his speech, the shadow Chancellor dismissed the Governor of the Bank of England as plain wrong. Who appointed the Governor? Did the recommendation ever come across the desk of the shadow Chancellor when he was the political adviser in the Treasury? [Interruption.] We will find out. Yesterday the Governor said:

“We have been through…the biggest downturn in world output since the 1930s, the biggest banking crisis in this country’s history, the biggest fiscal deficit in our peacetime history, and our biggest trading partner, the euro area, is tearing itself apart”.

My message to the House today is that addressing those problems is not easy, but nor is it impossible. I will come on to talk about the eurozone, but first we must put our own house in order, and we are making progress on doing so.

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

Tony Blair says in his memoirs that from 2005 onwards Labour

“was insufficiently vigorous in limiting or eliminating the potential structural deficit”.

Does the Chancellor agree?

[Mr Osborne]

I agree with Tony Blair on that and, indeed, on his views on the shadow Chancellor.

[Chris Bryant (Rhondda) (Lab)]

One of the difficulties is that some of the cuts that the Government have made are counter-productive in terms of trying to deliver economic growth. The Chancellor referred to this country’s relationship with India. I think that everybody in this House agrees that we need to do more business with Brazil, India, Russia and China. However, if their businessmen find it impossible to get a visa to get into this country or they encounter massive queues when they arrive at Heathrow because of the enormous cuts to the UK Border Force, they are not going to want to do business with this country. Stop cutting off our nose to spite our face.

[Mr Osborne]

There have been queues at Heathrow for far too many years, and of course those queues need to be addressed—[Interruption.] There have been queues for years. I agree with the hon. Gentleman that we need a visa regime that offers support to enterprising individuals—entrepreneurs, people who can bring real skills and value to this country—to come here, and that is precisely what the visa changes we have made will allow. But I have to say that we can have a visa regime that allows in the brightest and the best only if we can command public confidence that we are in control of our borders and that we have a cap on immigration numbers. Remarkably, not only has the Labour party set itself against a cap on benefits, which it will come to regret, but it has opposed the cap on immigration, and that is a huge mistake.

Let me discuss the progress we are making. As the Governor of the Bank of England reminded us, we inherited the largest budget deficit in peacetime but two years into this Government, we have cut the deficit by more than a quarter. In 2010, the state consumed 48% of national income in this country. Today, it consumes 43%. We took office when Britain’s market interest rates were the same as Spain’s. Two years later, our market rates are the lowest in our history and Spain’s are more than 6%. That is the practical benefit our fiscal credibility has brought.

When we came to office, manufacturing had been withering for years, but after two years this country is exporting more cars than it imports for the first time since 1976—the last time a Labour Government bankrupted this country and went begging to the IMF. Today—as Government Members have mentioned, but, strikingly, Opposition Members have not—we hear that when faced with the choice of which plant to invest in General Motors has chosen Ellesmere Port, in the county that I represent, Cheshire, as the site of their future. That is a successful industrial strategy at work, with Ministers, management, employees and employers working together to secure investment.

The chairman of Vauxhall has just said that the Government have put a strategy in place to attract inward investment and support manufacturing, which all helps to make the UK a great place to build cars.

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

We all applaud the deal at Vauxhall Ellesmere Port and I am glad that the Chancellor managed to get out—almost through gritted teeth—some acknowledgement of the contribution of the work force and the trade unions in achieving that. Does he speak to motor manufacturers? Does he know that what he has said about the great work they are doing being export-led is linked to the problems? Does he know what is happening to commercial vehicles and the problems the motor industry has in that regard? Finally, is he going to do anything about Lola, one of the most successful performance engineering companies in this country, which went into administration this week?

[Mr Osborne]

British car companies and their supply chain are doing incredibly well exporting their cars around the world as well as selling them at home. Instead of talking down an industry that is so important to the west midlands and to the rest of the country, the hon. Gentleman should be celebrating not just the decision about Ellesmere Port but the expansion of Nissan in Sunderland and the great news we have had about Jaguar Land Rover in Wolverhampton. Those are real success stories and those companies—Nissan, Jaguar Land Rover and Tata—have choices about where to invest all over the world. They could put that money anywhere but they are choosing to invest in the United Kingdom. We should be celebrating that fact today.

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

The company that the Chancellor has missed off the list is, of course, Ford in Bridgend, which has just had new investment. I must point out, however, that that investment was also there under the Labour Government over successive years. On Spain, will the Chancellor explain why in quarter 3 in 2009 to quarter 3 in 2010 growth in the UK was 3.2% and flatlining in Spain, whereas now it is 0.2% in Spain, which is much-maligned for obvious reasons, and we are in recession? What has happened in the first two years of his chancellorship to put us back behind Spain?

[Mr Osborne]

For a start, as of today Spain is in recession, so I am not sure that the hon. Gentleman’s point has a huge amount of force. This claim, which I guess is made only by Opposition Members whom I am looking at now, that the Labour party somehow bequeathed the new Government some enormous golden economic legacy and that we were incredibly fortunate to inherit this massive budget deficit and totally unbalanced economy with no real plan to deal with that debt or deficit—not that we have heard a plan today, either—is absolute nonsense.

We have also had the good news this week, which was of course not mentioned by the shadow Chancellor, that for the second month in a row unemployment has fallen and employment is up. We have 400,000 more people employed than two years ago, and 190,000 fewer people on welfare rolls. Yes, it is an exceptionally difficult economic time and the legacy of debt and disinvestment is a heavy one, but the tough decisions we are making are moving Britain in the right direction.

[Mr Mark Spencer (Sherwood) (Con)]

I too welcome the improvements in the manufacturing sector of the automotive industry. Does my right hon. Friend recognise that in the food and drinks sector, which is also in manufacturing, there have been enormous increases in the number of jobs and of exports?

[Mr Osborne]

I certainly do. Part of the work we published last autumn specifically supported what we can do in that sector. We are not ashamed to identify sectors where Britain has a competitive advantage and to see what we can do to enhance it.

[Ms Karen Buck (Westminster North) (Lab)]

Does the Chancellor not recognise that although everyone welcomes an increase in employment, wherever it comes from, this country has a crisis of underemployment and of people seeking full-time hours that they cannot get? It would have major implications for, among other things, the welfare bill, which his right hon. Friend the Secretary of State for Work and Pensions has quite rightly committed to trying to bring down, if we could help people work the hours they wish to work.

[Mr Osborne]

Of course we want to help people who are working part time to work full time, if that is what they wish, but four fifths of the people who have taken part-time jobs wanted to work part time. We absolutely must help the fifth who want to turn them into full-time jobs, but I would hope that the hon. Lady, too, welcomes the good news that unemployment has fallen.

[Ed Balls]

On that point, will the Chancellor confirm that the total number of hours worked in our economy is now lower than it was two years ago?

[Mr Osborne]

As I was explaining, four fifths of those who work part-time are getting the part-time work they want. The right hon. Gentleman should celebrate the fact that 400,000 more people are employed than was the case two years ago. Why not get up and welcome that?

If the Opposition’s argument is that we need to do even more, I agree. In the past six weeks alone, we have opened 24 enterprise zones around the country, cut businesses tax to one of the lowest rates in the world, increased support for small business research and development, reformed employment law in the teeth of Labour opposition to double the period before unfair dismissal claims can be made, reinvigorated the right to buy, launched NewBuy mortgage schemes, awarded ultra-fast broadband grants to 10 of our largest cities, frozen council tax across England, launched a £20 billion national loan guarantee scheme that is already delivering cheaper loans to hundreds and thousands of businesses, and increased the personal allowance to cut tax for 20 million working people and lift 1 million of the lowest paid out of tax altogether, with another 1 million to come. That is just in the past six weeks.

Yes, the Government must work harder and do more. The world does not owe this country a living. We will do that, but we have done a great deal already.

[Fiona O’Donnell]

What does the Chancellor say—apart from “Work harder”—to SMEs in my constituency that tell me that the single greatest contribution his Government could make to economic growth and the creation of jobs is to cut VAT?

[Mr Osborne]

This is what we have done for small businesses: we have cut the small companies tax rate, which was going to go up under the plans that we inherited and which the Labour party voted for in the previous Parliament; we have got rid of Labour’s jobs tax; and we have frozen the business rates. We will check the record carefully, of course, but I think that in his speech the shadow Chancellor was advocating an increase in national insurance.

[Ed Balls]

indicated dissent.

[Mr Osborne]

When my hon. Friends pressed him to explain how he would pay for his package, he said, “We wanted to see national insurance go up.” If he wants to correct the record, he can tell us whether he wants national insurance to go up to pay for his package.

[Ed Balls]

The Chancellor allocated £500 million for a national insurance tax cut for new firms that were taking on new workers. It has totally flopped and failed, with very little take-up. I said that we should use that £500 million to help existing small firms to take on new employees—a plan that would work, rather than a plan from this Chancellor that is failing. That says it all.

[Mr Osborne]

So the short answer is yes, he wants higher national insurance for businesses. How on earth will that help companies in the current economic environment? As I have said, we need to do more. We need to help to get more credit to businesses and to housing and infrastructure. We are going to use Britain’s low interest rates to work for us all and we are going to do more to reform our banking system—the epicentre of what went wrong when he was the City Minister.

[Ed Balls]

Why does the Chancellor not bring some clarity to the debate by telling us how many businesses have actually been helped by his national insurance rebate scheme for small businesses? Was it the hundreds of thousands he promised? Will he give us the actual number?

[Mr Osborne]

I can tell the right hon. Gentleman that 15,000 businesses have been helped by that scheme. The economic policies that he has drawn up would hurt millions of businesses. What the Labour party wanted and what he campaigned for was an increase in national insurance for all firms and we stopped that.

[Richard Fuller]

On that point, will my right hon. Friend note that last month we had the largest number of new company formations in my constituency of Bedford? One reason for that is that they want stable, low, long-term interest rates, which this coalition’s policies are delivering.

[Mr Osborne]

My hon. Friend is absolutely right. That is precisely what businesses need—a stable economic environment in which we are not exposed to some of the financial problems that some eurozone countries face at the moment. The low interest rates and the credibility that our policy bring help every business, not only in Bedford but around the country.

[Andrew Bridgen]

Does my right hon. Friend agree that just as we need to rebalance our economy away from over-reliance on the public sector, we also need to rebalance our exports away from over-reliance on the eurozone at the moment? The latest figures suggest that this is already happening, with UK exports to non-EU countries up by 12% while those to the EU remain flat.

[Mr Osborne]

I agree with my hon. Friend that we need to diversify where our exports go, not just because of the problems in the eurozone but because this country should be taking greater advantage of the extraordinary growth in the Asian economies. It remains a staggering fact that we were exporting more to Ireland than we were to Brazil, Russia, India and China put together.

[Several hon. Members]

rose—

[Mr Osborne]

Let me make some progress and then I will take some more interventions. I want to say something about some of the Bills in the Queen’s Speech, as we are debating the Queen’s Speech. I want to talk particularly about the banking reforms—something else that the shadow Chancellor mentioned in only half a sentence, so we have no idea whether he supports the reforms or not. [Interruption.] Perhaps he can intervene and tell me when I have made these points.

First, we have the Financial Services Bill, which was carried over from the previous Session. It already seeks to rectify one of the greatest errors of policy making—the decision that the Labour party took in 1997 to remove banking supervision from the Bank of England. The Governor of the Bank commented on that in his lecture on the “Today” programme the other day. That Bill, which is crucial, brings prudential supervision back under the control of the Bank of England, giving it new powers to monitor the build-up of dangerous levels of debt and asset bubbles and to deal with them rather than, as last time, letting disaster strike.

In this Queen’s Speech, we prepare to go further and address the structure of banking itself. We will introduce the Bill that implements the reforms proposed by Sir John Vickers and his Independent Commission on Banking that ring-fences retail banks from the riskier investment banking arms and provides more loss-absorbing capacity so that private investors will bear losses, not the taxpayer. Taken together, those Bills seek to give Britain a safer, more competitive banking system and will allow our country to have successful banks with a global reach while better protecting the taxpayer at home should one of those banks fail. I hope the Bills will command broad support across this House.

I hope that the Bill to reform public service pensions also commands broad support across the House. After all, those reforms are based on the proposals of the Labour former Pensions Secretary, John Hutton. They provide for generous pensions and security in retirement for hard-working public servants that are quite frankly beyond the reach of almost all in the private sector.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Can the Chancellor really justify asking fire brigade workers, who undertake some of the most high-risk tasks in our society, to pay 13% of their income towards their pension?

[Mr Osborne]

We have to have public sector pensions that are affordable. The truth is that people are living longer in retirement, which is a good thing, and that if we want to maintain generous pension provision for firefighters and others we have to make reforms that mean the country can afford that. So, the answer to the hon. Gentleman’s question is yes, and we have been in a long and good negotiation with the Fire Brigades Union and others on those reforms. As I have said, we seek to make public sector pensions affordable and it is pretty striking if the tone of interventions from the Opposition is going to be that we do not have support for this far-reaching reform that will put public service pensions on a sustainable footing. Opposition Members are going to have to ask themselves whether they speak in this House for their tax-paying constituents or for the unions that sponsor them.

We look forward to hearing, in the wind-ups, from the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), whom we welcome to his place. Perhaps he will tell us what Labour’s attitude to these Bills will be. We are sorry that he has been removed from his role as Labour’s policy chief. He is yet another Labour politician who has found that their career takes a knock when they try to tell their party some hard truths. He did extremely well in his new job of handing notes to the shadow Chancellor as he spoke today, but there was a time when he wrote his own notes rather than just handing them. There was the time when he wrote that note saying, “I’m sorry, there’s no money left”, but his party’s only message is to spend and borrow more. To be fair to him, he is the politician who tried to tell Labour to get serious about welfare reform and about dealing with the deficit. He was famous in my Department for the very precise memo he sent to civil servants on how to prepare his morning cappuccino and his afternoon espresso. How ironic that what did for him was his attempt to get Labour to wake up and smell the coffee. [Laughter.] I have to say that it was quite late last night when I thought of that one.

Who replaces the right hon. Gentleman as policy chief? The new policy chief for the Labour party is the hon. Member for Dagenham and Rainham (Jon Cruddas). We did some research on how he might approach the job and we found these illuminating remarks from a few weeks ago:

“What interests me is not policy as such; rather the search for political sentiment, voice and language; of general definition within a national story. Less ‘The Spirit Level’, more ‘What is England’.”

Well, that is clear then. Perhaps when the Opposition find out “What is England” they will let us all have the answer. The striking thing is that there is no policy from the Opposition at a time when tough decisions need to be taken about our country’s future and when far-reaching reforms need to be made to secure its prosperity.

[Mr Geoffrey Robinson (Coventry North West) (Lab)]

The Chancellor is back on politics, where he is happiest. He got through some parts of the Queen’s Speech in about three paragraphs or sentences, I think. On policy, why will he not listen for once and do what we are saying? Why will he not extend to all small companies taking on new workers the national insurance discount, which is nowhere near being taken up yet, instead of dismissing that suggestion? It is a good idea, so why does he not take it on? Why does he not extend his initial idea and make it effective for once?

[Mr Osborne]

First, as I have said, we have used the money available to us in the balanced Budget to cut the small companies tax rate, which the hon. Gentleman wanted to go up. [Interruption.] He says, “Additional to that”; Labour’s policy was to increase the small companies tax rate. We have not done that. We have cut national insurance across the board for low and middle-paid employees by getting rid of Labour’s jobs tax—that applies whether they are employed in small or larger companies—and we have frozen business rates for smaller companies. So, we have done all those things, but I completely agree that we need to do more to help smaller companies by reducing the red tape burden on them and by helping to get credit to them. That is what the national loan guarantee scheme that was launched at the end of March is doing right now.

[Graham Evans]

I am a proud Manchester United supporter. The players proudly wear “Aon”—the name of one of the world’s biggest insurers—on their shirts. Can my right hon. Friend tell us why that fantastic international company is closing its headquarters in the USA and moving it to the UK?

[Mr Osborne]

I am reminded that the players used to wear “AIG” on their shirts. Perhaps it is a sign of how things are improving that they now wear the name of a major Chicago-based insurer that has chosen to move its headquarters to London. We remember all the stories of companies that moved their international headquarters from Britain a few years ago; now they are coming back.

I want briefly to say something about the eurozone crisis.

[John Hemming]

Will the Chancellor give way?

[Mr Osborne]

Of course I give way to my Liberal Democrat colleague.

[John Hemming]

In 2006, Lord Turnbull, who was at one stage Tony Blair’s Cabinet Secretary, said that borrowing

“crept up on us in 2005, 2006 and 2007, and we were still expanding public spending…You might have thought that we should be giving priority to getting borrowing under better control, putting money aside in the good years—and it didn’t happen.”

Does the Chancellor think the Opposition have learned anything since?

[Mr Osborne]

I suspect that the shadow Chancellor did not listen to Lord Turnbull when he was at the Treasury, and he certainly does not listen to him now.

[Tony Baldry (Banbury) (Con)]

May I take this opportunity to ask my right hon. Friend to pick up on something from the Budget? The Chancellor said that he hoped that the VAT on alterations to listed buildings would not have an impact on listed places of worship. The Churches estimate that the tax will cost them £20 million a year. Would my right hon. Friend be kind enough to update the House on what he is proposing to do to assist listed places of worship?

[Mr Osborne]

First, I pay tribute to my hon. Friend for his work as Second Church Estates Commissioner. He has been in discussions with me and the Treasury about how to make sure that we live up to the commitment I gave in the Budget that churches and other places of worship would not be impacted by the introduction of VAT on alterations to listed buildings. Of course, it is already charged on repairs to listed buildings. I have been in discussions with my hon. Friend and with the Bishop of London, whom the Churches asked to lead on that work, and I confirm that we have reached agreement. The Government will provide £30 million of grant to the listed places of worship scheme. That will be 100% compensation, exactly as we promised in the Budget, for the additional cost borne by churches for alterations. It should also go a long way towards helping the situation on repairs and maintenance, where in recent years they have not been able to get 100% compensation. We think it will deliver 100% coverage for repairs and maintenance. I thank my hon. Friend and the Churches for working with us on delivering what we promised in the Budget.

[Mr Frank Field (Birkenhead) (Lab)]

I am grateful to the Chancellor for giving way, and even more grateful to him for his statement. I congratulate him on the way he dug himself out of the hole into which he placed himself. May I use this opportunity not only to draw attention to those outside the House who campaigned on the change, but to the Second Church Estates Commissioner, who played his role in the negotiations superbly?

[Mr Osborne]

I certainly pay tribute to the Second Church Estates Commissioner. We were clear in the Budget that we wanted fully to compensate Churches for the impact of the change and I am glad that we have done so.

[Mr David Hanson (Delyn) (Lab)]

Now that the Chancellor has dug himself out of that hole, will he turn his attention to another one—the caravan tax? In my area of north Wales, the North Wales tourist board estimates that a 30% drop in sales, on the Chancellor’s figures, will lead to job losses and a reduction in the tourism industry. In the constituencies of my right hon. Friend the Member for Kingston upon Hull West and Hessle (Alan Johnson), and my hon. Friends the Members for Kingston upon Hull North (Diana Johnson) and for Kingston upon Hull East (Karl Turner), caravan manufacturing will go because of the tax. How will that help the growth economy the Chancellor seeks, and will he review the tax urgently?

[Mr Osborne]

As the right hon. Gentleman well knows, there is already VAT on caravans towed by cars, but there is a consultation on the change. It finishes tomorrow. It is partly due to the good work of my hon. Friends the Members for Beverley and Holderness (Mr Stuart) and for Boston and Skegness (Mark Simmonds), who urged longer consultation, that the period was extended. I propose to allow it to finish and then we will set out our response.

[Ed Balls]

rose—

[Mr Osborne]

I will give way once more, but then I want to say something about the eurozone.

[Ed Balls]

In this moment of honesty, perhaps the Chancellor will explain how he is going to dig himself out of the hole on the charities tax, the pasty tax and the top rate of tax? We should get it all out on the table.

[Mr Osborne]

I have spent the last 35 minutes explaining how I am digging the country out of the hole that the right hon. Gentleman put us into.

Let me say something about the eurozone crisis. When eurozone central bank governors and Finance Ministers openly speculate on the possibility of Greek exit, the genie is out of the bottle. That and the Greek elections make this a perilous time. We are clear about the three steps the eurozone needs to take if its currency is to function properly.

First, countries in the periphery with high deficits and uncompetitive economies need to confront their problems head-on, as Governments in Ireland, Spain and Italy are. We are doing it in Britain too, but the adjustment our country must go through is made easier by loose monetary policy and a flexible exchange rate. The countries of the eurozone do not have that to help them, so the core of the eurozone, and the European Central Bank, need to do more to support demand and share the burden of adjustment.

Of course, ideas such as the project bonds put forward by the new French Government are worthy of serious consideration, but, fundamentally, the German Finance Minister is right when he says that rising wages in his country and increased domestic demand there can play a substantial role.

Secondly, the eurozone needs to follow what I described a year ago as “the remorseless logic” of monetary union that leads to greater fiscal union. As I said in the same interview, forms of collective support and responsibility must be developed. I echoed the view in many eurozone countries when I spoke of the possibility of eurobonds.

Thirdly, all of us in Europe, including the United Kingdom, need to address our continent’s lack of competitiveness. That involves structural reform to welfare, pensions and labour laws, and completing single markets in services and digital. It means all Europeans, including Britons, rediscovering the ambition and the ethic that made our continent the dynamo of the world economy for so many centuries. It is not that dynamo today. As the Prime Minister says in his speech today:

“The eurozone is at a cross-roads. It either has to make up or it is looking at potential break up.”

No one should underestimate the huge risks of the latter, but Britain will be prepared for whatever comes. We are making the necessary contingency plans. We will take the steps needed to secure our economic stability and protect our financial system. Above all, we will go on with the progress we have made in the last two years on reducing the structural deficit, keeping our credibility in the bond markets and keeping our interest rates low.

[Mr Alistair Darling (Edinburgh South West) (Lab)]

The Chancellor seems to be setting out quite a significant shift in the Government’s policy on what should be happening in Europe, in particular urging the German Government to do things in relation to promoting growth that many of us have argued for several months. Interestingly, they are not to apply to this country. Will he confirm that this is a significant shift, and will he add to his list that it is now desperately important that the eurozone looks at the health of some of the banks in Europe? The Spanish started last week. I do not know whether they have the strength to do what is necessary, but unless the banking system is significantly shored up, if the problems spreading from Greece continue—contagion and so on—we could have another major banking crisis on our hands. That would be an utter disaster.

[Mr Osborne]

I very much agree with the sentiment that the former Chancellor expresses. In the autumn of last year, and indeed before that, the Prime Minister, myself and others in the Government did consistently say, in public as well as in private, that surplus countries in the core of the eurozone needed to do more; that the European Central Bank needed to do more—I said it in the House and we said it in the ECOFINs and European Councils that we attended.

What has changed this week is that, first, the Greek elections have brought back the fear of contagion that had never really quite abated, despite the action of the European Central Bank over Christmas. Secondly, over the weekend and at the beginning of this week, central bank governors and Finance Ministers in the eurozone itself were openly speculating on Greek exit, and that has, as I said, let the genie out of the bottle. Some of the things that we were happy to say in private we are now also willing to say in public, because the issue is out there—on the agenda. We have not put the issue out there in the public domain, but now it is out there, put there by other people. We have very clear ideas of what the eurozone needs to do to make their currency work.

[Mr Darling]

The Chancellor is actually confirming what I thought. It is good that they are saying these things in public, but it does suggest that perhaps there is an opportunity to change direction in Europe. I know we will not agree about what is necessary in this country, but does the Chancellor agree with me that we need to be explicit now that austerity on its own will not work—we need policies of growth to go with it?

[Mr Osborne]

I completely agree that austerity alone is not enough, and that is why I have just been explaining how we have cut business taxes, set up enterprise zones, set up the national loan guarantee scheme and reformed the labour market. We have done all these things so that car companies expand their production and investment in Britain and choose Britain as a place to do business. Of course those countries in Europe need to undertake structural reforms to go alongside their efforts to get their public finances under control, but we have to ask ourselves this question: if you are running a high budget deficit in a single currency zone, and you do not have the support of loose monetary policy, you do need support from the core of the eurozone but to abandon a commitment to austerity will expose you to even greater pressure on the international money markets than those countries are already exposed to.

[Jessica Lee (Erewash) (Con)]

Is not another facet to this recovery very much the investment in apprenticeships that this Government have made, with 177,000 new apprenticeship places taken up in the last year, including ones in my constituency of Erewash?

[Mr Osborne]

First, my hon. Friend is absolutely right that one of the successes that we have had is the apprenticeship scheme, which is now working across all constituencies and supporting many hundreds of thousands of people. We will see what the facts are after the debate, but the information that we have just had says that what the shadow Chancellor was alleging in his intervention on me a few minutes ago is not true. The number of hours worked in this country has actually gone up over the last two years—up by 20 million hours. So on that note, there is a difference—

[Several hon. Members]

rose—

[Mr Osborne]

Let me say this. Over the last years—

[Ed Balls]

Two years.

[Mr Osborne]

It is over the last two years. But this points to a greater truth: the right hon. Gentleman had 13 years to prove to the country that he had the right policies to run the British economy, and he delivered the greatest economic disaster in this country’s modern history.

[Several hon. Members]

rose—

[Mr Osborne]

I will finish now by saying this. We are reducing the structural deficit, keeping our credibility in the bond markets and our interest rates low. We are reforming our banks, helping our unemployed, supporting our businesses, and giving back to our country the prosperous future that the Labour party so cruelly snatched from them.

[Several hon. Members]

rose—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I remind all Members that there is now a six-minute time limit on all contributions to the debate. A great number of Members wish to participate, so the limit does not have to be used in its entirety; that might ensure that more Members get in.

13:38

[Alison McGovern (Wirral South) (Lab)]

I shall start my remarks by talking about the announcement by General Motors about Vauxhall at Ellesmere Port. I represent many, many people who work there and I pay tribute to that excellent work force and the community around them who support them. Whilst I recognise the commitment of all politicians who have helped back Ellesmere Port, in Wirral all of us know somebody—a family member or a friend—who has worked incredibly hard for this, and it is those people I am thinking of most and congratulating today.

I would like to make a few remarks about unemployment. Our commentary on employment, I am afraid, often shows the limits of the way we do our politics. The news, and we ourselves, often obsesses about the figures—the monthly movement up and down—and whilst those are important indicators, of course, it is the trend that really matters. We often worry about the weather when we should be thinking about the climate that we are in, and sadly, the unemployment figures are worse than those for this time last year. According to the Library, the number of people claiming jobseeker’s allowance is now 106,000 higher than in April 2011. That is incredibly worrying. The Chancellor mentioned the figures for two years ago. Unemployment plateaued in 2010. It is growing again now and we need to worry about why.

To add to the problem that we have, our understanding of the impact of unemployment and the lack of the necessary jobs in our economy is limited. I recently tabled a parliamentary question, asking the Treasury what assessment the Department had made of the medium and long-term cost to the Exchequer of the current level of unemployment. That matters because unemployment has a wide range of impacts. The Treasury did not give me as full an answer as I would have liked. I would have liked to know how unemployment impacts on the health budget in the form of increased costs; how much funding is being made available for the regeneration that is needed; and the impact of unemployment on crime levels.

[Andrew Bridgen]

In the shadow Chancellor’s speech, he made much of the apparent increase in long-term youth unemployment. Is the hon. Lady aware of the cynical way in which the last Labour Government manipulated the figures for long-term youth unemployment by cynically bringing people in for a one-week training course and then restarting the clock immediately after, to keep the figures down? That was a cynical measure, which this Government have stopped.

[Alison McGovern]

I thank the hon. Gentleman for his intervention. I have thought a lot about youth unemployment over the past years. The former Government oversaw radical improvements, such as our intervention in the labour market with things like the new deal. I find it hard to characterise any of that work, which has been recognised around the globe, as cynical. I find that very difficult to believe.

[Bill Esterson (Sefton Central) (Lab)]

I wanted to agree with my hon. Friend about the important and welcome news about Ellesmere Port, because like her, I have constituents who rely on the work that comes from Ellesmere Port. In her excellent speech, might she comment on the tax cut for millionaires that is paid for by pensioners? Does she agree that if that tax cut were reversed, the money would be better invested in jobs and growth of exactly the kind that she is calling for?

[Alison McGovern]

I thank my hon. Friend and Merseyside neighbour for his question. Like my constituents, I cannot understand this Government’s decision to give tax breaks to millionaires.

[Sheila Gilmore (Edinburgh East) (Lab)]

In light of the earlier intervention, I thought my hon. Friend might be interested to hear figures, provided to the Work and Pensions Committee yesterday by the Department for Work and Pensions, on the issue of people who had apparently been off benefit. In March 2010, there were 18,000 young people who could have been put in that category, and there are now 4,000 in terms of training allowances. That is a difference of 14,000. As I think my hon. Friend would agree, that hardly explains the rise in youth unemployment.

[Alison McGovern]

I thank my hon. Friend for that helpful and informative intervention.

When the Chancellor talked about a growing economy, one of my hon. Friends shouted, from a sedentary position, “Not in the north-east.” We need to recognise that worklessness does not impact equally on all communities. That is why when we think about the growth we need, policy needs to be tailored properly to the economy in each and every part of the country, so that the GDP growth we all hope for represents the whole of the UK. I suppose it is entirely possible that the UK will recover, but leave behind heavily blighted areas of our country.

A study of unemployment reveals a key flaw in the Government’s thinking. They have talked about “expansionary fiscal contraction”—in other words, to achieve growth, the Government need to slash their budgets and investment will flow in from foreign shores. I do not believe that that is consistent with the Government’s other stated aim: to rebalance the economy. Finance for those parts of our economy that have strengths in manufacturing but need regeneration is necessarily long term. Government industrial strategy should shelter our industry from global headwinds, not leave us vulnerable.

Fiscal contraction at the pace we have seen has harmed blighted areas that had only recently started to recover from the impact of previous Conservative Governments’ attitude to industry. In my area, I see the impact of the withdrawal of central Government from regeneration and the stopping of regional growth via regional development agencies. The responses built into local government that were designed to target deprivation, which clusters in particular parts of our country, were stripped away in the financial settlement.

In the Budget, the Chancellor introduced measures that took money out of the pockets of people on low and middle incomes in those parts of the country where we want to rebalance. That will not help. Someone in the Treasury has to take responsibility for looking at the macro impact of all the measures that are affecting those places that stand to be the worst affected by this Government. We have had a botched Budget and then a next-to-nothing Queen’s Speech, I am sorry to say. The Government will be judged by the people in Wirral and Merseyside not merely on the GDP figures, but on the actual development we see in our city. We must take account of the differential impacts of Government measures on different parts of the country with different economies; we must not focus only on the national picture.

My question for the Government is: will they meet the test of real economic development? Only that will promote the widespread employment that people want. People will judge this Government on the basis of whether or not they see their friends and family in employment.

13:53

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

We are all aware, of course, that the Government are having to make some very tough and difficult decisions. Some of them may question some of those individual decisions, but let us be in no doubt about why we are in the present situation. In 1997, we handed over an economy with no deficit and a national debt of £350 billion that was being paid off. By 2007, before any banking crisis had taken effect, the debt had risen to £650 billion, because supporters of the previous Government were spending, at a rate of £30 billion to £40 billion a year, money that they simply did not have. We all know what happened then: after the banking crisis, they went on the biggest spending spree in financial history, which left us with a debt of £1 trillion on the books—probably twice that when private finance initiative commitments are included—and a deficit of £160 billion a year.

[Several hon. Members]

rose—

[David T. C. Davies]

I am happy to give way to a Labour Member who wants to answer some of those points.

[Paul Murphy (Torfaen) (Lab)]

The hon. Gentleman has said that the people of his constituency are pleased with the performance of his Government and his Chancellor. Is that why they actively rejected the Conservative party and the Liberal Democrats, so that they lost control of Monmouthshire county council?

[David T. C. Davies]

Monmouthshire county council will have a Conservative-led administration, with help from our great friends in the Liberal Democrat party, with whom it is always a pleasure to work. They were not responsible for causing the mess left by Labour.

I want some answers from Labour Members. I want to know why they left us with a debt of £1 trillion and what exactly they intend to do about it. It seems to me that the basis of their economic theory is Enid Blyton’s “The Faraway Tree”, which children climb to find a land where everything is free and nothing has to be paid for. To me, that is a fairytale; to them, it is an economic theory. They think they can just carry on borrowing and borrowing, and put off until tomorrow what needs to be done today.

[Huw Irranca-Davies]

Can the hon. Gentleman explain why he felt it necessary to write in to his local paper apologising for the incompetence of his Cabinet colleagues? I thought for a moment that he was describing them, not turning his guns on us. Surely it is they who are incompetent—that is what he stated, in black and white.

[David T. C. Davies]

I would never apologise for doing my job as a Back Bencher, which is to scrutinise and to point out that, on occasions, some Cabinet members have done things or prioritised certain policies with which I disagree. What Opposition Members should do is start to apologise, and not only for the £1 trillion debt. What about selling gold at $200 an ounce—400 tonnes of it? What about the £5 billion raid on private sector pensions, which has plunged people who worked in the private sector into poverty? Only one of them has apologised—the right hon. Member for Birmingham, Hodge Hill (Mr Byrne), who left a note saying, “Sorry, we’ve spent all the money.” That is not good enough.

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

Will the hon. Gentleman give way?

[David T. C. Davies]

No, I have no more time to give way.

I want to know why Labour Members still maintain that the banks are to blame, when, in all, just £120 billion was given to the banks out of a total debt of £1 trillion, almost 10 times more. They are following the policy of fools, knaves and despots throughout history started by Edward I, who blamed everything on bankers. The reality is that, every year, we are borrowing more from banks than we have given them. We get 10% of our revenue—£50 billion a year—from the banking industry. If Labour Members are allowed to destroy it, they will have to find cuts 10 times greater than the ones that we, unfortunately, have already had to make.

This Government are taking proper and concrete steps and I think that most Members present support almost all those measures. I totally agree with the decision to reform welfare spending, so that people have to go out to work, and at the same time to cap immigration, which has held down wages for the lowest paid, as even Opposition Members have been the first to accept. As one who has experience of trying to run a small business, I am delighted that the Government will do something to reduce the red tape of employment legislation, which makes many businesses reluctant to take people on. It is, of course, a pleasure to read about cuts in corporation tax and, yes, even the cut in tax for top rate taxpayers. We know that that is politically difficult to defend, but there is a strong economic argument for the measure, which is why Labour Members were not prepared to vote against it and will not now say what they would do.

In Wales the public sector is very large, and the Army forms a large part of that sector. I am worried to learn of proposals to amalgamate the Queen’s Dragoon Guards with another regiment. Many Welsh people are employed in the Queen’s Dragoon Guards, which is an excellent regiment. Since the battle of Agincourt, Wales has supplied men and women who have fought loyally for Britain, as I would have been happy to do in the Territorial Army—I saw no active service. I hope that the Chancellor will bear that in mind when the decisions are made.

I hope that the Chancellor will forgive me for expressing the hope that he will also look carefully at the carbon tax. I am one of a growing number of people who worry about the fact that there has been no increase in temperature for the past 12 years. It took me a while to get the figures from the relevant Government Department, but Members should have a look at the Met Office website. I worry about imposing on the manufacturing industry a tax that is not being imposed elsewhere in the world. I am not absolutely certain whether global warming is taking place or not, but I am certain that if we start imposing measures that are not imposed elsewhere, all that will happen is that manufacturers will go elsewhere and there will be no overall decrease in carbon dioxide emissions.

I am coming to the end of my little piece. I want to assure the Chancellor that we are his most loyal supporters, even if we occasionally quibble on certain issues. We are determined to face down the forces of financial chaos on the Opposition Benches. We know that every Labour Government have ended in utter financial catastrophe, whether because of Attlee using war loans to build the NHS on the back of American credit, Harold Wilson devaluing the pound and telling us it would stay the same, Jim Callaghan having to go cap in hand to the International Monetary Fund, as the Greeks are now doing, or the previous Prime Minister, himself a former Chancellor, who told us that he had ended boom and bust and then created one of the biggest booms in history, on the back of lax lending regulations and lax immigration controls, and then the biggest bust in history, which we now have to sort out.

We know, as do most people in this country, that, whether one is a nation, a company or an individual, it is impossible to go on spending more money than one earns. That is why Government Members will be loyally supporting the Government on the Queen’s Speech and making sure that we can build a better Britain, built on real growth, not debts that our children will have to pay off at some point in the future.

14:01

[David Miliband (South Shields) (Lab)]

I want to make two points in this debate. The first is about youth unemployment. I will present some figures showing the rising cost of the Government’s economic failure. The second is that the neglect in respect of youth unemployment is mirrored by a misguided response to the storms in the eurozone.

I do not think that we need to debate whether youth unemployment is a big problem; it is a massive problem. As the Chancellor and others have said in previous debates, long-term youth unemployment is the greatest danger to not only our economic future, but our social future. Today, according to the Government’s own figures, 260,000 young people have been unemployed for more than a year, which means long-term unemployment. Another 200,000 have been unemployed for more than six months. The interesting, depressing and worrying thing is that the situation is getting worse. As recently as 2008, 6,000 18 to 24-year-olds had been claiming jobseeker’s allowance for a year. By April last year that figure had tripled. Over the past year—just 12 months—it has tripled again, to 55,000. In my constituency, this time last year there were 15 18 to 24-year-olds who had been claiming jobseeker’s allowance for over a year, but now the number is 250, which is a 1,500% increase. The total figure for youth unemployment is 1.3 million or 1.4 million, which comes from the labour force survey, but these are JSA claimants, because that is a claimant count figure.

As for the costs, in February this year I chaired the Association of Chief Executives of Voluntary Organisations commission on youth unemployment. We costed the levels of youth unemployment on the basis of the figures for the first quarter of 2011, which showed a net present value cost of some £28 billion. I asked the university of Bristol to rerun the figures for the last quarter of 2011, which it has done, and the calculation now stands at £30 billion. In the space of 2011, the net present value cost has gone up by £2 billion. That seems to me to be 2 billion reasons for a greater degree of urgency and effectiveness in Government policy.

The Minister responsible for employment says that we should be pleased with stability, but stability in this policy field means that the problem is festering and getting worse. The deputy leader of the Lib Dems, the right hon. Member for Bermondsey and Old Southwark (Simon Hughes), said we should celebrate the “huge success” of Government policy. The wage subsidy that was introduced in April is at best unproven. The majority of jobs under the apprenticeship drive are the result of jobs for the over-25s being rebadged, not new apprenticeships for the under-25s. The expertise in the voluntary sector is being squeezed out by the Work programme. Some 20% of voluntary sector providers have stopped providing under the Work programme. There is a gaping hole in Government policy on transport costs for people to get to interviews, never mind getting to work.

I make no apology for repeating this very basic fact: the Work programme, which is the Government’s flagship programme, helps one in 10 of the youth unemployed. Its success rate is 20%, according to the Government’s own figures. That means that one in 50 of the young unemployed are getting a job as a result of Government interventions. I say to the Chancellor—I am grateful that he has stayed for the debate—that there are three steps that he could take now. First, he could require all public contracts over £1 million to offer apprenticeships to young people. In his autumn statement last year he announced infrastructure expenditure, which is a good thing, but where are the apprenticeships to go with it? Secondly, he could bring forward from 2014 money to raise the size of the wage subsidy or the number of young people helped. In 1995, when his predecessor, the right hon. and learned Member for Rushcliffe (Mr Clarke), tried a wage subsidy, it helped only 6,000 young people. He will have to boost the effort to get take-up. Thirdly, he should bite the bullet and recognise that every study anywhere in the world has shown that for the long-term unemployed only a part-time job guarantee can ensure that one year’s unemployment does not become three, four or five years’ unemployment.

[Mr Spencer]

The right hon. Gentleman is making a compelling case, and I know that he has worked very hard on this matter in the past, but surely he recognises that the best way to solve this is to increase the number of apprenticeships, which the Government are doing, and that his Government encouraged young people to try to aspire to university and many of them, when they did not meet that aspiration, found that deflating.

[David Miliband]

I am grateful to the hon. Gentleman, who makes a perfectly intelligent point. It seems to me to be a good thing to raise university participation levels up to international standards, which is between 45% and 50%, but it is crucial for those who do not go to university that we have high-quality options for them. High-quality apprenticeships are an important part of that.

[Dr Phillip Lee (Bracknell) (Con)]

Will the right hon. Gentleman clarify what he means by international standards?

[David Miliband]

The leading countries of the world for higher education are, first, the United States, which has a 55% participation rate, and, secondly, France, which most people would recognise as having an outstanding higher education system. It has 48% participation. Korea, one of the new countries growing up in the world, has 80% participation in higher education. By the way, Scotland already has over 50% participation in higher education, so I do not believe that somehow English or UK young people are unable to benefit from higher education in the way that people in other countries can.

The Robbins report of 1963 said that higher education should be open to anyone with the ability to benefit, and that seems to me to be the right test. For the 50% who do not go on to higher education, we of course need high-quality apprenticeships, but I say to the hon. Member for Sherwood (Mr Spencer) that he should work with us to raise the quality of apprenticeships, because too many apprenticeships are at too low a level and are not leading to the kinds of life chances that we want to see.

It is true that our levels of youth unemployment are not the levels of Spain and Greece—thank God for that —but in 600 wards in this country one in three young people are not in education, employment or training. It is not the 50% or 55% of the Greeks or the Spanish, but one in three. I do not believe that Europe should be the benchmark for levels of youth unemployment.

I also say to the Chancellor that Europe cannot be the alibi for the collapse of our economy at home over the past 18 months. If we look at the growth measures since his first spending review in the autumn of 2010, we will see that we are actually doing worse than comparator countries, and I do not just mean Germany. In the 18 months since the 2010 spending review, we have had worse growth than France, Poland, Sweden, Austria and Slovakia. I will compute the Spanish figures announced today, but until those figures were announced we even had lower growth than Spain. Our growth was worse than the EU 27 average, the eurozone average and the G7 average.

The Chancellor’s claim about the problem that the eurozone mess is causing for our economy is actually undermining his own promise to rotate our economy from domestic demand to external demand. The question is: what should we do about that? He says that the lesson is to stay the course. I say that when the external environment changes, we should change course. The storm in Europe is not a reason for us to stick to plan A; it is a reason to shift to plan B. There is a warning in the travails of the eurozone, but not the one that the Government claim there is. Debts are rising today in Spain, Portugal, Italy and Ireland because fiscal policy is exacerbating the downturn in the economic cycle. The Prime Minister said in his speech today that we are “on track”, but Conservative austerity is not working at home and collective austerity is not working in Europe.

I believe that our absolute requirement in the light of the real and serious risks we face is to pitch policy—fiscal policy, monetary policy, industrial policy and banking policy—against the tide of the economic cycle. We need to argue for that abroad and at home. We heard a shift today from the Chancellor about what should happen abroad. We should be embracing President Hollande, not snubbing him. We should be anti-austerity and pro-reform. That is the right position for Europe and the right position for Britain, because there are no islands in the modern economy. It is not ideology; it is maths. And judging by the Gracious Address, it is time for the Government to go back to the classroom.

14:15

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

I welcome the overall thrust of this Queen’s Speech and, in particular, the fact that it concentrates on the need for growth, more jobs and private-sector, wealth-producing buoyancy, which we did not see for a very long time under the watch of the previous Government. I must say that, yes, I do my best to be honest with the people I represent—

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

Yes.

[Mr Binley]

I do—they will tell you that, Sir—as you did when you said that there was no money left. We are both honest men.

I wish that the shadow Chancellor would welcome some of the achievements that the people of this country welcome; it is foolish of him not to do so when there are considerable signs of recovery. It simply lowers the esteem in which all politicians are held, and I urge him, and the Opposition Front Bencher who responds to this debate, to take that into account.

There are welcome signs of recovery. The private sector has created more than 500,000 jobs since the general election; the International Monetary Fund forecasts that the UK will grow at twice the speed of Germany and three times that of France; borrowing costs have fallen, investment has been increasing and only yesterday we saw a drop of 45,000 in the number of unemployed people in the first quarter of this year. All those things are welcome, but it would be refreshing to hear Opposition Front Benchers greet them with some enthusiasm—although I doubt that they will.

The truth of the matter is that consumers and businesses are saying, “To hell with it; we’ve got to get on with life,” and that is one reason why we are seeing some of the green shoots of recovery. Now we need to nurture them and ensure that they continue to grow and bear fruit.

The situation is fragile, and no one would say otherwise. Consequently, I urge the Government and the Chancellor to do more. We will not achieve growth with new laws. The previous Government tried that for 13 years, and we saw what happened. This place does not create the growth; it simply sets the atmosphere and ambience for it. So I appeal to the Chancellor to recognise that we need to change the culture regarding entrepreneurialism and the attitude to small businesses, and indeed serious and important recommendations on doing so are coming forward from various parts of the House.

We must also understand the needs of small businesses, because therein lies our best chance of growing jobs and the well-being of this nation.

[Richard Fuller]

Does my hon. Friend agree that there is nothing that a small businessman would like to do more than to employ a young, new worker? What would my hon. Friend suggest to the Chancellor can be done with employment regulations, so that we get our businesses employing people more easily?

[Mr Binley]

I welcome that important point, because I was about to turn to that very area. More can be done, and we do indeed need to reduce the regulatory burden and to strengthen the business environment.

I welcome in the Queen’s Speech the proposed measures to deal with executive pay and employment tribunals, but I still do not understand why the Government are obsessing about maternity and paternity leave, especially for very small businesses. I simply point out that many people meet in the workplace and set up a family life together, and, if a small business employing 10 people loses 20% of its work force for six months, temporary labour cannot be used as a replacement. That simply does not happen.

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

One trend in the employment figures over recent months has been that female unemployment has risen faster than male unemployment, and that it is decreasing less quickly. Detaching women from the labour market, as the hon. Gentleman seems to suggest we do by weakening maternity rights, will surely make the situation worse.

[Mr Binley]

I do not suggest that at all. What I suggest is that we understand the real needs of small businesses. If we want them to grow and create jobs for both men and women, we need to ensure that they are released from much of the burden that they face at the moment. I ask the hon. Lady to consider that burden, because it is a considerable one for small businesses—I have worked in the sector pretty much all my life and founded two such businesses. We need to release small businesses from that burden, so I would particularly welcome their being excluded from the sort of burdens that paternity leave suggests. The Opposition need to get real in that respect.

I turn to the attitude of the banks and financial services.

[Jim McGovern (Dundee West) (Lab)]

Will the hon. Gentleman give way?

[Mr Binley]

No, I am not going to give way. I have given way twice, so the hon. Gentleman will respect the fact that time is of the essence.

Small businesses have not had the support and understanding of the financial services sector. Again and again the banks tell us that 85% of applications for money are met, and of course that is true.

[Jim McGovern]

Will the hon. Gentleman give way on that point?

[Mr Binley]

My time is running out; I know the hon. Gentleman understands.

Yes, 85% of those applications that are finally made are met, but many people go along to the bank and are told before they reach the application stage that they are not going to get the money, so they never apply. The figures are twisted, and we need to understand that.

On regulation, I welcome the Government’s attitude to one-in, one-out, but they could do much more for small businesses by recognising that they would be the great engine of growth if they were only released. They could be excluded from many of the regulations that apply to business generally, and I urge the Chancellor to press that point in Cabinet.

Members will not be surprised that I now turn to my constituency. We are trying to create a new approach to jobs and development by establishing Northampton Alive, a project involving 15 major developments, part of which is the enterprise zone that, thank God, this Government allowed us to create in Northampton—the largest in the country. We have also introduced, however, a forum for the leading 60 to 80 people in the town, so that every six months of this major project, which lasts for 15 years, they get the opportunity to provide their input and to take ownership of their town, the new developments affecting it and the new job opportunities that will ensue.

Finally, local measures matter. We can do more locally, and I encourage the Chancellor to urge local authorities and local people to take up that challenge.

14:15

[Mr George Mudie (Leeds East) (Lab)]

Before I begin my remarks on the Queen’s Speech, I should like to compliment my right hon. Friend the Member for South Shields (David Miliband) on his very good speech. We all have opinions, but to put the facts in such a clear fashion that cannot be argued with proves why he is a loss sitting on the Back Benches. I am not a natural supporter of his, as he knows, but the Front Bench is his place, not the Back Benches—[Interruption.] It is a shame; that is absolutely right.

This Queen’s Speech is almost a re-run of the Budget speech. There are three financial Bills: the pensions Bill, the banking reform Bill, and the enterprise and regulatory reform Bill. This last has parts that may be acceptable, although they will have to be teased out and looked at, but other parts are worrying. Of the remaining Bills, some are good or desirable in their own fashion. In the context of the dangers and difficult problems facing the British economy and the need to get growth and a rebalancing of the economy, the Queen’s Speech offers very little. That is very disappointing, and it will make the public, who are worrying about their families, their homes, their futures and their children’s futures, wonder about how out of touch the House of Commons is with their worries.

The Queen’s Speech projects our spending the majority of our time on a Bill to reform the House of Lords. How sensible will that seem to the families out there who are treading water financially? We must remember that 80% of the public sector cuts are still to come, so we are not at the worst stage; we have almost not even started. Yet this Bill, on which there is no consensus in the House and which is fiercely opposed by Members from all parties, will take up a lot of time here and in the House of Lords. One wonders why we are doing it. The public will ask, “Have they nothing better to do?” As a result, we will not have a social care Bill in this Session—that is a disgrace—and nor will we have a higher education Bill, which would be crucial to the growth strategy. No one can say that the Government have got their priorities right.

My right hon. Friend the Member for Edinburgh South West (Mr Darling) got something that Labour Members have long wanted—an acceptance from the Chancellor that growth is necessary to run alongside the cuts. That was quite an achievement and quite good news. The sad news, however, is that when the Chancellor read out all the measures that he felt would deal with growth, they were all on the supply side, not the demand side. It is clear that the big corporates are flush with money and could invest today and tomorrow, but they are not doing so because they have no confidence in the economy and there is no demand in the economy. The sooner that confidence is brought back, and the sooner the Chancellor understands that he has to put demand into the economy to get people into jobs with money and the confidence to spend, the better.

[Jim McGovern]

I thank my hon. Friend—a fellow former Lawside RC academy pupil and Dundonian—for giving way. From 2005 to 2010, I never had any business people coming to my surgery. Since 2010, an ever-increasing number of have been coming to tell me that they are not getting a fair deal from the banks. Does my hon. Friend share that experience?

[Mr Mudie]

As a member of the Treasury Committee, I can tell my hon. Friend that we argue every month with the Governor of the Bank of England and appeal to him to do something about the banks, which are not lending to small businesses at the level that they promised and have been allowed to get away with it without any complaint from the Government.

If Government Members think that it is partisan to say that there is no plan for growth and no understanding of growth, let me read out what the Secretary of State for Business, Innovation and Skills said in a letter to the Prime Minister regarding industrial policy. He wrote:

“I sense however that there is still something…missing—a compelling vision of where the country is heading beyond sorting out the fiscal mess; and a clear and confident message about how we will earn our living in future.”

He clearly and comprehensively set out five areas where there should be investment, the final one being investment in the construction of houses, which he said would get people into work and have an effect on the supply chain. None of those issues appears in the Queen’s Speech or was addressed in the Budget. If the Government cannot trust and listen to their own Business Secretary about how to get an industrial policy for growth, what chance do the people of this country have?

14:25

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

It is a pleasure to participate in the final day of the Queen’s Speech debate, where we focus on the economy. Occurring as it is just after the May elections, there is a tendency not only to look at the new policies that have come forward but to take stock of the Government’s performance to date.

An important match took place at the weekend—the Chancellor may have taken an interest as his constituency is not far away—which determined the outcome of the premier league. If we had taken the half time score to be the final outcome, we would have drawn very much the wrong conclusions. The same can be said of the economy. We must work towards a full programme across the Parliament, and at the moment we are halfway through that political cycle. Let us be fair: the 3 May local elections represented a tough result for the Government. I am sure that whole House will unite in delight at the re-election of Boris Johnson. [Interruption.] I am glad that everyone concurs. We look forward to his waving the Olympic flag once again, having seen him do that in Beijing.

[Paul Uppal (Wolverhampton South West) (Con)]

Does my hon. Friend agree that it is important that the Government are taking long-term decisions and looking at the long-term interests of UK plc?

[Mr Ellwood]

I am grateful for that intervention.

Labour Members may be rejoicing in their election results, but before they start measuring the curtains for No. 10 it is worth noting that they fell well below the magic number of 40%. That suggests that those results were more about sending a message to the Government of the day than voting for an alternative. Of course people are worried about jobs, the cost of living, rising fuel prices and generally making ends meet, and we must not lose sight of that. The results therefore reflect a backlash against the establishment which is having to implement these very difficult decisions.

Three observations can be drawn from the results. First, such backlashes are often witnessed. Back in the days of Margaret Thatcher, she went down to 24% in the polls but then continued to win general elections. Likewise, in 2000 the Tories managed to get 40% only to lose the general election in 2001. Secondly, the electorate should be cautious about listening to Labour’s alternative economic strategy of spending more, because it is that sort of irresponsible stewardship that got us into the financial crisis in the first place. Thirdly, the Government need to listen and must not be distracted by less important issues. They must focus on the priorities of the economy, education, welfare, reducing crime, and the NHS.

[Mr Stewart Jackson (Peterborough) (Con)]

My hon. Friend is making a compelling case. I know that he has a great interest in tourism and leisure. Does he agree that it is imperative that the Government make a decision soon on airport capacity in the United Kingdom, in particular in the south-east, to drive economic growth, jobs and the renaissance of our economy over the coming years?

[Mr Ellwood]

My hon. Friend makes an important point. This is a busy year for tourism in Britain and we must get those aspects right. This is not the first time that those points have been mentioned in this debate, and I think that the Chancellor has taken them on board.

The other thing I would like to point out about the local elections—this will be the same in future elections—is the deluge of news that has been thrown at us by the 24-hour news industry. We must think about how the message is managed, not just about the message itself. The Budget is remembered more for Labour’s sensationalist catchphrases, which have been heard again today, than for its game-changing announcements, such as the increase in the personal allowance, which will affect 24 million people; the largest single rise in pensions ever; and the cuts in corporation tax, which make us the most competitive country in the G8.

The latest phrase that Labour is peddling, which has leaked into the media, is “double-dip recession”. If I took my son, Alex, to the fairground and we went on a rollercoaster called “The Double Dip”, he would be pretty disappointed—even at the age of three—if the second dip was eight times smaller than the first. Labour is being disingenuous with the figures and undermines our economy by constantly peddling that phrase. [Interruption.] I hear Labour Members grumbling, so perhaps we should look at the figures. The Q1 results for 2012 were better than the GDP growth results for 2011, which suggests that the graph is going in the right direction.

[Mr Byrne]

The hon. Gentleman is certainly making a case. Will he tell us the cash value of the decline in GDP in the last quarter? How much did it cost our country in lost production?

[Mr Ellwood]

I remind the right hon. Gentleman that the recession that lasted for five quarters, for which he was directly responsible, gave us a GDP growth figure of minus 2.3%. The figures that we are dealing with now are minus 0.3% and minus 0.2%. That means that we are heading in the right direction. It might technically be a recession of two quarters, but Labour is talking down the economy, which is not what the British electorate want to hear.

It is thanks to the measures that this Government are implementing that our economy is growing faster than that of the eurozone, twice as fast as Germany’s and three times as fast as that of France. Our borrowing costs have fallen to record lows, and thanks to the management of the deficit, we are able to retain our triple A rating. And yet, Labour are keen to peddle the idea that there is no plan for a recovery. That argument has just been put forward by the hon. Member for Leeds East (Mr Mudie).

I will give some examples of what the plan is. I have mentioned how we are managing the deficit so that borrowing costs are low. We are also creating one of the most competitive business tax systems in the developed world; cutting red tape by scrapping unnecessary and out-of-date regulations, which are costing UK businesses more than £350 million; and creating one of the most educated and flexible work forces in Europe by creating apprenticeship schemes and energising our schools system through the academy programme. Of course, we are also boosting investment and exports to rebalance the economy by setting up enterprise zones across the country, developing regional growth funds and replacing the regional development agencies with the more effective local enterprise partnerships. I certainly welcome the one that has just been launched in Dorset, which is already starting to release faster broadband and upgrade the county’s infrastructure.

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

What does the hon. Gentleman think the imposition of VAT on static caravans will do for jobs, growth and exports?

[Mr Ellwood]

Again, the hon. Gentleman is repeating a point that has been made by Labour and that the Chancellor has already heard.

To be fair to other Members who want to get in, I will conclude by saying that we need to remain firm on our plan. We need to focus on where we want to be in 2015. It was courageous of the Government to set out a plan for growth and I commend it to the House.

14:33

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

It is a great pleasure to speak in this debate, which is definitely the most important debate on the Queen’s Speech as far as my constituents—and, I suspect, all of our constituents—are concerned.

The constituency where I live is considered to be in the top 10 unemployment blackspots in the country. In north Ayrshire, there are currently 5,555 claimants chasing 313 jobs. The position that my constituents face is similar to that faced by the constituents of many hon. Members, irrespective of which part of the country they live in, but if we listened to Government Members we might think we are living in a very different economic situation. Yet again, they have used the occasion to show their complacency on the economic situation and how out of touch they are with many of their constituents, who they well know are struggling.

I am disappointed by the Queen’s Speech. Like many, I was underwhelmed when I listened to the announcements by the lack of proposals for legislative measures to try to address the serious problems that our country faces. Many of the speeches have repeated the speeches on the Budget we heard not so long ago. The Government had an opportunity to offer a grand vision of how they will move us forward, but they have failed yet again to make any significant proposals that will help to get us out of this dire economic situation. My hon. Friend the Member for Leeds East (Mr Mudie) has already quoted the Business, Innovation and Skills Secretary, but I agree with the latter that something important is missing, namely a “compelling vision” of where the country is heading.

I shall not necessarily talk about specific proposals in the Bills included in the Queen’s Speech, because the point I am making is on the lack of necessary measures. The hon. Member for Northampton South (Mr Binley), with whom I sit on the Business, Innovation and Skills Committee, spoke about the concerns of businesses and the banks’ failure to lend to small businesses. Yet again, there are no significant measures in the Queen’s Speech to force banks to lend to small businesses. Small businesses come to MPs’ surgeries because they are having difficulty getting loans from banks, but some no longer see the point of contacting politicians because they have done so many times, and the Government’s attempts to get banks to lend, such as Operation Merlin, have completely failed.

There was a lengthy debate yesterday on the decrease in living standards up and down the country, the collapse in wages and the Government’s failure to address the problems that our constituents face. In almost every area of Government policy, there is a failure to focus policy to help businesses to survive and develop.

On green jobs, the Proven wind turbine factory, which operated until last autumn, was a success story for Ayrshire. There were technical problems with one of the wind turbines that the company operated, but the company was one of the first in that field and very much a success story for Scotland. However, its future is uncertain. It had to fold—an Irish company has taken it over, but it will not continue as substantially as before. Those who set up and ran Proven say that the problem that led to its demise was the failure to get funding from the banks, because the banks failed to accept that there was a long-term future for the business because of the Government’s feed-in tariff policy and their approach to solar power.

The Government need to do better. They need to come forward in every area of policy with a plan that will get this country on its feet again.

14:39

[Ian Swales (Redcar) (LD)]

The key to jobs and growth is wealth creation. We create wealth by digging it up, growing it or making things. Everything else is just moving it around. That is why I welcome the Government’s focus on real wealth creation, especially manufacturing.

Labour has been highly critical of almost everything done by the Government, but it is hard to discern what its programme or vision would be. I suppose we can tell a lot about its vision from what it did when it had its hands on the levers for 13 years. It had 13 long years in which to create the society it wanted, so what did it look like in the end? It loosened bank regulation, and further to help its friends in the City it scrapped the public interest test on takeovers in 2002, meaning that many of our cash-generative businesses are now foreign owned, especially in utilities and infrastructure.

Labour decimated manufacturing, taking it from 22% to 11% of the economy, which had knock-on effects for many other sectors, such as logistics. It left Hartlepool, Middlesbrough and Redcar and Cleveland in the weakest 10 of the 324 local economic areas. It widened the gap between the north and the south and the rich and the poor, and widened health inequalities. It created a benefits culture in which work did not pay for many people and having children became almost a career option in towns such as Redcar.

What about the tax system? Today, we again heard from the Opposition the mantra, “Tax cuts for millionaires.” I do not think that friends or even enemies of the right hon. Member for Wokingham (Mr Redwood) would describe him as left-wing, yet in his alternative Queen’s Speech the other day he called for a return to the former Prime Minister’s favoured tax levels—a top rate of income tax of 40% and capital gains tax at 18%. So how did millionaires fare under Labour? They had a 40% top tax rate until the last month of its 13 years. After the recent cut, it stands at 45%. It levied an 18% rate on capital gains—a lower rate than their cleaners and drivers would pay on their income. This Government have lifted that to 28%.

Under Labour, millionaires could put £250,000 a year into a pension scheme and get tax relief. The cut to £50,000 by this Government has raised £4 billion from the rich. They received child benefit and paid 2.5% less tax on their spending. They could get unlimited taxpayer support for gifts to charities, including family- controlled trusts, public schools such as Eton and, as in the case of Andrew Lloyd Webber, a huge art collection, some of which he rents back cheaply to his own house. Add to that numerous loopholes, and millionaires must want Labour back as fast as possible. Meanwhile, people on the minimum wage were paying £700 a year in tax.

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

Will the hon. Gentleman remind me who introduced the minimum wage?

[Ian Swales]

It was one of Labour’s great achievements and one I totally support, but I do not support a tax level of £700 a year on the minimum wage, which was in place when the previous Government left office.

What do all these failures in Labour’s vision have in common? Apart from the takeover test, they are all being tackled by the Government. Of course we are doing a lot more than that to stimulate jobs and growth. We are dealing with Labour’s shocking education legacy, as a result of which employers, even in high unemployment areas such as mine, say they cannot find the people they need. We are starting from the bottom. The pupil premium is proving such a help to children in deprived areas. We are encouraging science study in school—it is already up 80%. The National Citizen Service is giving young people confidence in those all-important softer skills. We have made huge investments in apprenticeships, the number of which has more than doubled in my constituency.

We are dealing with Labour’s neglect of manufacturing. We have heard the good news today about Vauxhall and the Business Secretary’s involvement in it. He has also intervened recently in the bioethanol industry, and we will shortly see the restart of a plant in my constituency on which 2,000 jobs depend. We are also pushing green technology. I can look out my office window in Redcar and see 27 giant offshore wind turbines being constructed. Construction is about to start on a £500 million biomass power station at Teesport. The other day I met representatives of the Forewind company, which is starting a massive project on the Dogger bank and wishes to bring power ashore through my constituency. I thoroughly welcome the announcement in the Queen’s Speech of the green investment bank, which will bring more jobs and growth to this vital sector.

The Government are investing in technology and innovation centres, including a centre for process innovation in my constituency. They are investing to improve rail freight infrastructure from Teesport and have created enterprise zones, including three in my constituency at Wilton, Kirkleatham and South Bank. The regional growth fund has already given more help to manufacturing in the Tees valley than we ever saw under the north-east’s regional development agency, and I welcome the extra £1 billion that has been allocated. The work is being co-ordinated by the excellent new local enterprise partnership for the Tees valley.

The Government are beating the bushes to generate international trade, and we are beginning to see the fruits of that activity. Exports to non-EU countries are at record levels, and we now have the first net trade surplus on cars since 1976. The north-east region is already in trade surplus, and the figures will soon include the £20 million-worth of steel a week that is being exported to Thailand from the newly reopened Redcar steel works. The first ship left yesterday.

Private sector jobs are being created—there have been about 500,000 since the general election—but unemployment is still way too high, especially in the north- east and especially among the young and the long-term unemployed. My constituency still has the second highest unemployment level among those of Government Members, and that remains a high priority for me. I was therefore delighted to see a drop of another 85 in the figures yesterday.

As we watch the Olympics, the carbon fibre bikes, the Kevlar canoes, the space-age swimsuits, the polyurethane footballs and the Paralympian equipment will be a reminder of the vital role that chemistry and the process industries play, and will play in the recovery. There is optimism in the north-east’s process industries, and the position could be made even stronger by a Teesside carbon capture and storage network. I look forward to the result of the call for bids for that project. Large UK companies are ready to invest billions in it.

Times are tough for the economy as a whole, not least because of the debt burden. The eurozone is in chaos and there is still a lot more to do, but this Queen’s Speech contains more steps in the right direction and I commend it to the House.

14:46

[Margaret Hodge (Barking) (Lab)]

Today’s debate on jobs and growth is of huge importance not only to the constituents of Redcar but to those in Barking and Dagenham in my constituency. All too often, particularly in this Chamber, people believe that London’s streets are paved with gold, and that there is little poverty or joblessness in the capital. All too often, again in this Chamber, people believe that the challenges facing Londoners are concentrated in the inner boroughs. Sadly, and with a strong sense of anger and frustration, I must tell the House that the reality for families in Barking and Dagenham demonstrates that those beliefs are not only misguided but just plain wrong.

Any set of statistics will demonstrate a high level of joblessness in my constituency and, under this Government’s legislative programme, there is little hope for the future. A datablog published by The Guardian shows that Barking and Dagenham is ranked eighth out of 326 local authorities for long-term unemployment, and 11th for child poverty. If we look at the latest unemployment figures, we see that the unemployment rate in my constituency, across all people of working age, is almost double the national average, and that the number of people on jobseeker’s allowance for 12 months or more has doubled in the past year.

Growth and jobs are vital for my constituents, yet they have become the victims of the Government’s stubbornly blinkered and highly ideological approach to the economy. This involves putting tax cuts for the rich before job creation for the poor, putting deficit reduction before poverty reduction and putting the interests of the few before the well-being of the many. Without active Government intervention, my constituents will find it harder than most to find the jobs that they need to pull themselves out of poverty. Almost 60% of 19-year-olds do not have a level 3 qualification, nearly half the people of working age who are out of work have no qualifications at all, and one in four of my constituents work in the public sector. Faced with cuts in public sector jobs, cuts in training and employment opportunities, a failed growth strategy, little business investment and miserable levels of bank lending, the future for them is bleak.

As Chair of the Public Accounts Committee, I also know that when the Government talk about private sector job creation, the reality is something else. Many of the new private sector jobs are simply public sector jobs that have been transferred to the private sector as a result of the Government’s privatisation programme. We have only to look at the Audit Commission, at the privatisation of the Work programme and of prisons, and at private contractors providing health care to NHS patients to see that many of the so-called new private sector jobs are jobs funded by the public purse. That is scarcely a surge in private sector growth.

The Government claim that they are running the biggest-ever welfare-to-work programme with the Work programme. Let us inject a bit of reality into that claim. I shall look at the Work programme both as a constituency MP and as Chair of the Public Accounts Committee. I have always been an optimist, but I have grave concerns about whether this will be an effective value-for-money programme. Ministers claim that it is value for money because it is paid by results, but surely the programme’s purpose is to get people into work, not to cut the welfare-to-work budget. If we end up spending less, we will do so by achieving less. A detailed look at the programme shows that one in four of those referred will get a job anyway, with public money being spent both on the attachment fee and on the placement. Unemployment is much higher, so referrals are greater and more money is going to private providers, but with fewer people placed in a job.

[Stephen Lloyd (Eastbourne) (LD)]

The right hon. Lady talks about value for money, but does she not agree that the prime providers of the Work programme will be paid only if, first, they get people into jobs and, secondly, they sustain those people in jobs for two years, which will provide the bulk of the money. That sounds like good value to me. Does she disagree?

[Margaret Hodge]

I have two points on that. First, it is not good value if people do not get into work, which is the whole purpose of the programme, and, secondly, one in four of those who get into work would have done so anyway without any intervention at all. Given the black box nature of the programme, we will not know whether people have actually been given support. All the indications I have seen suggest that that is highly unlikely. We are beginning to get evidence to show that the more difficult cases are being parked, simply because all the money is focused on those most likely to get into work.

[Kate Green]

Does my right hon. Friend share my concern that Work programme providers are reporting that when they do succeed in getting people into work, it is usually short term and temporary? If people are cycling round and round the programme, that is certainly not good value for money.

[Margaret Hodge]

We have been looking into the issue of whether short-term or part-time work is being provided. When I tried to meet prime providers locally, they would not tell me how many people had been referred to them, how many people they had got into work or how long those people had been in work. The Government claim to be committed to transparency, but any decent assessment of the Work programme is greatly inhibited by such lack of transparency.

Finally, I shall speak about Barking and Dagenham as an excellent example of where opportunities exist for the Government to stimulate jobs and growth. We might have lost many Ford jobs over time, but we have massive potential for expansion, with Barking Riverside, Dagenham dock and Barking town centre. The lack of public sector investment in infrastructure and services, however, is the major barrier to achieving growth and jobs. There is potential in Barking Riverside, with planning permission granted by the local council for 11,000 new homes, but at the current rate of building it will take 50 to 60 years before the scheme is completed. If those homes were built, it would stimulate jobs and help to tackle housing need.

We cannot get the school that we need in order to assure families who move into the area that their children will have a school place; we cannot get the transport infrastructure we need through the docklands light railway extension, because there is no money there; and we cannot get the Mayor to do anything to stimulate private sector house building. What we need is action, not words. Not a penny of the regional growth fund moneys has come to an area like ours, which needs a huge amount of resources.

I am conscious that many Members want to speak, so let me briefly say in conclusion that although the hon. Member for Redcar (Ian Swales) devoted about half his speech to the previous Government, we are now two years into this Government—and things have got only worse. During the two years on their watch, living standards for hard-working families in Barking and Dagenham have declined. Since they came into office, people’s hopes for a better future—with jobs for their children, homes for their families, and economic growth for their children and grandchildren—have been smashed.

The Queen’s Speech has nothing to say to the people of Barking and Dagenham. It does nothing for a community where needs are great. It fails the hard-working families of my constituents, it fails the businesses in my borough, and it fails to meet the aspirations and needs of future generations who will make Barking and Dagenham their home.

14:55

[Paul Uppal (Wolverhampton South West) (Con)]

The right hon. Member for Barking (Margaret Hodge) used the term “victim”, and also spoke of a lack of hope. That is a theme to which I shall return later. I think that we should be very careful in our choice of words, given how corrosive they may be in the world out there—the real world, not the Westminster bubble.

In difficult economic times, we should not be seeking quick fixes. It is important that we continue to build the foundations that are necessary for economic recovery. The solution to a debt crisis should never be more debt.

[John Stevenson (Carlisle) (Con)]

Does my hon. Friend agree that part of the Government’s problem is the fact that the last Government borrowed in good years, and had borrowed some £40 billion before we even entered the recession?

[Paul Uppal]

That is an excellent point, and it is not made only by Members of Parliament. Hamish McRae, the acclaimed journalist, made it in The Independent during 2003 and 2004. He regularly asked readers what had happened to those golden economic rules—but that is by the by, and we cannot change it.

I want to raise an issue which I spoke about during the Budget debate. We are right not to allow protectionist rhetoric to creep into our political system, and continually to challenge protectionism abroad. That is crucial to the rebalancing of our economy to change it from an economy that spends on imports to one that earns through exports. I am encouraged to note that British exports rose by £50 billion last year, and that unemployment has fallen by over 45,000 in the first quarter.

I believe that there are two areas in which the Gracious Speech can make a real difference: the creation of the right conditions for private sector investment, and investment in our work force and the work force of tomorrow. Analysts have estimated that UK businesses have cash assets of more than £750 billion, equating to nearly half our GDP, and that investing just £20 billion of that in the UK could deliver a 1% increase in growth. We need to ask the difficult question: why are these cash-rich institutions not investing domestically?

The answer begins with the boom that preceded the recession. Unlike booms preceding earlier recessions, that boom was financed by public and private debt, which has continued to depress household borrowing and spending. The IMF’s analysis of advanced economies over the past 30 years concluded that recessions preceded by an unsustainable increase in household debt tended to be more severe and protracted. That is because as long as households pay down debts and increase savings, demand will remain weak.

One explanation for the weakness of private investment is concern among companies about the future availability of bank finance. They are becoming more reticent in their investment strategies, and are using cash as an insurance against a crisis. The situation is not helped by fears of contagion, or by the lack of liquidity in the banking sector. A solution to the problem would be the creation of a banking system that improved lending and the supply of credit. The introduction of a ring fence around retail banking separating retail banking services—such as deposit holdings and lending—from investment would pave the way for a more competitive banking system.

Tellingly, the removal in 1999 of the Glass-Steagall Act, which separated deposit holdings and lending from investment, changed the landscape of banking in America. It allowed larger investment institutions to enter the deposit and loan markets, creating a grab for small banks. In 1999, there were 19 significant large banks in America; today there are four. The picture in the UK is similarly worrying. Although there are smaller banks in the UK and the US, large banks have consolidated their position, creating market dominance. The consolidation of banking on such a scale is bad for businesses and bad for lending. With only a handful of lenders, concern arises about the availability of credit. We often talk about how banks are too big to fail, but rarely do we talk about banks being too big to be effective. Banks can only be described as quasi-public institutions, and will be accountable to the public long after they are sold. They are the engine of any economy, as they provide credit, investment and savings. We need a banking sector that not only serves shareholders, but benefits the wider economy.

I would also like to discuss how investing in the UK should involve our work force today and the work force of tomorrow. On a personal note, I recently held a jobs fair in Wolverhampton. We had more than 1,500 young people attending and more than 30 employers. One conversation I had on that day still sticks in my mind. It was with a young person from Wolverhampton who said, “I want to thank you, Mr Uppal, for organising this. You’ve given me hope.” When the Leader of the Opposition stands up and says that there is no hope in the Budget or the Queen’s Speech, the effect is deeply corrosive. I know that the situation in places such as Wolverhampton is challenging, but to dismiss people and just wipe away their dreams so quickly and flippantly is very damaging. Sometimes politicians in this House need to think carefully about the terminology they use.

We all appreciate that the Opposition have a job to do in holding us to account. However, it is important that we do not respond with knee-jerk reactions, but instead always look at the broader picture of what we are doing for the economy and not look to make political capital out of the situation. Investing in the work force of tomorrow means preparing young people for work today. Careers events in schools, inviting local companies to speak at schools, and lessons on interview and presentation skills could all help, and not just in year 11, but early on, when children are starting to think about options and subjects. It is not about getting young people to pick a career early on; it is about them knowing that their options will help them to make the right choices and give them goals for the future. If young people know that maths and science are essential for accessing the type of job they are considering, such subjects will seem more beneficial.

Ensuring a skills base for the future to drive Britain’s industry and manufacturing is evidently important, and recent reports point to a skills gap. It is disappointing to hear companies say that they cannot find the skilled people they need, especially when that is coupled with high unemployment. The west midlands is a great base for manufacturing, and, with the introduction of the i54 site, we can only improve on this. Taking the long-term view on jobs and growth—helping young people to get the best possible start early on—can only be beneficial in preventing them from ending up not in work, training or education.

Let me finish by saying, for the second time in this Chamber, that when it comes to the difficult decisions, at least those of us on the Government Benches are walking the walk, whereas Opposition Members are just talking the talk.

15:00

[Ian Mearns (Gateshead) (Lab)]

If I had been standing in this House a month or even a fortnight ago to speak about the prospects for jobs and growth, I might have expressed the opinion that the entire credibility of the Government now stood at a crossroads. A month on, however, I believe that we are well beyond that point. The Budget, followed by the local government elections and the collection of sideshows that make up the Queen’s Speech, have made it clear that the Government have abdicated any responsibility for trying to generate any real growth in our economy.

As Labour Members warned when the coalition came to power, the policies adopted by the Government were effectively an enormous gamble with the future of our nation’s economy. We also warned that whereas the richest and most privileged in our society would be spared the costs of that gamble, the poorest and most vulnerable would be expected to pay the costs. We predicted that the experiment—the gamble—was doomed to failure. However, heedless of the warnings, and driven by an ideological desire to shrink the state, the Government pressed ahead, determined to use the excuse of the budget deficit to drive through their political agenda, oblivious to the damage to our economy.

[David T. C. Davies]

Is the hon. Gentleman simply following the mantra that we should have borrowed even further, on top of the £160 billion that we were already borrowing when his colleagues left office?

[Ian Mearns]

I can tell the hon. Gentleman what I would do: invest to save to grow, and then reap the benefits of that growth through the taxation system.

We warned that the Government’s policy was wrong, but I do not think any of us predicted just how wrong, just how disastrous its impact would be and just how much more difficult things would become in regions such as the north-east of England. The impacts on the young, as so clearly outlined by my right hon. Friend the Member for South Shields (David Miliband), are much greater in regions such as the north-east, yet Government Members seem completely oblivious to what is happening in these regions.

The UK economy has returned to recession, after shrinking by 0.2% in the first three months of 2012. A sharp fall in construction output is said to be behind the contraction, but it is not the only factor. BBC economics editor Stephanie Flanders says that the situation

“adds to the picture that the economy is bumping along the bottom”.

At Prime Minister’s questions, the Prime Minister has said the figures were “very, very disappointing”—that is perhaps the understatement of this Parliament. He went on to say:

“I do not seek to excuse them, I do not seek to try to explain them away…there is no complacency at all in this Government in dealing with what is a very tough situation that, frankly, has just got tougher.”—[Official Report, 25 April 2012; Vol. 543, c. 944.]

He said it was “painstaking, difficult work”, but the Government would stick with their plans and do “everything” that they “can” to generate growth.

I am surprised that the Prime Minister was disappointed —what did he expect? The economic outcome of his policies was completely expected by many commentators. The outcome was highly predictable. The Prime Minister needs to recognise that it is his Government who have caused this recession in Britain and that it is his policy that has taken us back into recession. He needs to accept responsibility, and to accept that cutting deeper and deeper is the problem, not the solution and that to continue blindly will only damage our economic prospects yet further.

The Leader of the Opposition hit the nail on the head when he said the economic figures were “catastrophic”. He said that

“this is a recession made by”—

the Prime Minister—

“and the Chancellor in Downing street.”

He went on to say that it is their

“catastrophic economic policy…that has landed us back in recession”.—[Official Report, 25 April 2012; Vol. 543, c. 944.]

The Office for National Statistics has said that the output of production industries decreased by 0.4%; construction decreased by a full 3%; and output of the services sector, which includes retail, increased by only 0.1%, after falling a month earlier. Those figures are slightly worse than many expected, but the fact that the UK is now technically back in recession should not detract from the underlying reality, which is very much as predicted.

The UK economy has been bumping along the bottom for more than a year and is struggling to gain any momentum. The preliminary figures from the ONS are consistent with the messages coming from official and private data, which say that the UK was once again relying heavily on services and consumption by households. That suggests that the recovery will continue to be weak. Demand is very weak. UK business is sitting on a cash mountain but will not invest because there is no demand in the domestic market. So we very much welcome the growth of exports in the car sector, but the fact that such exports are outstripping the domestic market is not really that great news, because the depression of the domestic market is the real problem. We do not have demand.

The ONS figures also demonstrate clearly that the fall in Government spending has contributed to the particularly large fall in the construction sector. Some Government Members have tried to question the ONS figures and argue that the position is not so bleak, but they are burying their heads in the sand. Joe Grice, chief economic adviser to the ONS, has vigorously defended the figures. He said the construction data were based on a survey of 8,000 companies and had been carefully checked and double-checked.

We are in a very difficult situation. All across Britain and Europe people are rallying to challenge the consensus on austerity, because it is nonsense. The election of the new President in France, who is committed to a policy focused on growth, challenges the failed orthodoxy of austerity; the election and protests in Greece, the protests in Spain and the state elections in North-Rhine Westphalia in Germany last Sunday are shouting to us that a change of direction is absolutely necessary.

The Government could, if they so chose, focus on growth, but they do not do so. The fact that they choose austerity—that they choose destruction rather than investment—is wilful, and it is clearly a political choice. But there is an alternative and I beg them, on behalf of regions such as the north-east and on behalf of my constituents, to change tack—we need growth.

15:09

[Chris White (Warwick and Leamington) (Con)]

I am grateful for the opportunity to speak in this important debate. All too often, when we talk about the economy we speak in terms of GDP figures, confidence indices and the like, and they are very important, but we should always remember that this is about people’s lives and aspirations.

Employment in Warwick and Leamington has held up well over the past few years. In May 2010, 2,002 people were claiming jobseeker’s allowance. In March 2012, that had fallen to 1,646. Warwick and Leamington has climbed nearly 100 places and has gone from having the 414th highest level of unemployment among constituencies in the UK to having the 507th. I believe that that is a tribute to the inventiveness of our local businesses, the hard work of our local jobcentres and the determination of local residents to find work. However, while there is reason for optimism, we must also be aware of the challenges.

The number of those claiming JSA over the past 12 months has risen from 265 to 310 and although that figure has fluctuated, it makes it clear that we need to continue to build an economy that can create long-term and sustainable jobs, particularly for our young people. It will not be surprising to Members to learn that, as the co-chair of the associate parliamentary manufacturing group, I believe that manufacturing is the key to creating that sustainable labour market.

Although we all agree that there needs to be economic growth, we do not wish to achieve that through just any type of growth. We should not think of our situation merely as a short-term problem that needs short-term solutions, whether that involves stimulating demand or supporting the supply side.

Manufacturing is best placed to support the objective of increased employment for a number of reasons. First, manufacturing is strongest in those areas where private sector employment has been weakest. In the midlands, the north, Scotland and Wales, manufacturing occupies a bigger part of the economy than in London and the south-east. If we can increase manufacturing growth, it is likely that employment gains will be better spread across the country and we will tackle those parts that have traditionally suffered from structural unemployment.

Secondly, the nature of manufacturing is changing. It requires greater skills and higher levels of education. The UK Commission for Employment and Skills estimates that by 2017 the percentage of manufacturing jobs in high-end occupations—mostly degree-level employment—will rise from 27% today to 37%. That means there will be about as many people in high-end occupations in manufacturing as there will be in low-end occupations.

Thirdly, work within manufacturing is often higher paid than that in services. Average weekly earnings, including bonuses, in the manufacturing sector were £532 compared with £449 in the services sector. Finally, manufacturing jobs have a significant spillover effect into other parts of the economy. They enable the creation of services and other sectors around those jobs and help to provide pillars on which other parts of the economy can build. That increase in manufacturing employment presupposes manufacturing growth, and while I do not have the time to consider that in this speech, it is something to which I hope to return in the near future.

If we want to prepare our work force, and particularly our young people, for work in manufacturing, we need to ensure that we take steps now to support that aim. One of the best ways that we can do that is to support apprenticeships. However, we must ensure that they are the advanced and higher levels of apprenticeships so that we meet the increase in the number of higher level positions. According to the latest data, there were 200,300 apprenticeship achievements in 2010-11. However, only 1,000 were higher level apprenticeships. The number of advanced level apprenticeships completed was around 33% of the total and we need to ensure that, as we increase the total number of apprenticeships, that figure is not diluted.

The best way to support jobs and growth, however, is to give more support to our small and medium-sized manufacturers so that they can take on new employees. More grants should be given to small and medium-sized enterprises and manufacturers to train the new staff they hire, particularly those who have been long-term unemployed or who are aged between 18 and 25. Unlike larger businesses, SMEs often are not able to rely on the economies of scale that can reduce training costs. This presents a significant barrier not only to increasing employment but also to growth. I hope that the Government will look at ways of increasing the support we can give to SMEs in this regard with greater financial incentives for those higher-end qualifications that will become more important in the years ahead.

I believe that any long-term improvement in our economy has to be built on manufacturing if it is to be sustainable and create the kind of jobs we need to diversify our labour market. Increasing our manufacturing sector and reskilling our labour force will not be quick or cheap but that does not make it any less necessary. Although we face times of public stringency, we should not defer investment. That will only mean that we have to wait longer for the rebalancing to happen. I am confident that if both sides of the House can work together, support the manufacturing agenda and provide the long-term political buy-in that the industry wants in order to make long-term investment decisions, we can achieve the outcomes that we all want.

15:15

[Stephen Timms (East Ham) (Lab)]

One reason why there has been such a negative reaction to the Queen’s Speech, particularly from business, now that we are again in the midst of recession is the absence of measures to boost growth. There was a particularly exasperated reaction from the director general of the British Chambers of Commerce, which my right hon. Friend the Member for Morley and Outwood (Ed Balls) quoted at the beginning of the debate, straightforwardly accusing the Government of playing short-term politics instead of boosting the economy. A lot of people thought there would be a boost to the economy in this Queen’s Speech, but it simply was not there. The problem is that the Government’s policy has not delivered. We were told after the election that the policy being introduced would deliver a steady and sustained economic recovery with low inflation and falling unemployment. Unfortunately, that simply has not happened. The shadow Chancellor and the former Chancellor, my right hon. Friend the Member for Edinburgh South West (Mr Darling), warned that the policy put the recovery at risk. They have been proved right and Ministers have been proved wrong.

There are other reasons for the Government’s dramatic loss of popularity, one of which is a sort of policy incoherence across government, with different Departments going in contradictory directions. Let me give an example: people receive tax credits only if they work more than a certain number of hours. The previous Government set the threshold at 16 hours per week, but the Minister who is winding up the debate has announced that when universal credit is introduced in October next year there will be no hours thresholds. Support will be available only for people working very few hours, and the Secretary of State for Work and Pensions has perfectly fairly presented that as one of the virtues of his new system. However, the Chancellor, who opened the debate, has gone in the opposite direction. He has raised the threshold from 16 hours to 24 hours a week and more than 200,000 households have lost out. They cannot both be right, although one of them might be. The announcement from the Department for Work and Pensions goes in the opposite direction to the Treasury’s. No. 10 ought to have spotted that and sorted it out. People see that incoherence across government.

My right hon. Friend the Member for Barking (Margaret Hodge), who chairs the Public Accounts Committee, made some telling observations about the Work programme. We know remarkably little about what is happening in that programme because the Government have banned Work programme providers from publishing any data. When under pressure in January, the Minister with responsibility for employment promised guidance to allow them to publish, which they want to do. When he was pressed again he said that the guidance would appear by the end of April, but we are now in the middle of May and it still has not appeared, so providers in the Work programme have no way of comparing their performance with that of others. My right hon. Friend said that she could not find out what was happening in her constituency and every other MP is in the same boat. Jobcentre managers have no idea what is happening in the Work programme in their area, and the effectiveness of the Work programme is being weakened as a result.

This week, a very good charity working with homeless people, St Mungo’s, has resigned from the Work programme. It had three separate contracts with three Work programme prime providers, but in the 11 months since the Work programme started the charity has not had a single individual referred to it by any of those three prime providers.

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

I am listening with great interest to my right hon. Friend, not least because I have heard similar things in my constituency, not just about the voluntary sector but about experienced private providers. Does he think it is time that the Government started doing a proper job for the third sector? They want to involve it in the big society, but they are cutting its legs off.

[Stephen Timms]

My hon. Friend is absolutely right. Step one would be to allow the data to be published. Instead of banning everybody from saying what is happening, the Government should let us have some numbers so that we can see what is going on. That would offer the chance for clarification.

[Michael Connarty]

I am grateful to my right hon. Friend for making those points about St Mungo’s. I took the trouble to visit the project in Hackney, and I was very impressed by what was being done for people with long-term dissociation from society to give them skills and jobs. It is a tragedy if the charity has decided that the Government have nothing to offer them. The project is wonderful and the Government, given all their rhetoric, should be supporting it wholeheartedly.

[Stephen Timms]

My hon. Friend is right. Not one person has been referred to St Mungo’s since the Work programme started. If the homeless are not being referred to St Mungo’s, we can be very confident that they are not being helped by anybody, and that is at the heart of what is going wrong. We certainly need guidance so that people can start telling us what is going on in the Work programme.

The hon. Member for Wolverhampton South West (Paul Uppal) is rightly concerned about the challenges of securing investment. I am disappointed that no communications Bill was announced in the Queen’s Speech. A year ago yesterday, the Department for Culture, Media and Sport announced the first stage of what it described as a

“comprehensive period of consultation that will inform a Parliamentary Bill.”

Unfortunately, no such Bill has been announced.

The Communications Act 2003, which I was responsible for, is excellent, but technology has moved on and the regulation needs updating. The problem is clearly highlighted by the failure on 4G mobile services. Capital Economics estimates that a go-ahead for 4G in the UK would trigger private sector investment of more than £5 billion and raise gross domestic product by the end of the decade by half a percentage point. It says:

“The UK is off the international pace. The technology has already been deployed commercially by more than 50 operators in over 30 countries.”

In the UK, we still do not know when the spectrum auction, and liberalisation of restrictions on existing spectrum, will go ahead. We cannot afford further delay. The destructive promotion, which we have unfortunately seen, of the narrow interests of individual operators must now give way to the speediest possible implementation, allowing investment to be made. One of the benefits will be viable access to superfast broadband for a significant part of the country where landline services will not be available in any reasonable time scale.

We shall need new legislation and I hope that Ofcom and the DCMS will press ahead to make sure that the changes that are needed—the auction and liberalisation of the existing spectrum—proceed without further delay. We have waited long enough already.

I welcome the inclusion in the legislative programme of the draft Groceries Code Adjudicator Bill, following the initiative of the previous Government.

[Jim Shannon (Strangford) (DUP)]

As the right hon. Gentleman is aware, small firms have suffered at the hands of the giant supermarkets for far too long. The Bill lacks the teeth to allow the ombudsman to fine large supermarkets. Does he agree that the ombudsman needs those enforcement powers?

[Stephen Timms]

The hon. Gentleman makes a telling point. The legislation will have to be scrutinised closely and we will need to make sure that it delivers on the purpose for which it is being introduced.

I have to express my regret at the lack of a Bill that would put into law the commitment to raise the international development budget to 0.7% of GDP. The Secretary of State for International Development has made that promise and I hope it will come forward.

15:24

[Richard Fuller (Bedford) (Con)]

Mr Speaker, I draw your attention and that of other Members to the fact that I am an adviser to a venture capital fund and also to my other entries in the Register of Members’ Financial Interests.

I support everything in the Queen’s Speech that will deal with improving jobs and achieving growth in our country. I hope that is the only partisan point that I shall make because I would like to talk a little bit about the use of language, and then advise hon. Members about a very practical way that Members of Parliament can play a role in achieving the goals that we all seek in terms of enhancing jobs and creating growth.

Let me start, if I may, with language. It is always important, in trying to solve a problem, to use words in the correct way and in ways that make sense, because if we do not do that, of course we will not solve the problem. Sadly, we have a major problem with the language when it comes to jobs and growth, starting with the word “austerity”, which has been much used today in a number of speeches.

A dictionary definition of austerity, in its economic context, is:

“An economic policy by which a Government reduces the amount of money it spends by a large amount.”

In popular discourse that is a description of the coalition Government’s economic policies. The trouble is that it is not a correct description of the coalition’s policies. Over the period of this Government, total public spending will increase, not decrease, from £670 billion to £734 billion. If we choose to measure it in terms of public borrowing as a percentage of GDP, the reduction in the UK will be significantly less than that of Greece, Portugal and Ireland. “Austerity” is therefore a good catch-phrase, but it is not an accurate way to describe coalition policies. That is compounded by a false choice that is presented to the public: austerity versus growth. I think that is a false and misleading set of alternatives to present, because growth is an objective that all policies seek to achieve, and a better description of the policy alternatives that are being put forward is, on the one hand, growth based on living within our means, and on the other, growth based on borrowing.

The BBC, if I may say so, is particularly noteworthy in its use of these false comparisons. On 12 May Gavin Hewitt, who is the BBC’s European editor, had a column entitled “Growth versus austerity”. On 4 May, Stephanie Flanders, the BBC’s economics editor, commented:

“It’s not only Labour politicians who say this”.

in the debate about the trade-off between austerity and growth.

Yesterday evening, a debate on BBC’s “Newsnight” featured a huge animated set of scales with “austerity” on one side trying to be balanced with “growth” on the other. That is not the BBC bias of which the Mayor of London has recently spoken, but it is misleading propaganda being put to the British public.

I now turn to a practical idea that all Members of Parliament should consider in their constituencies. I am drawing on some of my experience in Bedford, and on Monday at 3 o’clock I shall be holding a workshop to describe that in more detail to hon. Members. I looked at the comparative advantages that Bedford had in terms of economics. We do not have much. We do not have a university science park, we do not have a lot of inward investment, and we do not have a big employer, but people have a willingness to invest in and grow local businesses. We are in the process of creating a Bedford business enterprise investment scheme fund—a policy introduced by the Labour Government and enhanced by this Government. That is an excellent scheme, to encourage people to invest in local businesses. The idea of the fund is to get people to put money into their local business because they want to see them grow. There is a sense of civic duty that motivates people, and the fact that they have idle balances sitting in the banks, earning very low interest rates, is a very good economic incentive for people to do that.

A Member of Parliament can act as a great initiator, champion and cheerleader for this initiative, drawing together a local advisory board of business people to run the fund, seeking out partners for the fund to help to popularise it in the community, and finding new businesses that the fund can invest in. In Bedford, we have set a target of raising £500,000, and we are well on our way to achieving that.

I believe that if other hon. Members engage in that sort of action, it will mean that MPs, who are often criticised for lacking real world experience and being out of touch, will be seen in their local communities doing something practical to help people. If we put a network of projects together, we could seek support for this excellent initiative from the regional growth fund so that we have a constellation of local groups across the country where local people come together to support—commercially—the growth of local businesses in their community. If people would like to learn more, I shall be happy to explain on Monday at 3 o’clock in the Thatcher room.

15:30

[Austin Mitchell (Great Grimsby) (Lab)]

To say that the Queen’s Speech was disappointing is not quite to plumb the depths of the inadequacy it demonstrated. Without being able to speak for Her Majesty, I am solidly assured that she would not have made the long and arduous journey from Buckingham palace had it not been for the certainty that I would be taking her photograph as she arrived here. Really, it was not worth her while to come down here for such a rag-bag of petty measures.

The Queen’s Speech was pathetic. It was pathetic because it is now about all the coalition can agree on. The glad confident morning of 2010 has given way to the bleary bickering, downward slope and near break-up of 2012. It was pathetic because it contained nothing about growth, the major problem in our economy, except for the ability to fire people, adding to the unemployment rolls. It was pathetic because it ignored the damage that two years of this Government’s disastrous economic policies have already done. My right hon. Friend the Member for Morley and Outwood (Ed Balls) set that out admirably.

Two years in, here we are in a double-dip recession, with youth unemployment reaching one in four—the rate is higher in Grimsby. The Office for Budget Responsibility is having to spend all its time revising its predictions downwards because they are no longer adequate for this Government’s failures. “I’m walking backwards for Christmas” should be the OBR’s theme song, were it not for the fact that it mentions Christmas—there is no Christmas at the end of this process. The economy has shrunk by 4%, and that is cumulative over the period, so the total shrinkage must be about 10% or more. A much smaller economy is bearing the same burden of debt, so our ability to pay it has shrunk and the standard of living of everyone in this country has shrunk. Hard-working families—non-working families, as well—are facing a burden of cuts and high inflation.

For me, sitting here today is a re-run of 1980-81, watching Conservative Members clutching at any pathetic straw, any pathetic glimmer of hope in the encircling darkness, to cheer themselves up. Margaret Thatcher had the Falklands to rescue her from that dilemma, but I doubt that this Government will have a Falklands to save them, because what they are producing is a decline—a shrinking—of the British economy and of everybody’s standard of living, all in the name of a neo-liberal ideology of rolling back the state. That ideology is plainly inadequate, wrong, prejudiced and damaging, because the only way out of our current situation is growth—economic growth, which increases our ability to pay off debt, as our Government paid off debt between 1997 and 2000. It is growth that revives the economy, growth that generates jobs, and growth that the people now want, but we will not get it if we follow this Government’s agenda.

I have done extensive research and can pronounce, with real authority, that the economy now needs three things: first, demand; secondly, demand; and thirdly, demand. Without the prospect of demand, business will not invest; the banks will not lend; closures on the high street and in the productive economy will continue; and firms will not spend their resources. No one will create jobs without demand to ensure the prospect of profit. Lack of demand clouds every prospect in this nation today.

How can we best achieve demand? My right hon. Friend the Member for Morley and Outwood has set out a five-point plan, which I heartily agree with. I would go further by borrowing more and spending more. I would give a two-year national insurance holiday for the employment of young people and for areas of the country in recession. I would boost the regional growth fund, whose achievements are pathetic, particularly in Yorkshire and Humberside, which got only 6,300 jobs, or about the same as the south-west and less than the north-west, both of which have lower unemployment rates than we do.

I would also borrow to build houses. We need a big housing programme of the kind that took us out of recession in the 1930s. The housing report published this week showed the problems and how they are accumulating. We cannot solve them unless we build houses for people who cannot afford to buy, who now make up the great majority of the population. To do that we can raise money through housing loans for councils, or we could take some of the money that is put into the banks through quantitative easing and give it to housing contracts instead, which will then be paid off over a period of time. The message to the Government that I wish the Queen had given is simply, as Bob Dylan put it: “Turn, turn, turn.”

15:36

[Stephen Barclay (North East Cambridgeshire) (Con)]

It is a pleasure to follow my colleague on the Public Accounts Committee, who I always feel puts the “Great” in Great Grimsby.

A number of Members raised the issue of credit for small businesses. The hon. Member for North Ayrshire and Arran (Katy Clark) focused on that, without wanting to give a specific solution, as did her colleague, the hon. Member for Leeds East (Mr Mudie), and, on the Government Benches, my hon. Friend the Member for Northampton South (Mr Binley). But the debate so far has not focused on one of the chief impediments to credit for small businesses: the high capital requirements imposed on banks, which makes it expensive for banks to give credit to small businesses, particularly those deemed to be high risk. To put that in context, at the moment around one quarter of Royal Bank of Scotland’s corporate book is designated as high risk.

It is not just a small sector of the small business and corporate market that is having difficulty accessing credit. The reason for that really goes back to the financial crisis. I think that the right hon. Member for Edinburgh South West (Mr Darling) was correct, following the collapses of 2008, to take a more risk-averse approach to capital requirements, and that led to the requirements we see today. The point I want the House to focus its attention on is whether we can bring greater urgency to the resolution mechanisms that apply to banks, including looking at living wills so that purchasers are in place if a bank gets into trouble, enabling others to step in and take the liability on and away from the taxpayer. If we take the liability from the taxpayer and give banks greater security by pooling assets through insurance mechanisms, we can take a less risk-averse approach to capital requirements. That, in turn, means that banks will be under less pressure to call in loans.

One of the consequences of banks calling in loans is the forced sale of assets, with businesses selling at a time not of their choosing and when the price is not right. Currently, when businesses seek credit to expand, often only short-term credit is available. Banks do not want to lend for the long term in case there is a deterioration—the eurozone is the most visible risk—and by lending short term they can churn loans and impose brutal charges. The impediment to businesses that want to expand and take on additional staff—a business’s biggest overhead is usually employing staff—is the lack of capital. Seeking that capital is therefore difficult. Banks do not want to lend because of the costs that they incur, and if they do lend they pass the costs on to small businesses through brutal charges and wide spreads in interest.

If our Front-Bench team can accelerate some of the special mechanisms that are available through the pooling of risk, through living wills and through identifying purchasers, we will avoid some of the risk that we saw with the Royal Bank of Scotland. Scandalously, for example, after the Treasury undertook 10 months of intensive work, Sir Nicholas Macpherson could not rely on what the balance sheet said the assets were valued at. The scale of the regulatory collapse that we faced and the continued uncertainty of the risks means we now need to put in place those resolution mechanisms if we are to get credit flowing into the small-business sector.

Let me give an example from my own constituency to bring this issue to life. Just this week, a business got in touch, telling me that its site was cramped and that it had borrowed just under £2 million to expand. Its turnover is up, and its profits are up, to £500,000 a year, but it can get only short-term loans on that £2 million. It cannot therefore expand its staff, despite the opportunities its new site offers, because of the spread of interest and the brutal charges attached to that £2 million loan. So I say to our Front-Bench team, let us speed up the resolution mechanisms, reduce the charges from banks lending to high-risk businesses and, as a result, let the credit flow to those businesses so that they can expand and deliver the jobs and growth that Members on both sides of the House seek to achieve.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

To accommodate more Members, the time limit is being reduced immediately, by one minute to five minutes.

15:10

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

Given that the economy is in recession, with the first double dip for 37 years, that long-term unemployment is at its highest since 1996 and that 1 million young people are out of work, it is shocking that the Queen’s Speech contains no measures to deal with those problems and, therefore, utterly fails to address the crisis that millions face.

I wish to focus my remarks on unemployment and, in particular, on youth unemployment and the Government’s failure to understand that there is an unemployment emergency in our country. We have had a Budget and a Queen’s Speech that have failed to deliver on jobs and desperately needed economic growth. Not only is that complacent; the Government do not seem to understand that every day they waste in failing to take comprehensive action to get our economy moving again, and our people into work, represents a tragic waste of talent, aspiration and confidence for more and more of our citizens.

My constituency has the highest rate of unemployment in the country, at 21.6%, and youth unemployment is at 11.2%—that is, 2,200 young people looking for work. From March last year to March this year, there was an 84% increase in the number of young jobseeker’s allowance claimants out of work for more than six months, and a shocking 91% increase in the number of unemployed young people out of work for one year or longer. Youth unemployment alone is set to cost Birmingham as a city £400 million in the coming decade.

Behind each statistic is a young person, bruised and battered by their experiences of job hunting under this Government and terrified that they will be part of the lost generation. They tell me that they have worked hard, overcoming difficult social and family circumstances to get qualifications, only to find that none of it matters. It is depressingly normal for young people in my constituency to tell me that they might as well not have bothered, that their effort has been wasted and that they do not know where to turn.

A climate of fear is already brewing among young people still at school, who despair that their chances of getting on have been kicked away by the cuts to education maintenance allowance and the trebling of tuition fees. They watch their older siblings getting into debt and sending off CV after CV with no luck and no hope, and fear that they will end up in the same boat.

Yet the Government do nothing but create more damage. They cut the future jobs fund, which was making a real difference in my constituency, as soon as they came into office, saying that, at £6,500 per job created, it was simply too expensive. Last week, the National Audit Office told us that the Government’s flagship regional growth fund will create 41,000 jobs, not the 500,000 that the Government originally claimed. The NAO also said that most of these jobs would have been created in any event and that each of them will cost us £33,000, with a cost, in some cases, of as much as £106,000 per net additional job. So the Government got rid of something that was making a real difference, saying that it was too expensive, and brought in something that is even more expensive but is not making the difference they said it would. That proves that they are not only out of touch and complacent but incompetent.

Unlike Labour’s proposal for a real jobs guarantee, the Government’s youth contract does not guarantee a job; it is merely a subsidy to an employer who is hiring a young person which covers only half their wages and does not create a new job. Labour’s plan for a real jobs guarantee would go much further, guaranteeing a job after 12 months of unemployment and covering the full wages for the employer.

In failing to deal with youth unemployment, the Government are storing up problems for the future, because if we allow the young unemployed of today to become a lost generation, they will be the long-term workless of tomorrow. As I have seen in my own constituency, which already suffers from long-term worklessness, getting back into work people who have been out of work for significant periods, or who have never been in work, is a significant challenge that costs huge sums. Problems that have been a generation in the making will take at least that long to fix, so it is far better, on every measure, to stop us getting to that point in the first place.

The young unemployed in my constituency and across our country were looking for a change of course and a sense of hope, but I am afraid that in this Queen’s Speech there is neither change nor hope—just a confirmation that this Government do not listen, do not care, and do not have a clue.

15:47

[Guto Bebb (Aberconwy) (Con)]

I had intended to speak about a number of issues in relation to the Queen’s Speech, but I will concentrate on three specific points because the time limit has been curtailed.

Before I do so, I should like to respond to a comment by the hon. Member for Linlithgow and East Falkirk (Michael Connarty), who said that the changes to public sector pensions would demand of some workers a 13% contribution towards their pensions. I entirely accept that a 13% contribution would be a significant sum of money. It is important to say, however, that our proposed changes to public sector pensions will protect those pensions. Labour Members should contrast the 13% requested in relation to public sector pensions with the equivalent contribution of about 38% that would be required of a private sector worker. I honestly believe that our proposed changes to public sector pensions will be the saviour of the system rather than its enemy, because people working in the private sector—taxpayers working extremely hard to try to pay their way—will feel increasing resentment unless there is an increased level of fairness between those in the public sector and those in the private sector.

On jobs and growth, I want to talk about two issues. First, there is a serious problem in relation to bank lending for small businesses. My constituency in north Wales is extremely dependent on small businesses—more so than on the public sector. There are not many constituencies in Wales where one can say that private sector employment is greater than public sector employment. People from those small businesses come to me time and again complaining that they are not getting support from the banking system. We have a Bill in the Queen’s Speech to deal with banking reform, but it is absolutely crucial that any changes do not make it even more difficult for small businesses to attract finance. Following on from the comments by my hon. Friend the Member for North East Cambridgeshire (Stephen Barclay), in my experience the problem has been not only a lack of long-term support from the banking system but an unwillingness even to offer short-term support.

I heard the bizarre example recently of a business in the tourism sector that employs more than 40 members of staff and that, despite the recession, has increased its turnover and its profitability by taking important steps to deal with its cost base, and yet its bank expects it to renew its overdraft facility monthly. It would be a challenge for anybody running a business that employs 40 people to plan for the future if they had to deal with their bank on the basis of a monthly renewal of their overdraft facility. The bank in that example is 94% owned by the state. I find that situation unacceptable.

When we consider the reform of the banking system, it is therefore imperative that we ensure that support is available for the small business community. In my constituency, growth will come from the small business community or it will not come at all.

Secondly, I will talk about the need to reduce regulation. I take exception to the comments of the hon. Member for Great Grimsby (Austin Mitchell), who complained that there was not enough in the Queen’s Speech. In my view, the important thing for a Government is not to legislate all the time. I assure him that nobody comes into my constituency office saying, “Please, please, we want more legislation.” What they want is for us to enact the promises that we made in the first Queen’s Speech and to deliver on behalf of the country. One thing that we said we would do for the small business community was to deliver on the burden of regulation.

In the Budget, the Chancellor made an effort to deal with some of the VAT anomalies. On the back of the two months that he has enjoyed as a result of some of the proposed changes, he might not want to visit VAT again. However, I say to him that there are anomalies in the VAT system that need to be dealt with, some of which affect the ability of small businesses to grow. The anomaly that I want him to deal with, which would boost growth in constituencies such as mine, is the way in which the VAT threshold damages businesses that aspire to grow. A small business that hits the £76,000 threshold has to get its turnover up to £100,000, otherwise it will be worse off as a result of being successful. If a small business turning over £76,000 decides not to grow because the implications for its bottom line would be bad, it will not employ more people and it will not contribute to economic growth. We need to deal with VAT anomalies, but let us start with one that is a barrier to growth.

15:52

[Paul Murphy (Torfaen) (Lab)]

The hon. Member for Bournemouth East (Mr Ellwood) hinted that the local elections results in May were not bad for the Conservative party. It strikes me that the loss of 1,000 council seats is not a ringing endorsement of the Government’s economic policy. What people were talking about in those polls was, of course, the economy.

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Will the right hon. Gentleman give way?

[Paul Murphy]

I will not, because there is not enough time.

People were also talking about unemployment in those polls. Unemployment in my constituency is at 8.2%. That compares with 3% when the Labour Government were in power.

I will address my short remarks to the alternative. The Government have taunted the Opposition, saying that we do not have an alternative. Opposition Members have been arguing the case for an alternative. The Labour Government in Wales are giving us an alternative. For the past year, they have been doing the sort of things that are necessary to stimulate the economy and provide jobs.

The hon. Member for Warwick and Leamington (Chris White) talked about small businesses. If he came to Wales, he would see that there is a small and medium-sized enterprises investment fund of £40 million. We have talked about the two-year-old regional growth fund in England, which has spent £200,000 to create just one job. In Wales, there is the £15 million Wales economic growth fund, which has already received 500 applications, including from my constituency, where a leading precision engineering company has invested nearly £800,000 in machinery, of which £250,000 came from the Wales economic growth fund. There is a £40 million stimulus package for young recruits and the skills growth Wales programme. There is capital investment for schools, social housing and energy efficiency. In England, the future jobs fund has been scrapped. In Wales, it continues as the jobs growth Wales fund, which will benefit 4,000 young people a year. Wales has its first ever national infrastructure plan, under which £90 million will be spent on capital projects.

Wales is also encouraging the third sector. In my constituency, the First Minister opened the Marie Curie Cancer Care national support call centre, which has created 140 jobs. This very morning, all Welsh Members of Parliament were invited to a meeting with Welsh university vice-chancellors. The universities in Wales are working with the Welsh Government, the UK Government and local government to create jobs. The contrast is between what the UK Government are not doing and what the Welsh Labour Government are doing. Why on earth cannot the Government here in England have the same sort of schemes we have in Wales to stimulate the economy and growth and ensure more jobs?

The mood is shifting. It shifted in the local government election results in England, Wales and Scotland. It has shifted in the United States, and in Europe with the election of François Hollande. The message that comes loud and clear from those countries and our own people is that we must change. The winds of change, as a Conservative Prime Minister once said, must now be heeded. Unless the Government understand the need for that change, it is simply not credible that any sort of growth will occur in the next few years.

The alternative is there, but the Government are reluctant, stubborn and foolish enough not to accept it. Unless they do, we will go deeper and deeper into recession.

15:56

[Mark Pritchard (The Wrekin) (Con)]

I welcome the measures set out in the Queen’s Speech to address jobs and growth, particularly the banking reform Bill and the enterprise and regulatory reform Bill. I also welcome the rise in employment announced yesterday, and I hope we will see a rise in full-time as well as part-time employment next month.

The Government are doing a lot to address long-term unemployment among the young—a problem that beleaguered and bedevilled the previous Government—but I agree with the right hon. Member for South Shields (David Miliband) that far more needs to be done. The Government have done a lot on apprenticeships, which is to be welcomed. I congratulate the Government overall on trying to rebalance the economy. We should have more people in our economy creating wealth rather than spending it, so we need to get the balance right between private sector and public sector employment.

It is questionable whether the current tax regime for business will be sufficient to grow the economy in the way that all hon. Members would like. I welcome the Government’s announcement on corporation tax, but my view is that it might not be enough to create the growth the country needs. Perhaps they need to look again at the corporation tax rate and the timetable for introducing it. I would like to see a 20p corporation tax rate introduced from April next year, and the higher rate—not the alternative rate—to be reduced from 40p to 36p from April next year.

That would affect revenue in the short term—some might say that that will add to the deficit—but in the medium term, and quite quickly, as people are rewarded for their risk, entrepreneurship, creativity and innovation, and as the economy grows on the back of that, revenues for the Exchequer would increase. We need more courage and less timidity in the Government’s tax plans and strategy.

I would like the business rate freeze extended for small businesses and our struggling high streets. I welcome the fact that the Government have extended it again for this year, but we must look again and probably extend it to the following year.

The Chancellor rightly mentioned the eurozone—I am moving away from my notes, which is quite dangerous. I have spoken out before on the International Monetary Fund. Whatever has been said, there is absolutely no doubt that some IMF contributions have been used as a back-door bail-out for the euro. Why do I say that? What is the evidence? Three eurozone countries have received bilateral loans from the IMF because their economies are failing, and they are failing in part because of their membership of the euro. A one-size-fits-all monetary policy for the whole of Europe was always a political project. It cannot be right to apply an interest rate in Germany reflecting the unique circumstances of the German economy to the unique and particular circumstances of, for example, the Portuguese economy or—perhaps more on our minds today—the Greek economy. That is the fundamental point. The euro is a political project that has gone horribly wrong, as many people warned that it would. We have heard a lot about new, bigger firewalls, but those will not deal with the underlying structural problems of a lack of competitiveness in Europe and the failed political dream—or, some might say, nightmare—that is the euro.

Finally, the European Investment Bank, although an important institution, should not be used as a new, indirect bail-out mechanism for a failing euro or eurozone. We are one of the four largest contributors to the EIB. Yes, it is important, but it should not be used as a back-door mechanism to save a failing euro. We want the euro to succeed. At the moment, we need to address the underlying problem.

16:01

[Mr Michael Meacher (Oldham West and Royton) (Lab)]

The Government now appear to have two central objectives only. The first, as stated at the start of the Queen’s Speech, is to achieve economic stability, and the other, of course, is their own survival. It is all the more astonishing, therefore, that they seem fixated on pursuing a path that is wholly opposed to both those objectives. Virtually no one among UK economic commentators or in the EU, IMF or US Administration believes that the Chancellor’s oxymoronic expansionary fiscal contraction will work or that prolonged austerity will lead to growth. Exactly these policies have been tried twice in the past 100 years in this country—with the Geddes axe in the 1920s and the May committee of businessmen in the 1930s. And what happened? Exactly what is happening today: a decade of anaemic growth and a rather little cut to the overall level of national debt.

The Chancellor has only three defences of his policy. The first is that, even at this stage, he can still use fiscal manipulation. Of course, that is what he said in last year’s growth Budget, and it led straight to this double-dip recession. In this Budget, the only growth provision was his cutting of workers’ protection against unfair dismissal—as though making it easier for employers to sack their workers will somehow stimulate growth. Now we see, from the press, that he is surrounded by the Tory think-tanks, all of which are telling him to cut taxes as a way to growth. Well, the fact is, as I have said already, that the big corporations are sitting on a mountain of cash. They already have the cash; they do not need cuts in taxation to produce more funding. The problem is the lack of aggregate demand.

The Chancellor’s second defence is quantitative easing, which he seems still to think will keep the funds going to business and produce the pick-up that the country needs. It has not. We have already put £325 billion into QE, but industry is still not stimulated. Indeed, the M4 money supply to business is still obdurately negative, because the banks have overwhelmingly used it to consolidate their own balance sheets, rather than to lend and get the economy going. The primary purpose of QE is to assist Governments with low long-term interest rates—that is very sensible—and debt repayment pressures, but it has no direct stimulus on the level of demand. That is why it will not work.

The Chancellor’s third and rather plaintive defence of his policy in the House has always been that were he to borrow to invest, he would be punished in the bond markets. I think that if he came to the House with a serious, plausible growth plan, the markets would be deeply relieved and very supportive.

Even if we leave that aside, as I would, there is one other source of funding that has not been tapped and that does not involve any increase in public borrowing. That is the taxation of the seriously rich. According to the latest edition of The Sunday Times rich list, which was published three weeks ago, the gains of the wealthiest 1,000 persons—who represent 0.003% of the population; an absolutely tiny proportion—amounted to no less than £155 billion over the past three years. That is actually rather bigger than the entire UK budget deficit. If that were taxed at the capital gains tax rate of 28%—I am not suggesting that it should be done just like that—it would raise more than £40 billion. That would be enough to create 1.5 million jobs through public investment in house building and national infrastructure. So why will the Government not do that? It is because the Chancellor and his Government have a deep ideological prejudice against any role for the public sector in driving the economy. This is a Government who believe—if they believe in anything at all—in the privatisation of anything that moves. That is a deeply reactionary idea, however, because when the private sector is flat on its back, as it is at present, there is no other way to provide an effective stimulus to the economy than through public investment.

16:06

[Mr Marcus Jones (Nuneaton) (Con)]

It is an absolute pleasure to follow the right hon. Member for Oldham West and Royton (Mr Meacher). I must admit that I did not really agree with much of what he said, but I did agree with his comment about low interest rates. It has not been acknowledged enough that, without low interest rates over the past four or five years, the economy would be in a far poorer state than it is today. In the light of that, we need to be careful. At the moment those low interest rates are a foundation on which we can build. I acknowledge that we are going through difficult times, but I am convinced that the Government must stick to their guns, use some gumption and keep making the tough decisions to reduce the deficit. It is good news that we have already reduced it by 25%, but we must keep showing the world that we are serious about getting on top of our debts, reducing the deficit and dealing with the mountain of debt left by Labour. I have listened to some Labour Members’ speeches today, and they still seem to think that we can borrow and spend our way out of recession. If it were that easy, we would be doing that—[Interruption.] We are not taking the easy route, and that is not for ideological reasons. It is because we want to protect those people with mortgages and business loans, and keep as many jobs as possible.

[Mr David Anderson (Blaydon) (Lab)]

rose—

[Austin Mitchell]

rose—

[Mr Jones]

I am not going to give way, because I do not have much time.

It is tempting to change course, but the low interest rates vindicate the Government’s strategy to date. The problem is that, while we are laying that foundation, the next area that we need to build on is being greatly restricted, owing to extremely low levels of confidence among the business community and consumers. Most people in this country are caught in the headlights of the oncoming eurozone crisis. We can all see it coming, and at the moment we are holding back. We desperately need a resolution to that crisis. It is going to be difficult but, one way or another, we need the certainty of knowing what is going to happen when we go into it and come out the other side. Only when we get over the problems that are undoubtedly coming down the track will confidence levels really start to shift.

In the meantime, the Government are working hard to create growth domestically, but that cannot afford to be based on short-termism. It must be based on long-term sustainability, and we need to rebalance the economy. We cannot simply rely on the service and retail sectors. They are massively important to the UK, but they have been completely sustained by private debt and Government spending. I know that the Opposition still think that that is a sustainable option, but we certainly do not.

We need to concentrate on sectors that can create real wealth within the economy so that it can be distributed and we can create jobs from it. We need to concentrate on sectors such as agriculture and manufacturing. I welcome the inclusion in the Queen’s Speech of the proposal for the Groceries Code Adjudicators Bill, which I hope will make the farming industry more sustainable as we go forward.

We need to build on what the Government have done for industry by reducing corporation tax and introducing an extension of above-the-line research and development tax credits. The regional growth fund and enterprise zones are starting to build on the resurgence of British manufacturing, and we are starting to see a real build in R and D investment in our manufacturing companies, which was previously lacking. We now have that factor working in our favour. We also have far better management than we have ever had in our motor manufacturing companies, while we also have far more moderate unions than we had in the past.

Those three factors help to explain why we are seeing this resurgence and are now in a positive surplus with our car manufacturing exports, which has not been achieved since 1976. Back in 1976, as many Members will know, we were absolutely blighted: we were blighted by difficult industrial relations; we were blighted by poor management; and we were blighted by a real lack of investment in R and D. In the short time available, I urge the Government to try to maintain this resurgence in British car manufacturing industry, so that we can see the west midlands go from strength to strength, while supporting jobs in the retail and wider service sector as we go forward.

16:11

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

I was supposed to attend an event hosted by Her Majesty this afternoon on her visit to Liverpool to celebrate her diamond jubilee, but I thought this debate was too important to miss—even for the Queen. I suspect that she was as unimpressed as were Labour Members on having to deliver a speech last week that was more to do with renewing coalition vows than it was about restoring the economic future of her country, which she serves so dutifully.

Liverpool Walton has seen a 165% rise in youth unemployment in the last 12 months, while total unemployment in the constituency has risen to more than 5,000, making the unemployment count the fifth highest in the country. I know that thousands of people in Walton, and millions around the country, are having conversations about their own lives. What are they thinking? They are thinking: “Do we have enough money for the weekly shop?”; “Do we have enough money to put petrol in the tank?”; “Who is going to tell the kids that they can’t do extra-curricular activities any more becausewe can’t afford the weekly subs?”. Some are even having to explain why their gas and electricity have been cut off.

The Government are simply wrong when what they do results in tearing families apart, providing tax breaks for the very rich and hitting the poorest families hardest. That is the human cost of Tory-Lib Dem policies. In Parliament, however, the Lib Dems still blindly walk through the voting Lobby with their Tory masters.

In the short time available, I would like to challenge a particular Tory-Lib Dem myth—the one suggesting that the only economic factor that relates to improvement in the living standards of lower-paid workers is raising the income tax threshold. Let me make it absolutely clear that that is not a bad ideal in itself, but here are the facts. I will paint an upbeat picture based on average earnings of £30,000, to which many of my constituents could only ever aspire. For the current financial year, 2012-13, the personal allowance is £8,105. That means that that anyone earning up to £30,000 will be £186 better off this year, making people better off by the grand total of an extra £15.50 in their pockets each month. In the next financial year, the personal allowance will rise to £9,205. That means people will be £346 a year better off, working out at a whopping £28.83 a month in people’s pockets.

That sounds great, and nobody is arguing that putting more money in pockets of the lower-paid is not a good thing. But—and there is a big “but”—there is a snag. The Liberal Democrats allowed the Tories to raise VAT to 20%, despite their manifesto pledge and the “VAT bombshell” posters that all Opposition Members probably remember. That 2.5% rise is estimated to cost each household with children an average of £450 a year.

The Institute for Fiscal Studies has estimated that by 2015—even if the tax income threshold has been lifted to £10,000—the Government’s tax and benefit reforms, as a package, will result in an average 4.2% reduction in the incomes of families with children during the current Parliament, which means that a couple with children will be £1,250 a year worse off by 2015. That is simply not acceptable, and it is not the full story. An extra £28 a month is clearly no recompense for such a disproportionate hit on families and their living standards.

The sober eye of history will view this Queen’s Speech more for what was not in it than for what was in it. There was nothing for the young unemployed, nothing for families struggling to get by, and nothing for the record number of women who are waiting and wanting to work. There was not even a single mention of the word “jobs”.

16:16

[Jackie Doyle-Price (Thurrock) (Con)]

Let me begin by emphasising that the priority that the Government are making of dealing with the deficit remains definitely the right one. Some of my hon. Friends have drawn attention to the emerging view that there is a choice between pursuing growth on one hand and pursuing austerity and dealing with the deficit on the other. The simple fact is that deficit reduction and the pursuit of growth are not mutually exclusive; indeed, we lay the foundations for lasting growth when we go back to living within our means.

Jobs and growth rely on investment by individuals and businesses, not on Government spending. We must not be complacent about the economic challenges that face the country, which, as many Members have recognised, are being exacerbated by the uncertainty and lack of confidence prompted by the eurozone crisis, but the need to hold our nerve and pursue measures that will strengthen our competitiveness is more important than ever at this time of economic turbulence.

Let us look at the realities of what is happening in the economy. Of course unemployment remains a great challenge. It is currently too high, and we need to do much more to ensure that everyone who wishes to work can find a job. However, it is also true that employment is on the rise and new jobs are being created. Many thousands of jobs are appearing on the horizon in my constituency. The Lakeside shopping centre is to be expanded, which will create new retail jobs. The new London Gateway port will create many thousands of new jobs, and is beginning to recruit for them. It is one of the largest inward investments in the country. The existing port of Tilbury, which has just celebrated its 125th anniversary, is also being expanded, with the promise of a further 10,000 jobs. Despite the global challenges, there is good news in our economy.

I was struck by the comments of the right hon. Member for Barking (Margaret Hodge), whose constituency is next door but one to mine. We are linked by the A13 and the c2c rail link. A 15-minute journey for her constituents will give them access to the new jobs that are being created on my patch. Let me say to all Members that when times are difficult, it is our role as leaders to inspire and encourage, not to tell our constituents that there is no hope.

In order to maximise the opportunities afforded by investment, the Government must remain vigilant in playing their part in building a competitive economy. Ministers must not be complacent about the growth that we are experiencing; additional measures are still needed to enable us to maximise the potential of that growth. That applies in two specific areas: we need to continue to invest in skills to ensure that our work force has the skills that employers need and want, and we need to ensure that our infrastructure is fit for purpose.

I have talked about the massive growth in the port facilities in my constituency. Within this decade, more cargo will be landed in Thurrock than anywhere else in the country. However, in order for that cargo to go where it needs to be—and, equally, to move the new manufacturing products that we will be exporting—we will need sufficient capacity in the road network to enable those items to be moved around the country. With that in mind, I welcome the recent announcement by the Under-Secretary of State for Transport, my hon. Friend the Member for Hemel Hempstead (Mike Penning) that we are finally looking at designing and working up proposals to improve junction 30 of the M25. That single project alone will unlock so much economic capacity in south Essex and will be a big tool in sustaining future growth. However, having made the announcement, my hon. Friend must do absolutely everything he can to ensure that the solution is fit for purpose. We cannot afford a sticking plaster; it has to deliver additional capacity. To be frank, the measure is a long time coming. It should have been done by the last Government when they widened the M25, but as usual when it came to infrastructure, they were very short-sighted.

The second issue I would like to address is that of skills, particularly for the younger unemployed, who remain a significant challenge for us. I welcome the expansion of apprenticeships that we have witnessed—they have doubled in Thurrock, from 400 to 830 this year—but we also need to consider self-employed apprenticeships.

[Several hon. Members]

rose—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. To enable more Members to contribute to this debate, the time limit is now four minutes.

16:21

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

I want to make a few remarks about unemployment. Despite the modest fall in unemployment yesterday, we still have the highest rate of long-term unemployment since 1996, with 650,000 people in part-time work because they cannot get full-time work and 2.625 million people unemployed.

I want to highlight two groups of losers in the labour market for whom there were absolutely no policies in the Queen’s Speech. The first group are women. Whereas male joblessness increased by 5.4% over the past year, the increase in female joblessness was nearly double that, at 9%. The second group are people from ethnic minorities. White British women and men are more likely to be employed than those from any ethnic minority. A report by Elevation Networks in March revealed that more than half of young black men are unemployed and that the youth unemployment rate for black people has increased at nearly twice the rate among white 16 to 24-year-olds. There was nothing in the Queen’s Speech to deal with those inequalities.

When I asked the Minister of State, Department for Work and Pensions, the right hon. Member for Epsom and Ewell (Chris Grayling) in February what steps were being taken to address black youth unemployment, he answered that “Get Britain Working measures” operated “irrespective of ethnicity”. There was nothing in the Queen’s Speech to address the structural drivers of black youth unemployment; no attention paid to, for example, guaranteed jobs for long-term unemployed young people, as recommended by the Riots Communities and Victims Panel; no ethnic monitoring of the Work programme or apprenticeships; no targets for black unemployment; and no mentoring of young black people. Indeed, despite the Prime Minister promising before the general election that there would be a massive programme of mentoring, nothing has materialised.

As for women, the Government have, I am pleased to say, recognised the importance of affordable and reliable child care, although I am alarmed by reports in the Daily Mail this week that Ministers think that the way to boost child care supply is to strip back regulation. Reducing bureaucracy is all very well, but deregulation that dilutes quality and compromises children’s well-being is simply unacceptable. The Netherlands saw a steady deterioration in the quality of child care as a result of introducing measures similar to those that we understand the Government might be contemplating. Indeed, the Dutch Government have now decided to reverse their deregulation policy.

Finally, let me talk about something that actually was mentioned in the Queen’s Speech, albeit only cursorily: the Government’s proposal to introduce measures to promote flexible parental leave. We have yet to see the details of exactly what will be on offer, but I warn Ministers to be cautious. An alliance of organisations, including Maternity Action, the Royal College of Midwives, the Royal College of Obstetricians and Gynaecologists, the National Childbirth Trust, Bliss, the Child Poverty Action Group and Citizens Advice, have warned of the need to protect adequate leave for women to secure the health and well-being of new mothers and their babies, and to select measures that actually ensure that a share of parental leave is taken up by fathers. Policies that have been shown to be effective in doing that include the meaningful replacement of a father’s lost income, and protecting leave for fathers, rather than eating into mothers’ leave. We need to ensure that the modern workplaces consultation proposals, which seem not to address those kinds of concerns, are carefully re-thought.

I am grateful for the opportunity to contribute to this debate. There is much more that I would like to say, but I will pass on to colleagues.

16:25

[Jessica Lee (Erewash) (Con)]

I thank the hon. Member for Stretford and Urmston (Kate Green) for her contribution. Although we do not perhaps agree on policy points, I always find her contributions in this Chamber thoughtful and well researched.

Having a broader view about how we tackle the issue of jobs and growth in this country for the longer term is crucial in getting this country back on its feet and continuing to do well. We need to weave together a number of different policy areas, and have a long-term vision and a commitment by the Government to achieve that. Various themes are involved: infrastructure, apprenticeships and training, and help at a very local level for small and medium-sized enterprises. All that has to be achieved against a backdrop of a strong deficit reduction programme, which the Government must stick to .

I see infrastructure as an important theme in allowing and helping people to be mobile, to reach new job opportunities and to reach their goals, be it through training or work. In my constituency we have a long-term project, which is now being considered by the Secretary of State for Transport, to reopen the train station in Ilkeston. We are pleased that the Government are considering the project in great depth, because Ilkeston used to have three stations until the 1960s, and it now has none. We are trying to get one reopened, which will give many young people many more job opportunities, as they will be able to get to Derby, Nottingham and further afield. In many ways, my constituency is well placed. It is right in the heart of the country, with the M1 running through it and the East Midlands airport nearby. However, it is the smaller projects that add to and feed into the wider infrastructure of the country that will really help.

I was able to participate in national apprenticeship week, as I am sure many hon. Members did. The personal experience of meeting young apprentices, such as Martin at Derwent Analytics, means that we see how young people are progressing and benefiting from such schemes, but I am not being complacent. Nobody in this House is being complacent about the challenges involved in tackling long-term youth unemployment. We must support those young people who are making progress. I applaud what the Government are doing on apprenticeships: 177,000 new places in the past year is no mean feat. My area has a proud, long history of apprenticeships, and as the local MP I will continue to champion their worth.

I also wish to discuss—briefly, given the time—local help for small and medium-sized enterprises. Although I welcome the changes in the local planning regulations, this is also about local enterprise partnerships. Erewash is lucky because its partnership is extremely strong. It particularly supports start-up businesses and helps with training and mentoring. Let me provide other examples. Prostart, in my constituency, also helps young people with training and with the encouragement and support they need to move on in the world. Women entrepreneurs are also doing well in my constituency: I was delighted to be there when Kirith Richards recently opened her photography suite and I wish her well for the future.

Time is against me so I will leave it there.

16:29

[Mr David Anderson (Blaydon) (Lab)]

We are two years in: two years since the rose garden, two years of failure, two years of intransigence and two years of incompetence. Over those two years, the public have seen that the coalition parties are, quite simply, not up to the job that the nation has given them. The last eight weeks have seen them exposed: the reverse Robin Hood budget, the devastation at the polls and the dampest of damp squibs disguised as a Queen’s Speech. Surely somebody should apologise to Her Majesty for wasting her time.

This country is going backwards, for three reasons: the joint incompetence of the coalition, the simpering connivance of the Liberal Democrats and the ignorance and arrogance of the leadership of the parties on the Government Benches. They were going to sort out the mess that they blame us for and, yes, there is no doubt that the country was in a bad state, as were many others, but that was because of the failure of the global capitalist system. It needed repairing, but, sadly, the Government’s remedy is worse than the disease. The real sadness is that it was so predictable because the Tory boys use exactly the same methods as their predecessors in the 1930s, 1980s and 1990s. They, like those who went before them, decided to make the workers, the poor, the old, the young, the sick, the disabled and the vulnerable pay for the failures of the rich, the wealthy, the billionaires, the bankers, the tax evaders and avoiders, the market traders and the money movers who believe that they are entitled to live in a different universe from the rest of us.

How else can we explain why workers are being made redundant, having their pay frozen and their pensions cut, and being made to work longer and harder for less, while the chief executives of the FTSE 100 companies have seen an average 11% rise in the past year alone? While ordinary folk struggle to make ends meet, the masters of the universe receive an average of £3.65 million a year—an annual increase in the past year of more than £1,000 a day. That is not pay at £1,000 a day, but a rise of £1,000 a day. All in this together? If only.

That all comes only weeks after we were told that the richest 1,000 people in this country own £414 billion, but of course the leaders of the coalition believe that the fairest way to get our country back into balance is to give those rich folk even more money by giving them a tax handout while freezing pensioners’ tax allowances.

The facts are there to be seen. Under the previous Government, we saw a genuine mixed economy in which the public and private sectors worked together in partnership to the benefit of all concerned. Nowhere was that more marked than in the north-east of England, where we had a decade of growth led by our regional development agency. What do we have now? The regional growth fund. My hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood) referred earlier to the damning report on that subject and she said exactly what a mess the RGF has been. We should remember that the RGF is supposed to make up for the 710,000 public servants whom the Government have decided to get rid of to pay for their policy. What a farce. What a mess they are in.

For their next trick? Let us make it easier to sack people, make it harder for people without money to seek justice in the workplace and cut so-called red tape around health and safety. Where does that leave us? It leaves us as a nation with mass unemployment, with 1 million or more kids on the dole, with a work force facing insecurity, pay cuts, worse pensions and unsafe conditions, with an economy that has gone from stagnation to recession and a Government who have no strategy. They have been in government for too long and they have been flushed out. It is time for them to go, and to go now.

16:33

[Alok Sharma (Reading West) (Con)]

In the lead up to the general election, I spent a lot of time talking to business owners and managers in my constituency and their verdict, after 13 years of Labour government, was that they felt that business was over-taxed, overburdened by regulation and overstretched by ever-growing tax legislation. Many businesses felt that the previous Government were on their backs, not on their side, stifling their growth, not encouraging it and limiting their job creation, not expanding it. In contrast, we have seen from the coalition a raft of policies that are laying firm foundations for sustainable future growth, cutting corporation tax to the lowest level in the G7, cutting red tape and simplifying our tax system. New Bills, such as the enterprise and regulatory reform Bill, will go further in reducing burdens on business by repealing unnecessary legislation.

I want to focus on exports and inward investment. Economic uncertainty in the eurozone will undoubtedly impact on our exports, but as many hon. Members have pointed out, our exports outside Europe have recently been growing. That is where our export opportunities lie in the short, medium and long term: exports to new growth markets such as India and China.

A few weeks ago in departmental questions, I asked the Business Secretary about our bilateral trade with India. He informed the House that he would shortly be leaving to take a delegation of small and medium-sized enterprises to India, pointing out that this was his third trip to India since May 2010. That caused some amusement among Opposition Members, suggesting, I assume, that they thought the Secretary of State was off on some sort of jaunt. That is exactly the sort of attitude that demonstrates why the Labour party does not get business and does not understand what is needed to grow our exports. Business is not won by sitting and whingeing from the Opposition Benches. In a global marketplace, if one is fighting for global contracts against global competitors one needs to sell and market across the world. I am rather pleased that we have Ministers across many Departments getting on planes and batting for British business abroad.

According to statistics from the Library, in 2000 the UK was the third-largest source of imports for India. By 2010, after 10 years of Labour government, that ranking had dropped to 22nd. The absolute level of bilateral trade has gone up, but not fast enough. Given our shared democratic values, history, language and cultural and family ties, there is much to suggest that we should have been doing a lot better on bilateral trade. I am very pleased that the UK aims to double bilateral trade with India by 2015, but given the slow-down elsewhere we might need to be even more ambitious. We are making progress and the Indian companies that I speak to see the UK as being open for business with a Government who welcome inward investment. British jobs are being created by inward investment from Indian companies, whether household names such as Tata or Infosys or less well-known but no less important companies such as Mastek, which has its UK headquarters in Reading and supplies IT solutions to the public and private sectors. Time is short, but I want to mention education, which is a huge growth area in India. British universities are highly respected, which again presents a great export opportunity.

Finally, I note that UK Trade & Investment has been doing an absolutely fantastic job and has really upped its game. Its contribution is appreciated by British exporters and companies in my constituency. We often talk about special relationships with other countries but in future we also need to talk about essential trade relations with certain nations. I hope that our bilateral trade will grow.

16:37

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

This Queen’s Speech, like previous Budgets, was an opportunity for the coalition to promote growth, but the scale of the jobs and growth challenge facing the UK is matched—thanks to this Chancellor directly and to this Government—only by the scale of paralysis and inaction. Over the previous six quarters, four of which, including the past two, have been negative, the UK economy has contracted by 0.2%. This is a double-dip of the Chancellor’s own making. He has told us that he was acting in our best interests and that, “We’re all in this together; honest Guv’nor, I share your pain.” He told us that he was pursuing his austerity policies to prevent us from becoming like Greece, which was sheer baloney. Instead, he has made our growth more like that of Spain, which has just followed us into recession. Just to illustrate this point further and to show that there was and remains an alternative, I point out that under the Labour chancellorship of my right hon. Friend the Member for Edinburgh South West (Mr Darling), the UK economy grew by 3.2% between quarter 3 of 2009 and quarter 3 of 2010. Under the current Chancellor, the Bank of England’s forecast for growth has again been slashed to 0.8% from 1.25% in 2012 and reduced further for the following year, and many economists are saying that even that is wildly over-optimistic.

The recession is now stretching out to historic proportions, trying to match the extent of the great depression, which lasted for more than 12 quarters. The facts are stark: output is now 4.3% below the level at the beginning of the recession in 2008 and the UK’s position on the world stage has contributed to that, because it has been pitiful. In the UK, it was made clear that everything must be sacrificed to the god of deficit reduction—jobs, growth, and creating confidence in the economy. The process continues, somewhat inevitably now, as the Prime Minister and the Chancellor daily talk up the chances of meltdown in Greece and across the EU in order to show how helpless little old UK can do nothing in the face of those events.

The crisis in Greece and the eurozone has become the stock excuse for this Government to do nothing. “Sorry Miss, the big black dog ran off with my homework” is now “Sorry Miss, the big black Greek storm clouds ran off with my jobs and my growth strategy. It wasn’t my fault.” That is not good enough. The Prime Minister and the Chancellor have to listen. They have to take lessons. They must do better.

It is true that the solutions lie at international level, but that is a reason for taking action, not for hiding from the storm. For the last two years, instead of sitting on the sidelines like Johnny no mates, we should have been leading by example, encouraging policies of growth as well as policies of deficit reduction. What is tragic is that the UK, which has previously been in so many ways a progressive force in the EU and globally, has now become a showcase for austerity and zero growth.

Let us be clear: if Labour had won the election, we would have had to deal with the deficit, but we would have done it in a more measured way, promoting growth, not just pain. We could not have escaped the pain, but it would have been distributed more fairly, not dumped on the backs of children, the disabled, women, the poor and hard-pressed middle-income families. Because our approach would have prioritised growth, we would even have got the deficit down, rather than increasing it as the coalition Government have done.

The Government do not get it. They are way out of touch. They never really believed we were all in it together—certainly not bankers and Cabinet Ministers. In areas where jobs could have been created, deficit reduction has blinded them to all sense. The Queen’s Speech has done nothing to change that. This is government for the privileged and the very wealthy few, not for the hard-pressed and the wealth-creating many.

16:41

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

In a hurricane, even turkeys can fly, and I will come to that later.

Rather than talking about growth, I like to talk about the national cake. The country bakes the national cake. Some shares of the cake are taken by the Government in tax and given to those without any cake. Other people work on baking their own parts of the cake. Then we have the deficit. That is where we make a time machine and snaffle a few slices of the cake baked by our children in years to come to eat today.

When 40% of GDP is being spent on public services, it is about two fifths of the national cake. That, which is the objective at the end of this Parliament, is higher than under the first two Blair Governments. Anyone who wishes to argue that the coalition Government are an extreme right-wing anti-public services Government has to explain why the Blair Government were more anti-public services than the current Government on that measure.

The growth we search for is the first differential with respect to time of the size of the national cake. The question to look at is the one about what the ingredients are. One ingredient that does not get sufficient attention is the energy used to cook the cake. It is possible to compare different countries’ national cakes and the amount of energy required to bake them. Using as the denominator the total energy supply in million tonnes of oil equivalent—not a ton as in a ton of bricks—we see that from 2006 to 2010, the UK’s energy intensity of GDP in 2005 dollars was 1.58, 1.64, 1.62, 1.66 and 1.74. That was a gradual improvement in energy efficiency in terms of bucks for bangs. The OECD average is 1.06, Switzerland has an amazing 4.74 and South Korea a low 0.45, while the US runs at 0.89.

Although the stock market is unreliable at predicting a recession, a spike in oil prices does cause a recession. A recession causes a drop in energy usage: total OECD energy usage dropped from 5,553 through 5,481 to 5,238 between 2007 and 2009, and then went up again to 5,413 in 2010. According to the International Energy Agency oil market report, OECD demand for crude oil peaked in 2007 at 49.09 million barrels of oil a day, then went through 47.5, 45.84, 46.17 to 45.63 in 2011. Brent bottomed out at just over $40 in December 2008 and has increased since. More recently, it peaked at just over $126 and today has come below $110. In the Budget, it was forecast at $110, so it has risen above Budget figures. To that extent, therefore, one would expect to have a constraint on growth in 2011 and early 2012, as oil prices have increased. Lo and behold, we have it: 10 of the 17 eurozone countries contracted in the last quarter of 2011. The lack of certainty does not help, but energy costs are part of this. The USA has the advantage that West Texas Intermediate has been cheaper than Brent.

Politicians are not all-powerful. We are affected by the global energy picture as well as the eurozone crisis. When the business climate is good, it is easier for bad managers to produce a good return—hence the US saying, “In a hurricane, even turkeys fly.” However, in difficult circumstances, such as those that we face today, the outcome can still be disappointing even though the policy choices are the right ones. The time we could have changed policy without paying was between 2005 and 2008, when Government spending was accelerated at exactly the wrong time, as was noted by Tony Blair and Lord Turnbull. It remains the case, however, that if we are to find ways forward we need to increase our energy-intensity of GDP and find more ways of having economic activity that uses less resources. A lot of all this is already being done, but there is a greater need for the future, as the old certainties of continual growth and resource consumption no longer apply.

16:45

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

Diolch, Mr Deputy Speaker.

I shall focus my comments on some very technical points, due to the lack of time. In relation to jobs and growth, Wales suffers from having no control over the major economic levers, as well as from a lack of information about our economy. There is no Welsh equivalent of GERS—the annual Government Expenditure and Revenue Scotland report. The Welsh Government, therefore, are fighting blindfolded and with one hand tied behind their back.

As the Chief Secretary to the Treasury informed me in a written response prior to Prorogation, Wales only has an annual update on the gross value added for each of the nine English regions and the other nations. The most recent update was made in December 2011 and covered the 2010 calendar year. Those results for the NUTS 1 regions were published at the same time as the more detailed breakdown for the NUTS 3 regions for 2009—figures which showed that the GVA per head in west central London is 10 times that in the Gwent valleys of south Wales. The gap between the richest and everybody else is growing, both regionally and individually, no matter the colour of the ruling clan here in Westminster.

That time lag means, of course, that information on which to base our economic decisions in Wales is retrospective. We are not getting the up-to-date information that is needed for accurate Government economic intervention. Equally, that can be seen in the index of production and construction and the Welsh index of market services, which the Office for National Statistics provides to the Welsh Government. Whereas the UK-wide GDP first-quarter figures were released midway through April, the Welsh figures for the same time frame will not be provided to the Welsh Government until the end of July 2012, when the Assembly will be in recess and the third quarter of 2012 will be well under way.

If the Welsh Government are responsible for economic development, as claimed by the Treasury, they need the up-to-date information on which they can make economic decisions, as well as key economic levers and tools in the form of fiscal powers. For good economic governance we need that data for Wales in good time, so that the Welsh Government can make proper, accountable decisions with the best available information. I would like to ask the UK Government to request that the ONS make that data available within the same time frame as applies for the UK-wide GDP figures, so that Welsh Government decisions are not made at a disadvantage.

During the opening years of this economic crisis, the Oxford Economic Forecasting think-tank estimated that London and the south-east would return to its pre-slump situation by around 2012, but that Wales would not do so until 2025 at the earliest. Given the continuing stagnation of the UK economy, those timetables might have slipped. The Welsh economy needs an end to the proposed cuts of public sector jobs and regional pay, a stimulus through a series of infrastructure investments and support for the private sector to develop and nurture our own small businesses. We need control over job creation levers such as income tax and corporation tax and we need accurate data, allowing us to see the effect of Government policy and broader economic shifts upon the Welsh economy immediately, so that we can change course when required. Diolch yn fawr.

16:48

[Oliver Colvile (Plymouth, Sutton and Devonport) (Con)]

Thank you for allowing me to speak, Mr Deputy Speaker. This is an important debate in relation to my constituency, which has a low-skills, low-wage economy. Before I go any further, I declare an interest. I still retain interests, although I no longer have an executive role, in a public relations communications company that I set up some 10 to 15 years ago. That company deals with community consultation and encouraging inward investment into inner cities and job creation.

As I said, Plymouth is a low-skills, low-wage economy, and 38% of the people who work in the city do so in the public sector. In my opinion, in their 13 years, the Labour Government created unsustainable public sector employment, which crowded out the private sector. It is difficult for a private sector business to compete for workers with good skills, because it cannot match the funds and wages available in the public sector. That is a very big problem. Unfortunately, from as early as 2001, the Labour Government were creating a structural budget deficit, which became increasingly apparent.

I am delighted that we in Plymouth have the third largest university in the country. It has established a really good reputation for marine science engineering. Earlier this week, upstairs, people might have seen the public exhibition run by Plymouth Marine Laboratory demonstrating exactly how our reputation for marine science engineering will be able to create jobs, as we need to do. As a country and as communities, we need to develop a clusterisation approach—that is, work to our strengths—but we must also develop our skills base. I pay tribute to two organisations: Plymouth university of course, but also Plymouth City college, which is doing an enormous amount of work in apprenticeships. A business that wants to set up and go into new areas needs the right skills base to sell its products.

We must stop looking only at Europe and the continent and start to look at the wider world—India, Brazil and, of course, China, but also the Commonwealth, with which we have great historical ties and where there are enormous opportunities. We need to concentrate on trade. We need to be like Muhammad Ali, who, as the House will remember, floated like a butterfly and stung like a bee.

16:54

[Ann McKechin (Glasgow North) (Lab)]

Last week, I travelled with the Business, Innovation and Skills Committee to Brazil, as part of our new inquiry into our export trade with that developing nation. I wish to put on the record our appreciation of the work of the UK Trade & Investment team in Brazil and the efforts they are making to meet the Government’s ambitious targets. What struck me time and again, however, was that we were visiting a country that had a clear and unambiguous industrial strategy. That is not to say it is perfect—in fact, in terms of ease of doing business, our countries are poles apart: the UK is fourth and Brazil 121st on the list—but everyone I spoke with appreciated the ability to work within a political environment that is firmly focused on job creation and growth. I noticed a sense of purpose and momentum that is totally absent here at home.

The previous Labour Government recognised—later than they should, but with unequivocal passion from our last Business Secretary, Lord Mandelson—the need to form a convincing industrial strategy, with a relentless focus and wholehearted support from Government at all levels. The result was developments such as High Speed 2, carbon capture and offshore wind, with science and innovation at their heart and a recognition that we must take risks if we want to be leaders in new industries. Two years on from the election, we are still waiting for the coalition’s strategy. HS2 has been kicked into the sidings of potential oblivion; there is yet more equivocation about airport capacity, as planes stack up waiting to get into our major airports; carbon capture has been put back several years at least; and offshore wind receives only cursory support.

Where are the big ideas? Where is the narrative that allows industry and finance to make the necessary commitments? Where is the financial support to allow us to enter those new industries? The establishment of the Green investment bank is welcome, but as one leading figure in the renewable energy sector told me this week, it must not be the bank of last resort. It needs to lead the way, not take the cast-offs that no one else wants to touch. It needs to be big enough to meet the challenges and opportunities we face. Instead, we have had a painfully slow start. The original concept has been watered down and now the bank will not have full borrowing powers until 2016. It is not fast enough or deep enough to do the job.

Our international competitors will not be sitting idly by. We need to learn the lessons of why we lost out on onshore wind production and ensure that that is not repeated. Since 2010 the UK has dropped from third to seventh in the world ranking for green growth investment. Our competitors know that investors need a stable environment, not the farce we witnessed over feed-in tariffs earlier this year. We also need to address the lack of capital grants, which are vital in forming the new supply chains of the future. Cuts in corporation tax are the wrong priority at this time.

As the Business Secretary correctly pointed out in his leaked letter to No. 10, we need to address the lack of confidence in the business sector. UK companies have some of the largest cash reserve ratios of any advanced economy, but there was nothing in the Budget to encourage the release of those funds. At the same time, we have many companies that are not cash rich, particularly in the SME sector, which cannot find affordable finance. The case for a business investment bank has never been stronger, yet there is more silence.

16:56

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

I am grateful to follow the hon. Member for Glasgow North (Ann McKechin). She mentioned an industrial policy, which we are of course looking at, but the problem she must face is that Lord Mandelson’s industrial policy came far too late. The north-west experienced 13 years in which her Government allowed the gap between north and south to increase, and it increased according to any survey chosen. Ultimately, the only investment that came into the north-west was rapid public sector investment in either construction—the so-called affordable housing that turned out to be one or two-bedroom flats, not real houses for families—or an ever-expanding regional development agency that could do nothing about the expansion of London and the south-east, when compared against the contribution of the north-west or any other region. I am pleased that this Government, through part of the Queen’s Speech, are consolidating the missing links and dealing with the failure to invest in infrastructure over 13 years.

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Will the hon. Gentleman give way?

[Eric Ollerenshaw]

I would love to, but I have less than three minutes. I am sorry.

This Government are committed to: an M6 link road around Lancaster, which has been on the stocks since 1948 but nothing was done about it in 13 years of the Labour Government; the northern hub investment, which will improve connectively between the northern cities and enable them to compete; and investment in broadband through Broadband Delivery UK. People talk about superfast broadband, but a third of my constituents do not have access to normal broadband, and that is the failure of real investment over the past 13 years. I believe that the Government are now doing something about that and that things are happening to build that environment and infrastructure so that the north can compete like any other region of the country. Labour Members talk about a lack of vision, but the vision came from the coalition in the very first months. The commitment from my right hon. Friend the Chancellor was that we deal with the deficit but, at the same time, attempt to restructure and rebalance the country not only between sectors, but between regions. That is the vision of the coalition.

[Karl Turner]

Will the hon. Gentleman give way?

[Eric Ollerenshaw]

I have no time to give way.

Members have talked about the regional growth fund, which is now committed to making the majority of its spend in the north. That will add to the balancing out through real jobs for real factories. At the same time, while the Government are listening, I suggest that too much of the regional growth fund is still concentrated on metropolitan areas. There is a lot more to the north-west than Greater Manchester and Merseyside, and many businesses need to access the fund, so I hope that it will increase as it develops.

I also look forward to the Local Government Finance Bill returning to the House, because I believe that the freedoms that that will give local authorities through business rate retention will be a truly local way of improving investment and contributing to businesses. I welcome the commitment that the Local Government Association and my county council have made to looking at local government bonds as a way of raising investment for local businesses. The key is to unleash the regions and give them the infrastructure to compete not only on the national stage, but on the international stage, and that means superfast broadband and the ability to use our own money to invest in our own business. I congratulate the Government on what they have done about this so far.

17:00

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

This is less a speech, more a postcard from East Lothian, but I am grateful for the opportunity to contribute to the debate, because I want to send Government Members a message from East Lothian about how we create jobs and growth. We rely heavily on the small and medium-sized enterprise sector, and the message from such businesses is clear: they are lukewarm about a lot of last month’s Budget, but they say that what would make a difference is a cut in VAT. I hope, therefore, that Ministers will listen.

I also want to talk about jobs. Many aspects of job creation in Scotland, including in my constituency, are devolved to the Scottish Parliament, and this House and the Government here need to work more closely with the Scottish Government. I have written to the Secretary of State for Work and Pensions—[Interruption] —whose attention I do not appear to have right now—about a constituent of mine. He is a 19-year-old man who finally had the chance of a job in a community bakery in Dunbar, but he was not allowed to apply for it because he was on the Government’s Work programme and the job was funded by the Scottish communities job fund. When a young man has the opportunity of the perfect job in his own community, it is simply inadequate to give him the response, “You cannot have it because of the double funding.” It surely cannot be beyond the wit of this Government and the Government in Holyrood to work together to address the issue. I understand that that is not a problem in England or Wales.

I went to see the providers of the Work programme in East Lothian, and they told me that they would be perfectly happy to consider transferring funding from their stream into the Scottish communities job fund in order to prevent a similar situation happening again, so I hope that Ministers will open discussions with the Scottish Government to address the problem. There is already enough pressure on young people trying to find work in my constituency. Figures last month showed an increase of 467% in youth unemployment, and that simply is not good enough.

Tourism is very important to the East Lothian economy, but unfortunately it is suffering and will suffer further, as I will find tomorrow when I visit the owner of a caravan park in North Berwick. So if the Government want to promote tourism and growth in my constituency, I ask them to look again at the introduction of VAT on static caravans.

I was also disappointed that in the Queen’s Speech we did not see any proposals on offshore gambling. Musselburgh race course recently won its third award this year, as the finest race course in the UK, and it is a driver of growth and innovation in a community that is struggling in so many ways. I am sorry that we did not see the issue addressed, but once I have heard the result of the private Members’ Bill ballot, I might find that I am able to do something about it myself, for my own constituents.

None of the barriers to business, growth and job creation was addressed in the Queen’s Speech and, as many others have said, it has been a missed opportunity. Telling people to work harder is not good enough, when inflation for the poorest 10% is at 41%, and for the richest 10% is at only 3.3%. This is a Government who choose to help that richest 10%, and that says it all.

17:03

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

Up until 2007, the Government were running unsustainable deficits and had an escalating level of debt, and that was before the financial crisis hit. Governments have a choice: they can either run their finances sustainably or give up the right to economic self-government, and there are lots of examples of that in Europe at the moment.

In tough times, this Government have created 600,000 new private sector jobs. There are 370,000 more people in work now than there were at the general election and 70,000 fewer people on out-of-work benefits than when we were elected. As from last month, we have the youth contract coming into play, which will also make a difference. Furthermore, we have made progress on the deficit, which we have already cut by a quarter. That has led to low interest rates; and we should remember that every 1% increase in interest rates puts £1,000 on an average family mortgage.

Business taxes are coming down to 22%, which will be one of the lowest rates in the G20. With the patent box, we have, in effect, 10% corporation tax rates on patents that are exploited here in the UK.

I am glad to see the Minister of State, Department for Education, my hon. Friend the Member for Bognor Regis and Littlehampton (Mr Gibb), on the Front Bench. I pay tribute to the work that he is doing to improve school standards. What with his work, the 457,200 extra apprenticeships—an increase of 63%—and the new university technical colleges that are being rolled out, we are well on the way to building up the educated, flexible work force that this country will need for it to be an economic success in future.

People need hope and confidence in tough times, and I, for one, am fed up with the diet of gloom coming from the media about the eurozone. Yes, 48% of our trade is with the European Union, and therefore it matters, but the EU comprises only 19% of the world economy, and we need to remember that the other 81%—Asia, the Americas and Africa—is growing strongly, in some cases by 10%. The world economy is due to triple over the next 30 years, and that provides fantastic opportunities. I pay tribute to the work of UK Trade & Investment and the role of the Foreign Office in helping exporters. Last week, I spoke to people from local businesses in my constituency, and they confirmed that that help is real, practical and available on the ground.

I am well aware of the difficulties that businesses have trying to raise credit to expand. That is why the £20 billion loan guarantee scheme is helpful. I heard only yesterday that Santander will be putting 650 managers back into local branches to take local decisions. That link between the local manager and local business is very important. It has been broken by many banks in the past, and I am glad that that is being dealt with. New methods of raising finance for business, including crowd-financing and websites such as Kickstarter.com, can help as well.

The UK is one of the most entrepreneurial countries in the EU. We have 4.5 million small businesses; in 1989, there were only 2 million. However, if we were as entrepreneurial as the United States of America, there would be another 900,000 small businesses in the UK, and many of the Government’s problems would be over. We need to make the UK an enterprise hub for the whole of Europe. There is evidence that many of the small businesses that are being created naturally end up exporting, which they can do very easily through the power of the internet.

Finally, I pay credit to the Government for focusing on infrastructure funding. As I look at my constituency, I see roads being built for which we have waited years, a new busway coming, a business innovation centre, and a new university technical college.

17:07

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

Last week’s Queen’s Speech was my first as an MP. Although nobody does pomp and pageantry better than we do, I was deeply disappointed with its content: lots of style but no substance.

When this Government came into office two years ago, we were in economic recovery. Since then, we have been bumbling along the bottom with very little growth, and now we are back in recession again. This is not due to the worst global financial crisis since the 1930s; it is due to the mismanagement of the economy by the current Downing street incumbents. Yesterday, the Bank of England yet again had to downgrade forecasts for economic growth, from 1.2% to 0.8%, and the outlook for inflation is well above the 2% target.

Yet this not the experience of every other country. The US, which was at the centre of the global crash in 2008, started to recover, like us, in 2009-10, and it is continuing to recover. Similarly, the rest of the G7 is performing better than we are. Our economic performance is one of the worst in the G7, with Italy coming up just behind us. Brazil has now overtaken us as the sixth largest economy. The austerity measures that this Government have introduced are clearly not working.

The impact on unemployment in the public and private sectors is already being felt. Last year, the public sector lost 276,000 jobs. Some have estimated that the figure will be as high as 700,000 by 2015. In Oldham, £24 million has been cut from next year’s council budget, meaning 400 job losses. That is not the end of it. My local hospital trust, Pennine Acute Hospitals NHS Trust, recently announced a statutory consultation on a further 160 redundancies. It has to find savings of £45 million this year. That comes on top of 600 posts that have already been lost. In spite of the Government’s reassurances that jobs will be created in the private sector, large and small businesses alike are closing, including BAE Systems in Chadderton, Warburtons Bakery in Shaw, Long’s Plumbing and, of course, Remploy.

Although I welcome yesterday’s unemployment figures that show a reduction in the previous quarter, I am afraid that the trend in long-term unemployment is upwards, as we have heard. In Oldham, more than 8,000 people are out of work across the borough, with 11 people chasing every job. The number of women out of work is the highest since 1995. There has been a 25% increase in long-term unemployment among the over-50s. In my constituency, the number of jobseeker’s allowance claimants has increased by 20% since June and doubled since 2006. Young people in my constituency have been particularly badly hit, with a 288% increase in long-term unemployment since last year. Worryingly, young black and Asian men are disproportionately affected, with 56% and 23% respectively being unemployed. Those figures have doubled since 2008, so we should be very worried about that problem.

What was there in the Queen’s Speech for those people? Absolutely nothing. At the Select Committee on Work and Pensions yesterday, I was profoundly disappointed by the apathy and complacency about what is going on and about how it can be addressed. The youth contract is not geared towards focusing on these problems and only quick fixes have been introduced. There are inequalities not only between different population groups, but on a geographical basis. The urban heartlands of Greater Manchester, Liverpool, Newcastle, Glasgow, Cardiff and parts of London are most affected. The Government’s talk about fairness is just that—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. I call Mr Mark Spencer.

17:12

[Mr Mark Spencer (Sherwood) (Con)]

I am delighted to be called to speak in this debate. The number of Members who want to speak is an indication of how important it is that the economy runs smoothly and allows the Government to do the exciting and generous things that they want to do in their programme. The economy is fundamental to that process. The same is true in our communities. In Sherwood, the fundamental issue is jobs and how we can create them.

The last Labour Administration created many jobs in the public sector, expanding it to such an enormous degree that we reached the point at the last general election—[Interruption.] The shadow Secretary of State for Work and Pensions says that they created jobs in the NHS. That is true—they were people walking around with clipboards who restricted our doctors and nurses. The last Government created jobs within quangos that restricted the private sector. Those jobs became unsustainable, to the extent that when the previous Administration left office, £1 in every £4 that was spent was being borrowed.

This is the fundamental argument. We need growth in our economy, but it must be sustainable for the long term. The Government have grasped that the only way to create sustainable jobs is to have an even-keel economy. That involves having low interest rates. Anybody running a small business in one of our constituencies who has an overdraft or a long-term loan with a variable interest rate understands how important low interest rates are. Once interest rates start to climb, the pressure on one’s cash flow and the pressure to reduce one’s wage bill become unsustainable.

So what have the Government done to create jobs? Our record is pretty good. One of the first things that the Government did was to reduce corporation tax to attract investment from overseas. That is just starting to show fruit, with companies relocating to the UK. We are using the planning system to try to make it easier for companies to establish themselves, and trying to ensure that the system works to create new businesses. For small businesses, we have looked at reducing business rates, which have a crippling effect. Anyone who runs a small shop and pays enormous local business rates will understand how important rate relief is in allowing their business to flourish. Reducing the burden of employment law on such businesses is also very important. Small businesses fear taking on new staff. If we can remove some of that fear, those businesses will be more likely to take on more staff.

What is happening in Sherwood? The good news is that unemployment is slowly coming down, which I welcome. There is still a long way to go, but the good news is we finally have a Government who understand business and how to run the economy. We are on the right course. We need to hold our ground and ensure we keep interest rates at their current level.

17:15

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

The Government have done little to promote jobs and growth for towns such as Blackpool. They scrapped the regional development agency, which helped us to renew our tramway and our key visitor attractions, including the tower and the Winter Gardens. They also scrapped the area-based grants that targeted our pockets of severe deprivation.

The Government seem incapable of understanding the challenges faced by Blackpool and other second-tier towns, particularly in seaside and coastal areas. They have done no strategic targeting of the regional growth fund by industrial sector, which was highlighted by David Marlow, who has said:

“Blackpool has not yet had a distinctive RGF success despite benefit and public sector ratios 80% and 60% above national averages, and private sector ratios at about 65% and 25% below average.”

Any narrow focus on city regions risks ignoring surrounding areas. We suffer from imbalances not only between regions, but within them. We need growth in second-tier towns and cities, seaside and coastal towns, and suburban areas.

Just what are the Government delivering on the ground for young people in terms of jobs and growth? I have seen first hand the positive impact the education maintenance allowance had in encouraging young people in Blackpool to go to colleges, where we have struggled to improve our skills levels. Given our pockets of extreme deprivation, that assistance was vital, but it is now gone, along with opportunities for thousands of young people from my sixth-form college and Blackpool and the Fylde college, which were jeopardised at one stroke of a pen in the Department for Education, the same Department that cut off the dedicated money—£200 million—available to schools for careers advice.

Yesterday’s unemployment figures also illustrate that that problem is not budging. In my constituency, one in 10 of the active population is out of work, including more than one in five young people, which is 8% higher than this time last year. Those figures disguise the work shortfall for young people and key groups such as women, a point strongly made by my hon. Friend the Member for Houghton and Sunderland South (Bridget Phillipson) earlier in the week. Thirty-four thousand women nationally gave up work altogether in the last quarter.

The previous Government had imaginative schemes such as the future jobs fund, through which Blackpool football club, which will battle for premier league status again at Wembley this Saturday, gave young people real opportunities. The Deputy Prime Minister’s belated youth contract promised to create half a million new job opportunities for young people, but we have seen no indication of it in Blackpool yet. If his figures are as reliable as the ones so recently demolished by the National Audit Office, I will not hold my breath.

This story is not just about statistics, but about individuals’ blocked hopes and frustrations. Wherever I talked to young people—not just in Blackpool, but in places such as Crawley, Reading and Milton Keynes, which I visited during the local election campaigns—I have found that they are in “it” together: they are in the mire, north and south, thanks to our Chancellor.

What about our small businesses, which are critical to our economic recovery and prevalent in my constituency? The Government have talked a good game, but my case work shows that many small businesses are being let down by the banks. When will the Government tell the banks to give support rather than telling people to stop whingeing?

We need proper activity on VAT, but we are not getting it, not on tourism and regeneration, or on repairs and renewals. The Government believe not in active and intelligent government but in scapegoat Britain. They scapegoat everybody except themselves, but their growth and jobs policies have failed.

17:19

[Richard Graham (Gloucester) (Con)]

Today’s criticisms seem to be based on a familiar litany of three core ingredients: first, that the Queen’s Speech should have been the length of a speech by Fidel Castro at his peak; secondly, that it should have launched lots of new initiatives; and thirdly, that the Labour years represented a paradise lost. We have heard many of those points made today, and I commend to the Opposition the damning obituary given by the right hon. Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) in one of his earlier books. He wrote that a day without a new initiative was a day wasted for new Labour. We do not need lots of new initiatives day after day; we need a series of cool, strategic policies that are well implemented.

All of us and our constituents have to win our jobs. Last year, I encouraged EDF energy, whose operational headquarters are in my constituency, to create 10 new apprenticeships there. One of them was won by an 18-year-old who came from Sheffield to Gloucester. He was interviewed, he moved down, he left his comfort zone and went for it, and now he is thriving in one of the most successful companies in our country. What he did is a great example to all our young people, not only in Gloucester but elsewhere in the country. We should learn from his determination to go and win a job.

In our city there are many new apprenticeship opportunities. In 2010-11, businesses in our city created 1,050 new apprenticeships. For the first half of 2011-12, we are up 20% and on target to create 2,200 new apprenticeship starts over the whole year. I visit two companies a week to see what the opportunities are, to encourage them to create new apprenticeships and to see whether those who have never done so are taking advantage of the Government scheme incentivising small companies with £1,500. I do a jobs fair every three months, on average, and I try to link our youth groups to trainers and the opportunities they can access with companies.

All of us can do our bit in our constituencies to help the policies along. I want to discuss the core policies on which we should be focusing. How many businesses have had loans from the national loan guarantee scheme, which is 80% guaranteed by the Government? Have they applied for this source of capital, which could help them to expand? How many of them have signed up to the youth contract and are offering Work programme work experience to our young people coming out of schools and colleges? How many of our manufacturers have applied to the regional growth fund manufacturing fund, which is available to them? Under the previous Government, manufacturing’s share of GDP was halved while benefits doubled, but in my constituency manufacturing is still 20% of our output. We have lots of good, thriving, small and medium-sized engineering companies, but they need help to access capital, and I need to help them to access the opportunities the Government have made available.

Today’s youth have the skills—or lack of them—that they gained predominantly under the previous Government. One secondary school in my constituency had the second-worst GCSE results in the country. Today, under the new Gloucester academy, those results have improved from 11% to 33% and, this year, to 40% of pupils achieving target grades. This type of long-term planning for improved opportunities will provide the young in my constituency with better opportunities and jobs in the future.

17:23

[Anas Sarwar (Glasgow Central) (Lab)]

Like thousands of my constituents, I am deeply disappointed that after taking us back into recession this Government have failed to come forward with a substantive plan in the Queen’s Speech to get the economy back on track. In the fourth quarter of 2011, growth dropped to minus 0.3%, and to minus 0.2% in the first quarter of this year. Long-term youth unemployment has risen by a shocking 264% in the last year alone. What might be described as an embarrassment by the Chancellor is a tragedy for families up and down the country. Nothing announced by the Government in the Chancellor’s Budget and certainly nothing in the Queen’s Speech will address the problems that hard-working families face across the country.

We all know that business lending is a vital part of any healthy economy. That is why the Opposition wanted the Government to tackle what the Business Secretary himself described as a “yawning mismatch” between the demands of small business for finance and the banks’ reluctance to lend. Instead, we got a small sticking plaster to cover a massive business funding gap that is estimated to reach £150 billion by 2016.

We have a coalition Government who have completely the wrong priorities. They are more interested in papering over coalition cracks than getting Britain back into work. Instead of helping hard-pressed families and small business owners, the Government decided in the Budget to give a tax cut to those earning more than five times the average salary.

I was disappointed not to see any mention in the Budget or the Queen’s Speech of families struggling with the rising cost of child care, which is higher in Scotland than anywhere else in the UK. It is no surprise that 10% more women are in employment in countries such as Norway and Denmark, where parents have access to affordable child care, than in the UK.

I was even more disappointed to see nothing in the Budget about supporting disabled people into work, following the Government’s shocking decision to close the majority of Remploy factories. According to the Government’s own figures, about 500,000 disabled people will lose their benefit entitlement when the disability living allowance is replaced by the new personal independence payment. Case studies conducted under the Government’s consultation on the PIP suggest that blind and visually impaired people who are judged to have adapted to their disability will not qualify for the higher rate. That ignores the reality that the difficulties, the barriers and, most importantly, the costs continue regardless of the length of time a person has lived with sight loss.

I urge the Prime Minister to look for inspiration to my home city of Glasgow, where the Labour council that was re-elected last week with a commanding majority —a feat that is almost impossible under a proportional representation voting system—has managed to lower unemployment in the past year in the face of this Government’s economic failures and the Scottish Government’s swingeing cuts. In Glasgow, people voted for a manifesto that put investment in jobs, growth and education first. They voted for the £25 million investment in the Glasgow guarantee, a programme that will use the Commonwealth jobs fund, the Commonwealth apprenticeship scheme and the Commonwealth graduate fund to create a lasting legacy of employment from Glasgow’s proud hosting of the Commonwealth games in 2014.

The people of Glasgow rejected the scorched earth policy of mass austerity and the imagined magic wand of separation in favour of investment to create jobs—investment such as that proposed by my right hon. Friend the shadow Chancellor in our five-point plan. We want to see the establishment of a state-owned British investment bank, similar to the bank for small and medium-sized enterprises that John Longworth, the director general of the British Chambers of Commerce, has been calling for, to help businesses to create the jobs that our country needs. We also want to see a jobs Bill that would ensure that money raised from a tax on bank bonuses was used to provide real jobs, with real wages and responsibilities, for more than 100,000 young people aged 18 to 24.

We have an out-of-touch Government at Westminster who are repeating the mistakes of the 1980s and a distracted Government at Holyrood who are concerned more about a separation referendum than about the real issues affecting the lives of ordinary Scots, and people up and down the country can see right through them. That is why we saw the elections results that we did last week.

17:27

[Emily Thornberry (Islington South and Finsbury) (Lab)]

When I speak as a representative of Islington South and Finsbury, I feel that I always have to begin by dispelling myths. People know about our cappuccino bars and our Georgian squares, but they do not necessarily know that 44% of my constituents live in social housing, or that my constituency has the second worst child poverty rate in the country. The very rich and the very poor live in Islington. We live cheek by jowl, and we like it that way. The recession has affected all of us, but some much more than others.

One thing unites people, however, no matter what their background. I have spoken to women, including aspirant Somali mothers, a middle-class mother whose child has just left Oxbridge, and a woman whose child has just left school, and we are all really scared for the next generation. Although we have brought up our children as best we can and put everything into equipping them for the world as perfectly as we can, we are really scared that, when we push them out into the world, the world will say, “No, sorry. We don’t need you. We might be interested in your little brother or sister one day, but you have entered the world of work at the wrong time. Come back in four or five years’ time.” What will happen to those kids in the meantime if we do nothing about unemployment among young people?

In Islington, we have had a massive increase in long-term unemployment among 18 to 24-year-olds, and I know that that has been replicated across the country. In Islington, it has gone up by 88% in the past year. I hear Government Members say, “Well, of course it is because they haven’t got the right qualifications”, or “It’s because the Labour Government didn’t educate them well enough”, but it does not matter what qualifications a young person has now; they simply cannot get a job. There is a generation now who are finding it exceedingly difficult. The hon. Member for Gloucester (Richard Graham) shakes his head, but if he were to advertise for an unpaid internship in his office, I suspect he would get at least 300 applicants from youngsters desperate to get employment. The problem is nothing to do with young people not being sufficiently educated; it is because the recession, which hits all of us, hits our children, teenagers and those in their early 20s the hardest. The older generation and Members here who represent our communities have a duty to do something about it. Frankly, the complacency of Government Members, to which I have had to listen over the past five and a half hours, is quite astounding.

I see in his place the Secretary of State for Work and Pensions, and I hope he will listen to what I have to say about other groups of people. I know the Conservatives say they are on the side of those who work hard and do the right thing. I know they want to change this country so that once again it rewards people who work hard, want to get on and play by the rules. The Conservatives want to represent the strivers, the builders, the family raisers, the community builders. Good, so would Conservative Members please consider the working poor in my constituency, who are being adversely affected by cuts to working tax credits, the housing benefit cap and universal credit? I hope the Secretary of State understands that they are badly affected by the price of housing and the extraordinary price they have to pay for rent. We must do something about that. Unless and until that is done, it will be impossible to have a mixed community in which people will be able to work at all levels.

17:31

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

This Queen’s Speech can be summed up by the Prime Minister wandering around the country saying that he is not for turning. I remind him and his party that the last person who said that—Lady Thatcher—was tossed out by the country when people found out that they were getting uncaring Conservatism once again. [Interruption.] Yes, she was, of course, tossed out by her own party.

This is a Government who continue to attack, with ingrained unfairness, the personal income of all apart from those in the super-rich bracket. They boast of attacking citizens’ and workers’ rights. With 100,000 public sector job cuts, it is good to see the Secretary of State for Work and Pensions in his place. How many of the present employees of Remploy will, to his shame, end up on the unemployment list? Only 50% of the jobs have been replaced by the private sector, and many of them are part-time and temporary jobs. Of 16 to 24-year-olds, 21% are in part-time jobs, while analysis suggests that 40% are on temporary contracts.

The national debt is higher, not lower, and the UK is in a double-dip recession for the first time in 30 years. Of course I welcome investment in car manufacturing from US companies. Their choosing a UK work force in a flexible trade union environment and our being near the EU market has nothing to do with the Government, and it follows the investment of Japanese and other international companies that invested under the Labour Government.

I am an economics graduate, so I know that economic growth is based on confidence in business and in consumers. The Chancellor is a one-trick pony, with low interest rates. His stated aim is that interest rates are being held low for the sake of the Government’s bond sales, but this has the effect, for example, of attacking the disposable income of pension funds and investment funds, thus hitting the mainly frugal elderly. Quantitative easing has also hit their income and made them poorer. This signals to UK businesses that the Government believe that the economy has to be held in check, as it is fundamentally too fragile to grow without creating threatening levels of inflation. This is caused by a failure to expand the resource base of the economy so that growth can be inflation-proofed for the future.

I looked at the “Prospects for inflation” chapter of the inflation report of May 2012, which states:

“Output has barely grown since the middle of 2010, and is estimated to have contracted slightly in each of the past two quarters.”

That is what this Government have delivered through their policies. Human resource expansion is required to deal, for example, with training and skills shortages. The ageing population needs to be replaced in industries with which I am involved. There is OPITO—the Offshore Petroleum Industry Training Organisation, which deals with offshore oil, and the subsea employers association—talk about 44% of its vacancies being in non-graduate technical jobs, with an additional 20% in technical graduate jobs. The Chemical Industries Association says that it fishes in the same pond for staff, and it demands science education in schools to provide a base of people who can be skilled up for growth. Mike Mack, the world president of Syngenta, says that he fears he cannot sustain his investment in this country because of the shortage of skilled labour. He steals from other companies, and they steal from him. We need technical apprenticeships. Forget the boasts about the number of apprenticeships that have been started; how many have been concluded? How many newly qualified technicians have we got? The SNP Government falsify the statistics. They say that there are 25,000, and write to companies asking them to include people who are doing part-time work as apprentices in order to supplement the figure.

Business investment is 6% lower than the target set by the Chancellor. There is £950 billion in company accounts that is not being invested. Companies are holding on to it: they are afraid to invest, because the signals are all wrong. The Chancellor has gone for corporation tax reductions, but they are a blunt instrument. VAT increases hit the supply chain for customers, for business and for personal consumption, whereas VAT reductions—a targeted programme such as the one that the French use, reducing VAT—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. The hon. Gentleman’s time is up.

17:35

[Jonathan Ashworth (Leicester South) (Lab)]

I shall make only a few brief points.

I thought that the Queen’s Speech was extraordinarily flimsy, given that it emanated from a party that is in its second year in government and has been out of power for 13 years. When we compare it with the greatest Queen’s Speeches of the Labour Government in their second year and, indeed, those of the Thatcher Government in their second year, it is apparent to us that the present Government are running out of steam after only two years.

There was nothing about jobs in the Queen’s Speech. As my right hon. Friend the Member for South Shields (David Miliband) demonstrated so eloquently in his speech, the Work programme is entirely unsatisfactory. It cannot possibly deal with the youth unemployment crisis. The Queen’s Speech should have been seen as an opportunity to put right the mistakes that the Chancellor had made in his Budget. I am glad that he has dug himself out of the hole of the churches tax, but I wish he would dig himself out of the hole of the pasty tax and the caravan tax, and, indeed, his £40,000 giveaway. I believe that the Prime Minister’s former speechwriter Ian Birrell described it as

“a missile into six years of Tory modernisation.”

I could not have put it better myself.

Unemployment in Leicester South has increased over the past 12 months. Although I welcome the drops in unemployment announced yesterday, I must tell Ministers that in Leicester South it fell not by 1%, but by one. If the Government do not produce measures to deal with the youth unemployment crisis soon, I fear for the future of many of the communities we represent.

The Chancellor expected growth of 2.5% this year, but we are now in a double-dip recession. Some of the contributions from Government Members were rather complacent on that front. Many people warned the Chancellor that a fiscal consolidation of this scale and pace, along with a collapse in demand and consumption, would lead to a recession. Indeed, the Business Secretary, when he was in opposition, gave him that very warning before the general election.

What are we given in the Queen’s Speech? We are given what appear to be proposals for the further erosion of workers’ rights. I must tell the Chancellor that downward pressure on workers’ rights will not lead to the growth in the economy that he wants. What a turnaround this is for the Business Secretary. He started his career co-authoring “The Red Paper on Scotland” with my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown), but it appears that in the twilight of his career he will become the Twickenham strangler of rights at work.

Government Members have talked about trade and exports. I agree that the patterns of international trade are changing. As many Members will know, the city of Leicester, which I represent, has deep and extensive links with India, Bangladesh and Pakistan, and I want us to build on those links and to trade further. The hon. Member for Sherwood (Mr Spencer) referred to food manufacturing, in which we in Leicester have expertise. We export British Asian food to Europe, to the middle east and, indeed, to India. However, I must tell Government Members that although the reports that I hear of UK Trade & Investment have improved, they are patchy at times.

We need more support for export finance in Leicester. It would be greatly to the advantage of the Business Secretary, when he and the Prime Minister go on trade missions to India, to take with him not the great and the good, but some of the small business people from Leicester who understand how to enter challenging markets in India, Pakistan and Bangladesh.

Let me finish by simply saying that we have a Government who promised us growth and jobs; what they are delivering is recession and unemployment.

17:39

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

It is a privilege to wind up a week of debate and speeches on the Gracious Speech. However, let me start by saying what a disappointment it was to hear not a word of recognition, humility or apology from the Chancellor for a litany of Budgets that have put this country back in recession and given us a Queen’s Speech with nothing to dig us out.

We have, however, had something very significant this afternoon. We have had an admission—a confession, in fact—from the Chancellor. He finally forced himself to say it, in response to the intervention from my right hon. Friend the Member for Edinburgh South West (Mr Darling), although he had to choke it out. He said that austerity is not enough. The Chancellor finally said it. However, confession is not enough; redemption will demand a change of course. He has U-turned this afternoon on his policy for Europe; he should now U-turn on his policy here in the UK. Instead, what we got was a lot of jokes. Most people in this country now feel that if he focused more on economics and less on jokes, perhaps the country would not be in quite the mess that it is. The customary advice is: “Don’t give up your day job”, although most of us probably feel that the sooner he gives up his day job, the faster Britain will be back on its feet.

This is the Chancellor who told us a year ago that he was putting fuel in the tank of the British economy. What has happened? Where has the fuel gone? It has somehow been siphoned off into the jerry cans in the Cabinet Office. Instead, what we have got is £150 billion of extra borrowing, 1 million young people out of work, fewer hours worked this year than last, and a fall in our national output in the last quarter of £700 million —a development that the hon. Member for Bournemouth East (Mr Ellwood) said was a step in the right direction. This is the first double-dip recession since 1975, the year of “Monty Python and the Holy Grail”, the story of a bunch of incompetent chancers, supposedly running the country, chasing after something that they had somehow misplaced. What an allegory of this Government’s pursuit of growth!

All week we have seen an unedifying witch hunt for the culprits—the people who have somehow misplaced Britain’s growth. This week the Government found someone else. The fault, it now seems, lies with those in the British business community, who just need to be working harder. My advice to them is that they should not take the attack personally. Indeed, they join illustrious company: we have had “the weather”; we have had “the wrong type of snow”; and we have also had the royal wedding. When it comes to their failure, this Government will blame only others.

[David T. C. Davies]

Will the right hon. Gentleman give way?

[Mr Byrne]

I will not give way, because there are so many points to respond to.

We know that this recession was not made by British business. It is not down to the weather, the snow or the royal wedding; it is down to the failed policy of this Government. Despite the good news we had on unemployment this week—there was a glimmer of hope—Britain’s jobs crisis has now gone on for too long. We now have more people working part time or becoming self-employed, because they will do anything to make ends meet. Long-term unemployment is surging towards the 1 million mark, the number of people out of work for two years is up to 500,000, 100,000 more people are signing on than last year, redundancies are up by 50,000, and vacancies are down by more than 10,000. Families all over Britain are facing a disaster, because of the failed policies of this Government.

This afternoon we heard those stories from all over Britain. The point was made forcefully by my hon. Friend the Member for Liverpool, Walton (Steve Rotheram), and it was a story repeated by my hon. Friends the Members for Ogmore (Huw Irranca-Davies), for East Lothian (Fiona O'Donnell), for Blackpool South (Mr Marsden) and for Leicester South (Jonathan Ashworth). We heard in the debate this afternoon that we need growth and demand—a point made by my hon. Friends the Members for Oldham East and Saddleworth (Debbie Abrahams), for Gateshead (Ian Mearns), for Great Grimsby (Austin Mitchell) and for East Lothian. We heard how higher unemployment is hitting some communities and some regions harder than ever—that was the point made by my hon. Friend the Member for Wirral South (Alison McGovern). It is hitting ethnic minorities harder than ever—that was the point made by my hon. Friends the Members for Stretford and Urmston (Kate Green) and for Oldham East and Saddleworth. It is now hitting young people harder—that was the message we heard from hon. Members from all parts of the House, and it was a point made with particular force by my hon. Friends the Members for Islington South and Finsbury (Emily Thornberry) and for Birmingham, Ladywood (Shabana Mahmood).

That is why what we needed in the last Budget and in the Queen’s Speech was not excuses, but action. We needed action on bank lending—that was the point made by my hon. Friends the Members for Leeds East (Mr Mudie) and for North Ayrshire and Arran (Katy Clark), and by the hon. Members for North East Cambridgeshire (Stephen Barclay), for Northampton South (Mr Binley) and for Aberconwy (Guto Bebb). We needed action on infrastructure spending, too—that point was made with great force by my right hon. Friend the Member for Barking (Margaret Hodge), the hon. Member for Erewash (Jessica Lee), and my hon. Friends the Members for Glasgow North (Ann McKechin) and for Glasgow Central (Anas Sarwar). This absence of action is now costing this country a fortune.

[Andrew Selous]

rose—

[Mr Byrne]

Perhaps the hon. Gentleman will tell us just how much the benefits bill is increasing as a result of that failure.

[Andrew Selous]

When the right hon. Gentleman wrote his famous note saying that there was “no money” left, what did he think the implications of that were?

[Mr Byrne]

The hon. Gentleman speaks for a party that has now put up borrowing by £150 billion more than projected. Does he know why? It is in large part because the benefits bill is not being capped by this Government—the benefits bill is going through the roof. It is set to be £25 billion higher than was projected by the end of this Parliament, with the cost of unemployment benefit set to be up by £5 billion and the cost of housing benefit set to be up by £6 billion by the end of this Parliament. I really do not know how he has the temerity to say what he has just said, given that it is his Government who are putting up debt.

The problem is that this Government have not learned the lesson that the way to bring the benefits bill down is by getting people into jobs—that is where this Government are failing. It is no wonder the people all across Britain are saying that this Prime Minister and this Chancellor have no idea how ordinary people live. The Prime Minister is riding on horses with editors of newspapers who are charged with perverting the course of justice while our young people cannot even afford a bus fare to college. We heard this afternoon just how much that bill has now become in a powerful speech from my right hon. Friend the Member for South Shields (David Miliband). We heard that youth unemployment will cost our country £30 billion over the years to come. When are this Government going to heed that lesson?

When will they look at the hit now being taken by working parents, who are struggling with child care? These parents are now losing £500 this year. No wonder 32,000 women have already had to give up work this year because they cannot afford the child care. We should look at what this Budget means for working parents—a point made with some eloquence by my hon. Friend the Member for Islington South and Finsbury and by my right hon. Friend the Member for East Ham (Stephen Timms). Such is the incompetence and such is the incoherence that families in this country are now better off on benefits than they are in a job—what a catastrophic failure of policy and what a catastrophic failure by this Chancellor.

Look at what these proposals mean for savers—people doing the right thing. Alongside the granny tax, the Government tried to sneak out in the Budget small print another £900 cut for pensioners by getting rid of the savings credit. Look at what the proposals mean for workers with disabilities. Some 11 million people in this country have disabilities. Disability Rights UK says that 25,000 people with disabilities have had to give up work this year because their support and help are being cut away from them. This Secretary of State for Work and Pensions is now administering reform of the incapacity benefit system with all the finesse of border control at Heathrow airport. It is now taking people up to 11 months to get a hearing and then, when they reach that tribunal, half the decisions are being overturned. That is not a result that he can be proud of.

Worst of all is the treatment being handed out to workers at Remploy. These are workers indirectly employed by the Secretary of State himself. Worst of all—worse than anything I have heard over the past few months—are the reported comments that he made to Remploy workers. Apparently he told them that they “are not doing any work at all. Just making cups of coffee.” That is not compassionate conservatism; it is the conservatism of contempt. The Secretary of State should apologise to those workers this afternoon. When he should have been launching a war on poverty, he has launched a war on decency.

This Government have no idea how these young people, these parents, these working mothers and these workers with disabilities are now living. They are failing on jobs, they are failing on growth, and they are out of touch, out of their depth and out of steam. We need a change of direction and Labour’s amendment today offers that. I commend it to the House.

17:50

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

I welcome the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) back from a potential sojourn in Birmingham as mayor—his announcement that he wanted to stand was so powerful that Birmingham, on the spot, rejected the whole idea of having a mayor. I have got to know him well over the past couple of years and he has been heavily involved in designing the policy framework for the Opposition. He talked about part-time work and, as a result of his leader’s decision, he will experience it himself. I am sorry about that, because I am sure that he would have done a very good job had he been allowed to continue—I certainly suspect that he would have done better than some of his colleagues.

Today is about the Queen’s Speech, and I want to welcome a number of Bills: the Crime and Courts Bill, the children and families Bill, the draft care and support Bill to modernise the care system, and, importantly, a pensions Bill to provide once and for all a decent single-tier state pension to reward those who save. Let me say a few words about that matter and in tribute to the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Thornbury and Yate (Steve Webb). He and I have worked very hard together and I hope that when we publish the White Paper both the House and the country will see that we are proposing a genuine and serious reform that should improve the quality of retirement for everybody in the future. We will reform the state pension system, creating a fair, simple and sustainable foundation for private saving. The main benefits of the Bill will be that it will enable individuals to take responsibility for meeting their retirement aspirations in the context of increasing longevity and create an affordable and sustainable pension system for future generations.

Let me respond to a few of the comments made by hon. Members on both sides of the House. The right hon. Member for South Shields (David Miliband), who I see in his place, made an elegant speech, as ever, in which he referred to a number of different issues. In particular, he mentioned youth unemployment, and I want to ensure that we establish the baseline on that point. The trouble was that the previous Government gerrymandered the figures on youth unemployment. When somebody had been unemployed for six months, they put them on one of their programmes—the future jobs fund or whatever—and took them off the unemployment register. They were not put back on to the register until they fell out of that programme—[Interruption.] Members might want to hear this. If we add together the figures, we see that the total number of claimants aged 18 to 24 on jobseeker’s allowance or other forms of temporary support is lower this month than it was in May 2010. Under the previous Government, during a period of growth, youth unemployment rose every year from 2006.

[Sheila Gilmore]

The Secretary of State appears to be unaware of a briefing that his own Department gave to the Select Committee on Work and Pensions yesterday, which exposed the lack of rigidity in the figures. Apparently, the correct figure shows that in March 2010 the number of people who were taken off benefit on a training allowance was 18,000. It has come down to 4,000, but will he accept that that does not explain the rise in youth unemployment?

[Mr Duncan Smith]

Labour gerrymandered the figures, and that was a long suicide note about what they tried to do to change those figures. The hon. Lady can try as much as she likes but the truth is that the previous Government set in place every single mechanism to ensure that they did not count young unemployed people.

[David Miliband]

The figures that the right hon. Gentleman’s Department have put out show that in the past year—under his Government—long-term jobseeker’s allowance claimant figures have gone up threefold to 55,000. How does he explain that?

[Mr Duncan Smith]

As I said to the right hon. Gentleman—his point was about youth unemployment—the reality is that the figures I have given today are correct. His Government created a major crisis by putting us into a great big slump. That is what they did. Whatever else he wants to say in an attempt to defend the Labour Government, we are having to dig them out of a hole and we are the ones producing better youth programmes such as the youth contract. Those unemployment figures are very simple. When you add all the details together, you find that unemployment among young people was higher when we took office than it is now.

I want to move on to what other hon. Members said. The hon. Member for Leeds East (Mr Mudie) said that he wanted to see the right hon. Member for South Shields on the Front Bench. I wonder what role he would see the right hon. Gentleman in if he got him there. I congratulate my hon. Friend the Member for Bournemouth East (Mr Ellwood) on his speech. He reminded us that we had some great news the other day because Boris won again in London. That is very good news for all of us. [Interruption.] I wonder what Opposition Members are saying. The reality is that their candidate, Ken Livingstone, failed, and I note that a lot of them did not even bother to turn up to support him.

The hon. Member for Redcar (Ian Swales) attacked Labour very effectively. I should like to pick up a point made by the right hon. Member for Barking (Margaret Hodge), the Chairman of the Public Accounts Committee, who said that the welfare-to-work programme is unlikely to be good value for money. I differ from her on that. The big difference with the welfare-to-work programme is that we will not pay the providers unless they get someone into work. Under the future jobs fund and everything else that was going on under the previous Government they threw money at providers ahead of any kind of outcome, caring only to tick the boxes to say that they had done something rather than that they had done something reasonable.

A large number of people spoke in the debate, including my hon. Friend the Member for Warwick and Leamington (Chris White), the right hon. Member for East Ham (Stephen Timms) and my hon. Friends the Members for Bedford (Richard Fuller) and for North East Cambridgeshire (Stephen Barclay). The hon. Member for Liverpool, Walton (Steve Rotheram) made an interesting speech. I notice that he wants to put his name forward to be manager of Liverpool. I wish him the best of luck in that endeavour. As a Tottenham supporter, I am looking forward to him running Liverpool next season.

The Opposition approached this debate believing that they had the right to criticise our Government for what they call our failures, yet not once have they ever apologised for putting the economy in the worst possible state—the biggest bust. They try to compare themselves to other countries. It is worth noticing that the US economy is set to fall faster—

[Ms Rosie Winterton (Doncaster Central) (Lab)]

claimed to move the closure (Standing Order No. 36).

Question put forthwith, That the Question be now put.

Question agreed to.

Question put accordingly (Standing Order No. 31(2)), That the amendment be made.

The House divided: Ayes 213, Noes 312.

17:59

Division 2

Ayes: 0

---

Labour: 205
Scottish National Party: 5
Plaid Cymru: 3

Noes: 0

---

Conservative: 267
Liberal Democrat: 44

Amendment proposed: at the end of the Question to add:

“but respectfully request that your Government recognise that its programme fails to include any meaningful measures to deliver growth in the economy, which is the most pressing issue facing the UK; and therefore call on your Government to bring forward a plan for growth to include measures designed to increase bank lending to small and medium-sized enterprises, to build confidence in economic recovery, to bring forward a programme of direct capital investment and to tackle unemployment.”—(Stewart Hosie.)

Question put forthwith (Standing Order No. 33), That the amendment be made.

18:12

Division 3

Ayes: 213

---

Labour: 207
Scottish National Party: 4
Plaid Cymru: 2

Noes: 311

---

Conservative: 267
Liberal Democrat: 43

Main Question put.

18:25

Division 4

Ayes: 310

---

Conservative: 268
Liberal Democrat: 41

Noes: 212

---

Labour: 204
Scottish National Party: 5
Plaid Cymru: 3

Resolved,

That an humble Address be presented to Her Majesty, as follows:

Most Gracious Sovereign,

We, Your Majesty’s most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.

Address to be presented to Her Majesty by Members of the House who are Privy Counsellors or Members of Her Majesty’s Household.

Business without Debate

Thursday 17th May 2012 Commons Chamber

Delegated Legislation

Ordered,

That the Motion in the name of Mr Peter Lilley relating to the House of Commons Members’ Fund shall be treated as if it related to an instrument subject to the provisions of Standing Order No. 118 (Delegated Legislation Committees) in respect of which notice of a motion has been given that the instrument be approved.—(Mr Heath.)

John Lawton

Thursday 17th May 2012 Commons Chamber

Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

18:36

[Fiona Bruce (Congleton) (Con)]

I am extremely grateful personally to Mr Speaker for affording me the opportunity to secure this debate and to raise the case of the disappearance of my constituent, Mr John Lawton. John’s wife Lynda, his son Steve and daughter-in-law Rachel are in the Gallery this evening, at what is a deeply worrying time for them. I pay tribute to the dignity and commitment they have shown throughout the period of some five to six weeks since Mr Lawton disappeared in Greece. They have spent much of the past five to six weeks in Greece and are back in the UK while the search for John continues.

John Lawton went missing on 8 April—Easter Sunday—while participating in the Taygetos marathon in Greece. The race started at 8.30 am. The organisers have confirmed that John passed through checkpoint 4 at 1.17 pm, which was about halfway round the course, 21 km from the start of the race at the start of the Viros gorge, but he never reached checkpoint 5, at 26 km—or at least he was never checked in there. Some new information in that connection has just come to light, and I will refer to it later in my speech.

Since being made aware of John’s disappearance, I have been assisting the family and trying to maintain awareness of the case. I heard about the matter within three days and made immediate contact with the Foreign Office to call for assistance. I know that the Under-Secretary of State for Justice, my hon. Friend the Member for Huntingdon (Mr Djanogly), also made immediate representations to the Foreign Office in his capacity as the constituency MP of Mr Lawton’s son, Steven. My hon. Friend spoke with the Foreign Office no fewer than three times on Easter Monday, and his intervention contributed to the provision of a helicopter search for about an hour on the following day. The family are appreciative of my hon. Friend’s active interest in the case.

I first raised the matter in the House at my earliest opportunity, at Foreign Office questions on 17 April, when the Minister for Europe kindly confirmed in response that he had spoken with our ambassador in Athens, called for further representations to be made at the highest level of the Greek Government, and made arrangements for a member of the consular team in Greece to visit the Lawton family to discuss their concerns and what support they required. At that time, one key thing that the family wanted—they still want it on an ongoing basis—was a well-resourced, professionally co-ordinated search directed at the highest possible level by the Greek authorities.

I wish to put on the record my thanks to the Minister and the staff in his office for their ongoing assistance. I thank him specifically for taking the time to speak directly with Steven Lawton a few weeks ago and for his continuing agreement to meet representatives of the Lawton family at any stage. It is also important to thank British officials in Greece who have continued to press the Greek authorities on behalf of the family. Dialogue with the police and the Greek Ministry of Foreign Affairs remains crucial. It is particularly important because at present, as the family told me a few minutes ago, the search in the area is no longer continuing, other than through the occasional tourist who might see the posters placed in the area advertising John’s disappearance.

Over the past five or six weeks, I have received dozens of e-mails not only from constituents but from people across the country who know John, Lynda, Steve and other family members, and I have been struck by the affection and respect in which they are held. One typical e-mail read: John

“is a man who worked with people with learning, physical difficulties and challenging behaviour”

whom

“he never gave up on. His wife, Lynda, is the nicest person you could meet and they are totally devoted to each other”.

John and Lynda married when they were 18-years-old and have been happily married for 42 years. The family tell me that there is no reason John would have voluntarily disappeared. They have lived in the local area, in my constituency, for almost all their married live, and their two children, Steve and Sara, attended school in Sandbach. The local community has rallied to support the family, and yellow ribbons have been worn by many people to show their concern following John’s disappearance. The local media, too, have been extremely supportive. I spoke on BBC Radio Stoke most recently this morning about the matter, and the Crewe Chronicle and the Sandbach Chronicle have made this a headline issue for several weeks, which has been crucial, not least in helping to raise funds to support the search for John.

John Lawton is a popular and active member Sandbach Striders running group, three of whose members have been out to Greece to help in the search. I have been particularly impressed by the lengths to which members of the group have gone to support the family. Six members—husband and wife duo, Jason and Jo Bulley, Perry Wyatt, Terry Coppenhall, Robert Kettle and Steve Treweeks—participated in the London marathon to raise funds for volunteers to go out to Greece as part of the search team. A JustGiving page, in the name of John Lawton, has also been set up by Missing Abroad. The last time I visited the site, 300 people had generously donated more than £13,500. That money, however, has all but been spent on the cost of the 15 Cheshire search and rescue team volunteers who also went out to Greece to help with the search, and on other expenses. I hope that the recently revised target of £25,000 for these costs can be surpassed as soon as possible and that publicity generated, not least as a result of this debate, will help in that process.

In the immediate aftermath of his disappearance being reported, the Greek authorities initiated a search conducted and led mainly by the local Gaia volunteer rescue group. People from the local villages were extremely helpful, closing their businesses and searching throughout their Easter holidays. The search was joined at various points by the police, fire service, search dogs, local mountain rescue teams and the Greek Red Cross. The official search, however, was called off by the Greek authorities about two and a half weeks ago. The family have asked me to express their gratitude that it lasted 20 days, but since then only local volunteers, family members and volunteers from Cheshire have been on the ground looking for John. The 15-man team from the Cheshire search and rescue group returned just a day or so ago, and the family are now particularly keen that I emphasise that there is now no ongoing, active, professional search, and have asked that the Minister ask the Greek authorities that the search be reconvened, not least because information has come to light that leads us to believe that not all the relevant areas have been searched.

The family have engaged privately commissioned UK investigators to review the evidence that has been amassed in respect of John’s disappearance. A detailed timeline chart has been prepared and was sent to the Minister earlier this week. The chart is an analysis based on interviews conducted by UK investigators directly with Greek and British witnesses. The police investigation into John’s disappearance has confirmed that there were eight athletes behind John at the fourth checkpoint, but there has been no formal indication that they were all interviewed and asked whether they saw him between the fourth and fifth checkpoints.

An English witness who lives near the fifth checkpoint on the course apparently approached Gaia to say that she recalled seeing John running past her home close to the fifth checkpoint at about 2 pm. A gel packet, of the English brand that John used and certainly had with him at the time, was found on the course just before the fifth checkpoint. It was found some four weeks ago, but it has not yet been established whether it belonged to him. The family is awaiting the results of DNA tests from the Greek authorities. Any help the Minister can provide to help to secure those results promptly would be appreciated. Two other such gel packets have been found recently by the Cheshire search and rescue team.

All this information suggests that John might have progressed beyond the main area covered by the initial search, and the family is therefore requesting the Greek authorities to recommence their search efforts and to focus on the area highlighted by the new evidence. The initial search might have been conducted in the wrong area, and it is for that reason that the voluntary groups out in Greece have been searching the area between checkpoints 4 and 5 far more extensively. However, additional professional help would be greatly appreciated.

John Lawton is not the first Congleton constituent to disappear in Greece. The Minister might be aware of the case of Steven Cook, a Liverpool university student and former Sandbach school pupil who disappeared in the resort of Malia in Crete on 1 September 2005. I know that Steven’s parents have campaigned tirelessly for more information following their son’s disappearance, and the advice and support that they have offered to the Lawton family over the past few weeks have been greatly appreciated, especially as John’s disappearance must bring back memories of the extremely worrying time during the aftermath of Steven’s disappearance.

I have highlighted a very sad case tonight. It is a case that continues to cause the Lawton family an immense amount of worry and distress. I know that the Foreign Office has been as active as possible, here in London and out in Greece, but I would be grateful if the Minister could confirm what further action can be taken at this time to continue and extend the search for John. Will he also tell me how the discussions with the Greek authorities are progressing, and will progress in the future, and what further steps will be taken to ensure that John’s family receive the ongoing support that they require from all the relevant authorities, here and abroad, and in particular, to ensure the re-engagement of the official search?

I would also be grateful if the Minister could use this opportunity to clarify what assistance the Government can give through the Foreign Office to families who find themselves in a similar predicament. Could he, for example, review the literature that is provided by our embassies to families who find themselves with a missing relative abroad to ensure that it is clear? The disappearance of a loved one at any time is a tremendously distressing situation to have to contend with, but it is made much worse when it happens overseas. I am sure that it would be of considerable help to receive some guidance from the Minister in this respect. This would be of benefit not only to the families who find themselves in this predicament but to Members of Parliament who want to advise their constituents as well and as expeditiously as possible in such circumstances.

I want to close as I began, by paying tribute to the immensely dignified and committed way in which the whole Lawton family—not only Lynda and Steven, but Lynda and John’s daughter Sara, who has also been supporting them—have behaved, and to the commitment that the whole community in my constituency has shown in this situation.

18:49

[The Minister for Europe (Mr David Lidington)]

I congratulate my hon. Friend the Member for Congleton (Fiona Bruce) on securing this debate, and I pay tribute to the consistency and tenacity with which she has represented the interests of the Lawton family to me and my officials in the Foreign and Commonwealth Office. I also want to acknowledge the presence in his place this evening of my hon. Friend the Member for Huntingdon (Mr Djanogly) who, as Mr Steve Lawton’s MP, has been extremely active in making representations to the Government on behalf of the family.

I want to take the opportunity to respond to my hon. Friend the Member for Congleton by outlining the consular assistance we have provided to the family and the contacts we have had with the Greek authorities since Mr John Lawton was reported missing, and by trying to provide at least an initial response to some of the newer questions that she posed this evening.

As my hon. Friend said, Mr John Lawton had been taking part in the Taygetos mountain marathon challenge in the Kardamyli area of Greece on the morning of 8 April, Easter Sunday. He started the race, but did not show up at checkpoint 5 en route. Local search efforts began immediately it became clear that he had missed a checkpoint, and he was formally reported missing on Monday 9 April, Easter Monday. Following this, a more intensive search and rescue operation started on 9 April and lasted for 18 days before being officially called off on 26 April. To date, Mr Lawton remains missing. I am sure that the entire House will appreciate and sympathise with the anguish and sense of frustration and anxiety that Mr Lawton’s family and friends will have felt ever since the day he disappeared.

In these circumstances, expectations of consular staff are extremely high. In the overwhelming majority of cases, consular staff throughout the world perform their duties with care and compassion, doing all they can to help families to keep up to date with developments and get the information they need in order to make properly informed decisions as things progress. The primary role of consular staff is one of welfare: it is to assist, where they can; to obtain information from relevant authorities where possible; and, where appropriate, sometimes to raise more detailed issues with those authorities. What our consular staff cannot do themselves is to investigate missing persons overseas, and, as I know my hon. Friend understands, they cannot instruct the local authorities how they should handle a search or investigation in their own country, just as we would not expect other countries to attempt to instruct us how to carry out a missing person search in the UK.

Consular staff in Greece and London have been very active in this case since Mr Lawton’s disappearance was first reported. On the same day as the report was made, consular staff in Athens were in contact with the local chief of police who was supervising the search, to register our concern and see whether there was any assistance we could offer. The chief of police asked if we could intercede with the central authorities in Athens to try to secure the use of a helicopter with thermal imaging equipment. As a result of the direct intervention of the British embassy in Athens with officials at the Greek Ministry of Foreign Affairs, such a helicopter was dispatched to the search site during Tuesday 10 April —just over 24 hours after Mr Lawton was officially reported missing.

In the early days of the search, consular staff were able to support some other strands of the search operation, including attempts to locate John Lawton through his mobile phone or through the Garmin watch with GPS facility that he was wearing at the time. Unfortunately, the mobile phone was later found to have been left switched off at his hotel, and the watch could only receive a signal—regrettably, it could not transmit details of Mr Lawton’s location.

Our consul in Athens was also in direct telephone contact with Mr Steve Lawton, John Lawton’s son, on the evening of Easter Monday, and has remained in contact ever since, with a face-to-face meeting when she visited the area on 19 April.

Our embassy staff in Athens maintained regular contact with the Greek authorities at both senior and local operational level in both the Foreign Ministry and the Ministry of Citizen Protection, which has responsibility for the police and related emergency services, to support the efforts of Steve Lawton himself at the search site. Normal practice in Greece is for such a search to last for 72 hours, as was the case in March this year when a Greek national went missing in the same area. As my hon. Friend acknowledged, in this case—in large part, I believe, as a result of the that high level of contact from our staff—the Greek authorities maintained the search for nearer to three weeks. During that time they deployed a variety of resources, including specially trained search and rescue teams, other manpower—both official and volunteer—and trained dogs and a thermal imaging helicopter.

In the most recent high-level intervention, our ambassador in Athens has spoken to both the Minister and the Deputy Minister for Citizen Protection, acknowledging the efforts of the authorities so far and encouraging them to continue to consider whether there was anything more that they ought to be doing. The Minister confirmed that the investigation should continue, and obviously I will ask our embassy to follow up that conversation in the light of what my hon. Friend has said this evening.

My hon. Friend mentioned some of the findings of the privately commissioned investigation. Having received the report earlier this week, we have passed it on to our ministerial contacts in Greece, together with the family’s request that the search should recommence on the basis of the timeline analysis and the findings of the investigation. I note what my hon. Friend said about the time that it has taken to obtain the results of the DNA test that was promised for the gel samples. As she will understand, I cannot speak with any detailed knowledge of how the system of pathology tests operates in Greece, but I will ask our consular team in Athens to look into the matter as well.

I hope that my hon. Friend and the Lawton family will be reassured that we maintain, and will continue to maintain, a high level of contact with the Greek authorities. Inevitably, given the current economic and political situation in Greece, Ministers and the officials who are political appointees will be preoccupied with the forthcoming general election, but we will continue to do all that we can to maintain the profile of this case with them and with the operational authorities at a more local level.

I am grateful for the fact that my hon. Friend was able to arrange for me to speak directly to Mr Steve Lawton by telephone when he returned to the United Kingdom for a few days to accompany his mother home. That enabled me to explain our role in a little more detail, and to assure him that we would continue to maintain our close contact with the Greek authorities as the case progressed.

I completely understand why the Lawton family and John Lawton’s friends felt frustrated that the Government could not intervene and send UK search specialists to bolster the Greek effort, as we sometimes do in the case of natural disasters overseas. As I said to Mr Lawton when we spoke, it is the Greek authorities that have the local expertise and the legal responsibility and powers in their own country and locality, and they were co-ordinating the search on the ground. Official offers of support from the UK would normally be made only if the local authorities in the country concerned lacked the equipment, resource or experience to conduct a search, and requested such help from us. Those circumstances did not apply in this case. However, in the event that the family, friends or UK search teams wanted to be actively involved in the search on a volunteer basis—either independently or in support of an official search—we would help to facilitate contact with the relevant authorities in Greece if that were asked of us.

We have recently been in contact with the Cheshire search and rescue team in that regard. I understand that it had been invited to continue the search by the Lawton family and the Greek volunteer search teams. Although our assistance was not required in this case, we stand ready to help, should that be required in any similar deployments in future. As my hon. Friend has said, the funding for the Cheshire team has come from the JustGiving page set up by Missing Abroad, a charitable organisation set up by the Lucie Blackman Trust in 2008 to provide practical and in some cases financial support to families and friends of people who have gone missing overseas. Missing Abroad can supplement consular support by offering additional services, including supporting or co-ordinating searches for missing people in other countries. It also provides valuable emotional support to families. FCO consular staff, both in this country and abroad, regularly encourage people to contact Missing Abroad. My Department also provides some funding to Missing Abroad, as its services clearly complement the support that our consular teams offer. Details for Missing Abroad are available via the Foreign Office’s public website and in the FCO publication “Missing persons abroad”.

Let me respond to the point my hon. Friend made about the provision of information. Although there is inevitably an inherent tension between the wish to provide a concise and clear account and the need to provide answers to the detailed questions that families facing many different circumstances might have, we are always keen to learn from the experience of people who unfortunately have to make use of such literature. I would be very happy for my officials to talk directly to my hon. Friend and to members of the Lawton family to see whether improvements could be made in the light of the experience in this case.

The main help that the FCO can give in such cases is to assist families in understanding how systems work in other countries—although we cannot provide professional legal advice—to liaise with local authorities where necessary and, if appropriate, to act as a bridge between those authorities and families. That is the kind of support that our staff in Crete have provided to the family of Mr Steven Cook, in the other case that my hon. Friend mentioned. Steven’s family have been in close contact with consular staff in Crete since he first went missing in 2005.

I freely acknowledge that our efforts and those of the Greek authorities will never be enough for as long as Mr John Lawton remains missing. I believe that our consular staff have worked hard to provide the family with consular assistance during every stage of the case. More important, we stand ready to continue to offer support to the family and to maintain our contact with the Greek authorities for as long as necessary.

Question put and agreed to.

19:03

House adjourned.

Ministerial Correction

Thursday 17th May 2012 Ministerial Corrections

Thursday 17 May 2012

Security

Thursday 17th May 2012 Ministerial Corrections

The following is the answer given by the Secretary of State for Northern Ireland, the right hon. Member for North Shropshire (Mr Paterson), to a question from the hon. Member for Gedling (Vernon Coaker) during Northern Ireland Question Time on 16 May 2012.

[Vernon Coaker (Gedling) (Lab)]

We know how much the security situation in Northern Ireland has improved—we are all thankful for that—but, as we have seen with the recent escalation in the number of attempted bombings and hoaxes, there remains a severe threat from those who wish to take us back to the past. Does the Secretary of State agree that the Army bomb disposal teams do tremendously courageous and vital work, and will he assure the House and the people of Northern Ireland that they will receive whatever resources they need to do their important job?

[Mr Paterson]

I am grateful to the hon. Gentleman for his question and I also thank him, on the record, for his great support in our teamwork with the devolved Ministers in bearing down on criminals in Northern Ireland. Let me reassure him that support for the ATOs—ammunition technical officers—is very much a feature of the £200 million programme that we put together two years ago.

[Official Report, 16 May 2012, Vol. 545, c. 534.]

Letter of correction from Owen Paterson:

An error has been identified in the oral answer given on 16 May 2012. The response should have reflected the fact that the work of ammunition technical officers in Northern Ireland is funded directly through the Ministry of Defence.

The correct response should have been:

[Mr Paterson]

I am grateful to the hon. Gentleman for his question and I also thank him, on the record, for his great support in our teamwork with the devolved Ministers in bearing down on criminals in Northern Ireland. Let me reassure him that support for the ATOs—ammunition technical officers—is very much a feature of our approach to tackling the threat in Northern Ireland.

Written Ministerial Statements

Thursday 17th May 2012 Written Statements

Thursday 17 May 2012

Government Chemist Review

Thursday 17th May 2012 Written Statements

[The Minister for Universities and Science (Mr David Willetts)]

The 15th annual review of the Government Chemist has been received. The review will be placed in the Libraries of the House plus those of the devolved Administrations in Wales and Northern Ireland. The review will also be laid before the Scottish Parliament.

Local Government Finance

Thursday 17th May 2012 Written Statements

[The Secretary of State for Communities and Local Government (Mr Eric Pickles)]

Today, I am publishing a series of documents which underpin the policy behind the Local Government Finance Bill.

The current flawed system of Government handouts to local authorities encourages a begging bowl mentality, with each council vying to be more deprived than its neighbour. Our reforms will allow councils to stand tall, and reward them for supporting local jobs and local firms. All councils, including the least prosperous areas, will have the opportunity to gain under this system.

Economic analysis by my Department, which I am placing in the Library of the House today, shows that these new laws and reforms deliver an opportunity for a £10 billion boost to the wider economy, generating more business rate revenues for councils.

The Local Government Finance Bill will enable local authorities across England to keep a share of the business rates they collect, giving them a strong financial incentive to promote local economic growth and directly linking a council’s financial revenue to the decisions they take to back local firms and local jobs. The bigger pot will mean there is more money to support frontline services, help pay off the deficit and still protect vulnerable communities.

In addition, the Bill gives local authorities autonomy in helping provide for the most vulnerable in their areas through designing local schemes of support for council tax.

Business rate growth will be shared evenly between central and local government. The “local share” will be retained in full by councils and will be set at 50% for the seven year period. The full “central share” will always be returned in grants to local government.

The Bill will support the success of the 24 confirmed enterprise zones across the country by enabling the uplift in business rates on those sites to be retained locally and invested back into growth projects across the local enterprise partnership area.

In addition councils will get to keep 100% of the business rates from new renewable energy projects. These will not count against the local-central shares. A centrally run safety net will provide support should a council’s income drop below a set baseline, protecting areas which suffer a downturn.

The technical documents being published today cover:

Business rates retention—to strengthen the incentive for councils to support local firms and local jobs.

Statements of intent covering renewable energy; the central and local shares of retained business rates; and the safety net and levy.

A technical paper setting out proposals on pooling arrangements for local authorities.

An analytical paper: “The economic benefits of local business rates retention”.

Localising support for council tax—to strengthen the incentive for councils to help their residents get back into employment.

Statements of intent setting out the detail of policy to be covered in forthcoming regulations on the prescribed requirements for schemes—including those for pensioners and the default scheme; transitional arrangements; council tax base adjustments and risk sharing of financial pressures; and the procedure for making local schemes.

A consultation on the funding of localised support for council tax

These will provide the details local authorities need to bring forward their own proposals for local schemes. I will also shortly be publishing guidance to help local authorities take account of work incentives and the needs of vulnerable people.

Treaty on the Functioning of the European Union (Irish Protocol)

Thursday 17th May 2012 Written Statements

[The Minister for Europe (Mr David Lidington)]

An intergovernmental conference was convened yesterday, 16 May 2012, in the margins of Coreper, to sign the protocol put forward by the Irish Government during negotiations on the treaty of Lisbon. The protocol will need also to be ratified by all 27 member states before it can be attached to the treaty on the functioning of the European Union and the treaty on European Union.

In the UK, under the European Union Act 2011, the Minister must lay a statement before Parliament under section 5 of the Act as to whether, in the Minister’s opinion, the protocol falls within section 4 of the Act—cases which attract a referendum. The 2011 Act also requires primary legislation to approve the protocol before the UK can ratify it. The statement will be laid within the two-month period specified in the Act and primary legislation will be introduced in due course.

Animals in Scientific Procedures

Thursday 17th May 2012 Written Statements

[The Parliamentary Under-Secretary of State for the Home Department (Lynne Featherstone)]

I am pleased to inform the House that I have today placed in the Library and published the Government’s response to the public consultation on the options for transposition of European Directive 2010/63/EU on the protection of animals used for scientific purposes. Directive 2010/63/EU will replace Directive 86/609/EEC on which current United Kingdom legislation—the Animals (Scientific Procedures) Act 1986—is based. In common with other member states, the UK must transpose the provisions of the new directive into legislation by 10 November 2012 and implement them from 1 January 2013.

The Government welcome the new directive which strengthens the protection of animals used in scientific procedures and promotes the development, validation, acceptance and implementation of methods and strategies that replace, reduce and refine the scientific use of animals (the 3Rs). It also sets down detailed rules to ensure harmonisation and the proper functioning of the internal market. These are intended to rectify variations in the implementation of Directive 86/609/EEC which have tended to create barriers to trade in products and substances developed using animals in research and testing.

The public consultation was launched on 13 June 2011 and closed on 5 September 2011. The consultation paper invited views on the options for transposing the new directive and on the accompanying impact assessment. Responses were received from over 13,000 individuals and 98 organisations.

The Government’s response summarises the responses to all of the questions included in the public consultation and explains how we propose to transpose each of the articles and annexes of the new directive. The response also includes an estimate of the impact of our preferred approach to transposition of each of the provisions of the new directive.

In line with Government policy on the implementation of European legislation, we propose to “copy out” most of the provisions of the directive. There are, however, a number of areas in which we intend to retain current stricter United Kingdom standards. For example, we propose to retain special protection for dogs, cats and horses as well as non-human primates and to retain all current United Kingdom care and accommodation standards that are stricter than those set out in annex III to the directive. All are justified on animal welfare grounds or to maintain public confidence that animals used in experiments and testing will continue to receive a very high-level of protection.

We also propose to retain the current requirement that individuals carrying out regulated procedures on animals must hold a personal licence authorising them to do so. We will, however, explore the opportunities to simplify the detail of personal licence authorities and to remove current requirements which increase regulation without adding to the effectiveness of the licensing process. We will ensure any changes avoid detrimental impacts on levels of compliance or animal welfare and protection.

The directive introduces inspection for all member states but with a minimum frequency much lower than we currently practise in the United Kingdom. We propose to retain our current risk-based approach to inspection and are committed to maintaining a strong and properly resourced inspectorate and a full programme of inspections.

We estimate that these proposals will have no significant impact on costs or competitiveness.

The Government’s response can be found at: http://www. homeoffice.gov.uk/science-research/animal-research/

Economic Crime Committed by Commercial Organisations (Enforcement Tool)

Thursday 17th May 2012 Written Statements

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

Today the Solicitor-General and I are launching the “Consultation on a new enforcement tool to deal with economic crime committed by commercial organisations: Deferred prosecution agreements” (Cm 8348), which has been developed jointly by the Ministry of Justice and the Law Officers’ Departments.

Treating economic crime more seriously and taking steps to combat it more effectively are key commitments in the coalition agreement. We need to develop new tools for prosecutors to use alongside existing methods, to give them the flexibility to secure appropriate penalties for wrongdoing, at the same time as achieving better outcomes for victims. We believe that these proposals will enable prosecutors to take more effective action against commercial organisations which commit economic crimes.

The Government are clear that more needs to be done and that white collar crime should be treated as seriously as any other kind of offending. That is why we are consulting on a new enforcement tool: deferred prosecution agreements (DPAs).

Under a DPA, a prosecutor would lay but would not immediately proceed with criminal charges against a commercial organisation pending successful compliance with tough requirements such as financial penalties, restitution for victims, confiscation of the profits of wrongdoing and measures to prevent future offending.

DPAs would contribute to a just outcome, securing appropriate penalties for and the surrendering of the proceeds of wrongdoing, and benefits for victims in a way that is sanctioned by a judge, without the uncertainty, expense, complexity or time of a full criminal trial. They would enable commercial organisations to be held to account—but without unfairly affecting employees, customers, pensioners, suppliers and investors who were not involved in the behaviour that is to be penalised. And the process will be transparent: as DPAs will be public, the public will always know what wrongdoing has taken place, and the penalty that has been paid.

Copies of the document have been placed in the Libraries of both Houses, in the Vote Office and in the Printed Paper Office. The document is also available online, at:

www.justice.gov.uk/consultations.

The consultation will run until 9 August 2012. A response paper is scheduled to be published in October 2012.

Parliamentary and Political Service Honours Committee

Thursday 17th May 2012 Written Statements

[The Prime Minister (Mr David Cameron)]

The previous Government had a policy of not recommending honours for political service, although some individuals were honoured for services to Parliament. The Government believe that there are many people in politics who demonstrate selfless commitment for the good of the nation and that it is right to recognise the best of them.

A new honours committee—the Parliamentary and Political Service Honours Committee—is therefore being established. It will consider candidates for honours from the Westminster Parliament and the devolved legislatures; the staffs of those bodies and the bodies which report directly to them (for example, the National Audit Office and the ombudsmen); and, voluntary workers and staff of the political parties.

Lord Spicer is the chairman of the new committee. The official members are the three Commons Chief Whips of the major parties. There are also to be at least four independent members: currently these are Baroness Hayman, Lord Butler of Brockwell, Dame Mary Keegan and Peter Riddell.

The membership has been chosen to include a balance of party members and those who do not have known party allegiances but have a good awareness of Parliament and the bodies which report to it. Because of time constraints, it has not been possible to select these independent members by the normal process of open advertising and written application in line with Nolan procedures. The intention is that when further appointments are to be made, they will be carried out using the normal processes for selecting honours committee members.

The new committee has been established for the birthday 2012 honours round and has the support of the three main parties. As with all the specialist honours committees, its recommendations are subject to the agreement of the main honours committee, chaired by the head of the civil service.

Tram Train Pilot

Thursday 17th May 2012 Written Statements

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

I have today given final approval to proceed with a pilot of tram train technology in south Yorkshire. I have asked south Yorkshire passenger transport executive to lead the delivery of the vehicles and to sponsor the pilot in collaboration with Network Rail, Northern Rail and Stagecoach Supertram.

The pilot I am announcing today will allow us to determine the practical and operational issues of extending tram trains from the national network to on-street running and running trams and heavy rail vehicles safely over existing heavy rail infrastructure. It will also allow us to gauge passenger perception and acceptability of tram train.

The knowledge that we obtain from the pilot will enable us to understand the technical and operational challenges involved in this project so that the concept can potentially be rolled out elsewhere in the UK.

The pilot will see the introduction from 2015 of new tram train vehicles capable of using both light and heavy rail infrastructure, so providing continuous travel from Sheffield’s Supertram network onto Network Rail’s national rail network, as well as providing more capacity on the Supertram system itself

The new vehicles will provide three services an hour operating from Parkgate retail park in Rotherham, travelling through Rotherham central station and joining up to the existing Supertram network at Meadowhall where the services will then continue onwards to Sheffield city centre. The project is also expected to create 25 new driver jobs locally, plus around 10 additional jobs in maintenance and revenue protection.

The pilot will run for two years and alongside the additional capacity being provided for the Supertram system, is expected to cost £58 million, including the cost of the vehicles and infrastructure changes.

House of Lords

Thursday 17th May 2012 Lords Chamber

Thursday, 17 May 2012.

11:00

Prayers—read by the Lord Bishop of Wakefield.

Sudan and South Sudan

Thursday 17th May 2012 Lords Chamber

Question

11:06

Asked By

[Baroness Cox]

To ask Her Majesty’s Government what is their response to the humanitarian crisis in the Republic of Sudan and South Sudan.

[Baroness Northover]

My Lords, we are deeply concerned at the serious humanitarian impact of conflicts between Sudan and South Sudan, and within both countries. We are closely engaged with the UN and other humanitarian agencies to ensure an effective response to the needs of affected people, and are pressing both Governments to enter into political processes to resolve conflicts.

[Baroness Cox]

I thank the Minister for her sympathetic reply. Is she aware that I recently returned from a visit to four camps on the Sudan/South Sudan border, where 250,000 refugees have fled from sustained aerial bombardment by Khartoum or been expelled by President al-Bashir’s commitment to turn Sudan into a unified Arabic Islamic state? Conditions in those camps were dire then; they are now becoming catastrophic, with a rapidly rising death toll. Will Her Majesty’s Government make strong, urgent representations to Khartoum to cease aerial bombardment of its own civilians, and across the border in South Sudan? It is in no way justified by President al-Bashir’s allegation of military action by South Sudan, which bears no comparison with his massive, sustained slaughter of his own people?

[Baroness Northover]

My Lords, I am aware of the noble Baroness’s visit, and I thank her for giving me a copy of her draft report. I am aware, as the House is, of all her work in this area. She reports some terrible stories within it.

Continued aerial bombardments by the Sudanese armed forces are absolutely unacceptable, and we condemn them. Ministers and officials at our embassy have pressed this point during meetings with Sudanese counterparts. We worked very hard with Security Council partners to achieve unanimous support for UN Security Council Resolution 2046, which saw the Security Council demand under Chapter 7 of the UN charter a political resolution to conflict in Southern Kordofan and Blue Nile, as well as addressing wider issues in both countries. We are also very actively monitoring the humanitarian situation and getting supplies in place.

[Lord Chidgey]

Is my noble friend aware that the UN Security Council passed that resolution on 2 May, and that within it was a two-week period for conflict to stop and negotiations to begin? That was on 16 May. There have been no negotiations starting; instead, the fighting has started again. What do the Government propose to suggest that the UN Security Council should do now?

[Baroness Northover]

Yesterday, the special envoy to the Secretary-General briefed the Security Council on compliance by Sudan, South Sudan and the SPLM-North with Security Council Resolution 2046. He is keeping a close watch on the extent to which the ceasefire is not being adhered to. He identified a small window for restarting negotiations between Sudan and South Sudan. President Mbeke is travelling to Khartoum and Juba to engage with the parties and convene a meeting between them as soon as possible. We, the US and France have confirmed our readiness to consider sanctions if necessary.

[Lord Alton of Liverpool]

My Lords, does the Minister concur with the view of Dr Mukesh Kapila, who was the high representative of this country and the United Nations in Sudan, that the second genocide of the 21st century is unfolding in South Kordofan? How can the Government continue to do business as usual with a regime that is led by someone who has been indicted for war crimes—crimes against humanity—by the International Criminal Court? How can we simply sustain diplomatic relations as though it is business as usual?

[Baroness Northover]

My Lords, it is not business as usual but, as the noble Lord knows, the UK Government engage with all Governments in the hope of bringing about the changes that the noble Lord would wish to see. In embassy involvement, the only countries from which officials have been withdrawn are Syria and Iran, which was necessary for the protection of staff. In all other areas, including North Korea, there is engagement, but it is not business as usual. With regard to the crimes to which the noble Lord referred, it is clear that there have been indiscriminate attacks on civilians and war crimes. Indeed, President al-Bashir is indicted by the International Criminal Court. It is worth bearing in mind, too, that the case of Charles Taylor shows that international criminal justice is not time-limited.

[Baroness Kinnock of Holyhead]

My Lords, the Minister will be aware that DfID has suspended long-term development aid to South Sudan in response to the Government’s decision to turn off the oil pipeline. However, does the noble Baroness recognise the tragic effects of such action for the people of a country that has such desperate needs at this time? Will the Government reconsider that decision in the light of the fact that two major donors, the United States and Norway, have not taken such action and will maintain all development assistance, while at the same time focusing on dialogue between South Sudan and Sudan?

[Baroness Northover]

The noble Baroness rightly points to the implications of South Sudan cutting off its oil supplies, which constitute 98% of its revenue. It is extremely important to bring home to the Government of South Sudan the implications of that and that the international community will not simply bail them out. DfID is very much focused on humanitarian relief, which is extremely important, but the important issue here is to get the Governments in question to negotiate and take forward some of their responsibilities to their citizens.

[The Lord Bishop of Wakefield]

My Lords, to pick up the point about humanitarian aid, given that children make up half the population of South Sudan, and that the malnutrition rate for children under five in the border areas averages between 15% and 22%, will the Minister please ensure that any UK humanitarian aid specifically supports the health and happiness of the children caught up in this tragedy?

[Baroness Northover]

The right reverend Prelate makes a very good point on what is, I think, his birthday—many happy returns to him. The UK has contributed £10 million to the World Food Programme for general food distribution and £15 million to the Common Humanitarian Fund. We are acutely aware that it is children who will be particularly vulnerable in this situation. Therefore, the provision that the international community is trying to make is very much focused on their needs.

[Lord Elton]

My Lords—

[Baroness Tonge]

My Lords—

[Noble Lords]

Order!

[Lord Elton]

My Lords, are there plans in place to maintain the integrity of the delivery of humanitarian aid to the people who are intended to receive it at a time in the future when the application of sanctions may make Governments very anxious to acquire it for themselves?

[Baroness Northover]

All these issues are extremely complex and the noble Lord rightly points to the potential impact of sanctions. As for humanitarian relief, a huge logistical effort is going on at the moment to get food and other supplies in place, particularly with the onset of the rains coming down the track and the potential of mass migration that may result, as noble Lords may be aware. We are monitoring this very closely and my colleague, Stephen O’Brien, is watching all the time what is happening.

Businesses: Debt

Thursday 17th May 2012 Lords Chamber

Question

11:15

Asked By

[Lord Harrison]

To ask Her Majesty’s Government what action they are taking to monitor, enforce and improve the provisions of the Late Payment of Commercial Debts (Interest) Act 1998 to aid small and medium-sized enterprises’ access to finance.

[The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox)]

My Lords, the Government closely monitor UK payment times. Experian reports that UK payment duration has been and continues to be historically low, and has reduced by more than four days since the first quarter of 2009. However, the Government recognise the importance of prompt payment to business cash flow, especially to small and medium-sized businesses, and we plan to improve the provision of the late payment Act by transposing the 2011 EU directive by 16 March 2013.

[Lord Harrison]

My Lords, at a small business event this week I met a “Dragon’s Den” winner who tells me that over the past three years paying late has increased and payment periods have increased, causing him to spend time on chasing people up and wasting valuable time that could be spent adding value to the business. When will the noble Baroness find the inner dragon in herself, not only to breathe fire into existing legislation but on big businesses and public institutions that deprive small businesses of £35 billion that should be available to them to add value to their businesses?

[Baroness Wilcox]

I thank the noble Lord—and, yes, I have been a dragon, but nowadays I am quite quiet. There is no doubt about it that half the problem is caused by the fact that small and medium-sized businesses are so grateful to get the contracts that they usually do not look at the payment terms and do not make sure how they are going to be paid in the first place. We have the legislation in place—the Labour Party put it in place. We are going to improve on it by using a system covering late payment which, after all, we were the first to put into the European Community. We are now writing it for them to extend it so that it will cover local authorities and any business-to-business transactions that are not being carried out successfully. I hope that that helps.

[Baroness Sharples]

Can my noble friend say whether government departments are paying their bills on time?

[Baroness Wilcox]

I am delighted to be able to say that, after two years, government departments are paying their bills on time. We are paying within five days to the main contractor, which then has to make sure that it pays within 30 days to its sub-contractors. We are watching that very carefully.

[Lord Young of Norwood Green]

During a House of Commons debate on late payments on 14 September 2011, the then Business Minister, Ed Davey MP, announced that the Government would transpose the EU directive on late payments,

“into UK law in the first half of 2012, which is earlier than we are required to do”.—[Official Report, Commons, 14/9/11; col. 280WH.]

Can the Minister tell us why we are now talking about some time in 2013, given the Government’s commitment to assisting small and medium-sized enterprises?

[Baroness Wilcox]

It is a long-standing commitment of the Government not to gold-plate European Union legislation by implementing it early. We have confirmed many times our intention to transpose that directive, thereby providing business—especially smaller business—with certainty. We are making sure that it is written as it should be written and in a way that we think it can be enforced. As we know, within the European Community, our problem is that our Anglo-Saxon law here is not necessarily the same law as applies to some of the other countries. Therefore we have to be very careful that what they are going to do is enforceable.

[Lord Razzall]

Now that the noble Lord, Lord Pearson of Rannoch, is in his place, is the Minister prepared to give any more detail as to exactly how the implementation of this European directive will help small and medium-sized enterprises on this topic?

[Baroness Wilcox]

The fact that we are being asked to substantially write it is an enormous help. It means that we can write it following the legislation that we already have, which I have already explained and on which I complimented the previous Government for putting in place. The most important thing that we can get out of this is a requirement that local public authorities have to pay within 30 days. It is very important to get that in place, and it is certainly worth taking the time to get it right.

[Lord Borrie]

My Lords, is it not the case that this Act will never be adequately enforced until a public official is given the statutory task of enforcing prompt payment and prompt interest payment on behalf of SMEs? Next week the Government will announce the appointment of a groceries adjudicator to help farmers in their battles with supermarkets. Surely there are wide reasons for saying that a public official is needed to assist in enforcing this Act as regards the late payment of debts.

[Baroness Wilcox]

The noble Lord, Lord Borrie, who is a former Director-General of the Office of Fair Trading, always comes up with something on which I would like to reflect, and I will do so on this occasion. If he would like to write to me explaining exactly what it is that he thinks is a good idea, this Government are always willing to listen.

[Lord Tebbit]

My Lords, does my noble friend agree that if we did not have to create legislation that suited all members of the European Community and could just do this legislation on our own to suit ourselves, it could have been done months ago—perhaps even years ago, during the time of the last Labour Government?

[Baroness Wilcox]

We are keen and happy members of the European Community, my Lords.

[Lord Phillips of Sudbury]

Will my noble friend contemplate more active support of small and independent businesses given that they are so much greater contributors to community life and local cohesion than their monstrous brothers?

[Baroness Wilcox]

The late payments that we have studied indicate that it certainly is not just large organisations which pay late. I say again that very often small and medium-sized companies do not make sure that their payment terms are right and do not do credit checks on companies. They should do credit checks no matter how big the company is. Nowadays we no longer hear the word factoring. When I ran my small business factoring was very important. If noble Lords look at today’s newspaper they will see a letter from the Royal Bank of Scotland which says just that. It advises small businesses to go to their bank and learn how to factor.

Schools: Parenting Skills

Thursday 17th May 2012 Lords Chamber

Question

11:22

Asked By

[Lord Northbourne]

To ask Her Majesty’s Government whether they have any plans to implement the recommendation of the Independent Review on Poverty and Life Chances that parenting and the responsibilities of parenthood should be taught in all secondary schools.

[The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford)]

My Lords, the teaching of parenting skills in schools falls within the remit of personal, social, health and economic education. We are reviewing PSHE to determine its core body of knowledge and improve the quality of teaching without being overly prescriptive about it. Schools will have the flexibility to determine whether they include parenting skills as part of their PSHE lessons based on local circumstances and the needs of their pupils.

[Lord Northbourne]

I am most grateful to the noble Lord for that Answer. However, I cannot help wondering whether the Government take this issue sufficiently seriously. Are they aware of the number of children who arrive in school at five years old damaged by a lack of appropriate parenting—sometimes almost by a lack of parenting at all? Do the Government realise the extent to which this damages and will continue to damage those children, and makes difficult the coalition’s commitment to developing social mobility and equality in schools?

[Lord Hill of Oareford]

The Government do take this issue seriously. I know how much the noble Lord, Lord Northbourne, cares about it and I was glad to have the chance to discuss some of these issues with him a month or two back. The Government are taking a range of measures such as extending free education and care to 15 hours a week for disadvantaged two year-olds from September 2013, and doubling that again by September 2014. We have announced parenting trials and more flexible parental leave, so there are a number of measures. When one draws those together, I hope he will see that we take this issue seriously. We need to approach it across a broad front.

[Baroness Gardner of Parkes]

Is there any thought of including parents, along with the children, in these educational matters because the parent very often knows nothing about them? It is all very well to think of the next generation, but the present generation could do with a bit of help too, and if schools could in some way include parents in this scheme it would be to the good.

[Lord Hill of Oareford]

My Lords, many schools do precisely that. They might have Sure Start centres on the same site as the school. They often run programmes to involve parents and educate them more generally. My noble friend makes a good suggestion and I know that schools already undertake it.

[Baroness Massey of Darwen]

My Lords, perhaps I may ask two brief questions. First, how seriously are the Government taking the recent reviews on early intervention and social mobility? Secondly, when will we have the results of the review on personal, social and health education?

[Lord Hill of Oareford]

We certainly take those reviews seriously and, as I have said, we have already made some announcements and introduced new policies on the back of the recommendations that we received from Frank Field and Graham Allen. We are in the process of setting up, for example, the Early Intervention Foundation to help provide evidence for some of the policies that we have been discussing. So far as the PSHE review is concerned, I hesitate to raise this again—actually, I have not raised it; the noble Baroness raised it with me but we have been having this exchange for a long time. I know the delay is probably too long, and I know that that is what she feels. As she knows, the sequence is that we want to make our announcements on the national curriculum review, which we expect to do shortly, and then, on the back of that, it seems sensible to bring the PSHE review together with it—so the national curriculum will be first and, after that, the PSHE review.

[Baroness Walmsley]

My Lords, does not the recent spate of cases of horrendous sexual exploitation of young girls, many of whom were in care, demonstrate that the lack of good parenting makes them very vulnerable? In which case, does the Minister accept that high-quality PSHE in schools can go a long way towards making up for that? It must be provided for every child in every school because, as we know from recent press coverage, sexual exploitation happens all over the country, not just in Derby.

[Lord Hill of Oareford]

I agree with my noble friend’s remarks about those appalling cases, which are shocking. I also agree that good PSHE in schools can help to raise some of those issues, educate children and warn some of those who are most at risk of the kind of behaviours that they ought to avoid. Part of the PSHE review is looking at the question of best practice, the quality of the teaching—which is vital—and the content of PSHE.

[Baroness Howe of Idlicote]

My Lords, bearing in mind that citizenship education, through which it was intended to teach parenting, became devolved and was never sufficiently taken up, can the Minister assure us that parenting skills are emphasised to the young people concerned, because it will be one way to encourage early intervention to be successful, particularly if you can make it clear to young children from deprived backgrounds that their skills are going to be important for future generations?

[Lord Hill of Oareford]

I agree with the broad thrust of that point. One should also say that there is quite a lot of research, which, as one might expect, says that young people think most about parenting just before they become parents. Children in different kinds of schools in different parts of the country will also tend to need different kinds of education. That would include PSHE. However, I agree with the broad thrust when the noble Baroness says how important that is.

[Baroness Jones of Whitchurch]

My Lords, does the Minister accept that the cuts to childcare support and work incentives such as the working tax credit will inevitably result in more children living in poverty, and will therefore inevitably make the role of parenting even more difficult for existing parents?

[Lord Hill of Oareford]

As I have said, we are extending the offer of free education for three and four year-olds to 15 hours a week. We are extending it to disadvantaged two year-olds from September 2013 and to 40% of all two year-olds by 2014. The new universal credit will extend childcare help to those working less than 16 hours a week—that is, families who had not previously been eligible for it. We obviously need to do more to help people with parenting—particularly those from the poorest backgrounds—and I hope that the range of measures we are taking will result in some progress being made in that direction.

Eurozone

Thursday 17th May 2012 Lords Chamber

Question

11:30

Asked By

[Lord Empey]

To ask Her Majesty’s Government whether they intend to make any further financial contributions to the eurozone bailout.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, first, we should be clear that there are no requests on the table for further financial assistance. The Government have made clear their view that the responsibility for sorting out the problems of the euro area rests primarily with euro area Governments. The UK will not be a member of the permanent European stability mechanism, which will replace the European financial stability mechanism established under the previous Government, for which the UK holds a contingent liability.

[Lord Empey]

The Minister will be aware that there is considerable confusion in the public’s mind about what our commitments to the eurozone actually are. Although we may not have those commitments through formal European agreements, we are putting more money into the IMF and have done a bilateral deal with Ireland. Can the Minister clarify, in language that people outside can understand, exactly what our liabilities to the eurozone and its member countries are in the event of further financial turbulence?

[Lord Sassoon]

My Lords, as I explained, there are no requests for further assistance on the table at the moment, so it would be entirely hypothetical to discuss what our further commitments might be. However, as I have said, as of July this year, the permanent European stability mechanism comes in. The UK is not party to the agreement to establish that mechanism and there will be no further commitments from the UK under the European financial stability mechanism from July this year. The IMF does not support the eurozone or any other currency union. It is there to support individual countries, and any assistance is considered country by country on the merits of each case.

[Lord Lawson of Blaby]

My Lords, my noble friend the Minister is causing some of us a little concern. Why did he not answer the Question on the Order Paper with a simple no?

[Lord Sassoon]

Because it is a complicated Question, which deserved a somewhat fuller Answer.

[Lord Tomlinson]

My Lords, as the decisions affecting the eurozone clearly have a major impact on this country and its economy, can the noble Lord at long last tell us precisely what advantages are achieved for the United Kingdom by excluding ourselves from some of the very important European decisions?

[Lord Sassoon]

My Lords, we are not excluding ourselves from very important decisions; we are saying that it is for members of the eurozone to take the lead in sorting out the problems with the euro. We are very much at all the discussions. As well as questions of potential and past bailouts, we are discussing growth strategies and the completion of the single market, which will put Europe back on a sustainable growth path.

[Lord Forsyth of Drumlean]

My Lords, what is complicated about our country borrowing at an increasing rate so that the national debt will be 50% larger in seven years’ time? What is complicated about ruling out providing money to the eurozone that we do not have to spend?

[Lord Sassoon]

My Lords, I have been completely clear that as of this July, the mechanism in the eurozone, which the previous Government signed us up to, will no longer make any future commitments. The new permanent mechanism that is being put in place is a eurozone-led mechanism and the UK is not part of it.

[Lord Barnett]

My Lords, I referred yesterday to a report in the best newspaper in the country, the Financial Times, which obviously the noble Lord, Lord Howell, does not read. That report, by two journalists, said that the Prime Minister was contemplating capital for a European growth fund. That would be a sensible compromise with the new French President. Will the Minister either confirm the truth of this or deny it completely?

[Lord Sassoon]

My Lords, like my noble friend Lord Howell, I did not see the article. I thought that my noble friend’s answer yesterday was exactly to the point. Ideas have been floated around that the European Investment Bank should increase its capital and stability and in some way its ability to lend. If proposals come forward, we will look at them, but it is very important that the EIB does nothing to prejudice its own debt rating.

[Baroness Falkner of Margravine]

My Lords, given the relatively healthy state of the German economy and its growth rate, are the Government having any conversations with the Germans about using fiscal measures to unleash some consumption and spending within Germany so that 80 million Germans do not keep their money under their mattresses but use it as a spur to generate further growth?

[Lord Sassoon]

My Lords, we do not offer advice to the Germans on how to manage their own economy any more than they would offer advice to us.

[Lord Pearson of Rannoch]

My Lords—

[Lord Campbell-Savours]

My Lords, are Ministers saying that, if the European Union were collapsing all around us, we would stand aside and do nothing at all?

[Lord Sassoon]

No, my Lords, that is not what I have said or am saying.

House of Lords (Cessation of Membership) Bill [HL]

Thursday 17th May 2012 Lords Chamber

First Reading

11:37

[Lord Steel of Aikwood]

My Lords, I beg to introduce a Bill to make provision for Peers to cease to be Members of the House of Lords by way of retirement or in the event of non-attendance or criminal conviction. This Bill contains exactly the same provisions as the one passed by this House and sent to the Commons at the end of previous Session so, although it sounds like a bit of a fib, I have to move that this Bill be now read a first time.

Bill read a first time and ordered to be printed.

Higher Education (Fees) Bill [HL]

Thursday 17th May 2012 Lords Chamber

First Reading

11:37

A Bill to ensure that higher education institutions in England, Wales and Scotland may not vary fees charged to British students based on a student’s place of domicile and to require organisations using public funds to assist students in paying fees not to vary support based on a student’s place of study within the United Kingdom.

The Bill was introduced by Lord Forsyth of Drumlean, read a first time and ordered to be printed.

Police (Collaboration: Specified Function) Order 2012

Thursday 17th May 2012 Lords Chamber

Motion to Refer to Grand Committee

11:38

Moved By

[Baroness Stowell of Beeston]

That the draft order be referred to a Grand Committee.

Motion agreed.

Misuse of Drugs Act 1971 (Temporary Class Drug) Order 2012

Thursday 17th May 2012 Lords Chamber

Motion to Refer to Grand Committee

11:38

Moved By

[Baroness Stowell of Beeston]

That the draft order be referred to a Grand Committee.

Motion agreed.

Arrangement of Business

Thursday 17th May 2012 Lords Chamber

Announcement

11:38

[Baroness Anelay of St Johns]

My Lords, in line with the advisory guidance that has been given on previous days this week, if Back-Bench contributions were to be kept to seven minutes, the House would be able to rise by its normal time of 7 pm today.

Queen’s Speech

Thursday 17th May 2012 Lords Chamber

Debate (6th Day)

11:39

Moved on Wednesday 9 May by

[Lord Cope of Berkeley]

That an humble Address be presented to Her Majesty as follows:

“Most Gracious Sovereign—We, Your Majesty’s most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament”.

[The Minister of State, Foreign and Commonwealth Office (Lord Howell of Guildford)]

My Lords, first, your Lordships might like to know that this summer, which will be a very busy one in this nation, we expect to welcome and look after about 120 foreign leaders and Prime Ministers and their entourages for the Olympic Games, as well as some 40,000 foreign media personnel. I hope that there will be no doubt in your Lordships’ minds that we at the Foreign and Commonwealth Office will be working hard to look after that lot.

On Tuesday last, my right honourable friend the Foreign and Commonwealth Secretary set out the Government’s two principal foreign policy aims: first, to respond to urgent challenges and crises in a way that promotes Britain’s national interest and our democratic values; and, secondly, to equip our country to be a safe, prosperous and influential nation in the long term, in the service of poverty reduction and conflict prevention, and in the upholding of human rights, religious freedoms and environmental safeguards.

To do this successfully, our nation needs to adapt. Wealth and power are shifting globally, so once again in our history we need to look beyond our traditional partners of recent decades to the new and emerging economies of Asia, Latin America and Africa. The world’s pattern of energy resources and energy powers, too, is being transformed by new gas discoveries and low-carbon aspirations. To make the most of the enormous opportunities that these shifts offer, we must move to reinvigorate and refocus our diplomatic network and our policy priorities.

Of course, that does not mean forgetting old friends. The United States of America will remain our strongest ally; our relations with our European partners will remain an essential pillar of our foreign policy; and we should recognise the growing importance of the Commonwealth, which is evolving into one of the most relevant networks in the changing world, embracing some of its most dynamic economies. I have called it the necessary network of the 21st century. It is certainly one of the key gateways to the great and rich new markets of the future, in which we must succeed.

I will say a word about the Arab spring and the developments of the past 18 months. Obviously, 2011 was a momentous year. Already, the Arab spring has brought huge changes to the Middle East and north Africa. Significant challenges remain, but the Government are optimistic about the road ahead. This summer, Libya is set to hold its first democratic elections in more than 40 years. Egypt’s citizens are about to choose their next President, and we hope that this will be an important step towards building a prosperous and stable future for the Egyptian people. Bahrain has committed to a reform process and has made some progress, although there is a good way to go. Peaceful reform is under way in such nations as Algeria, Jordan and Morocco.

However, there is still much to do. The region now needs to consolidate and build on these gains, taking further economic and political measures to entrench stability. The events of the Arab spring have also made ever more pressing the need for a two-state solution to the Arab-Israeli conflict. We urge both sides to avoid any steps that would undermine the prospect of successful negotiations. In this House on Tuesday, I welcomed the news of the Egypt-brokered deal on the Palestinian hunger strikers.

The Government will continue to support the process of reform that is under way in the Middle East and north Africa. In February last year we launched the Arab Partnership Initiative, which aims to support long-term political and economic reform in the region. We committed £110 million over four years through the initiative. Last year the joint FCO-DfID Arab Partnership Fund funded more than 50 projects in 11 countries in the region. We intend to intensify that work over the coming years.

Meanwhile, Iran’s stance and influence remain dangerous. We have yet to see any firm indication that it is willing to take concrete action to address concerns about the potential military dimension of its nuclear programme. We want Iran to take steps to build confidence in its nuclear activities, and we will maintain the pressure until genuine progress is made, including through sanctions and the current EU embargo on oil imports.

In Syria, the situation clearly remains completely unacceptable. More than 10,000 people are estimated to have been killed and many thousands displaced or detained. While we welcome the deployment of UN monitors in Syria in accordance with Kofi Annan’s six-point plan, which is already having an impact, it is deeply concerning that the violence continues. The Annan plan remains the best chance to find a way through Syria’s crisis, but we will not hesitate to return to the UN Security Council if rapid progress is not made.

I turn now to the broader pattern and the rise of Africa and the emerging powers. The positive developments in north Africa reflect a broader trend on the continent as a whole: that is, the gradual realisation of Africa’s enormous potential. Significant challenges, of course, remain in sub-Saharan Africa, as we all know. We are very concerned, for example, by the rise in military tensions between Sudan and South Sudan, and urge both parties to comply with the African Union’s action plan. In fact, al-Qaeda in the Islamic Maghreb and associated groups in Africa remain a threat, particularly across the Sahel. We have seen an increase in terrorist attacks in Nigeria, and the Sahel and the Horn are suffering food and water crises.

These developments, however, should not dilute the broader message: it is a time of significant change in Africa. Many commentators need to catch up with that new reality. Infant mortality is down; foreign investment is up. The IMF forecasts that the African economy will grow by 5.8% this year, which sounds a lot from our perspective here in Britain. The continent has an increasing presence on the international stage. South Africa, a member of the G20, is playing an increasingly active role globally. Angola, Mozambique, Tanzania and Ghana are the new potential stars. I visited Ghana the week before last. Nigeria, with its wealth of natural resources, is unlocking its potential as a considerable regional energy power. Even in Somalia there is new momentum in the political process following the successful London Conference on Somalia. It is right, therefore, that we develop and strengthen our relations with Africa.

Equally, we need to raise our game in the emerging and already advanced economies of Asia, particularly in China and in Latin America, but also with the Korean and Japanese giants and world leaders. We have already increased our efforts to promote trade in these markets. In 2011, UK goods exports to Columbia increased by 35%. In India the figure is 37% and Indonesia an impressive 44%. We believe that we can do even better and will intensify our efforts. We have to recognise and work constructively with massive Chinese involvement and investment right across the globe, including in the UK, and not forgetting our continuing ties with Hong Kong.

In doing so, we will not lessen for a moment our focus on human rights, which remain at the core of Britain’s values. In particular, discrimination and violence against women and girls remain among the most widespread human rights abuses. Tackling these issues is a priority for the UK and central to our work to advance gender equality and empower women.

It is Britain’s leadership, supported by our international partners, that has helped to secure tangible, real reform in countries such as Burma, where we are finally seeing a hopeful path forward and which my right honourable friend visited only recently. Meanwhile, nearer home, Europe is seeking to recover from the biggest financial crisis for generations. In Chancellor Merkel’s words, we are in a period of great uncertainty. That is very apparent.

Europe faces two big economic challenges: resolving the eurozone crisis, if that is possible, which remains a major obstacle to our economic recovery, and responding to the relative shift of economic power to the east and south—all predicted by some of us 15 years ago and to which rather slow-learning commentators have at last woken up.

While it is for each eurozone member to decide how to handle the crisis, particularly the immediate Greek crisis that fills our newspapers, we continue to believe that control of public finances and structural reform to increase productivity and competitiveness are the only realistic ways forward. We have just introduced a Bill to approve an amendment to the EU treaties and confirm the compatibility with the treaties of the eurozone-only European stability mechanism. We have ensured that the UK will not be liable through the EU budget for any future EU eurozone bailouts once the ESM comes into force.

We share common values and interests with our EU partners, and can use the collective weight of the EU in the right situations to increase our impact on the international stage. But the European Union must reform as well, and we will play a strong part in that. The EU must support peace and stability in the western Balkans. We look forward to Croatia’s accession to the EU, due in July 2013, and will bring forward a Bill to approve this. We will also continue to develop our co-operation with Russia.

On Afghanistan, my noble friend Lord Astor will have more to say on this issue and on our defence dispositions when he winds up this evening. However, I would like to pay a very strong tribute to all the British personnel who have lost their lives or been injured serving their country there. The process of transitioning security control to Afghan forces is on track, and we expect the ANSF to take a lead on security responsibilities across the country by mid-2013, with ISAF moving to a supporting role.

The Chicago summit later this month will focus on the size, make-up and funding of the Afghan national security forces. My right honourable friend the Defence Secretary has already announced that Britain will contribute £70 million a year from 2015 to fund the ANSF. As the transition in 2014 approaches, it is more important than ever that we engage with Afghanistan’s neighbours, including Pakistan and the central Asian states, and this we are most certainly doing.

A common theme in what I have outlined today is the role of networks in the modern, globalised world. States are increasingly organising themselves into networks, ranging from the political—I have already mentioned the European Union—to the economic, social and cultural. Let us take one of the world’s greatest networks, the Commonwealth. This Government are committed to making more out of the Commonwealth, an organisation uniquely placed to advance our foreign policy and trade objectives. This is why Commonwealth Heads of Government agreed in Perth last year—a meeting I attended—to some of the most significant reforms in the organisation’s history. More than ever, now is the time, as we celebrate Her Majesty’s Diamond Jubilee and welcome the world’s leaders here, to make the most of our Commonwealth connections.

We will in due course publish the Government’s new White Paper on our relations with the UK’s overseas territories, another important network. Their future welfare forms part of our larger determination to assist small island states, not least those in the Commonwealth in the Caribbean, which face major challenges; for example, climate issues and crippling energy costs. I stress that we remain absolutely committed to the rights of the people of the Falkland Islands to self-determination and to develop their own economy.

That brings me to the network of the Foreign and Commonwealth Office itself, my own department. Over the past year we have taken steps to substantially reinvigorate our diplomatic network. We have put the Foreign and Commonwealth Office back at the heart of government in the making of British foreign policy. By the end of this Parliament, we will have deployed 300 extra staff in more than 20 countries around the world, and we will have opened up to 11 new British embassies and eight new consulates or trade offices in the emerging nations. We are achieving this while making £100 million per year in savings in the Foreign Office budget, as required by the FCO’s spending review settlement.

At this point I would like to pay a warm tribute to the FCO’s committed staff across the globe, often operating in very difficult conditions, and those of the Department for International Development and Ministry of Defence, who work tirelessly in support of our country around the world.

In security terms, the same kind of attitude and priority shift as on the economic and trade fronts is warranted. There is no dispute that America remains the most powerful hard-power military nation and ally, but in a world of dispersed power, cloud information stores and e-enabled, non-state threats, new instruments and techniques of influence and persuasion are required to underpin security and prevent the exercise of hostile force against British citizens and interests. We need, if I may quote Her Majesty’s own words, the,

“camaraderie, warmth and mutual respect”,

of other countries, which our overidentification with past policy and approaches failed to deliver and, in some cases, repelled.

Instead, we need to rely on new network and soft-power intimacies through: local government links; educational links; language links; cultural links such as our museum activities branching out from the UK; the BBC World Service and the British Council; parliamentary links; common judicial practices; common law similarities; common professional standards in medicine, science, accountancy and advanced research of all kinds; civil society networks, religious and faith ties; and the enduring power of ideas and innovation in all fields and every kind of service and design package that our creative and original thinking can generate. Alongside all this, we have become, in the words of the former Prime Minister, Sir John Major, a “development superpower”. It was good that, last year, no fewer than 143,710 Commonwealth students sought to come here. More British students should be encouraged to go to the great new universities of modern Asia.

Sixty years after Dean Acheson’s jibe about Britain having lost an empire and not found a role, we are now finding a role, despite misplaced American comment to the contrary. Britain is emerging as an agile new network power, positioning itself consciously and effectively in line with the new global patterns of economic power, trade flows, markets and influence. We are becoming a safe haven for the world’s investment and wealth.

Europe is our region and neighbourhood; America is our ally and friend; the Commonwealth is our family; and the changing world is our stage. If we are clever, wise and patient, we have every chance on this stage of maintaining and building on our prosperity and contributing decisively, as we must and should, to world stability and peace.

11:57

[Lord Wood of Anfield]

My Lords, I, too, thank FCO and MoD staff around the world for their extraordinary service and dedication. I know from my own time as an adviser in the previous Government that their professionalism, discretion and judgment are huge assets to this country in good as well as difficult times.

When the Prime Minister and his team came to power two years ago, they made it clear that their foreign policy would not be driven by any doctrine or philosophy. Instead, the Foreign Secretary pledged to be hard-headed and pragmatic. Not for him were wild fancies of reform of the architecture of international institutions, or visions of the future of Europe or the Atlantic alliance. Instead, the direction of foreign policy has, at most, been characterised by certain themes: taking emerging nations seriously rather than the traditional preoccupation with the troika of Europe, the Middle East and the USA; putting Britain’s commercial interests at the heart of foreign policy; and focusing on building up a portfolio of strong bilateral relationships rather than investing in multilateralism.

Many observers will support these themes and may have sympathy for underpromising on the vision front when it comes to foreign policy. But the modesty of the Government’s overall approach to foreign policy has, I fear, become a liability rather than an asset. Although muddling through may have been an adequate approach in normal times, it is an approach that looks rudderless in the times of extraordinary and unexpected changes that we are living through.

We are living in times where Europe finds itself in a protracted economic crisis that has become a political crisis, in which democracy and growth have been weakened while austerity and anti-political sentiment have strengthened. The Arab world has seen an uprising against non-democratic regimes—a popular rejection of the false choice between radical Islamism on the one hand and stability based on repression on the other. Yet there is continuing uncertainty about what comes next. We have witnessed the death of bin Laden, widespread war-weariness in response to the Iraq and Afghan conflicts, a shift in American priorities to trans-Pacific rather than transatlantic relations and, recently, Brazil overtaking Britain as the sixth-largest economy in the world.

These are dramatic changes in the landscape and Britain has a reasonable expectation to know the Government’s strategy in response to them. Where do they see Britain’s place in this changing world? Where should we concentrate our efforts and where should we be less engaged? You would be hard pushed to find their answers. It is one thing to boast the absence of doctrine and quite another to lack coherence. Yet that is what the respected Atlantic Council earlier this week concluded about this Government’s foreign policy. It said that the,

“coalition government has yet to develop a coherent strategic vision for the United Kingdom’s role in a changing global landscape”.

It went on that,

“British foreign policy vision and strategy remain unclear,”

and,

“threatens to leave London isolated”.

There is no better example of that than the Government’s approach to defence. Their 2010 strategic defence and security review failed to provide any genuine strategic rethinking of Britain’s role in the world and did not survive its first contact with reality. It delivered aircraft carriers without aircraft—an extraordinary outcome that the noble Lord, Lord Tebbit, described as,

“little more use than a pub with no beer”.

It made our Libyan operations dependent on a frigate planned to be cut and Tornado jets set to be reduced. It was characterised by a rapid lunge for savings rather than a considered review of strategy, and the recent U-turn on the Joint Strike Fighter—reinstating a Conservative cut to the procurement plan inherited from Labour—shows what happens when decisions are taken too quickly and ends are not supported by means.

When it comes to European matters, I confess initially to having been baffled by what exactly the Government thought they were doing. There have been consistencies, in particular the Conservative part of the coalition’s determination to plunge cavalierly into isolation within Europe. It began back in opposition days when, as is now widely known, David Cameron made a deal with his Eurosceptic—more accurately, Euroseparatist—Back-Benchers to pull the Conservative Party out of the mainstream centre-right grouping in order to form a new grouping of what might politely be called maverick parties further to the right. The result has been diplomatic isolation of the Conservative Party in Europe.

Late last year came the decision to pull out of participation in the process of drawing up a new fiscal compact. British business was crying out for influence at a time of economic turmoil but the Prime Minister once again chose isolation. He said that he could not receive guarantees on behalf of the City of London but then walked away, ensuring his inability to protect its or any other British interests in the continuing series of monthly discussions that followed. He apparently thought that fellow non-euro countries would join him—they did not. He then claimed that he had managed the extraordinary achievement of vetoing a treaty before it had even been written. The Deputy Prime Minister disagreed, saying:

“The language gets confusing. Veto suggests something was stopped. It was not stopped”.

Indeed, it was not: something that walked, talked and smelt like a treaty got signed earlier this year by euro countries whom it affected. Non-euro countries that stayed in and ratified the arrangement without being affected by its terms got the right to attend and participate in some of the eurozone meetings on wider issues of competitiveness and institutional arrangements. Britain is not there. The Prime Minister’s team said, “Ah, but by not signing this ‘non-treaty’, we ensured that it would not be justiciable in the European Court”—except that they had not. Article 8 of the new treaty made clear that the ECJ’s rulings on issues brought to it under the treaty would be binding. The whole episode has been a mess, a sacrifice of British influence for the sake of keeping the Conservative Party from splitting at the seams.

Not content with institutional isolation on an unprecedented scale, recent months have seen the Government develop a penchant for diplomatic isolation inside the EU as well. The Prime Minister twice declined to meet—even informally—with Mr Hollande, first in Paris and then in London. Instead, Mr Cameron took the unusual step of endorsing Mr Hollande’s opponent, President Sarkozy, in Le Figaro. That approach caused consternation not just in France but in the ranks of our own Foreign Office. One senior diplomat told the Daily Mail:

“We put all the chips on one card and it turned out not to be the ace … It was an error of judgment and not what was advised”.

What is the Government’s approach to the current crisis of the euro? On Sunday, George Osborne angrily warned of the self-fulfilling dangers of speculating about the demise of the euro. Today his boss, the Prime Minister, said it was time for leaders of the euro to make up or break up. Which is it? Is the Government’s policy that the euro should survive, or that it might be better if it breaks up? The Government want us to believe that the problem of the euro lies in the design and policies of the euro area alone. We all know that there are problems galore in that area, but the Government want us to believe that it is just their problem and theirs to sort out. The British public, however, as well as the electorates of France and elsewhere, know that there is a second element to Europe’s economic crisis: the failure of a politics of austerity of which the Government are a champion, not simply a spectator.

Rather than continue this mixture of thinly veiled Schadenfreude, issuing dramatic ultimatums to Merkel, Hollande and others from the sidelines and calling those who disagree with government policies dangerous, does not the Minister agree that the Prime Minister would be better advised to engage in helping to find a solution to this crisis, and at least contemplate the possibility that his approach to recovery through austerity is just not working?

Finally on Europe, in the gracious Speech, the Government outlined their plans to approve Croatia’s entry into the EU and to remove future UK liabilities for European bailouts. We will work constructively with the Government when we see those Bills, but is the Minister confident that his own party’s Back-Benchers will do likewise? Given his party’s record on rebellions over Europe, including what I believe was the largest post-war Commons Back-Bench rebellion, is he 100% sure that there is not trouble ahead for his Government from those who see even the slightest treaty change as reason either to say no or to demand a referendum?

I turn to the Middle East, where the most pressing and worrying issue is the continuing oppression and violence in Syria. We have supported the Government’s approach since violence began last year, including their support for the Annan peace plan, but it is difficult to view the continuing cocktail of oppression by the Assad regime, inter-ethnic violence, recurrent terrorist attacks, and, just last weekend, spillover of violence into northern Lebanon, with anything other than serious pessimism. Does the Minister remain confident that the existing approach of the international community will achieve any success in limiting the violence and halting the spread of the conflict?

When it comes to Israel-Palestine, I am pleased to say that all sides of the House share the ambition of helping to secure a universally recognised Israeli state living alongside a sovereign and viable Palestinian state. That outcome can be achieved only through a negotiated settlement between the parties involved. Although the region is no nearer either peace or even a peace process than it was two years ago, the international community has a role beyond simply being interested spectators. We must continue to condemn the appalling rocket attacks from Gaza, and at the same time continue to call on Israel to cease settlement building on Palestinian land. We must also, in an atmosphere where militants committed to violence threaten to attract support away from moderates committed to peace, do what we can to strengthen the hands of the moderates. In that context, we felt it right last year to support the recognition of Palestine in the context of its application to join UNESCO. Does the Minister continue to think that the Government’s refusal to recognise Palestine was correct, and can he clarify whether he speaks for both parties in the coalition if he answers that it was?

We recognise the continuing threat that Iran’s policy towards its nuclear programme poses to Israel and to the wider region. That policy must change, and the Government’s support for strict sanctions on the regime is entirely right and welcome. However, will the Government clarify whether Britain is seeking to postpone an EU ban on insurance for ships carrying Iranian oil, as has been reported recently? Perhaps the Minister would also clarify what is the UK government’s agenda for the P5+1 talks with Iran in Baghdad next week?

In Afghanistan Britain has nearly 10,000 troops actively engaged, and our gratitude to them for their extraordinary bravery and sacrifice cannot be repeated often enough. Again, we welcome the fact that a cross-party consensus, even in the most trying and difficult times, has been maintained. Progress has been made, in particular with the growth in the size of the Afghan national army, but, as ever, serious challenges remain, and as NATO nations’ attention turns to exit dates and the logistics of winding down their military commitment, the nature of those challenges is changing.

While we support the Government’s actions in Afghanistan, I confess to having concerns that the Prime Minister’s commitment to making it his “number one priority” is slightly at odds with the fact that it is nearly a year since he made a parliamentary Statement about it. First, the NATO summit in Chicago takes place next week and, in light of recent announcements by the Australian Government, the incoming French President and President Obama, one key issue for Britain must surely be to ensure that NATO brings order to bear on individual countries’ dates for withdrawing their forces. Secondly, Chicago must provide greater clarity about the status of forces agreement between Afghanistan and those forces remaining in the country after 2014. Thirdly, there are widespread concerns that insufficient international diplomatic efforts are being applied to the task of achieving a lasting political settlement in Afghanistan. It is a subject we have heard little on from this Government, and there is no standing process in place to reassure Afghans and the wider region that it is the focus of the international community’s attention. We know from experience in Iraq of the dangers of not planning sufficiently for building a lasting peace. There can be no basic stability in Afghanistan without serious work to build self-sufficient political processes.

My colleague and noble friend Lady Kinnock will address issues around development policy and Africa later. I would like to finish by looking at the issue of the Government’s approach to multilateralism. It is fair to characterise the UK’s approach to engaging with the wider world as bilateralism writ large. With economic as well as strategic interests in mind, it has picked a selection of countries and focused its diplomatic and commercial efforts on building better links with them. It is an approach captured in the beautifully vague phrase in the gracious Speech that the Government will build relations with the emerging powers. However, where does this leave the Government’s approach to multilateral institutions? The challenges we face as a country—climate change, global economic instability, terrorism, food and water supply issues, and a gradual, cumulative shift in wealth and power to the east and south—do not observe geographical borders. We are moving from a world where military, diplomatic and economic power is no longer concentrated in one or maybe two great powers but is becoming de-aligned, fragmented and uncertain. These are challenges to which bilateralism writ large cannot provide an adequate response.

This is why the case for multilateralism embedded in strong international institutions and based on consent in the international community is so strong—and so much in our national interest. Yet multilateralism is not in great shape at the moment: Doha has been stalled for years; the international climate change agreements are making inadequate progress to meet the scale of the challenge we face; prospects for an arms trade treaty do not look very promising; and the G8 and G20’s response to continuing economic uncertainty in the last two years has hardly encouraged faith in those forums’ capacity to mount a fight-back against collapsing growth, fragile banks and low confidence. This is a time for Britain to lead in helping to restore faith in multilateral institutions, but the Government are showing no leadership whatever at the multilateral level. I would struggle to find any even semi-seasoned observers of the Government’s foreign policy to tell us what their plan of action is for the upcoming G8 summit, let alone what they want to achieve when the UK takes over the chairmanship in 2013. I know that June is next month rather than this, and so a long way off, but I have not got the first clue what Britain wants out of the G20 meeting in 32 days at Los Cabos.

The Government may eschew doctrines as flights of utopian fancy, but sometimes doctrines are revealed by silences rather than speeches. The Government’s continuing failure to take multilateralism seriously is not the hallmark of realpolitik but a failure to take a hard-headed, long-term view of the British national interest. Oscillating between isolationism and rhetorical bursts from the sidelines does not add up to a foreign policy. If the goal is, as it should be, to serve our strategic and economic interests by building stronger institutions and more effective rules in the international arena, foreign policy must be much more than simply an occasional opportunity to seek domestic political advantage at home.

12:13

[Baroness Falkner of Margravine]

My Lords, let me start by congratulating the noble Lord, Lord Wood of Anfield, on his new responsibilities at the Dispatch Box. Given what we have just heard, one thing we can be sure of is that our foreign affairs debates in this House will become perhaps not less controversial but certainly more interesting.

I want to pick out one or two points from the gracious Speech on Afghanistan and the Middle East. We look forward to the NATO summit in Chicago next week and hope that the French will be persuaded to set aside their campaign promises to bring their nearly 4,000 troops home even sooner. The challenges of securing a stable Afghanistan have increased with the problematic situation in Pakistan, coupled of course with the intransigence of the Taliban. It was inevitable, once the US announced a date for drawdown in 2015, that combat troops from other countries within ISAF would seek to go earlier. If the American intention, beyond political domestic audiences, was to suggest to the Taliban that they could have their country back from 2014 and therefore sit it out, it has palpably failed as the body count continues to rise. Indeed, recent attacks in the centre of Kabul have demonstrated evidence of their capability to infiltrate the Afghan national army at its heart. The rise of green-on-blue attacks, where the numbers are already nearing those for the whole of last year, are clearly jeopardising the joint-training module. Our forces are to be congratulated on their success in upskilling the Afghan national security forces despite these setbacks.

Views have been divided about the extent to which the Taliban can be trusted to honour their commitments at the negotiating table. I confess to some optimism last year with the announcement of talks and the opening of a political office in Qatar, but the suspension of those talks is a setback that demonstrates that the younger and more radical Taliban have the upper hand for now. The danger persists that while they may not be strong enough to rule the country, it is now inevitable that after 2014 they will be strong enough to thwart constitutionalism and the rule of law, particularly where women’s rights and human rights are concerned.

With regard to our own situation in Afghanistan, I welcome the Government’s negotiations to expand the options available for our own withdrawal. The stakes are high for our own successful exit, with 9,500 UK troops and some $5 billion of equipment.

For a Liberal, it is difficult to countenance rewarding some of the nastiest human rights-abusing regimes in central Asia with contracts and treasure, but given the difficulties of the supply routes through Pakistan, it is pragmatic to have these options, not least to demonstrate to the Pakistanis that they are not the only game in town. Nevertheless, if Pakistan’s co-operation can be secured and the safety of our troops and materiel guaranteed, it is clearly in our interest to use the least expensive option that that provides. When my noble friend concludes his remarks, he might be able to tell us whether the Government’s talks with the Pakistani Prime Minister earlier this week were fruitful in this regard.

I turn to the situation in Syria. After 14 months of violence, with tens of thousands killed and injured, we still find ourselves in a stalemate. Despite the Annan plan and the so-called ceasefire, the Assad regime continues to kill its own people, often within view of the monitors, and is slowly succeeding in doing what the Serbs did in Bosnia: giving false assurances, bidding for time, scaling down activity while monitors are around and then cracking down brutally when their backs are turned—in other words, to be assured that, with the protection of Russia, things can be strung along long enough for progress to be made on the ground to wipe out the resistance. I therefore regret that Mr Putin has decided not to attend the G8 at Camp David. A disengaged Russia does itself no credit and endangers its legitimacy on the United Nations Security Council.

We cannot stand aside and let this situation continue until an exhausted Syrian people simply give up. Too much blood has been shed for them to go back passively to life under this regime, and the infiltration of the real terrorists in the shape of al-Qaeda has begun. The American academic Anne-Marie Slaughter is right to call for the UN to up its game. One of the things that she proposes it might do is set up a recording unit of the atrocities as a means of delegitimising the violence. Bearing witness through the recording of acts of violence and the images of the people who commit them will allow for justice to be done when the worst individuals are brought to trial through the International Criminal Court.

Diplomatic recognition is also an important element of sanctions, along with the others that this Government have initiated through the Security Council. I want to press them further on the actions that they can take against the Assad family. Have we considered withdrawing Asma al-Assad’s passport? I appreciate that she is a UK citizen by birth, but I believe that she also carries a Syrian passport. In this case would it not be a powerful symbolic and judicial step to indicate that her complicity in the regime’s atrocities make her an unworthy carrier of UK citizenship? I wonder whether we have taken legal advice in that regard.

Can my noble friend also update us on progress to form the various opposition groups based in Turkey and France into a cohesive opposition force in exile? We should accept that after decades of authoritarianism it will take time for a democratic political culture to emerge where there has been so much distrust. However, Syrians must themselves realise that when they seek democracy they must demonstrate a cohesiveness of intent and a steadfastness of purpose in the greater interests of their country.

In conclusion, let me pick up an observation made by the noble Lord, Lord Wood of Anfield. He expressed disappointment about the modesty of this Government’s foreign policy. I say to him respectfully that, given that his party took this country into two major wars in under two years, a little modesty would probably be welcomed in this country by our own people at this point.

12:21

[Lord Cameron of Dillington]

My Lords, I want to talk about African agriculture. When I say “Africa”, please read “sub-Saharan Africa” for the sake of brevity. Africa contains 13% of the world’s population but 25% of its undernourished people. It contains 23 out of 30 of the world's least developed countries. Of its population, 80% depends on agriculture and 70% of these farmers are women.

If one can focus on turning Africa’s smallholder subsistence farmers into very small but money-earning farming businesses, then one can kick-start their rural economy while helping to feed the people from their own resources. One can empower these lady farmers to take control of their own lives, which is an agenda in itself. One can ensure that they bring up children whose health is based on a varied diet. Above all, one can ensure they have the means to educate their children. You ask any lady farmer who has been taught how to earn money from her farming what she is going to do with that money, I can promise you 100% that she will answer, “I am going to educate my children”. And they do.

The point I am trying to make is that every single one of the millennium development goals can be met by focusing on farming. The potential for successful African agriculture is huge. Agriculture and agribusinesses already represent nearly 50% of the GDP of Africa. According to the World Bank, the African urban food markets will grow four times between now and 2030. Africa, with 60% of all unused agricultural land in the world, and its barely used water resources, represents a great opportunity for science, business and agriculture to combine to transform a continent.

How do we realise that potential? How do we overcome the greatest poverty of Africa, which is a poverty of information? How do we get the information to transform lives through agriculture, to the people whose lives need transforming? To me, that is the key to unlocking the potential. Yes, we need roads to carry goods; yes we need markets and storage to ensure that good food gets to the right places undamaged and at the right price. But, above all, we need farmers to know how to access the best seeds, to know when to plant them, to know when it is going to rain or not going to rain. There are very few weather forecasts for farmers in Africa and, if you think about it, such information is the difference between life and death to a farming family. We need farmers to know how and when to treat the crop so that they get a quality product which sells well in the marketplace. Above all, we need farmers to know how to sell their product and get a fair price.

To some extent, this information can be distributed via the various Governments’ agricultural extension services. But, frankly, if you have 250,000 farmers per district, as in some parts of Africa, these underpaid, underincentivised and often undertrained national extension officers are never going to do much more than touch the surface. What you need is to encourage more agribusinesses to take on the risks and the role of supplying smallholder farmers not only with seeds and fertilisers but also with the knowledge required to bring their crop to fruition and, above all, to market.

These businesses will need help to understand that they have to work patiently with local communities. Patient capital in Africa often requires many years to take effect, many years to prove the benefits of every change to local practice and many years to encourage the necessary co-operation among smallholders. However, once you establish the lines of communication and the supply lines, for seeds and fertilisers in and harvested crops out, much of the other information on weather, timings of crop treatment, prices and collections can now be accessed on mobile phones. Crop insurance and money transfers can also be done on mobile phones. You do not need banking arrangements or cash, both of which leave room for corruption along the line. You pay a farmer directly on to her mobile phone. She uses her mobile phone to buy food in the shops as well as to pay for her seed and also—do not forget—to educate her children.

All this is now possible and happening in certain projects in Africa. We just need to scale it up. Of course, we need the right business environment to exist in the countries involved. No government control of inputs, please: we need free competition so that inputs are delivered to the farmer at the cheapest possible price and, most importantly, without any politicians taking a rake-off on the way through.

However, even if we manage to persuade national Governments to deliver this competitive business environment, there is still a great risk to the agribusiness involved. Food is a perishable commodity, and the endless official and unofficial delays and transport difficulties of doing business in Africa mean that the risks will remain high.

There is no one exact solution to how the UK Government can best help agribusinesses minimise their risk. There will be a multiplicity of solutions—different ones for each business, each country and even each district. Already the Africa Enterprise Challenge Fund does work of this nature and is one of DfID’s very successful conduits for its aid. However, now is the time to look again at the work that this fund does, to see how it can better sell itself and better assist all sorts of agribusinesses that specifically target smallholders. They are the key; I underline that point. If it can promote much more agribusiness activity with smallholders in Africa, the economic and social gains to huge swathes of the African population will be enormous.

12:27

[The Lord Bishop of Wakefield]

My Lords, I shall return to issues of defence and international security. Last Sunday afternoon I gave an address at a memorial service for Corporal Jake Hartley and Privates Anthony Frampton and Daniel Wilford. All three died in that most deadly incident involving an IED in early March this year, along with three other soldiers, two more of whom were from Yorkshire. The Yorkshire Regiment has borne more than its fair share of casualties. We salute and pay tribute to its soldiers’ courage and the sacrifices that they have made. Amid all the feelings of tragedy and grief on Sunday afternoon, there was a palpable feeling of pride, too. All had given themselves for a safer and more stable world. In this context, it was encouraging to read of the £70 million set aside to support the Afghan national security force beyond 2014. It would press us beyond tragedy if the lives lost in Afghanistan in the past 10 years were seen to be of no avail by allowing that country to slide back into anarchy, civil war or fragmentation into provinces ruled by dangerous warlords.

However, the other question that is posed concerns the true viability of a lasting peace without effective engagement with the Taliban. The presence of US bases and special forces until 2014 seems to rule out the possibility of such engagement. Peace will come only with realism about this factor and not simply by force of arms. What is the Government’s response to this aspect of the peace process?

The commitments outlined on the Horn of Africa and the Middle East are also welcome news. Having sailed through the Gulf of Aden only last year, and engaged to my full extent in pirate practice on board ship, the realities of the instability and dangers there were very immediate in our minds.

Only a brief visit to Eritrea opened one’s eyes to the acuteness of the suffering and poverty in this part of the African continent. The fragility we encountered is far exceeded in Somalia.

Although Her Majesty’s Government’s briefing do not mention commitment of military resources here, two issues remain relevant. Is the Royal Navy committed to contributing to the patrols in these dangerous waters while other efforts are made to bring greater stability to failing states? Secondly, if Syria, Bahrain and other Middle Eastern states remain unstable or in civil conflict, what ancillary resources and reserves do we have should further action be necessary? Libya produced challenges that could not have been predicted at a time when the defence budget was being drastically reduced following the recent SDSR. Indeed, the continued implementation of the SDSR with a planned cut in manpower of 20% alongside continuing gaps in procurement as we await the arrival of the two new aircraft carriers raises questions of how Britain sees her role in the unfolding unstable international landscape.

We have been very well served in this House in the rigorous and transparent briefings that we have received. I take this opportunity to thank the Minister for his untiring work and courtesy in all this. Questions do, however, remain. First, there has been widespread welcome for the enshrining of the military covenant in law. A significant number of noble Lords from all parts of this House contributed much time and focus upon the covenant. My instinct is that the covenant is all the richer for the efforts expended within this House. Thus far, however, the delivery has been modest. Expectations remain high, and understandably so. I began with the families suffering greatly from the continuing casualties in Afghanistan. How will the challenge of caring for the physically and mentally wounded from the campaigns in Iraq and Afghanistan be met after combat operations cease?

Secondly, Her Majesty’s Government have not thus far made clear how they see the future role of Britain in international defence and security with the severe reductions in resources. Not only is morale, especially in the Army, very low, following the reduction of resources and the planned future reduction, as well as the cut-backs in manpower, there is also no real clarity about how the aims set out in the SDSR of a continuing high-profile role for Britain in international defence and security and how that is to be made into a reality. Now more than ever it seems important to develop our co-operation on defence issues with our European neighbours. My fear here is that the United Kingdom’s negotiating strategy puts such a step at risk.

The commitments to limiting nuclear proliferation are very welcome. It was good to hear the Minister in his introductory speech talking about Iran in particular. The restraint that the Government have shown in response to those developments in Iran and North Korea together with the robust commitment to non-proliferation is comforting in a volatile international theatre. Can we be given some indication of how we intend to work with the United States of America and the European Union in moving forward efforts to secure positive responses from both the Iranian and North Korean Governments?

We are living in unstable and unpredictable times. The continuing economic volatility adds to the danger of social unrest and military adventurism. The signs, as far as they go, in the gracious Speech are encouraging. But if we are to look toward a clear role for Britain in defence and security, we need a sharpening and filling out of the scenario with regard both to strategy and securing resources for the future. I hope that the Minister can encourage in us a real optimism in his response to these unanswered questions in his summing up this evening.

12:30

[Lord King of Bridgwater]

My Lords, this debate is taking place at a very appropriate time in advance of the NATO summit this weekend, which will discuss NATO forces 2020. That is clearly an extremely important moment; Mr Rasmussen, the secretary-general, in the Times this morning says that it is dealing with,

“increasing security challenges but decreasing defence budgets”.

My noble friend the Minister said that the Government looked on the world situation with some optimism. I do not want to ruin everybody’s morning, but I hope that in the wind-up my noble friend may help to destroy some of my sense of gloom about some of the things going on. I took the opportunity to look at the first Queen’s Speech debate that we had in this Parliament. Given some of the events that have taken place since then, sadly there is no question that the world is a significantly less stable place and in many ways a more worrying place. We have of course the economic crisis, which suffuses everything and affects every country in the world in one way or another. And we have, undoubtedly at the moment, a significant number of countries that, if not actually failed states, certainly lack a secure and established Government. Greece has to have a temporary Government to hold the fort, and a number of other Governments are finding that they are rapidly defeated at the ballot box when they try to bring in measures that they consider necessary to restore the situation.

The Arab spring has certainly not become an Arab summer. One looks at the situation in Egypt and at the increasingly worrying situation in Syria today, with the reports that America is now intervening, with Saudi Arabia and Qatar, providing more weapons to intensify the conflict there. It looks as though Kofi Annan’s initiative is of pretty dubious benefit at present. There is the suggestion that the conflict is spreading across into Lebanon as well, and there are continuing difficulties in Iraq—and then of course there are the problems in Libya and the uncertainties in Sudan and South Sudan as well. One of the least attractive parts of the Libyan legacy was the departure of a huge number of mercenaries—I think some 10,000s—who went with their weapons on the run, having been recruited from Niger, Chad, Mali and other territories and are now on the loose in those areas, making them extremely unstable and dangerous.

Then there is the Sahel. A distinguished United Nations spokesman talked of the prospect of famine there, saying that we may see a famine like the world has never seen, with possibly 13 million people affected. I listened with interest to the noble Lord, Lord Cameron, who talked about an abundance of water in Africa. In thinking about what I might say today, I came across one staggering fact. Lake Chad used to be 25,000 square kilometres and is now after barely 20 years 1,500 square kilometres, with all the implications of that for agriculture in the future. Into that dangerous area, al-Qaeda has moved. We have talked about that organisation moving around, and the dangers of associated bodies in northern Nigeria and the problems they are causing there. Then we have AQIM—as my noble friend referred to it—which is al-Qaeda in the Maghreb. These are very dangerous situations.

On top of this, we add the issues of population explosion. We have gone effortlessly from 6 billion to 7 billion and are heading for 9 billion in the world by 2050. We are also facing the issues of climate change. That throws into the equation the issues of food security and energy security as elements of tension threatening the world. Undoubtedly that means more unemployment, and we are seeing serious levels of youth unemployment in the world.

This debate covers a range of topics but in the brief time that I have I want to concentrate on just two. My first obsession is the situation in Israel. The situation in Israel has changed since we had the previous Queen’s Speech. It has lost the only two friendly neighbours that it might have had in the shape of Egypt and Turkey, which makes it much more isolated. I despaired of what I thought was the totally negative attitude of Mr Netanyahu and his previous coalition Government, egged on by AIPAC in the United States, which makes even Netanyahu look like a moderate at times. Given that situation, I wondered whether change could occur. However, developments have occurred such as the apparent agreement over the hunger strikers, the apparent willingness to enter into peace talks and the extraordinary move on the part of Mr Mofaz and the Kadima Party in forming a giant coalition. I wondered what it meant, particularly in relation to Iran. My other deep concern, which I am glad to see is echoed by a number of significant voices in Israel, is that an attack on Iran would be disastrous, given the unstable and chaotic nature of this area of the world. I know that Her Majesty’s Government are doing all they can to convey that message as clearly as possible. I think that President Obama is trying to make efforts in that direction as well. I think that the noble Lord, Lord Gilbert, has said in this House that there are worse things than Iran getting a nuclear weapon. The chaos, confusion and proliferation that could follow an unsuccessful attack on Iran are certainly some of them.

The other issue that I want to address is Afghanistan. I listened with great interest to the speech of the right reverend Prelate, who set out his objectives: namely, the stabilisation of the Government and the avoidance of civil war and sectarian strife. One could have all sorts of ambitions, such as Afghanistan becoming a better, more civilised, place that was more aligned with objectives and ideals that we could share. However, I noted that the Statement which was made on the Kabul conference in July 2010, just after the previous Queen’s Speech, said that it had been rather a bad month. That speech was made virtually two years ago but the current month is also pretty bad.

There is no question but that I am unstinting in my praise for the courage of our forces and what they have done. I am wearing the tie with the Light Infantry Bugle. The unit used to be called the Somerset Light Infantry, then became the Light Infantry and is now The Rifles. I think that The Rifles have suffered as many casualties as almost any other unit in Afghanistan and have shown great bravery. However, the truth is that the objective for which we entered Afghanistan has been achieved. That objective was to make sure that it was no longer a place in which terrorist groups could be trained and recruited and in which they could plan their attacks on the United States and the western world. However, I am told that not a single al-Qaeda person has ever been found in Helmand. The idea that we are still fighting al-Qaeda in Afghanistan is not true, and we have become caught up in other issues that are outside the original objective. Therefore, I say to the Government that given the threats we face from the Yemen, the issues arising in the Sahel and the southern Sahara, to which I have referred, and the risk of al-Qaeda emerging in other areas, we must be flexible in our response. I know what the Government’s plans are for withdrawal from Afghanistan and it is vital that we stick to them. And in that withdrawal, it would be absolutely intolerable if Pakistan did not agree to suitable arrangements for extricating all the equipment.

We face a dangerous time in the world. We need to face it with our NATO allies, all of whom face severe economic and financial challenges. That is why we must be flexible and mobile and, given that our defence capabilities are limited, we must achieve as many objectives as we can by means of soft power, as my noble friend said in his opening remarks, and as William Hague said yesterday. We must make sure that our defence capabilities are available to be used in different areas and that we do not get bogged down—we are coming up to our twelfth year in Afghanistan—so that when other threats emerge we can play our part in tackling them.

12:44

[Baroness Blackstone]

My Lords, it is perhaps appropriate that I should follow the noble Lord, Lord King of Bridgwater, in this debate, given his concerns about what is happening in Israel, since I want to speak about the occupation of the West Bank by Israel and the continuing harassment and humiliation of the Palestinian people that this entails. In doing so, I ask the Government, through their membership of the EU and other international bodies, to use their best efforts to put pressure on the Israeli Government to stop the expansion of settlements and to adhere to human rights in their treatment of Palestine.

Having recently returned from the West Bank and Jerusalem, I was shocked by what I saw. There are now 500,000 settlers on the West Bank, and their numbers are growing every day. The size and number of these illegal settlements make a two-state solution, to which the Minister referred in his opening speech, more and more difficult because they deny the prospect of territorial integrity for a prospective Palestinian state. There has been no progress in the peace process. The Israeli Government give the impression that they wish to continue the status quo, modified only by even more settlers taking over land which at the time of the Oslo agreement was deemed to be set aside for the Palestinians.

GDP per head in Palestine is now only at 1994 levels. It has been calculated that the Palestinian economy would be six times greater in size were it not for the effects of the occupation. These effects include the inability of Palestinian businesses to export their products without very high costs imposed by barriers placed by the Israeli Government on the transport of goods from the West Bank into Israel. As a consequence, there is little interest from foreign investors, and Palestinians living abroad, who have attempted in the past to invest, have been unable to make a profit and in some cases have lost large sums of money.

Palestinian agriculture has been seriously damaged by loss of land to settlements and by the failure of the Israeli Government to ensure that water supplies are maintained. Water consumption by the settlers is hugely greater than that of Palestinians. The building of the wall has cut off Palestinian farmers from their olive groves and from their land for horticulture. In turn, this has led to a high proportion of the Palestinian population becoming dependent on food aid. This is mainly provided now by the EU and consequently means that British and other European taxpayers are having to fork out to pay for the consequences of the Israeli Government’s irresponsible policies. More than 80 per cent of national income in Palestine is now development aid, half of which is humanitarian aid, from which, of course, there are no long-term benefits.

The Palestinian people have for many years been committed to education, which they see as an important contribution to economic growth. However, stagnation in the Palestinian economy means that many educated young Palestinians have to seek opportunities overseas. The universities suffer from unacceptable harassment. For example, when trying to update equipment for their science and engineering laboratories, they order items from a standard catalogue used by scientific and technology faculties from many countries. Israeli customs dismantles the equipment and removes key components, which it justifies on the grounds that such equipment could be put to “dual use”. However, it gives no adequate evidence for this and leaves these important science and technology departments with expensive equipment that is unusable. All universities of any quality around the world now recruit their academic staff internationally and thus have many academic staff from overseas countries. The Israeli Government refuse to allow Palestinian universities to recruit from overseas, thereby damaging the quality of their teaching and the fulfilment of their research potential.

The military courts’ treatment of children who have been arrested for throwing stones at Israeli soldiers is little short of disgraceful. An international NGO has recently documented what happens to these children in a searing report entitled Bound, Blindfolded and Convicted. I recommend it to those of your Lordships who are interested in the humane treatment of children and in what happens when they suffer verbal abuse and humiliation as well as physical violence from those who have arrested them and are holding them in custody. The long-term effects of treating boys in this way cannot be underestimated. The bitterness and resentment they feel is no surprise and, of course, damages any prospect of good relationships between Israelis and Palestinians in the future—a prospect that we all must want.

The lack of time means that I cannot go into the issues around the use of administrative detention on more than 300 adult prisoners in Israel, the completely unacceptable prison regimes and the keeping of numbers of these prisoners in solitary confinement. However I welcome the fact that, following the recent hunger strikes, the Israeli Government have responded to these protests and promise reforms. Nevertheless, it is important that international bodies continue to monitor what happens to these prisoners, following decisions made this week.

Many other aspects of the occupation cause great distress and damage and disrupt the economy and people’s everyday lives. This includes the daily humiliation of going through Israeli-manned checkpoints to get to work, to go to school or simply to visit friends and families. The main checkpoint in Jerusalem is a particular cause for concern, with Palestinian workers herded like cattle through pens surrounded with metal fencing. The delays can be up to three hours. They affect the population at many different levels, from senior officials in the Palestinian Authority to schoolteachers who cannot get to school in time to instruct their pupils, to those undertaking semi-skilled and unskilled jobs in Israel. In parts of east Jerusalem settlers are taking over land and housing from Palestinians against their will. Elsewhere, Arab houses have been destroyed to provide yet more land for settlers.

The situation that I have described cannot be in the long-term interests of Israel. The more it goes on, the more other nations will refuse to support Israel in international, economic and political fora. Plenty of Israeli citizens wish for and deserve something better from their Government with respect to the treatment of Palestinians under the occupation. We owe it to those citizens, as well as to the Palestinians, to put pressure on the Government of Israel, first through economic sanctions—particularly on exports coming from illegal settlements—and, secondly, by upping political pressure for a change in Israel’s policies in occupying for more than 40 years territory to which it has no right.

12:52

[Lord Chidgey]

My Lords, in my contribution I should like to concentrate on developments in the international aid sector.

For some years now, there have been extensive efforts across the aid and development sector and the recipient community to develop monitoring and assessment techniques and evaluation procedures to measure and gauge aid and development effectiveness—be it in the African Sahel, the impoverished plains of the Indian desert or in the infant classroom of a Chinese village school, or whether it be for the relief of famine, combating disease or for providing education, skills or training.

The pursuit of an effective and accepted global system of aid and development monitoring has proved as exhaustive as the outcomes have been elusive. Through a series of international fora, initially with the Paris agreement and then with the Accra agenda—it sounds rather like a quiz show—international agreement has finally, some 10 years later, been reached at the fourth high-level forum in Busan, in the Busan Partnership. All the international governmental delegations have signed up, even China—thanks in no small part, it has to be said, to the determination and persuasive talents of Andrew Mitchell, our Secretary of State for International Development. All the major charities—for example, the Global Fund, the Gates Foundation, the World Bank and many more—have signed up. The post-Busan interim group now meets in Paris at the OECD under the chairmanship of Rwanda and the United Kingdom. It has agreed on seven themes that should guide the selection of global indicators for the monitoring of the Busan commitments—the set of indicators which will monitor the progress on the prioritised themes. The proposed set of indicators brings together: first, indicators that are measured through country-level progress; secondly, indicators that are global in nature or draw on existing global data; and thirdly, indicators that do not require data collection at the country level or aggregation to inform global monitoring.

Given the intense pressure and often ill-informed criticism to which aid and aid projects can be subjected, an objective, quantifiable and measurable international methodology for monitoring effective development co-operation is essential. There is, however, one extremely important component missing from this formula—the one component which, I would argue, has the strongest interest in measuring the effectiveness of an aid programme, in measuring its cost-effectiveness and value for money and in deciding whether the programme or project really does meet needs of the community it is designed to serve. That component is clearly the people themselves or their elected representatives. Yet there is hardly a mention of parliaments, enhancing parliamentary capacity or strengthening parliamentary capability to better monitor and hold to account the activities of national and regional governments who direct these aid programmes.

I suggest that one way of making sure that aid does indeed work is to allow the recipients to take ownership of the aid programmes—which are, after all, theirs—by ensuring that their citizens can acquire the skills and talents they need to drive forward their economies, drive their communities out of poverty and break the dependency in conflict-affected and fragile states which historically had more than 40% of the land under fertile agriculture but in which the figure has now fallen to around 10%, with 40% of the population being dependent on food aid.

Parliamentarians were represented at the Busan forum, albeit in small numbers, including just a handful from development recipient parliaments in southern and central Africa and representatives from the International Parliamentary Union and AWEPA in Europe—perhaps three dozen in all. The international governmental delegations, aid organisations, lobby groups, functionaries and so forth, I am told, numbered several thousand, which confirms just how little sensitivity, involvement or awareness the aid community seems to have of the communities that it ultimately serves.

Reporting back to the final plenary session at Busan on behalf of the parliamentary forum, I and others called for donors to support a parliamentary platform on aid and development effectiveness that engaged donor and partner countries’ MPs. They should engage in a dialogue on knowledge and experience for joint monitoring, mutual peer learning, risk assessment and management, and policy coherence. We also called for all stakeholders to recognise that effective institutions and policies must start with the separation of powers in order to prevent abuse. We believe that this is essential. We called for Parliament to provide the meeting point for civil society, the private sector and local government on issues as diverse as climate change mitigation and combating corruption.

That leads me to the closing part of my contribution. Much is made of the proportion of our wealth that we allocate to aid, and of the decision to raise it in this country to 0.7% of GNI by 2013. That has been an international target since, I think, 1970. I appreciate that, 40 years on, that is something to be aspired to by many countries. Of course, the actual cash that we are passing over these days is somewhat less than it would have been a few years ago, given the fall in our GNI. People should remember that 0.7% is not a static figure. I want to put this in perspective and compare it with the potential wealth of some of the developing countries that we are aiding.

The DRC is estimated to possess mineral assets of precious metals worth in excess of $24 trillion. Yet in the UNDP’s Human Development Index last year, the DRC was again listed as 187th out of 187. It is estimated that less than 5% of the real value of the minerals exported from mines in the DRC finds its way to the state treasury; the rest disappears through a network of shelf and offshore companies registered in zero corporation tax havens such as, but not limited to, the BVI.

I am running out of time but a similar situation, but on an even greater scale, exists in Zimbabwe with the Marange diamond fields. Surely we should start to take seriously the naked international theft and corruption on an industrial scale which takes place in these fabulously wealthy countries, whose citizens are left in poverty.

13:00

[Lord Stirrup]

My Lords, it is quite clear and quite right that the Government’s main effort over the coming Session will be on the economy, in particular the search for growth. I intend to speak today about the wider security concerns that were touched on last week in the gracious Speech, but I am in no doubt that in the long run our ability to respond to those concerns depends very much on our economic strength, and that is likely to be slow in building, given the continuing levels of public and private indebtedness. Nevertheless, there are some difficult near-term challenges that loom large on the international scene and, despite our straitened circumstances, we must be prepared for them.

In many cases, the press of events is likely to deny us the luxury of delaying our response until more prosperous times. First, there is the unfinished business of Afghanistan. The next two years will see a decline in our contribution to combat operations, with the Afghans assuming the lead across the country by 2014. This is in my view still the best option for achieving long-term stability. It was never possible for us to solve Afghanistan’s problems. The only people who can do that, if anyone can, are the Afghans themselves, and the sooner they take on the responsibility, the better.

However, I am concerned at the growing sense, not just here but more widely in the international community, that after 2014 we will pretty much be able to wash our hands of Afghanistan. This, I think, is wrong on two counts. First, the Afghans will continue to need expert support in many areas, not least militarily. We may end our direct combat role in 2014 but that does not mean that the Afghan national security forces will be able to operate entirely unaided. The number of people we have deployed will of course reduce dramatically, but we must be prepared for a long-term engagement with the Afghans. We will have brought them to the start line, but they have a long race yet ahead of them, and they will need our help in running it.

Secondly, and even more importantly, we have to resolve the issue of long-term funding for Afghanistan. People often talk of the collapse of Afghan governance following the Soviet withdrawal in 1989, but what they sometimes miss is that the Najibullah Government managed reasonably well after the withdrawal of the troops. It was the collapse of the Soviet Union and the consequent end of foreign aid that brought about the regime’s downfall. If the international community fails to put Afghan funding on to a sustainable basis post-2014, I suspect that a similar collapse will be inevitable.

It will of course be difficult to persuade many nations that they should go on footing the bill for Afghanistan when their own financial position is so uncertain. That will no doubt be true here in the UK too. However, having expended the lives of so many of our own people and so much of our national treasure in Afghanistan, it behoves us to sustain the necessary financial commitment to turn that sacrifice into lasting benefit. I would not say that if I thought that progress in Afghanistan was a lost cause; I do not. Indeed, I think that progress will become slightly less difficult once we disengage from combat operations and the Afghans become ever more responsible for their own destiny. It will not be pretty, and it may follow political paths that we did not foresee or would not have chosen, but continuing economic development and increasing levels of education will, in the long run, be good for Afghanistan and good for the region.

That means that they will also be good for us because although we might just feasibly be able to ignore Afghanistan, we cannot ignore Pakistan. The ties that bind us—and there are nearly a million of those ties in the form of UK citizens with family links to Pakistan—are simply too strong. Pakistan’s future is connected, inter alia, with that of Afghanistan. The challenges in Pakistan are to my mind even greater than those in Afghanistan, but neither can be viewed in isolation from the other. So Afghanistan will remain a long-term security interest for the UK, and we must treat it accordingly. With that in mind, I hope that over the coming months the Government will bend every effort to get international agreement on adequate long-term financing for Afghanistan.

The other issue that I want to address is Iran. I do not know whether the ongoing diplomatic efforts to persuade the Iranians to forgo highly enriched—that is, weapons-grade—uranium will be successful. What I am sure of is that a military attack on Iran’s facilities is unlikely to delay the programme for very long and that the consequences of such an attack are unpredictable but likely to be extremely unpleasant for everyone. I know that the Israelis see the issue through a rather different prism, and I have some sympathy with their concerns, but many Israelis would agree with the assessment that I have just put forward. I am also clear that sanctions against Iran are having a real and serious effect, and that this stick, if combined with suitable carrots, may just be enough to cause the Iranian regime to change course. Therefore, I hope very much that we see some substantial progress coming from the imminent talks in Baghdad.

However, in the line of business that I have followed for most of my life, we always reminded ourselves that hope is not a plan of action. No matter how much we might be against an attack on Iran, such a decision is not in our hands, so we need to be prepared for all eventualities. We need to remember that Iran views us with considerable suspicion, which is not entirely unreasonable given our previous form in that country, and that, if attacked, it could retaliate against us and our interests, no matter how loudly we protest our innocence. We must be able to respond if challenged in this way, and the more obvious it is that we are able and willing to respond, the less the chance that we will actually have to do so.

There are of course many other serious challenges to international order and stability, such as in the Yemen and the Horn of Africa, that could affect us here in the UK. Our first response in each case should be through diplomacy and aid. Indeed, I would resist strongly any suggestions that we should increase our military involvement unless such an option were inescapable. We should always be cautious about committing forces, bearing in mind that the outcome of such commitment is always unpredictable.

Nevertheless, the use of military force is sometimes necessary. Our military capabilities have been stretched very thin in recent years, and continue to be so. Of course, at present the Armed Forces are putting a lot of effort into containing costs and managing redundancy programmes. I do not deny the need for this. Balancing the MoD’s books was a necessary task, but defence does not exist merely to keep the books balanced. It exists to serve the nation in times of need, and this requires not just the right equipment and numbers of people but commensurate levels of training for the wide range of contingencies that those people may be called upon to face, none of which can be secured quickly or at no cost.

So, even at a time of such financial stringency, it is crucial that the Government keep their eye very firmly on the international scene and the risks that we face, on the responses that we may have to make to those risks and on the capabilities that we will require to underpin those responses.

13:08

[Lord Empey]

My Lords, the Minister will not be surprised to learn that I want to say a few words about Libya. It is hard to believe that it was only last year that that nation was in turmoil and a bloody revolution to remove a vicious dictator was in full swing. I am pleased that our Prime Minister and Government took a robust stand against Gaddafi and led the world in the attempt to prevent the further enslavement of the Libyan people.

For decades, Gaddafi ruled by fear and violence. He was reviled and isolated by much of the world, but in more recent years he underwent something of a change in status. After he renounced the drive to obtain nuclear weapons, he was welcomed in western capitals, pitched his tent as appropriate, and growing trade relations were gradually being established, led in part by Britain. However, memories are short. It was not that long ago that we witnessed, within walking distance of this Chamber, the brutality of the Gaddafi regime when its agents shot dead PC Yvonne Fletcher.

That action was but the tip of the iceberg as far as the Gaddafi regime’s crimes against the people of this country were concerned. Gaddafi began to ship weapons to the Irish Republican Army in the early 1970s and the interception of the vessel “Claudia” by Irish defence forces in 1973 was proof positive of his hatred of this country. Following our support for President Reagan’s actions in bombing Libya in the 1980s, Gaddafi decided that he would wage war on the United Kingdom using the proxy of the Irish Republican Army. This was not the first time that our enemies have used the vehicle of Irish republicanism to attack this country. It happened at least twice in the 20th century alone. However, Gaddafi’s supply of vast quantities of weapons and explosives to the IRA in the 1970s and 1980s was by far the most audacious and effective in recent years. Intelligence sources estimated that boatloads of arms and explosives were landed in Ireland, with the interception of the “MV Eksund” in 1987 being the only success in that decade. Intelligence sources conceded that that had been a serious failure and very costly.

In addition to vast quantities of rifles and other arms, the supply of the explosive Semtex was the greatest boost to the terrorist arsenal. These explosives allowed the IRA to conduct a bombing campaign in Northern Ireland and in Great Britain for many years, and were its most potent weapon. Events such as the bombings of the Baltic Exchange and the Arndale centre in Manchester, and numerous attacks on soldiers in buses and even on the Blues and Royals on horseback were fuelled by Gaddafi’s largesse to these terrorists.

This context leads me to my main point. The Minister knows that I have raised the issue of compensation for the families of those killed and wounded in this House and elsewhere for some time. I began by writing to the then Foreign Office Minister, Mike O’Brien MP in 2002 and 2003 as well as to Prime Minister Tony Blair. Since then, I have met officials dealing with this matter and believe that a situation now exists where we can make some progress. When the newly elected Government of Libya are established, can the Minister confirm that there will be a UK Government-led initiative to ensure that the victims of the Gaddafi regime’s crimes get compensation?

I know that there are some third-party actions, led by lawyers acting for a number of victims, and I know that the Foreign and Commonwealth Office is facilitating their meetings with the National Transitional Council. But well and good as that may be, I want an assurance that Her Majesty’s Government will lead the main negotiation with the new Government of Libya and not leave it to random groups of individuals and lawyers to take up the case. If this were to happen, many people in this country would lose out. It needs to be led from the front by the Foreign and Commonwealth Office.

I hope that the efforts made by the United Kingdom to free the people of Libya will not go unnoticed by the newly elected Government. The United Kingdom took great risks and, at the start of the revolution, the Prime Minister was being briefed against by our American allies and others. Many western democracies such as Germany did not lift a finger to help and left it to us, the French and eventually the United States, with some Gulf support, to carry all the risks. You can bet your bottom dollar that the Germans and others will be queuing up in Tripoli to get contracts and do business despite their lack of effort. They did the same in Iraq and I hope that our business leaders and other government departments will not allow us to be left behind again.

I fully understand that massive problems exist in Libya, with much of the country’s infrastructure destroyed and many unresolved tribal issues. The pressure on a new democratic Government will be from their own constituents who will want jobs and services restored. Nevertheless, a marker must be put down that we want a positive outcome to the question of compensation from Libya to the United Kingdom for the crimes of the previous Government of that country. There can be a debate about what form that should take, whether cash or other offset deals involving contracts or trade but, at the end of the day, we want justice for the people of this country. Other nations have pressed their cases in the aftermath of air hijackings and so on and we must be just as resolute.

Although most of the victims are to be found in Northern Ireland, I have always avoided seeing this as a provincial issue. Many other citizens of the UK were victims also. All the regular soldiers who were killed and injured and returned to Great Britain are the most obvious example. However, people were also injured in some of our cities, such as London, Manchester, Birmingham and Warrington, to name but a few. As victims can be found all over the United Kingdom, it must be dealt with as a national issue by the national Government. I trust that the Minister can give the people of this country the assurances and guarantees that I am seeking.

13:16

[Lord Campbell of Alloway]

My Lords, I apologise to the House and to my noble friend Lord Howell because I had to attend to a puncture on my car while he was addressing the House.

This will not be a very long speech. I am really concerned with the position that was taken on the origins of the gracious Speech, the debate on which is being concluded today. It created a torrent of dissent, not only in my party, but also among the loyal Opposition and the Cross Benches. It concerned imposing a Government who would abolish this House, curtail the primacy of the other place and assuredly destroy the relationship established between our two Houses. Inevitably, that will cause dissent.

I am not criticising any particular person and certainly not the Leader of the House. By mentioning it today, I am seeking to ask the other place to consider retracking this coalition. At the moment it is not effective.

The voices and votes of people who support the coalition were not heard at all—certainly not the other day in the council elections. If one looks carefully, one realises that the coalition does not reflect anything that the electorate particularly want. In fact, they rather object to it. I take that as my theme today. I know that it will be thought that I am criticising the noble Lord, Lord Strathclyde, but I am not. I have to make this clear because it may be taken that way, but that is not my intention.

One could go a little further because this is a debate on defence. My question relates to this. Defence of the realm is not something that just happens today; it happens for quite a time ahead. Foreign affairs are the same. They should both take fair precedence on government expenditure. However, they are both dependent on the state of the economy—and the state of the economy is and has been for some time a stalemate. This is relevant to adequate provision for defence and foreign affairs, which all relate to government expenditure.

There is not much that I wish to say beyond that. An amendment to the Motion was tabled yesterday by the Opposition. It made some points that I would like to make today. One is that there are no settled means of providing growth for the economy—none. There is no reference to them in the gracious Speech—none at all. If there is any reference to encouraging growth, there is no mention of effective means. Not only that, but there are no settled means of easing our mammoth debt. Every month we have to borrow more to pay interest on it. We are doing what we can—up to a point—but we must try to do a little more and ease the economy up. Then we will have a chance to deal with all these things.

This is the last day of debate on the gracious Speech. The Statement on the second day was something of a shock. I have made my points and I hope that the other place will help the coalition reset itself to reflect the voice of the people.

13:24

[Lord Teverson]

My Lords, I have the great privilege of being the chair of the House’s European sub-committee on external affairs, on which I have been helped many times by the Chairman of Committees, who is in the Speaker’s place and whom I thank for his assistance over the past few years. Today I will go through some of the issues that the committee has felt strongly about and has reported on, and will ask the Government a number of questions on them.

South Sudan and Somalia are both in the Horn of Africa, which is one of the areas that we looked at and about which we have concerns. I will deal with the Horn of Africa first. We very much welcome the fact that our Government, together with the European Union, are bringing together a much more overarching strategy for the region—one that is not just based on naval forces against piracy but encompasses security sector reform, with personnel based in Uganda but for the benefit of Somali troops, as part of a much broader Horn of Africa strategy.

In particular we noted that in the past two weeks there was an incident where EU forces in the Indian Ocean, as part of Operation Atalanta, attacked onshore pirate facilities in Somalia. I am sure that I speak on behalf of my committee when I say that we welcome that bolder-than-usual step forward towards making sure that we stem the problem at the source rather than trying to solve it in the vast expanse of the Indian Ocean. It is a major step forward.

We were very iffy—if I may put it that way—about the civil arming of merchant ships, which is being introduced with government approval. There, perhaps, the committee will have to eat its words. If it is done with sufficient training and is successful, it will be another step forward that we will welcome.

A Question was asked earlier in the day in the House on South Sudan. It is a key issue. Matters have got worse. We thought that perhaps they could not get worse but they have. The committee is very aware that the problem is not just with the Sudanese Government; the South Sudanese Government, too, have been reckless in this area by cutting off oil revenues to the north and by their occupation, however provoked, of Sudanese oilfields for a temporary period—as well as all the other issues in South Sudan.

We wish South Sudan every success in its independence, but at the moment the situation is going the wrong way. We know that both the European Union and our Government are very concerned to make sure that the matter is resolved peacefully. Again we ask them to bring China constructively into the conversations, because China is the main market for both countries’ output of commodities, so that we can somehow resolve the issue without all-out war between the two nations. It is a very difficult topic, but if it goes wrong it will threaten much broader regional instability that will spread into Uganda and other parts of that area of Africa.

Another area that our committee is involved in is not directly European but covers the UK-French defence treaties that were agreed at the end of 2010. It is probably not known by the House generally that my committee, together with the Defence Committee of the other place, meets the Senate and the National Assembly every six months to track the progress of the treaties and to give a parliamentary overview on whether they are fulfilling their objectives. The overview was demanded more by the French Administration than by us, but was very much supported by the MoD as something that would help us in our negotiations. Of course, the Libyan war was an example of bringing together our forces. Instead of practice through exercises, there was close co-operation between our two armed forces during that time.

We are very keen that those defence treaties should continue to be successful. There has been much progress with them over the past year: they have been deepened. But I would be interested in the Government’s view on how the change in aircraft specification for our own aircraft carriers away from cats and traps will affect that interoperability and whether it will in any way sour the potential defence relationship. Has there been any initial indication from the new French president in the Elysée Palace as to whether he is equally dedicated to this very noble cause of two great European powers making sure that together they are able to exercise their military influence in times of budgetary difficulty?

I would like to bring up an area of personal interest as chair of the All-Party Group for Guinea-Bissau, which is a small ex-Portuguese colony in west Africa. It has been an independent state since the 1970s. It has all sorts of issues. I was due to go out as an election monitor for the second round of presidential elections last month. Unfortunately, those did not happen because of a military coup. My APPG was part of the monitoring of the first round of presidential elections. The tragedy was that that election was carried out perfectly—as well as any election in this country—yet the military did not approve of the likely result and intervened. I want publicly to thank the Foreign Office and the ambassador in that part of Africa, who is based in Senegal, who helped that election monitoring to work and be successful. I can do no more than endorse European and British sanctions now on Guinea-Bissau and on those individuals in the military until that situation is resolved.

I was going to talk about the European military situation and the NATO summit in Chicago coming up, but I do not have time. However, it is imperative that the EU and NATO work together for Europe's defence now that America is cutting its own budgets and looking towards the Pacific theatre. We have huge resources in Europe and we should use them better, which means that they should not cost us any more money to be effective.

13:32

[Lord Craig of Radley]

My Lords, it is now just over 18 months since the Government announced the outcome of their strategic defence review. Much criticism was and still is heaped upon it, suggesting that the outcome was driven by the financial difficulties that the country was facing and was less than a fair appraisal of the Government’s strategic perceptions. The vision—no more than that—of a new defence capability to be achieved around 2020 was projected, but without certainty, until after the next SDSR in 2015, that the additional forward funding required to match these aspirations is going to be provided. Last Monday's defence budget Statement said that the proposals for planning round 12, which will take the programme as far as 2021 were,

“reflecting the planning assumption agreed with the Treasury of a 1% per annum real increase in the equipment and support budget from 2015”.—[Official Report, 14/5/12; col. 141.]

Note, please, that that is not the same as an increase in the overall defence budget. Will that 1% have to be found from elsewhere in the defence programme? Perhaps the Minister can elucidate on that point.

Given the great unease and uncertainty about the economic situation, I wonder whether even a modest increase in the equipment spend of 1% will be achievable come the day. Meanwhile, today our Armed Forces are involved in considerably more expeditionary activity than they were to expect or to plan for, and at the same time all three services are embarked on redundancies and redeployments of major proportions.

An essential part of any defence programme must strive to ensure that commitments and capabilities are matched. If they are not, sooner or later the overstretched equipment has to be replaced or refurbished far more quickly than planned for and at additional budget cost. I hope that the Minister will be able to tell the House more about the next stages in the coalition’s defence thinking, not just about the gradually more imminent withdrawal from Afghanistan. Do they, for example, accept that for what are termed wars of choice there has to be a protracted period of disengagement or an absolute minimum of new operational commitments? That is particularly so for the Army, which seems likely to have to rely on the safe recovery of much of its equipment that is now deployed in Afghanistan, although if press reports at the weekend are to be believed, £2 billion worth of this army kit is to be left behind and handed over to the Afghan Army.

For the rest, if the problems over logistics access through Pakistan persist, and with no credible alternative route to shipment home by sea, the long and tortuous overland route north and west from Afghanistan will be even more of a challenge. Perhaps the Minister will be able to reassure the House that the Government have contingency funds earmarked to replace army equipment handed over to the Afghans or that does not make it successfully back to this country from Afghanistan.

One of the most unsatisfactory decisions announced at the time of the strategic and security defence review was the scrapping of the maritime patrol aircraft Nimrod mark 4. I set out my reasons when your Lordships debated the review back in November 2010 and I do not intend to dwell on them again in detail. But since that debate, I was concerned to learn that the public line being taken by the then Defence Secretary, Dr Fox, had been inaccurate and misleading. What really took so many by surprise was the decision not only not to proceed with Nimrod, but to cut all the airframes up immediately for scrap.

That caused a great deal of disquiet. Attempts were made by the Government to explain away this crass decision. For example, in a BBC TV broadcast on 27 January last year, Dr Fox said that the Nimrod had not passed its flight tests. The story was being put about that the Nimrod was 10 years late, was unsafe, that there were doubts that some of the technical difficulties could be resolved and even that the aircraft had not flown. If those were the points being briefed privately by the Secretary of State to the Prime Minister during discussions of that defence review, then he was being seriously misled about the true state of the programme. While I accept that rightly or wrongly the financial pressures faced by the Government forced the decision not to bring the Nimrod into service, it does nothing for the credit of those taking these decisions to attempt to mask it with such misleading statements.

The true state of the programme, admittedly after years of difficulty, was, by autumn 2010, well advanced. Five airframes had been flying, the first getting airborne in August 2004. The second, which first flew in December 2004, was used extensively for missions system testing and had completed more than 230 flights. Three further aircraft with mission systems had been flying by 2010. Apart from the first airframe that did not have a mission system fitted, four aircraft could have been ready for operational use by last year or this one. The first aircraft was in fact delivered to and accepted by the RAF in March 2010.

None of that suggests that the aircraft was unsafe or that any teething technical problems could not have been dealt in the normal way when a new type enters service. Apart from its primary role in maritime operations, the earlier variants of Nimrod demonstrated the versatility, variety and flexibility of such air platforms fitted with state-of-the-art electronic aids and weapons. Nimrods proved their worth hundreds of miles inland over Afghanistan as much as they did providing security cover for our deterrent force submarines or co-ordinating search and rescue missions far out over the Atlantic. In last Monday’s Statement there was no mention of a plan to meet this particular role. I hope that the Minister will reassure the House that the roles abandoned when Nimrod was scrapped have not been forgotten.

Are there plans for a new maritime patrol aircraft with the range, endurance and sophisticated mission systems associated with its predecessor roles well to the fore in the future equipment programme? The cost of providing new platforms and mission systems for this role will probably far exceed that of putting the nine Nimrods into storage until the funds to bring them into service could have been found—a penny-wise, pound-foolish decision if ever there was one. Indeed, there seems to have been a waste of resources on this programme and on the “will we, won’t we, will we, yes we will have” the F35 STOVL-variant and the £100 million additional nugatory cost of preparing for the now redundant cats and traps system on the carrier.

The current reliance for critical maritime surveillance tasks on a mix of Merlin helicopters, surface ships and a Hercules aircraft can do little to match the reach and variety of roles of a maritime specialist aircraft. The sooner their more modest capabilities are replaced and enhanced, the better for our national security. I hope that the Minister can reassure the House.

13:41

[The Lord Bishop of Lichfield]

My Lords, Ascension Day is a good time to focus on international development because the Ascension marks the moment when Christ’s command to care for our neighbour becomes universal, crossing all geographical and tribal boundaries.

For some years, the millennium development goals have eluded our grasp. Successive Governments have discovered that without a financial commitment these goals, though widely welcomed, could prove unreachable. It was one of Gordon Brown’s great achievements to commit the then Government to 0.7% of our gross national income in aid by 2013. At the last general election, all three parties made the commitment to enshrine this international target in law. The Government reaffirmed this commitment in the March Budget, meaning that the UK will meet this long-standing international commitment for the first time in 2013. The UK will be the first G8 country to have achieved this target. Given the current state of the economy, this is a remarkable achievement.

Naturally there has been some lobbying from the development agencies. They are worried that the lack of draft legislation might mean uncertainty for the poor throughout the next parliamentary timetable. However, the Government’s commitment is clear and to be welcomed. In April, the Secretary of State for International Development wrote to the heads of UK aid agencies, saying:

“The Coalition Government’s ‘Programme for Government’ also made clear that it would enshrine the 0.7% in law”.

So why the lack of any draft legislation?

The Economic Affairs Committee of your Lordships’ House recommended in March that the Government should drop their commitment to 0.7% being spent on overseas aid from 2013. Its report warned of the risk of skimping on value for money and accountability. We all have horror stories of money that has been given and then misused. A friend of mine runs a charity called Operation Sunshine that takes container-loads of useful goods to people in one of the poorest spots in the world. At present all the containers are being held up by bureaucratic customs officers in the receiving country and no one seems able to shift them. I also remember contributing to a fund seeking to buy a bike for every pastor in an extremely poor diocese. All went well until we heard that the bishop had absconded to the US with all the proceeds.

However, for every occasion like that, most of us have dozens or even scores of stories of wonderfully creative ways in which aid has been used to transform lives. A Lent project in my Midlands diocese has produced enough money to enable young people in a very poor African township to go for higher education. All of us who go out there from Lichfield reckon that we in the still-rich West are the ones who gain the most from these twinnings. If that is so in our small church-led projects, surely it can also be so in the use of much larger intergovernmental schemes.

Next year the UK takes over the chair of the G8. With the UK in the international spotlight, 2013 is a vital year for Britain to demonstrate leadership in the fight against extreme poverty. Perhaps it is as well to recognise that aid is only one dimension of our struggle to prevent famine, infant death and all the other millennium targets. The parable of Dives and Lazarus reminds us that when the difference between rich and poor gets to a certain point it makes God angry and that poverty arising from injustice is structural and cannot be rectified by charitable giving alone.

The churches have been cautious about legislating for what are essentially moral commitments, but in recent years they have found themselves moving beyond the aid debate to look at the broader question of tax justice. For example, Christian Aid estimates that developing countries lose approximately $160 billion a year to tax avoidance by multinationals. It is exciting that the Government’s decision to meet the 0.7% spending commitment next year means that a modest proportion, about a penny ha’penny, of every pound the Government spend will be on aid. This has the potential to put nearly 16 million children in school, provide more than 80 million children with vaccines, save the lives of 50,000 mothers and provide better nutrition for nearly 10 million people.

It is therefore a little disappointing that parliamentary time has not been made available to do what has been promised, and it would be good to hear why from the Minister. I am sure that there are many noble Lords who would welcome reassurance that parliamentary time will be made available before the next election. To enshrine this commitment in law would create an excellent platform for the Government when it comes to talking about trade, immigration, environmental protection, corruption, peacekeeping and global security. It has been well said that we dare not build our own economic recovery on the backs of the global poor.

13:47

[The Earl of Sandwich]

My Lords, it is a great pleasure to follow the right reverend Prelate the Bishop of Lichfield and to support everything he has just said—although I think we were all horrified to hear about the absconding bishop and we pray that it may not happen again.

The level of the aid budget may not seem as compelling as some issues of foreign policy but it affects millions of people’s lives as well as our own. It is in the coalition agreement and all parties are signed up to it. “We will legislate when parliamentary time allows”, say Ministers. Where have we heard this before? The Bill to enshrine the United Nations 0.7% target in law is a bit further down the list than Lords reform but it is one that already commands consensus and will need very little parliamentary time. Indeed, if the Bill is already being drafted, as I hear, it would be a good candidate for pre-legislative scrutiny. Can the Minister say when he thinks it may come forward?

We know from the Secretary of State’s interview last month that he is personally behind the Bill and that his party will support him, judging by a show of hands in the 1922 Committee. Politicians of all hues know that there is massive public support for the aid target, and aid agencies are pressing for the Bill. Thanks to Ministers like our own noble Baroness, Lady Chalker, who was here earlier, poverty eradication is now firmly Conservative philosophy these days and one of the keystones of the coalition. I was pleased to hear the noble Lord, Lord Howell, mention Africa and my noble friend Lord Cameron explaining what actually works in Africa, and we need to hear more about that. Plenty of things work.

However, as we have heard, there are critics of the legislative route, including some close to home. The Economic Affairs Committee’s report does not accept that meeting the UN target by 2013 should be a plank of aid policy and gives four reasons: it prioritises the amount rather than the results of aid; it makes spending more important than effectiveness; speed reduces quality, value for money and accountability; and there is an increased risk of a corrosive effect on local political systems. The report claims that it deprives future Governments of the flexibility to respond to changing circumstances. I do not agree with these points, which are rather academic, and I will be happy to respond on them when we have a full debate on the report. I suspect that the then Minister will dispose of them fairly quickly, saying that legislation will in no way alter the quality of aid or impact on other Governments and that it gives the givers and receivers of aid more stability and confidence in the aid process.

Meanwhile, the Lords report has been ferociously attacked by the Bond group, which represents all the leading aid agencies. It argues that aid is already making a difference, saving millions of lives and ensuring growth and good governance. It says that we need targets such as the millennium development goals to halve poverty and reduce infant mortality by at least one-third. These and some other targets have already been met, thanks partly to an international campaign but mainly because of the efforts of certain Governments and of the poor themselves.

The 0.7% target was set by the UN more than 40 years ago. Although progress has been slow, Denmark, Luxembourg, the Netherlands, Norway and Sweden have now reached it. The UK stands high in the esteem of other countries and was commended by the OECD only two years ago for an outstanding aid programme. It will certainly be expected to be one of the next countries to attain the 0.7% target. I was especially impressed by Christian Aid’s recent comment that Britain had the largest share of aid through the Marshall Plan after the war and that we now had the opportunity to “pay it forward” to others, finding a new role as a “development superpower”, as the Minister put it earlier.

Finally, the aid agencies remind us that world recession has hit the poorest in all countries hardest through rising food and energy prices. In countries suffering from conflict, the internally displaced can expect no future without the assistance of the international community. In South Sudan, we are hovering on the edge of another humanitarian disaster, as we heard earlier. In Kosovo, we have helped another new nation emerge beyond those disasters. We have high hopes for Afghanistan. I spoke to a delegation of Members of Parliament from Afghanistan yesterday, who gave me much confidence about what we are achieving there. In other words, we already have a moral duty, as we have heard from the right reverend Prelate, to maintain our aid programme and this should be turned into a legal requirement. It is also in our own self-interest that we keep up our international obligations, many of which also bring us greater security as well as political, diplomatic and trading advantages. We heard some of these arguments from the Labour Front Bench, too.

At the same time, we need to reconsider our aid targets such as the MDGs, which are coming to the end of their time. The Prime Minister is due to co-chair the post-2015 review, which will build on their successes and look forward to a new set of sustainable development goals.

The advocates of these SDGs, as they will be called, will have to tread carefully if they are not to founder, as Rio is foundering, on one basic paradox: developed countries are trying to reduce world consumption and carbon emissions while developing countries, led by middle-income countries, are going for growth and trying to increase them. The climate change agenda is getting bogged down in this paradox, and it would be better for the world if we stuck to people-based poverty reduction as our primary development goal. Churches and aid agencies have focused correctly for years on integrated development and the relationships, as we heard from my noble friend Lord Cameron, between soil and water, between nutrition and healthcare, between small farmers—most of them women—and entrepreneurs, following attainable projects. Good governance and human rights are also important. I know that DfID is very good at these, but in every programme we must look first at the participation of the people, because they will ensure their own success.

13:55

[Lord Luke]

My Lords, I am honoured to be able to contribute to the defence part of the debate on the Queen’s Speech. I am becoming much more positive about the direction in which British defence is going. Far too much money was wasted under the previous Administration, and I am pleased to see the coalition taking a common-sense approach to procurement and making sure that the defence of our country and protection of our brave service men and women are always our first priority.

I applaud the MoD’s recent decision to carry on building both aircraft carriers for the Navy. We never know what the threats of the future may be and, as we know from the past, warfare is changing all the time. Ensuring that we have the capability to fend off any situation thrown in our direction is imperative. Therefore, having two carriers is a must. No matter how sophisticated the weapon, all such apparatus requires maintenance and, eventually, major refits.

In the case of a carrier, it is vital that maintenance is thorough and not rushed. Great care must always be taken, and while one carrier is out of action, there must another one to plug the gap. Will the Government confirm that both carriers will come into commission more or less simultaneously? I know that it is hard to be precise, but can the Minister tell us the latest estimated cost of these carriers up to date and what the eventual total might be?

Can my noble friend say a little more about the interoperability of these carriers with the French and, indeed, with the Americans? Can he confirm that the initial three Joint Strike Fighters scheduled to be delivered to us will all be the STOVL versions? The right honourable Secretary of State, in his Statement on the 10 May, said that the relatively short range of the STOVL JSF would be less important because of the use of air-to-air refuelling. Where will the tanker aircraft fly from? And what tanker aircraft will we have in eight years’ time, when we should be able to start using the carriers?

How many JSF fighters do we have on order and how many will we eventually be able to deploy? How many will be usually stationed on each carrier? How are we going about training personnel for all this new equipment, so that as soon as the carriers and the JSFs are ready, time is not wasted with training? Have we indeed started, as I think I have read, sending key personnel to America to begin to learn the ropes on the American carriers?

Can my noble friend tell me the latest estimated date for the first JSF fighter being delivered and, therefore, when training can begin in the United Kingdom? What thought has the Minister had for the future of these carriers and the types of equipment that we may have to accommodate as warfare changes? I imagine that, as the years pass, warfare is bound to become even more technical and space on these carriers will be needed to accommodate new and developing technology over their 50-year life expectancy. Will the Minister ensure that there is spare room available to accommodate extra gear if required? I look forward to the Minister’s response.

13:59

[Lord Liddle]

My Lords, I follow on from the excellent speech by my noble friend Lord Wood of Anfield on our Front Bench to ask what this Government’s vision is of Britain’s place in the world. The noble Lord, Lord Howell of Guildford, spoke eloquently earlier about Britain as a network. Fair enough, that is essential in a multipolar world but being a good networker is not the foundation stone of an effective foreign policy. That depends on firm alliances in a world where our position is that we will soon represent only about 2% of global GDP.

The transatlantic relationship has been the central plank of our foreign policy for my lifetime. It is what I grew up to believe in. To what extent will that still be the case in the decades of the Asian century now unfolding? What will be the impact of the coming US debt crunch on its defence budget, commitment to Europe and vital ability to help us, as it did in the recent Libyan operation? Alongside America’s reduced resources and increasing shifting focus to the Pacific, there is also every sign of increasing inwardness in the United States. Just look at the defeat of the excellent Senator Lugar in the Indiana primary last week—a man who contributed a lot to internationalism and Atlanticism in his distinguished career.

Yet, at the very moment that America’s Atlanticist commitment is visibly diminishing, the present Government appear to have set a deliberate course of loosening Britain’s ties with the European Union. Last December, we had the Prime Minister’s infamous non-veto—a petulant walk-out on our European partners that is already damaging our interests, for example on the recent financial services regulation. I fear that this is not a one-off. Look at the Government’s decision to focus precious Foreign Office time and resources not on the questions of how we strengthen the European Union and its role in world affairs or secure Britain’s role in what is increasingly an inner core/outer core European Union, but on how we weaken those ties. What else is the meaning of all this babble about repatriation of powers and renegotiation of the relationship, or, in coalition speak—the Liberal Democrats still have some power to change the words if not the substance—rebalancing of competences?

Last year, when the European Union Bill made its way through this House, Ministers assured us that the purpose of the referendum lock was to draw a line under the process of European integration as it affected Britain and enable the Government to go out on the front foot and make the case for British membership of the European Union. Since then, we have waited with bated breath. I was glad to see the reference in the speech of the noble Lord, Lord Howell, to membership of the EU as an essential pillar of our foreign policy, but can the Front Bench opposite point to a single speech or newspaper article in which the Prime Minister, the Foreign Secretary, the Minister for Europe or any other member of this Government has made a substantial and sustained argument—as opposed to a glancing paragraph—in which they argue the case for British membership of the European Union? I will of course apologise if I am wrong and these speeches and articles can be put in the Library of the House, but I would love to see them.

It is almost 65 years since the mighty, magnificent Ernest Bevin, in the wake of the Communist coup in Czechoslovakia, declared that “Europe must unite or perish”. I am thankful that we are in a very different world now, but the basic message remains the same. Today, the challenge is of potential decline: decline in Britain and Europe’s relative economic power; decline in our political clout as power shifts to other parts of the world; and decline in what, for all those terrible episodes in Europe’s past, has been the overall civilising influence of European culture and values. Decline may not bother some people if they think that they will be comfortable in their own lifetime and cosseted by our social model and welfare states, but I fear that this sense of comfort is illusory. The economic crisis we are witnessing now—in Britain as much as in the eurozone—may be deeper and more fundamental. It may be the end of the promise of betterment for future generations and the start, particularly for the low skilled and less fortunate, of a long process of squeezed living standards in response to a doubling of the labour pool available to global capitalism.

The question facing the nations of Europe in this harsh new world is: do we want to be pushed about and powerless, or will we unite to defend our interests and values? We can work together to deepen a single market and invest in research and knowledge that creates a dynamic and vibrant economic base that can withstand more global competition. That is a single market that takes the high road to competitiveness and, through the social and environmental standards of decency and sustainability that it sets and robustly defends, defies a global race to the bottom. That is a united Europe that will not be brushed aside at the world’s top tables on questions of energy, climate change, resources and development. That is a united Europe that can spread the benefits of democracy and stability to its wider regions, be capable of defending its vital interests, and be a force for good.

To conclude, in the next decade, Britain faces a stark choice about its global role. Do we succumb to the false seductions of comfortable little “Britzerland”, or play our full part in rebuilding Europe’s unity and strength? For all the problems of Europe and the eurozone, and all the EU’s difficulties in terms of its bureaucracy and the need to renew and restore its legitimacy, somehow—for the sake of our national interests—we have to make Europe work.

14:08

[Lord Sharkey]

My Lords, I will speak about the current situation in Cyprus. The reunification process is now 40 years-old. During that time, important changes have taken place on the island, but not any settlement. In particular, civil society has matured, and matured faster than the political systems. The economic gap between the north and the south has grown considerably and now there is the important fact of the discovery of large natural gas reserves in Cypriot territorial waters. But the reunification process itself is, at best, stalled.

Alexander Downer, the special adviser to the United Nations Secretary-General, said in Cyprus two weeks ago:

“It is clear to me … that the negotiations have recently come to something of a standstill”,

and,

“I explained to both Leaders that there could be no more business as usual”.

He also said:

“The Secretary-General has told the sides that it is never too late for bold and decisive moves and new ideas or innovative proposals. But if none are taken, then obviously there will be no further convergence on core issues”.

The questions that arise from all that are: why has the negotiating process failed and what can be done to give it a prospect of success, so that it is not simply a rerun of what has been tried many times before?

It is entirely possible that negotiations have failed because of a lack of political will to succeed on both sides. In fact, a reasonable interpretation of the current position might well be that both political sides are essentially quite happy with the current arrangements. Perhaps, too, the negotiations have failed because they have been essentially political. There has been no wider involvement of the citizens of the island or, indeed, of its business communities. That is a great pity, because 70% of the island’s inhabitants, both north and south, want the negotiations to succeed, but only 15%, north and south, believe that they will succeed in their current form.

The stalemate over reunification is more dangerous now than it has ever been. Three new factors make it so. First, the economic conditions of the north and south continue to diverge in a way that will progressively make reunification less attractive to the south. Secondly, the recent gas finds in Cypriot territorial waters are already a real cause of tension between the communities and their supporters. Thirdly, the whole region is significantly more troubled than it has been for many years.

All this argues for some urgent, fresh initiatives, some fresh approach, before the situation descends into partition, open conflict over gas finds or, paradoxically, the unnecessary impoverishment of the island because of the impossibility of exploiting the gas reserves in a politically unstable area of contested territory. But what forms might new initiatives take?

On Tuesday evening, I attended a meeting of the All-Party Parliamentary Group on Conflict Issues on this very question. The meeting was full of members of both diasporas and was called to listen to organisations of civil society from both the north and the south. The speakers, both Greek and Turkish Cypriots, offered this perspective. They were certain that the people of Cyprus wanted reunification. They were equally certain that the people of Cyprus felt excluded from the negotiating process. They were absolutely confident that the current negotiating model, which they characterised as “two old men in a room with United Nations”, would continue to fail. They told us that that model was understandable enough 40 years ago, but that civil society had matured, was stronger now and needed to play a role. They told us that negotiations should not proceed in the search for a master settlement where nothing was agreed until everything was agreed. They made the case for a progressive, gradualist, continuous series of small, positive changes. They told us of the existence of cross-community civil society groups, bi-communal activities and projects. They saw the extension of those efforts as a new way forward, a practical way of aligning the citizens of the two communities and a way of building the trust and familiarity that the political parties had so obviously failed to build. They wanted our help, as a guarantor power, and the continued help of the EU and the UN, in doing that. They wanted our help in strengthening those civil society projects and in giving them a standing and legitimacy that their own political establishments had been reluctant to concede.

Those representatives of Cypriot civil society seemed to me to make a compelling case. That well-known Californian novelist, Rita Mae Brown, once remarked that a good definition of insanity was doing the same thing over and over again and expecting something different to happen. This must not be the case with Cyprus. I ask my noble friend the Minister to give careful consideration to these proposals for a new approach to negotiation.

14:14

[Lord Williamson of Horton]

My Lords, I would like to make some comments and pose some questions to the Minister about European affairs. As I always do, I declare an interest in that I spent the greater part of my career in the United Kingdom Civil Service on European affairs and a smaller part in the European Commission, as I have pensions from my work.

I begin by noting that in the gracious Speech, the Government will seek approval of Parliament relating to the agreed financial stability mechanism within the euro area. The Bill, which is commendably short, will have its Second Reading on 23 May, and I shall give my comments then, but on examining it briefly, the procedure seems to me to comply fully with the European Union Act of the previous Session and to be strictly limited to the euro area which, happily, we are not in. Subject to further examination of the Bill, I do not see the difficulty.

In the debate today, I recognise that many issues concerning the European Union now relate to economic policy. We have only to open the daily papers day after day to know that that is the case. To that degree, they might have been thought appropriate to the subject matter of yesterday’s debate, but these issues—in particular, the probable departure of Greece from the eurozone and, following the election of President Hollande, a change of emphasis elsewhere in the eurozone towards a stress on economic growth—are extremely important to the United Kingdom’s economy and the world economy, so we need watchful monitoring on the part of the Government, although I realise that they are not susceptible to an immediate answer from the Minister.

For myself, I think that the likely result after a while will be the creation of a lender of last resort in the euro area and, within strict limits, the issue of eurobonds, which would considerably restore an element of stability, which is clearly in the interests of the United Kingdom.

The points I wish to make, however, go wider than the economic performance of the European Union, the eurozone, and I think that the Minister will find the relevant to the UK’s foreign policy and our relationship to our European neighbours. I want the Minister to set out clearly what are the key positive priorities—I repeat, positive priorities—for the Government to obtain advantages for the United Kingdom in our relations with the European Union and in the development of the EU policies in the years ahead. There clearly are such priorities, but I do not see them reverberating around the country or in the media in a period when disillusion with the European Union is clearly strong.

In the previous Session, the Government introduced, and Parliament passed, the European Union Act, which ensures that any transfer of powers or competences to the European Union cannot take place unless the British people, in a referendum, decide to do that. That is a defensive wall, but I do not think that public opinion has fully registered it. It is perhaps inevitable in those circumstances that the debate should move to the assertion that the current powers of the European Union are almost all-embracing. That is surely not correct. There are very wide areas of our public life in which the role of the European Union is marginal: for example, education health and housing. For that reason, the European Union Act was a very important piece of legislation.

I come now to where we are today. It appears that our position on discussions in the European Union is mostly directed to resisting proposals which we do not find acceptable. Of course, we have to do that, although the objective should always be to nip them in the bud and to maximise the number of our allies. I take as an example the current EU budget proposals which, in a period of economic meltdown, are too high. It is said that some of the costs results from projects, such as some regional development projects in new member states, which are now coming to a conclusion so bills must be paid. Is that true and, if it is, where have we identified corresponding savings in other areas?

I yield to no one in recognising the need for a tough stance where necessary. I am proud of the small role which I played in the negotiation of the United Kingdom rebate, which has so far brought about £68 billion to the United Kingdom—figures are always nice to cite—and which cannot be changed without our agreement.

However, my main point is the need to present well our positive objectives within the European Union. Here are some examples. First, there is international trade, in which the European Union is immensely important. Where are we looking for more bilateral agreements to open up trade between the European Union and other nations such as South Korea, Brazil and elsewhere, and what are our priorities? Secondly, there is our influence in foreign affairs—a point I put particularly to the Minister. The decision to put the external delegations, which were under the control of the Commission, into the European External Action Service with input from member states is an important challenge. How do we rate the challenge and what advantage is the UK getting or aiming to get from it? How far has it helped in relation to, for example, the Arab spring and, in particular, the disastrous situation in Syria?

Thirdly, there is maximising the advantages of the world’s biggest single market and the need to encourage growth of the member states’ economies. Of course, the excessive level of public spending in the member states and the high level of unemployment have different causes. That is why I am a bit more positive and optimistic about the future of the euro. Both Spain and Ireland were in fiscal surplus before the crisis hit; their problems stemmed from the massive and unsustainable housing and construction boom. The Italian economy, which we are hearing a lot about, has been running a primary surplus for many years but is overburdened by the legacy of public debt, which predated the euro. Now we have to look to see what we can do in the relatively short term to encourage, if not to create, greater growth within the European Union. Perhaps a growth compact, as suggested by some leaders in the eurozone, could be an advantage.

To summarise, my main point is that the Government should identify and, where appropriate, make public their priorities for advantages for the United Kingdom to be sought and gained within the European Union. This should be at the forefront of government thinking in the year ahead.

14:22

[Lord Sheikh]

My Lords, I want to focus specifically on our relationships with other countries, our overseas aid provisions, our drive to extend global stability and the need to undertake more overseas trade. As outlined in the Queen’s Speech, this Government’s first priority will be to reduce the deficit and restore economic stability. I believe that this will be the key to successfully implementing many of our other important policies, including in foreign affairs. The more economically stable our country is, the more we are able to help others across the world.

One of our notable commitments on foreign relations is to support the extension of political and economic freedom in the Middle East and north Africa. I have visited several countries in these areas and spoken with the heads of their Governments. I have established close links with their ambassadors and held discussions with them, and with citizens of these countries, regarding their relationships with the United Kingdom and the challenges facing their countries. We cannot expect other countries to adopt our form of government and no attempt should be made to do so. However, our involvement in any overseas country must be soft and we should therefore exercise soft influence. Although we can provide assistance where there are problems, the people themselves must find solutions and form a system that suits their circumstances. We can, however, help in building institutions, which are important if these countries are to achieve progress. In addition, we need to help bring in peace and stability and assist in the achievement of democracy and economic growth, which will result in the creation of jobs.

I am a strong believer in the empowerment of women and the need to deal with issues relating to poverty. It is also important to improve the standard of education and provide free primary education for all. It is important that we do not underestimate the extent to which politics and economics are intertwined in helping these countries to make their transitions. We have seen in several countries that political freedom often follows the opening up of economics. While these countries open up their own economies, it is important that the wider international community engages with them on an economic level. When countries are trading with and investing in each other, they are developing relationships and stakes in each other’s peace and stability. From a British point of view, I want to see more of our goods and services exported overseas. We need to be looking for new opportunities in these emerging powers; our manufacturing and service industries can help build these new democracies, while helping increase our export base. There will be mutual benefits to our country and our trading partners. This will also result in the building of people-to-people connections.

In addition to our duty to support countries in transition, we have a moral obligation to assist poorer countries to begin realising a state of transition. I have always been supportive of our pledge to commit 0.7% of gross national income as development assistance from next year, and I was pleased to hear this included in the Queen’s Speech. I have visited a number of developing countries where DfID is involved, and where a large part of my work has been in looking at the widespread impact of diseases on poor communities. I appreciate that this Government have made several bold commitments on this, including vaccinating children against preventable diseases and providing access to safe, clean drinking water for millions of people. There is still a level of consternation among the public over our ring-fencing of the aid budget. It is crucial that we not only continue on our course but take even greater care to ensure that this financial assistance gets through to the right places. In addition, the Department for International Development must be clear in showing us that our money is being put to good use, not being misappropriated.

Although I am in favour of providing aid to foreign countries, we must consider providing support, including financial assistance, to properly organised trade missions. It is essential that we organise trade missions made up of businesspeople who can look for opportunities overseas and undertake more business and trade. I am strongly of the view that aid and trade must be simultaneous and that our high commissions and embassies can play an active part in this regard. As a businessman, I have promoted the need for us to undertake more overseas trade. It is essential that we do not undersell ourselves in trade but actively enhance the position of UK plc. We have unique services and products which we can offer to the world, and, although the Government can create conditions, businesspeople must take the initiative and be proactive in undertaking more business overseas. I firmly believe that we can overcome our financial difficulties by the application of austerity measures and appropriate taxation, and by undertaking more business at home and overseas. This includes the sale of defence equipment to responsible Governments.

More can be done to promote our trade with Commonwealth countries. Furthermore, we need to look for more markets in South America, Asia and Africa. Trade must be two-way traffic, which means that not only should we go abroad to look for business but we must encourage others to come to our country. I was pleased to hear this morning that Vauxhall Motors will invest considerable capital in building new motor cars at its Ellesmere Port plant.

In closing, with reference to all overseas matters on military intervention, trade and development assistance, I emphasise the need for greater co-operation and more joined-up thinking between the relevant government departments.

14:30

[Lord Ahmed]

My Lords, today the noble Lord, Lord Howell, mentioned the Arab spring, the Middle East, Iran and Afghanistan. I was hoping that the regional stability of South Asia would also have been mentioned due to the great challenges faced by ISAF, NATO and Afghanistan’s neighbours. I realise that there are experts in your Lordships’ House who understand defence and foreign relations strategy much better than me. However, I have made a number of observations about the current situation in Afghanistan, Pakistan and the unresolved issues between India and Pakistan, particularly the right of self-determination for the Kashmiri people as well as the current bigger role cut out for India and the perceived isolation of Pakistan.

I am chairman of the All-Party Parliamentary Group for Kashmir. We have received the report by the International People’s Tribunal on Human Rights and Justice in Indian-administered Kashmir, which documents the buried evidence of 2,700 unknown and unmarked mass graves containing more than 2,943 bodies across 55 villages. These graveyards contain victims of murder and fake encounter killings between 1990 and 2009. The bodies include those extrajudicially, summarily and arbitrarily executed and the victims of massacres committed by Indian military and paramilitary forces. Even in the past 18 months, over 100 peaceful demonstrators have been killed.

Kashmir has remained to be the longest outstanding internationally recognised dispute, and the UN Resolutions of 1948, 1949 and others have remained unimplemented for decades. I welcome the recent dialogue between India and Pakistan; however, the issue of Kashmir must be resolved. The Kashmiri leadership needs to be consulted and included in all future talks by both India and Pakistan. This is essential for the 12 million Kashmiris as well as the over 700,000 British Kashmiris who have consistently supported a UN-sponsored free, fair and impartial plebiscite to decide the future of their people.

Peace and regional stability in South Asia depend on how stakeholders are consulted and their interests sought. According to various media reports, India has been playing an ever increasing role in the rebuilding of Afghanistan, which is detrimental to cohesion in South Asia. Pakistanis feel sandwiched between their eastern boarder and the Afghan border.

Our forces, ISAF, NATO and DfID have contributed greatly to the cause of Afghanistan and the development there. It is important that this legacy be better protected and honoured. The training of the Afghan military in India or by the Indian Army inside Afghanistan can cause unrest with Pakistan. The presence of Baluchi nationalist militants in Afghanistan also concerns the Pakistan authorities. I welcome the invitation to Pakistan to attend the Chicago summit. I understand that there is some progress in discussions with the Government of Pakistan to reopen the Afghan border routes for NATO supplies, which it had closed after the killing of 24 Pakistani soldiers at the border.

It is important for any relations to create trust between the countries, but unfortunately there is a problem of trust between Pakistan and its old friends. For example, I understand that in private meetings, the Pakistani leadership has never objected to drone attacks yet, publicly they have always condemned the US for violating the country’s sovereignty. This has sent out the wrong signals inside Pakistan. The current elected Government in Pakistan are weak and dysfunctional, which is why, unfortunately, they lack direction and credibility abroad.

It is right to mention that Pakistan has made a bigger contribution in the loss of lives than any single NATO country or ally. As the front-line state in this “war on terror”, Pakistan has lost over 30,000 civilians and over 5,000 soldiers and police officers. Many estimates of economic and financial losses go beyond $75 billion. We have to remember that Pakistan has housed over 4 million refuges from Afghanistan since 1979, and even today there are more than 2 million refugees in Pakistan. We have to remember that Pakistan has 4 million to 5 million heroin addicts, and the tribal areas have occasionally become no-go areas for the state. Many in Pakistan believe that this is due to the direct influence of its neighbour.

It is in that context that I urge Her Majesty’s Government to continue supporting Pakistan. Geo TV, a Pakistani channel, reported last night that Pakistani Prime Minister Yousuf Raza Gilani was in a meeting with our Prime Minister last week, agreeing terms for resuming NATO supplies through Pakistan. Will the noble Minister confirm whether progress was made in relation to this?

I congratulate the Government and thank them for considering Pakistan and making it the largest recipient of British aid over the next three years, focusing on education, which is desperately needed for the training of teachers, for giving females more opportunity in schools and for helping Pakistan to achieve its millennium development goals. Has Pakistan has been consulted on its role in Afghanistan? Have Her Majesty’s Government encouraged both India and Pakistan to find a permanent solution on the issue of Kashmir?

14:36

[Lord German]

My Lords, I wish to address two issues that came up in the gracious Speech a few days ago: international development assistance and state pension reform. I have struggled to find a link between the two since we can speak only once, and I hope that I have found a tenuous one—noble Lords will probably spot it.

I support the words of the right reverend Prelate the Bishop of Lichfield and the noble Earl, Lord Sandwich, in seeking to get a response to the request for the legislative locking in of the commitment to 0.7% of GNI. That is in the coalition agreement, which says that we will make it a legal requirement to stick to that commitment, and we need that reassurance so that not only are this Government committed to that but future Governments cannot move away from it. The Government are to be congratulated on reaching that target as we are one of only six countries in the whole world, and by far the largest of them, to have done so. We can pat ourselves on the back since we have achieved it well ahead of many other developed large economies.

I would like to suggest to Ministers some ways of spending this money slightly differently from how they are doing it at the moment. It will not come as a surprise to the Minister that I am going to talk about Lesotho. I declare my interest as honorary president of the Dolen Cymru Wales Lesotho Link; my pecuniary interest is that my wife is an employee of that charity. It is in its 27th year and it links Wales with Lesotho, a country-to-country link that brings together the third sector, the state sector and communities and third-sector organisations. In their consideration of how they will use international aid, I hope that the Government will consider the needs of this poor and ravaged country. It is the only Third World country completely surrounded by a developed-economy country—in this case, South Africa. Twenty-seven years ago Lesotho was roughly the same size, and had roughly the same population, as Wales, but it has lost one-third of its population because of HIV/AIDS, which still has a 24% incidence rate, and its average life expectancy is 40. Less than a quarter of the population has electricity. Most of the population are subsistence farmers. There has been massive soil erosion, which has made food security a critical issue. Half the population now receives help from an internationally aided feeding programme.

However, Lesotho is a Commonwealth country with a developed democracy and a multiparty system. In nine day’s time, there will be a general election. It shares the same electoral system as Wales and Scotland. Unfortunately, UK Governments have progressively backed away from this country. I know that the Welsh Government are seeking a way of building a new partnership with the UK Government to see whether they can assist in this matter. I understand why DfID is reluctant to work with relatively small pots of money when it wants to work in partnership with its funding and get a bigger return. I hope the Government will commit themselves to looking favourably upon a relationship with Wales and the Welsh Government to see whether they can lever some of the additional funding that has been announced towards this very poor country.

One of Lesotho’s primary concerns is that it has a very poor private sector. Here, I want to address microfinance. Lesotho’s economy has been built upon subsistence farming, and it has to develop. It has large water resources, nearly all of which go to South Africa. It has diamond mines, yet most are owned by companies in the West, including in the United Kingdom. It needs to build its private sector, and to do that, it has big microfinance needs. As in other countries, there is a huge demand for small-scale financing. There is apparently about $40 billion of microfinance funds around the world at the moment, but demand for them is growing by 20% to 30%, which is outstripping the core sources that we can all think about in the way that this money has arrived. There are 150 million to 200 million recipients of microfinance, but the UN suggests that that figure will grow to 1 billion. Only one fund has so far worked its way through in providing that money through the whole lifecycle. It had a 6% return. So what organisations in the United Kingdom might provide funds? Pension funds look for a long-term, steady return, and if they could get a 6% return, they might be able to come up with some of the financing to make sure that that growing demand is dealt with. I hope the Government will encourage pension funds.

That is my link to state pension reform. People in this country are living longer. One person in six now lives to the age of 100, yet fewer people are saving for retirement. Our current system also supports inequality as women, the low paid and the self-employed tend to lose out, usually having lower than average state pensions. Ultimately, a pension scheme that has been changed by means-testing and other changes has become very complex and people do not know what they should do. Consequently, they are not saving enough for their retirement. It used to be calculated that people could expect to retire on 45% of what they were earning, but by 2055 their state pension will be only 32% of their earnings during their working life. The single-tier system greatly simplifies the system. It provides a clear outline of what people can expect from the state at present and in retirement. It provides a firm foundation for saving, reinforces our commitment to auto-enrolment and balances the risks of defined contribution pension systems. People will qualify as individuals. It will provide people with a clear incentive to save. This is the citizen’s pension that many on these Benches have been campaigning for and pressing for for many years, and we are about to see it come to fruition.

14:44

[Lord Jay of Ewelme]

My Lords, I start by congratulating the Prime Minister on his appointment by the UN Secretary-General to chair, along with President Ellen Johnson Sirleaf of Liberia and President Yudhoyono of Indonesia, the high-level panel on what should follow the millennium development goals. I hope that he will find the time among many commitments and occasional distractions to focus on that task because it matters, as does meeting the present millennium development goals. In that context I, like my noble friend Lord Sandwich and the noble Lords, Lord Sheikh and Lord German, am glad that in the Queen’s Speech the Government reiterated their intention to meet the target of spending 0.7% of gross national income on official development assistance. I am less concerned that that target may not be enshrined in legislation. I regard it as a policy rather than a legal issue, and I share the view expressed in the House a couple of days ago by the noble Lord, Lord Phillips of Sudbury, that we have a bit too much legislation before us.

Meeting the 0.7% target matters, just as meeting the millennium development goals matters. To take one example, a recent article in the Lancet showed that in 2010 over 5 million children died before the age of five from infections and largely preventable diseases, with pneumonia the leading cause of death. Half of those deaths were in Africa. As the noble Lord, Lord Howell, said, there has been huge progress in Africa, but there is also huge need. Reducing that toll of childhood death requires consistent and concentrated action and consistent and concentrated funding. Britain under both recent Governments has built up a justifiably strong international reputation for its commitment to aid. Despite the understandable pressures to renege on that commitment, I sincerely urge the Government to stick to it.

Having praised the Prime Minister and the Government, perhaps I may, as is perhaps proper for a Cross-Bencher, balance that by coming a little closer to home and saying that it was surely a mistake for the Prime Minister not to see soon-to-be-President Hollande when he was in London before the recent French election. Whatever one thinks will happen to the eurozone or about the future of the European Union, the position of France will be crucial. In foreign policy and defence, relations between France and Britain, within the EU and NATO and bilaterally, will be crucial. It is therefore wholly in Britain’s interest to get to know and to talk to serious French presidential candidates. For some months before the election, it was pretty clear to French policy watchers that it was at least possible—to many of us, probable—that Monsieur Hollande would become President of France.

If I may for one moment sink into my anecdotage, I remember that when I was ambassador in France, Tony Blair, as leader of the Opposition, came to see President Chirac and Prime Minister Juppé, both leaders of the French right, just before the 1997 election. At the end of the meeting with Prime Minister Juppé, at which Mr Blair had expounded British prospective economic policy, Prime Minister Juppé replied, I thought rather wistfully, that he feared that such a policy would be far too right wing for France. I do not for a moment suggest that if Monsieur Hollande had expounded his economic policy to the Prime Minister, the Prime Minister would have responded in the same way; none the less meetings of that kind are important and useful. I hope that in future the Prime Minister will see his way to meeting prospective French Presidents or, indeed, prospective German Chancellors if, as may often be the case, they are passing through London.

Finally, on our own embassies around the world, when I look back to the run-up to the war in Iraq and its aftermath, I find it hard to avoid the conclusion that we suffered from having no embassy in Baghdad between 1991 and 2003. We did not have that feeling and understanding for the country, its rulers and its people which comes from day-to-day contact with even the most detestable of regimes. We were, as a consequence, less well able than we might have been to judge the likely consequences of our actions. I therefore find it worrying that we currently have no diplomatic staff in either Tehran or Damascus, in two countries at the very heart of our foreign policy, or in Bamako in Mali, a country which, as the noble Lord, Lord King, said earlier in the debate, is at the heart of instability following the conflict in Libya.

I entirely understand and support the need to put the safety of our staff first. Particularly in Tehran, after the invasion of the embassy compounds, evacuation was the only course open to us. The question now is how we can get our staff back securely to Tehran, Damascus and Bamako in order to report, influence, protect and promote our interests. There are ways in which that can be done, step by step. I hope that the Minister will be able to assure us at the end of the debate that it is indeed the intention that our staff should return. I hope also that it will be the aim of the Government to preserve our staff securely in other difficult and sometimes dangerous places such as Kabul, Khartoum and Juba. Their presence will continue to be essential to protect and promote our interests and, in particular, to meet the objectives set out by the noble Lord, Lord Howell, in his speech at the beginning of this debate of responding to crises, focusing on poverty reduction and increasing our interests in Africa.

14:52

[The Lord Bishop of Guildford]

My Lords, I return to a European Union theme. I declare an interest as a vice–president of the Conference of European Churches.

From these Benches I warmly welcome the inclusion in the gracious Speech of the European Union (Approval of Treaty Amendment Decision) Bill—that is a nice mouthful, is it not?—although I note the question of the noble Lord, Lord Wood, about support for it in another place. I have also listened carefully to the careful and informed speech of the noble Lord, Lord Williamson of Horton, on this matter.

The European Stability Mechanism will replace earlier and apparently ineffective mechanisms. Although the ESM will entail no UK budget liability—that of course remains the responsibility of the euro member states—all European Union member states must approve the amendment to the Treaty on the Functioning of the EU, so confirming that the mechanism is legally compatible with the treaties. This is rather technical but it is very important.

Your Lordships’ House will not include many who think that European economic stability and the future of the euro in Greece or Spain or Italy, or even the future of the euro itself, is a matter of indifference to the United Kingdom. Of our exports, 40% are to the euro area. This is no new thing. My own diocese, largely in Surrey, was once big in wool. The arms of the bishops of Guildford include several woolsacks because the wool came from the North Downs, down the River Wey, down the River Thames and over the North Sea to Flanders, where it was sold for the cloth trade. Economically, we are still intrinsically bound up with our fellow European states. Whatever differences there may be among Members of this House on the extent to which we should be involved financially in supporting the euro—that is complicated, as the noble Lord, Lord Sassoon, mentioned this morning—I welcome the intention of presenting this legislation shortly, and of supporting the eurozone states in their internal endeavour to secure the stability of the euro and of Europe, of which we are a part. It would be my hope that both Europhiles and Eurosceptics—in and out of government, in this House and elsewhere—could unite on this at least.

It can be no comfort at all to your Lordships’ House to contemplate the enormous difficulties we have seen in the forming of a permanent Government in Greece, or this morning’s news in at least two papers of the beginning of a rush on the Greek banks. Then there is the continuing social unrest there in the land, and indeed in the city, of the birth of democracy. That is significant. Nor can we contemplate with equanimity the disturbances in Spain. I therefore invite the Minister to say a little more on how the United Kingdom Government can continue, no doubt behind the scenes, to be of assistance to the eurozone states, as they have been, perhaps somewhat robustly, in the discussions leading up to the decision about the ESM.

I also welcome anything the Minister can say on the way in which the United Kingdom is to keep in touch with what may develop following the meeting this week between President Hollande and Chancellor Merkel, as well as, of course, exchanges between the new French President and our own Prime Minister. The Chancellor and our Prime Minister are not for turning on austerity. That is clear, but Chancellor Merkel also spoke of the possibility of an add-on growth policy. Once again the UK, as I am sure the Minister will agree, is not isolated from the common need of all European countries to move out of recession. That will not be easy, as the Governor of the Bank of England has recently reminded us. My plea is that we move beyond slogans to a more mature discussion about the troubles of Europe—of which we are part—and how we can move forward together.

Finally, my concern is not only that the United Kingdom is intrinsically linked economically with Europe. It is much more than that. The Christian faith and all that goes with that culture came with the Roman soldiers and merchants to Britain. It came again with the Celtic missions from Ireland and Scotland, and again from Rome itself to Canterbury. We in turn sent missionaries to what is now the Netherlands, north Germany and Scandinavia. Irish missionaries travelled all over Europe. This is relevant to a forthcoming appointment: archbishops of Canterbury came from what is now Turkey, from Aosta in north Italy and Normandy. A Yorkshire priest-scholar, Alcuin, was Charlemagne’s chief adviser and confidante. The Reformation came from Württemberg, Geneva and Strasbourg. The royal families of England were conjoined with the royal families of Aragon, of Castile, of France and later of Holland and Hanover and, most recently, Greece.

I look forward to this rather technical legislation as a sign that, despite differences of approach to fiscal union and the disputed question of direct support for the euro, the United Kingdom remains committed to the fact that we are part of Europe, not only financially but historically, culturally and religiously. Consequently, we have our political and economic part to play therein.

14:58

[Lord Rana]

I am pleased to be here today in your Lordships’ House, adding my support to international development, an area that has great resonance for me. I am delighted that the Government have committed 0.7% of gross national income for international development from next year. Not only does international development encompass my own ideology in helping to promote and achieve the impossible in situations where there is a great need for support from the international community, but it can work for good in other directions too. This can be seen in the way that the lives of people who commit to helping are enriched and enhanced for the common good. The enrichment can and does bring benefits to wider communities by bringing together different cultures and societies and promoting a better understanding of the needs of people in other countries. What international development can bring to us in the United Kingdom is not often recognised. It is more often than not looked on as a one-way street of giving with no taking, which does not bring back benefits of any kind.

Allow me to give an example. I have led trade delegations from Northern Ireland to India for the past 10 years. The most recent, to promote business initiatives and investment between the two countries, was in April this year. The delegation comprised First Minister Peter Robinson, Deputy First Minister Martin McGuinness, Economy Minister Arlene Foster, 20 companies and two universities from Northern Ireland. It was supported by the British high commissioner in Delhi and the deputy high commissioners of Mumbai and Bangalore. This is international development from a different angle that is, at present, exciting, dynamic and bringing great benefits. It is a two-way street that is helping to develop part of the United Kingdom and strengthen its international presence, while building on historical links and the many years of previous financial support.

The success of such initiatives shows for itself. India is now the second biggest investor in Northern Ireland, employing nearly 5,000 people, and there are 49 Northern Irish companies doing good business in India. We met the Chief Ministers for Mumbai and Delhi and, as a result, they are looking forward to the further development of industrial, educational and tourism links. This shows how important development grants can be for future trade with a country as it grows.

However, there is still a lot that needs to be done. Last week the “Living Below the Line” campaign raised awareness of how much of the world’s population subsists on around a dollar a day. A recent article on the BBC website cited as many as 1.3 billion people as still subsisting at this level. This emphasises the importance of continuing international development for the bigger picture of the global economy, and that there is still a need for a concerted effort by the developed countries to tackle this problem.

Official aid figures do not include contributions by private trusts and individuals. A great deal of unofficial aid is given by charitable and philanthropic organisations from this country, about which little reliable information is available. I cite the example of, and declare an interest in, my charitable trust, which has been funding a university project in a village called Sanghol in Punjab. This is archaeologically a very famous site in north India. The settlement goes back around 5,000 years. There were no facilities in the area for children to acquire graduate or postgraduate education. We started with a greenfield site and now there is a 25-acre campus, with nearly 2,000 students spanning six institutes that offer graduate and postgraduate courses. It employs 200 people, plus another 200 construction workers, and it is still growing.

My vision was to create a village society that, in its fusion of native values and culture and modern sciences, would be a model for the whole community. The intention was that it would bring international development to the heart of the community and give it a lifeline with which to combat the problems and injustices that living in a rural part of India brings. It is very humbling to see first hand how this makes a difference to the lives of many young people. Nearly half the qualifying students are girls, who would have little chance of a university education without this initiative.

The trust’s efforts have been supported by the UK-India Education and Research Initiative in setting up a vocational training institute in collaboration with VTCT—Vocational Training Charitable Trust, UK—in April this year. It has helped to bring together educational establishments in both countries. In this, the British Council has done a great job to help. Assistance from UKIERI and the British Council works at the grass-roots level and gives aid to the beneficiaries more quickly. Perhaps DfID would consider working with philanthropic initiatives in the same way that UKIERI and the British Council do. This would speed up the process and help more young people in the field of education. Providing good-quality education goes a long way in alleviating poverty and empowers people to compete in the global market.

15:06

[Lord Lyell]

My Lords, nearly five years ago my late noble kinsman Lord Lyell of Markyate rose at the Conservative Party conference and made a much briefer speech than I shall be able to make today. He just said that the first duty of any Government is the defence of the realm. The rest of his remarks were drowned out by bad manners as everyone took off, but I suspect he was absolutely right.

I have the very good luck to be in your Lordships’ House and to be a member of its defence group. We are beautifully led by the noble Baroness, Lady Dean of Thornton-le-Fylde, who keeps me and many other ex-servicemen—people go right back—in shape and in the best condition to understand exactly what is needed by, and can be done for, defence in your Lordships’ House and elsewhere.

Perhaps it is appropriate that today’s debate was instituted by my noble friend Lord Howell. Together with our principal doorkeeper and the late Sergeant Kiwi Clements, who 55 years ago licked me into shape as a young national serviceman, he belonged to that great regiment, the Coldstream Guards. The motto of the Coldstream Guards is “Nulli Secundus”. Sergeant Clements put me under close arrest for thinking it meant “no second helpings”. It does not; it means “second to none”. Those words apply to my noble friend the Minister on the Front Bench, who will be winding up the debate. My noble friend gives all of us with any interest in defence, let alone those of us in the defence group, constant briefing advice and one-to- one contact with the Ministry of Defence. For anyone who has any interest in defence, it is top-class. I also know that all the work that he has done has brought many others in your Lordships’ House much closer to defence and one aspect of it that we are discussing today.

My noble friend Lord Luke referred to aircraft carriers. The Minister will have to cope with the budget. I hope that he will not worry about my speech for one second of his winding-up speech; he can write to me in due course. I know that he will write to my noble friend Lord Luke about the aircraft carriers. One recent development in aircraft is that the Ministry of Defence has chosen the F-35B as its vertical and short take-off and landing model. If I am wrong my noble friend can correct me—probably in writing—later, but I understand that this will enable both aircraft carriers to be in constant service, and that it will be a great saving in the budget, costing far less than the cat and trap.

Equally, at sea, it is very encouraging to read of the great success of the Type 45 destroyer. It was three years ago that my noble friend Lord Lee of Trafford and I went down to Portsmouth and viewed HMS “Daring”, which was the first of the Type 45, with its outstanding commanding officer, that man of Fermanagh, Captain McAlpine. He set the standard of his crew for what is now being done and it is already a major success in the Royal Navy. I just hope that the Type 56 frigate, when it comes out, will be an equal success.

I turn to the Army aspect of defence and the SDSR. I understand that the Army will be reduced over the next 10 or 12 years to about 82,000 personnel—my noble friend the Minister may be able to explain that today or at a later stage—but the apparent good news that has come out in the past two or three days concerns the Scottish regiments and what I would call the cap badges. I understand that my right honourable friend the Secretary of State has taken the question of cap badges, particularly as it refers to Scotland, very seriously indeed. He is not with us today, but the noble Earl, Lord Stair, was fighting with the Scots Guards 30 years ago at Mount Tumbledown in the Falklands. The noble Lord, Lord West, is also not here today, but he, too, was there. For Members of your Lordships’ House who have been in a situation like that, it hammers home to them, as it would have hammered home to me, that you are together with your friends—as we said in the services, your muckers. When it is one to one on a dark night in winter in the Falklands, you are with people with whom you have formed a very close bond, and that gives you that extra pace in defending the realm and in what you have to do.

I quickly turn to Afghanistan. There has been more and more decent news recently over the kit, the supplies and the support of our forces all over Afghanistan and on the way out and back. Indeed, there is an interesting article today in the Financial Times about the situation in Afghanistan and the kit referred to by the noble and gallant Lord, Lord Craig of Radley. It seems quite encouraging.

The House of Lord defence group is not, I hope, all red leather Bench warriors. Certainly we take an interest in other things—my training goes on, as I started out as an accountant, seeking the truth—but we are very concerned with the families of servicemen all over the world, here and elsewhere, and their quarters, housing, children and support. For families but also for the wounded service men and women, Headley Court is second to none and does a wonderful job. Our group made at least two visits; I hope that we are able to do that.

I was fortunate five years ago, with the noble and gallant Lord, Lord Craig, and the noble and learned Lord, Lord Mayhew, to visit Birmingham, which is the first stop for injured service men and women returning to this country. The work that is done there and continues to be done is really very encouraging and I hope that my noble friend will be able to give us some support either today or at a later stage.

When we discuss defence today or at any other time, here in the comfort of the warm leather Benches, I hope that I as a humble national serviceman can say thank you and pass on my gratitude to each and every one of the service men and women all over the world—in Afghanistan, under the sea and elsewhere. We think of them and think of the frightened, startled recruits who are starting their training, and to them we say our thanks.

15:14

[Lord Judd]

My Lords, most people in the world do not believe the agendas of international deliberations are their agendas. Repeatedly these agendas are seen as those of the traditionally powerful and privileged and dominated by a determination to preserve their advantage. Reform of the United Nations Security Council and its membership is long since overdue to make it representative of the world as it is rather than the world of 1945. Its credibility depends on this; so, too, do the arrangements for governance in the international financial institutions and climate change negotiations. The world as a whole has a stake in the outcomes, and this must mean that it has a stake in the making of the agendas.

Transparency and accountability in the appointment arrangements of the United Nations Secretary-General and the chief executives of the other global institutions is crucial. The world also needs a United Nations Economic and Social Council with clout and of the same status as the existing Security Council.

Consider the acute threats to humanity across the world, as 1.3 billion men, women and children are trapped in absolute poverty, struggling desperately to survive and not knowing when or where they will have their next meagre meal, let alone any other basic essential. Consider, as the noble Lord, Lord King, powerfully reminded us, the Sahel. There are between 18 and 19 million people in imminent danger of starvation, with hardly half the required emergency assistance yet provided. This is no time to consider modifying our aid commitment—in other words, reducing it. Of course we must constantly strive to ensure the best possible use of the resources that we provide, but to ensure that it is essential to listen to the experience, the truth as seen by them, and the priorities of the disadvantaged themselves. They are tired of being hectored and lectured on what they must do; they want to be heard and to share in the ownership of the solutions. This is something that the Prime Minister would do well constantly to remember in his new role on the United Nations high-level panel to design a post-2015 development framework. To succeed, the panel must speak with and for the dispossessed and poor, not about or at them. The world needs solidarity.

How can we settle for less than a world in which every new-born child has a meaningful prospect of reaching its full physical, mental and creative potential? With all the ingenuity, information technology and expertise on hand, it is obscene to settle for anything less. That is why I am glad that, despite the regrettable absence of promised legislation in the Queen’s Speech, the Government remain committed to the 0.7% of GNP target. It is high time that we joined Denmark, Luxembourg, the Netherlands, Norway and Sweden in demonstrating that this is an imperative.

Of course, the battle for a stable, secure and just world is not just about aid but about fair trade and fair access to limited and finite resources. In other words, it is about social priorities in economic policy. At times of stringency these matters become more essential, not less. Monetary disciplines and social justice are never incompatible. To claim that they are is blinkered, fatalistic nonsense. We shall have neither stable, secure societies nor the basis for sustained economic well-being and progress unless this is understood, as must be the indispensability of prioritised and targeted investment to ensure our future.

In our highly unstable age, with its threats of terrorism, the cause of global social justice has never been more vital. So also, of course, is the cause of human rights. Terrorist potential may be impossible to eradicate, but it can be contained, minimised and marginalised. It is no exaggeration to say that where there are few human rights issues, the phenomenon of extremism and terrorism can be marginalised. Where there are significant human rights abuses, the breeding ground for terrorism will always be present. Human rights are not an optional extra for society; they are a muscular indispensability for stability and security. We erode or neglect them anywhere in the world, not least in the UK itself, at our peril.

That is why institutions such as the European Court of Human Rights are so essential. They establish an agreed shared commitment in a wider context. That is why they must be properly resourced. It is also why ruthless action by the Russians or their surrogates in the North Caucasus, or by Israelis against Palestinians, about which my noble friend Lady Blackstone spoke so well today, not least the military detention of children, is so inexcusable and wrong. It fans the flames of extremism. It is never irresponsible, and always right, to ask why people are recruitable as suicide bombers.

We must also beware counterproductivity here in the United Kingdom, with the pressures to amend and streamline our well tested legal principles and systems. The pitfalls of counterproductivity should always be uppermost in our analysis when confronted with abominations such as the Syrian or Gaddafi regimes. Have we always researched as thoroughly as we should have what we are intervening in and what the longer-term consequences will be? Did we get that right in Libya? Did we have in place what was needed in time to make a success of Kofi Annan’s peace initiative in Syria? These situations are too complex to be seen largely as just a matter of ridding the world of a particularly nasty tyrant.

I conclude by reflecting for a moment on the arms trade treaty, in which the United Kingdom has played such a commendable role and on which it is planned to have its final diplomatic conference in July in preparation for its adoption. It is a highly desirable, urgently necessary treaty when we are faced with so much conflict, and possible conflict, crushing the already disadvantaged people of the world. Do the Government agree that it is better to have no treaty than a weak treaty? Is not the essential principle that states shall never transfer arms where the end-use cannot be guaranteed and where there is a clear risk that they will be reused to commit violations of humanitarian and international human rights law? Will the Government refuse to compromise on this and resist the subtle pressures—or sometimes the blunt pressures—to settle for words such as “take into account” as compromises? What progress is being made in these respects to bring Algeria, Syria, Iran and the United States itself on board?

15:22

[Lord Palmer of Childs Hill]

My Lords, in the area of defence, we received the welcome news that under the coalition the defence budget is now at last under control. We know which aircraft we are going to use; we know which ships are in, or will be in, service; and we know what equipment our forces will deploy. The trouble is: have we forecast what conflicts we will need to cope with? Are our forces, who are equipped to fight in Afghanistan, able to use the same equipment in a conflict with a vastly different terrain and climate? Are we treating our service personnel decently, as was debated by your Lordships during the passage of the Armed Forces Bill? Are we ready to provide the housing that is required by service men and women coming back to the UK from Afghanistan and Germany? Are those obliged to leave the armed services prepared for civilian life?

One area of strife that we debate and debate in this House is the Middle East. British rule and influence have historically been strong, whether in running Egypt at the turn of the century or the Palestine mandate. This month, as mentioned by the noble Lord, Lord King of Bridgwater, has seen a threatening hunger strike about conditions of detention in Israeli jails brought to a welcome end that was brokered significantly by the Egyptians. This month has seen a remarkable coalition Government—in this instance, I do not refer to the UK but Israel—where the two largest parties, Likud and Kadima, have come together with others to form a strong coalition Government that could have the will and power to further the peace process. This month has also seen one of that Government’s first acts, in seeking negotiations with the Palestinians without any preconditions. I can only hope that our Government do all they can to encourage both sides to the negotiating table and to hammer out a lasting peace formula that will give the Palestinians a sovereign state, sitting alongside a secure state of Israel. It is a fact that neither side will get all that it wants, but that is the price of negotiation and compromise.

The noble Lord, Lord Wood of Anfield, said a lot with which I agree on this subject. However, he mentioned admission to the United Nations. I also wish to celebrate, in time, the admission of the Palestinian state to the United Nations. However, I believe that it is a prize you receive by sitting down at the negotiating table. You do not get your prizes ahead of sitting down. That is the price of negotiation. But I will be there cheering that admission when it takes place.

The noble Baroness, Lady Blackstone, spoke very eloquently and movingly about alleged wrongs and so on. In the time I have for this speech, I cannot deal with her comments—I hope she understands. I throw into the melting pot that wrongs always go around, and one fact that, of the 850,000 Jews who fled Arab lands, 600,000 found a place to stay in Israel. A lot of problems can be sorted out only by sitting down at the negotiating table.

There was welcome news a few hours ago that President Abbas of the Palestinian Authority has made new innovative appointments to a Cabinet, which may be part of the formula at the moment. A former leader of the Palestinians, Yasser Arafat, was once said to miss no opportunity to miss an opportunity. This should be a time when we actually take that opportunity. There are people who say that the Netanyahu Government of Israel are not sincere in what they say about sitting down at the negotiating table without any preconditions. My advice to everybody—Israelis and Palestinians—is, “Sit down; trust that sincerity and see whether it is there”. If you do not actually sit down and have negotiations between people who are nominally against each other, or who are against each other, you will never succeed.

We often debate people’s rights across the region—those of Christians, Jews, women, gay people, different types of Muslims, Kurds and other ethnic minorities. It is right that the Queen’s Speech, as referred to by my noble friend the Minister, expresses the Government’s ongoing desire to support such rights across the Middle East and north Africa. In 2011-12, the UK Government funded projects to increase women’s political participation in Egypt, protect freedom of expression in Tunisia, increase young people’s role in policy formulation in Morocco, bring prisons up to international human rights standards in Algeria, and support public service broadcasting in Iraq. That was not just morally the right thing to do but in our national interest in terms of prosperity and security.

On 9 December last year, we debated the desperate plight of Christians in the Middle East. I took part in that debate, as did the Archbishop of Canterbury and the Chief Rabbi. It is appalling how Christians are treated in so many countries in the Middle East, and we often stand by and say nothing about it. Much of the discrimination and prejudice comes from Governments themselves, including in the Middle East and north Africa. I therefore applaud the fact that Her Majesty’s Government will support the extension of political and economic freedom in countries in transition in the Middle East and north Africa.

Other noble Lords have spoken about the problem of Iran. Her Majesty said that her Government will work,

“to reduce the threat of nuclear proliferation, including in Iran”.

Iran’s ambition to be a regional power makes it a meddler and a sponsor of terrorism in the region and beyond. Just this week, Iran stands accused of smuggling arms into Syria. Should such a regime gain nuclear weapons, the region’s other Governments would feel that they must also have such weapons, sparking an arms race that would drag in many countries in the wider world, from Europe to Latin America. It is vital that we use all peaceful means to prevent such an outcome.

15:29

[Lord Alton of Liverpool]

My Lords, my brief remarks today will urge Her Majesty’s Government to do all they possibly can to engage with China, especially in Africa and on the Korean peninsula and on questions of human rights.

Yesterday, with my noble friend Lady Cox, I met Bishop Macram Gassis, whose whole life has been spent working with the Dinka and Nuba people in Sudan. I subsequently spoke by telephone with the Minister for Africa, Mr Henry Bellingham MP, and relayed Bishop Gassis’s description of the murder and mutilation of children and the rape of women in South Kordofan.

Earlier today, along with my noble friend, I drew the attention of the House to the recent assessment of Dr Mukesh Kapila CBE that the second genocide of the 21st century is now unfolding. More than 1 million people have been affected as a regime, led by a president indicted by the International Criminal Court for crimes against humanity, systematically kills its own people. In parenthesis, I say to the noble Baroness, Lady Northover, who responded to the Question earlier today, that what makes Sudan unique is that President Omar al-Bashir is the only head of state anywhere in the world to be indicted by the International Criminal Court. To have business as usual, including the visits of parliamentarians and business leaders to Sudan promoting business interests in Sudan, cannot be right when in Darfur 200,000 people were killed, in South Sudan 2 million people were killed and now, today, the second genocide of the 21st century is being played out in South Kordofan.

On 26 March I described the paralysis of the international community in addressing this issue, and nothing has changed. It is now a year since I told the Minister, the noble Lord, Lord Howell of Guildford, about the situation there. He said in response:

“Reports of such atrocities will have to be investigated and, if they prove to be true, those responsible will need to be brought to account”.—[Official Report, 21/6/11; col. WA 294.]

Nine months later, he said that,

“we continue … to seek urgent access to those most affected by the conflict”.—[Official Report, 9/11/11; col. WA 66.]

However, no one has been brought to justice, the bombs continue to rain down, a genocide is unfolding, and a plane last tried to take in aid in November last and was pursued for 50 miles by Sudanese war planes.

So what can we do? Seventy per cent of Sudan’s oil is in the south and most of it is bought by China. While the killing continues, the oil will not flow. More than any other country, China is in a position to insist that the bombing stops, that humanitarian relief is allowed in, and that all sides participate in peace talks, which China should broker.

North Sudan is also considerably indebted to China. It has external debts of around $38 billion. Both China and the United Kingdom should use the leverage of debt relief to insist on an end to aerial bombardment and access for humanitarian aid. It is unconscionable that Britain should write off Sudanese debt while it kills with impunity, and I hope that when the Minister responds he will tell us that he concurs with that view.

China is in Africa because it has a scarcity of oil, minerals and food. Africa provides a solution. The big question will be: can China avoid the age-old temptation to exercise hegemony and, instead, use its statecraft to resolve conflict? Short of the arms trade treaty, referred to by the noble Lord, Lord Judd, a few moments ago, it would make a dramatic difference if China and the United Kingdom stopped the flow of arms—many made in China—into Africa. However, if we need to engage with China in Africa, we must also encourage it to use its diplomacy and genius elsewhere too.

Last night, at a meeting of the North Korea All-Party Parliamentary Group, which I chair, we heard from Mark Fitzpatrick, the director of the International Institute for Strategic Studies, and Mrs Sun-young Park, a member of the National Assembly of the Republic of Korea. I have sent the Minister a copy of their papers. Three million people died in the last Korean War, including an estimated 400,000 Chinese soldiers and, I might add, 1,000 British servicemen, more than in Iraq, Afghanistan and the Falklands combined. We need to engage with China to encourage the United States formally to end the state of war with North Korea. This does not imply appeasement—quite the reverse. It is what we did with great effect during the Helsinki process. There are some welcome harbingers.

China's recent decision to repatriate North Koreans to Seoul is to be welcomed; so is their admonition to North Korea to look after the welfare of their own citizens rather than to promote nuclear ambitions; China’s decision not to obstruct the recent United Nations Human Rights Council's statement on human rights issues in North Korea; and the Security Council statement on the recent rocket launch. What is really needed is a Beijing peace conference where old hatreds are set aside and constructive, but critical, engagement seeks ways to achieve a lasting peace, prosperity, reconciliation and the reunification of the Korean peninsula.

In addition to China’s role in the world, I want to mention one other question concerning human rights. The world's attention has recently been focused on the plight of Chen Guangcheng, the blind civil and human rights activist, jailed for four years after challenging China's one-child policy. I have raised this case in your Lordships' House many times. Having taken sanctuary in the US Embassy in Beijing, Chen is now held in a hospital unit. The Economist, in its editorial last week, said:

“At rare moments, the future of a nation, even one teeming with 1.3 billion souls, can be bound up in the fate of a single person”.

It said that what happened to Chen,

“matters enormously to China's future”.

That also matters to the United States. If they have removed Chen from safety but failed to secure safe passage for him and his family, it will cast serious doubts on American diplomacy. Have they let a brave man down? Have they been taken for fools? If Chen is punished and the US humiliated it will signal a troubling shift in superpower relations.

Chen's case also matters to countries like our own. We have aided and abetted the very policies that led to Chen's imprisonment in the first place. It has taken a blind man to see that to which we have shamefully closed our eyes. This remarkable Shawshank has caught the public imagination and blown open a policy of coercion and eugenics, a policy which I sought to outlaw the last time we had a Bill on development aid before your Lordships’ House. Over three decades, British aid given to UNFPA and IPPF has gone to the China Population Association. The CPA, in turn, has implemented a one-child policy that makes it a criminal offence to be pregnant and illegal to have a brother or a sister. It is a policy which has led to an estimated 400 million babies being aborted or killed through infanticide; a gendercide policy which favours the birth of male children so that one out of every six girls is aborted or abandoned. China is a country where 500 women take their own lives every single day. China has the highest suicide rate for women anywhere in the world.

China is a great nation, but it does itself no credit with something like the one-child policy. We must engage with China both on human rights questions and on its role in the world, not least on the Korean peninsula and in countries like Sudan.

15:37

[Baroness Tonge]

My Lords, it is no secret to Members of this House that I have been in disagreement with many of the policies of the coalition Government over the past two years. I have moved temporarily from my party’s naughty step to access the microphones—there is no more significance to it than that.

One shining beacon, however, has been the actions of the Secretary of State for International Development and his department. The commitment to enshrine in law 0.7% of GDP to overseas aid, with an additional £740 million to be spent on maternal and child health and an emphasis on family planning, was very welcome. However, although the commitment was in the Queen's Speech, there is no legislation yet to make it law. I suppose that there was some nervousness about doing this in the current economic climate, and I know there has been opposition from some newspapers and members of the public, but I live in hope.

I would suggest that the Opposition would understand the arguments that we have made for aid to the poorest countries of the world if we ensured that it was spent even more wisely. For example, although more than 50% of global overseas aid comes from the European Union, much of it goes to near neighbours of the EU such as Turkey and Morocco, which are hardly the poorest of the world. EU aid also goes to Palestine to rebuild its infrastructure, destroyed by Israel, only for that infrastructure to be destroyed again. Taxpayers all over Europe might think well about our overseas aid if it were not being used to subsidise the illegal occupation of the Palestinian Territories. Why does the European Union not have a poverty focus for all its aid, as we do, and as has recently been recommended by the Select Committee for International Development in its recent report on EU assistance? The poor should be our focus.

There is also still widespread concern that overseas aid does not reach the people and projects for which it is intended but ends up in the back pockets of politicians in those countries. I was privileged yesterday to meet a group of women Members of Parliament from Afghanistan, brought here by the Commonwealth Parliamentary Association, to which I pay tribute. These brave women told me that they had huge concern about the disappearance of aid in their country but as women MPs had no means of tracking where it had gone. Their message, which I promised to relay, was that the projects that had survived had made a difference to women’s lives in Afghanistan, but that they feared they would have to “disappear back into the shadows or be killed” once ISAF had left. It is a chilling thought.

Much more needs to be invested in the women of Afghanistan if the Department for International Development’s aim of peace, stability and prosperity is to be brought to that country—yet there is no budget line for maternal health and family planning in that country’s operational plan for the next four years. The maternal death rate in Afghanistan is among the highest in the world: 1,600 deaths per 100,000 live births. Many more women suffer chronic illness following unassisted childbirth. The contraception rate is 2% among women of childbearing age, and family size averages 6.9 children per woman. How can women contribute to their country’s “peace, stability and prosperity” if we do not help them? Perhaps if the Minister cannot answer these points he will write to us after the debate. DfID, after all, will have its Golden Moment in July to ensure that the poorest and most marginalised women in the world are given sexual and reproductive health services and family planning. The all-party group that I chair supports this initiative and is delighted with it. I hope that it will be extended to Afghanistan.

I emphasise the importance of ensuring that the 215 million women in the world who would use family planning if it were available to them get what they need. If we can meet this need, as DfID wants us to, it will reduce the growth in world population—and it will do so voluntarily, without the type of coercion mentioned by the noble Lord, Lord Alton, that occurred some years ago in China. The reduction in the growth of world population is crucial if Africa, for example, is to feed itself—and it must happen if we are not to be engulfed by climate change and global warming. The issues are interlinked: population growth, consumption in the developed world and the environment.

Finally, I will put in a plug for our own royal society. It produced a magnificent report recently, People and the Planet, which dealt with all these issues. I hope that the Deputy Prime Minister will read it before he attends the Rio+20 conference on our behalf in the near future.

15:43

[Lord Faulkner of Worcester]

My Lords, I will speak about Britain’s relations with two very different countries, neither of which has been mentioned in the debate today—although the noble Lord, Lord Alton, came very close a moment ago in his reference to human rights in China. I will first ask a simple question about Ukraine, in the context of the European football championships next month. The Minister will be aware that a number of heads of government, in particular Angela Merkel, said that neither they nor any of their ministerial colleagues would attend matches played in Ukraine unless Yulia Tymoshenko was released from prison. Do Her Majesty’s Government plan to adopt the same approach? If so, will they offer similar advice to the President of the Football Association, His Royal Highness the Duke of Cambridge?

I wish to speak mainly about the United Kingdom’s relationship with Taiwan. I declare an interest as co-chair of the All-Party Parliamentary British-Taiwanese Group. My co-chair is the noble Lord, Lord Steel of Aikwood, who leaves this evening at the head of the delegation of nine members drawn from all political parties in both Houses. They will attend the inauguration ceremony on Sunday for President Ma Ying-jeou, who was re-elected for a second four-year term on 14 January in what most observers regarded as a fair and open contest.

In terms of the relationship, I start with the positives. In a number of areas, it is excellent. Last year, Taiwan purchased £1.5 billion-worth of British-made goods and another £1.5 billion-worth in services. There are 16,000 Taiwanese students at British universities and they and their parents contribute £0.5 billion in tuition fees and living expenses. Some 80,000 to 90,000 Taiwanese come here as tourists. Numerous Taiwanese manufacturing companies have located here. HTC, for example, which manufactures smart phones, has expanded from employing five people to 500. On 23 April, I attended the annual meeting of the Taiwan Britain Business Council and I was delighted to hear the noble Lord, Lord Green of Hurstpierpoint, make an enthusiastic and positive speech from his standpoint as Trade Minister about British opportunities for doing business with Taiwan. He visited the country in his official capacity last year and it would be a great pleasure if we heard him speak more often in this House on issues such as this.

That is the positive side of the relationship. There is another, deeply unsatisfactory side as well. I do not have time today to discuss the wider “one China” issue, which in my view is in urgent need of review. We will need to return to it on another occasion.

I need, however, to talk about the United Kingdom Border Agency. Yesterday, the noble Lord, Lord Henley, had a most uncomfortable time answering questions from his noble friends about its shortcomings. Your Lordships may recall that the noble Lord, Lord Dholakia, described how a CPA meeting yesterday with a Tanzanian parliamentary delegation had to be cancelled because the UKBA had denied the delegates visas. Similar problems are experienced on a regular basis by staff employed by the Taipei representative office in the UK. The visa waiver for citizens of Taiwan who come to the UK on holiday does not apply to them. The staff have to apply annually for a visa extension and are required to surrender their passports when doing so. Because UKBA often holds on to these passports for up to four months, when an emergency arises such as the need to visit a sick relative back home or attend a heads of mission meeting called at short notice, the individual has to decide whether to abandon the trip or submit themselves to a so-called fast-track option, for which the application fee is £648 but it still takes weeks to complete. By contrast, British staff at our office in Taipei receive a three-year multiple-entry free gratis service, which is processed within 48 hours.

There is a straightforward way through this, and that is to establish a privileges and immunities protocol that sets out very clearly the status of Taiwanese Government staff working in the UK and their British counterparts in Taiwan. A good starting point is the view expressed by the noble Lord, Lord Howell of Guildford, who I am delighted to see on the Bench, when speaking from the opposition Front Bench in January 2003. He said:

“I am sure that we all appreciate that because of respect for the ‘one China’ policy and our relations with the People’s Republic of China, we do not accord Taiwan full diplomatic status. Can we at least be assured that we give Taiwan representatives in our country and the sort of causes that we are discussing in this Question the same support and encouragement as are given by our neighbours, particularly France and Germany, in their dealings with Taiwan? Are we as effective as they are in maintaining good relations with this remarkable democracy?”.—[Official Report, 20/1/03; col. 432.]

That is a very good question to which we still do not have a satisfactory answer.

The best examples of what is possible are found in the Commonwealth countries of Australia and New Zealand, both of which have the same common-law legal system as we do. The Australian Government, which has a much closer relationship with China than we have, has in place a remarkable set of rules called the Taipei Economic and Cultural Offices (Privileges and Immunities) Regulations 1998, which grant the Taiwanese staff in Canberra and Sydney virtually all the same benefits as other diplomatic missions to which Australia grants diplomatic recognition.

It is worth noting that, as Taiwan is a member of the World Trade Organisation, if there were ever a WTO ministerial meeting in the UK, Taiwanese participants would have to be given exactly the same privileges and immunities as all other participants, but we cannot, apparently, bring ourselves to grant them at any other times. That alone surely undermines any argument about possible legal implications.

I would appreciate it if the Minister can give an undertaking that the FCO will look at a privileges and immunities protocol for Taiwan, and also promise to look at the problems of the United Kingdom Border Agency and its treatment of Taiwanese Government employees. We will have to come back to the question of the “one China” policy at another time because that is in urgent need of review.

15:51

[Lord Taverne]

My Lords, I want to speak about our relations with our partners in the European Union. The eurozone crisis is the worst problem we have faced for many decades. As a non-member, Britain has little direct influence. However, our reaction has been to lecture our colleagues, the eurozone Governments, and more often than not to insist that whatever happens we will resist any infringement of our sovereignty. The first is uncalled for and merely serves to irritate our partners. The second increases Britain’s isolation and gravely damages our national interests.

It is worth looking back at why Europe has achieved what it has achieved. The European Union is based on sharing a degree of sovereignty for the common benefit. It replaces national rivalries with a mutual interest in co-operation. This benefits all members in a number of ways. First, it benefits us economically, through the single market. Even the most sceptical anti-Europeans agree that the single market increases our prosperity. However, there would be no effective single market without qualified majority voting—that is, without a degree of shared sovereignty, which we originally supported. Incidentally, we have never been outvoted on qualified majority voting.

Secondly, the EU benefits us through promoting free trade. Without a common European position in trade negotiations, world trade barriers would be much higher than they are. Protectionism is a constant danger, especially at a time of recession, and even some EU countries would like to bring back a degree of protection, but the EU treaty and competition law stop them. Thirdly, it benefits the environment. The European Union, as a group, is the strongest force in the world for action on manmade climate change.

On the political front, co-operation has made least progress, but even here there are huge achievements. The democratic values that the EU stands for have spread to the ex-communist countries and former dictatorships. Enlargement has been one of the EU’s historic achievements, in which we have played a major part. Incidentally, if Greece is forced out of the eurozone—and possibly out of the European Union—it is quite possible that it will return to the dictatorship that ruled before it became a member.

The European Union could act more effectively as a counterweight to the United States and China, which would greatly benefit the world. Both those large countries want a more united Europe with a stronger voice; they are not interested in a Britain which becomes more and more isolated from the Union. We could play a much more effective part in the Middle East, for example, where America’s role as a mediator is hampered by the influence of the Zionist lobby in Congress.

However, successive British Governments have refused to recognise the advantages and importance of sharing a degree of sovereignty. They have talked constantly of red lines; they boast about the battles won against the dastardly continentals trying to do us down. What has been the result? It has been a constant erosion of our influence. Gradually, we are edging more and more into the sidelines. The European Union Act of last year stopped any further moves to more effective sharing of sovereignty, even in cases where it is in our interests. The so-called veto of last December achieved nothing except to exasperate our partners, including our closest allies, and isolate us further.

Soon, we will face crucial decisions for our future. Will we contribute extra funds to the IMF? It seems that the Government are disposed to do so. Will they stand firm against the anti-European lobby, which has proved a very powerful influence in the past? It is likely that, next month, there will be a European Union growth pact, separate from the new treaty. Will we back it? It is vital that this should be a pact of 27, not of 17, and certainly not one of 25 or 26.

We will face decisions on the future of banking in the European Union, crucial to the future of the City. What will happen to the fourth capital requirements directive and the plans for a banking union, with its system for shared guarantees? What will our position be? Of course we have some special interests that we cannot ignore, but they must be considered in perspective. They must take account of our common interests with the rest of the European Union and, above all, the grave danger and damages that would be a consequence of our isolation.

Outside the eurozone, we are already without a voice in the measures to save it. In other areas, the eurozone will take decisions that affect us in important ways. We have placed our negotiators at a huge disadvantage by virtue of last year’s European Union Act, but we still have important cards to play. Germany does not want to be left alone to fight protectionism and dirigisme. France and Britain together can still provide a basis for a European Union defence policy, despite recent divisions about aircraft for our carriers. However, what we badly need is a sense of direction and vision, not a self-defeating obsession to preserve every inch of sovereignty.

15:58

[Lord Williams of Baglan]

My Lords, I shall confine my remarks to the Middle East, a region where for the past five years I have worked for the United Nations and Her Majesty’s Government.

As the noble Lords, Lord Howell and Lord Wood, and others have remarked today, the crisis in Syria shows no sign of abating. The UN mission led by Kofi Annan, for whom I have great respect, not least because he was my former boss, is clearly in trouble. The number of monitors is still barely above that of the much maligned Arab League mission and, after some early decline, the level of violence is on the rise again. More importantly, the 10 April deadline for removing heavy weaponry and troops from residential areas in their entirety has clearly passed and not been met. Yesterday, President Bashar al-Assad gave an interview to Russian television and showed no sign of compromise. There is no sign that he will accept the political accommodation necessary and implicit in the Annan plan. Having met the President many times, I regret to say that I do not believe that accommodation is in his DNA.

It is of deep concern that the crisis in Syria is already migrating to neighbouring Lebanon—a dangerously fractious country at the best of times. Some 10 people have died in the northern city of Tripoli in the past few days in clashes between the minority Alawite and majority Sunni communities. The leader of the Alawite community, Rifaat Eid, one of the less attractive Lebanese politicians of my acquaintance, is quoted in the Lebanese press this morning as saying that,

“calm in Lebanon can only be restored through the intervention of an Arab army … No one is capable of doing”,

this “except the Syrian army”. One of the greatest achievements of the UN was the 2005 withdrawal of that army after a 30-year presence. I regret that it is again time to look at other diplomatic options. I hope that this can be done at the Chicago NATO summit and the Camp David summit next week. Above all, Russia and China need to be cautioned that their continuing support for the Assad regime is as useless and short-lived as the support that they rendered to President Milosevic of Serbia in the late 1990s.

I was pleased that the Prime Minister, Mr Cameron, recently received the beleaguered Lebanese Prime Minister, Najib Mikati, who needs our strong support in these difficult days. We also need, with our partners, to make it absolutely clear that the international community will not accept any Syrian interference let alone intervention in Lebanon. As the trial of General Ratko Mladic has just started in the Hague and that of Charles Taylor is just ending, we need also to remember our commitments with regard to the established international norm of the responsibility to protect.

It is more than 30 years since the Israeli/Egyptian peace treaty of 1979, 10 years since the creation of the quartet which brings together the US, EU, Russia and UN and almost five years since the former Prime Minister, Mr Blair, assumed the post of quartet envoy. It is difficult to imagine a more powerful body on paper than the quartet but, having sat through many quartet meetings, I can think of no time in the past 20 years when the situation was more difficult if not bleak. It was not always thus. I take this opportunity to regret the withdrawal from politics of former Israeli Foreign Minister and Kadima leader Tzipi Livni, who tried under the last Government to advance the cause of peace. Last week, Prime Minister Benjamin Netanyahu surprised his own people with a political coup of great consequence in forming a coalition with the Kadima party now led by Shaul Mofaz. This gives Mr Netanyahu unparalleled political strength that no Labor Administration has had not for years but for decades. We must all hope that he uses this strength to accept and advance the two-state peace process.

The noble Baroness, Lady Blackstone, spoke eloquently earlier of the conditions of the Palestinian people— conditions I can confirm, having lived and worked there. I also believe that peace is vital for Israel itself. The progress of the Arab spring has highlighted Israel’s isolation in the Middle East. Governments once close to it, such as the Egyptian Government of President Mubarak, have toppled. Few Arab Governments now can speak openly in favour of Israel. It is time to see the peace process between Israel and Palestine advance again.

16:05

[Lord Hylton]

My Lords, like other earlier speakers, including my noble friend Lord Williams of Baglan, I shall speak about the Middle East and the Arab spring. I suggest that it is too soon to dismiss the latter. Demands for personal dignity or honour will not just go away, but will find ways to express themselves. Islamic politicians, once in office, will find means to address the real needs of their people. The United States, on the other hand, now sees most of its old policies in ruins. That is true from Turkey to Egypt to Iraq. Its enemies in Iran and Syria manage somehow to survive, even if under great difficulties. As to Iran, it would be good if Britain and the EU could help to lay the ghosts of the US embassy siege and the more extreme anxieties over nuclear weapons.

Egypt, as we all know, has the largest population of any Arab country and is in many ways the pivot. What, I wonder, has the United States gained from its huge annual military subsidy? Perhaps only poverty and discontent. It would be rash to forecast the future. So much will turn on the results of the elections for president, the willingness of the military to hand over to civilians and on the balance between the president and the parliament. Could a large IMF loan for inward investment and the unfreezing of blocked state assets together improve the economy in a big way? That would be in everyone’s interests. I note that the unfreezing issue is both urgent and delicate because of its colonial overtones.

Following my noble friend, I now come to Israel. How do the Government interpret the addition of Kadima to the existing coalition? Will the next 18 months be used to create the conditions for peace? Will illegal acts and provocations by settlers and others be reduced and, if possible, eliminated? Will the blockade of Gaza be ended? Will military occupation of the West Bank be reduced, and will the status quo in East Jerusalem be maintained? I suggest that all such acts could produce very favourable reactions among both Palestinians and Arab states.

The noble Baroness, Lady Blackstone, made a most important speech which should on no account be overlooked. She underlined the practical problems arising from Israel’s occupation of the West Bank and East Jerusalem, not to mention the continued blockade of Gaza. I join her in urging the friends of Israel here, in the United States and in Europe, to stop defending every action of every Israeli Government. Instead, they should campaign against illegal and provocative acts. That is absolutely necessary if Israel is to be accepted as a normal part of the Middle East, making a vital contribution to the prosperity of the whole region. I do not expect the United States to exert itself significantly until a new Administration, of whatever colour, is fully installed next year. Until then, perhaps the United States could quietly encourage Palestinian national unity.

Meanwhile, there is much that Her Majesty’s Government can be doing. We should continue our traditional diplomacy, promoting our basic interests, which happen to coincide with the common good of the Middle East and north Africa. We should remember the positive impact of all strands of our considerable soft power—reference was made to this by several speakers this afternoon. By contrast, our military exports create no prosperity at all. I suggest that soft power includes a full understanding of the relevance of religious faith to behaviour, culture and politics.

A more prosperous Middle East is a vital concern of both Europe and the United States. Unless increased employment happens in all countries, but especially in the larger ones, the fruits of the Arab spring will be bitter indeed. It is very much in the interests of the oil and gas-producing states that employment and prosperity should rise throughout the whole region. If well used, their sovereign wealth can produce good results. The sooner this can start, the better. The task is urgent. I trust that Her Majesty’s Government agree that we should all address it in the most co-ordinated way possible.

16:11

[Lord Bowness]

My Lords, on 29 March this year, addressing the lord mayor’s Easter banquet, my right honourable friend the Foreign Secretary said, in a speech that ranged over most of the world:

“Britain is a transatlantic nation and a European nation. But our … interests go beyond that to be global. We have to forge new partnerships beyond our traditional alliances … This in no way means we are moving away from our indispensable alliance with the United States and our deep partnership”,

with Europe. He continued:

“Our ties within Europe are also vitally important. Despite Europe’s current economic”,

problems,

“the extension of … democracy is a success few dared to hope for thirty years ago”.

This is a message we hear frequently; we heard it from my noble friend Lord Howell of Guildford in opening today. We should indeed cultivate the wider and developing countries. We should embrace the Commonwealth as an important forum and network but, at the same time, remember that its members—which now include some who do not share the common history—have diverse interests in different parts of the world. It is not, nor is it likely to be, a substitute for the European Union as a political, trading or defence organisation.

The Foreign Secretary could have added, as a European Union success, the peace that Europe has enjoyed and which cannot be attributed solely to NATO—peace not only among historic enemies but in the peaceful changes from dictatorships and communism, inspired by the prospects of membership of the European Union. When critics count the cost of the European Union, perhaps we should count what it has saved the continent in other ways. My fear is not that our wider interests are being neglected by too great a concentration on the European Union but rather that we are taking the relationship with the European Union and its achievements for granted.

The gracious Speech, at a time of economic and political turmoil, contained only two references to Europe: namely, Bills to deal with the accession of Croatia and legislation to deal with the European financial stability mechanism, which we have already approved but now have to do again because of the European Union Act of last year. Despite being delivered in the middle of a deepening and widening crisis, there is no statement of intent to work constructively with our partners in the union to find a way through. We need to give leadership, as my noble friend Lord Taverne said, not merely lecture others to give leadership because their problems are hurting us. What other solutions do we offer, since the EU solutions and those of Chancellor Merkel, to date, are based very much on our own economic policies?

What leadership is the United Kingdom prepared to give over the crisis in Greece? The problem is not just for the eurozone. Truly, in this instance at least, we are “all in it together”, and the calls by the popular press to let our European partners stew in their own juice or lie on the bed they made will not change that. It is no good saying that we will not be involved in any solution because, in the past, we told you that the euro would not work and that the structures to make it work were lacking or flawed. Maybe if we had not been so hands-off in the beginning, some of the mistakes would not have been made but we are where we are, however wise we may now be after the event. The stability that we have taken for granted is now threatened, and we see the rise of nationalism and worse in Greece and elsewhere. Some states, specifically Greece, will undoubtedly need help to come through their present problems. Yes, they have lessons to learn, reforms to make and deficits to reduce but, without some investment and help to earn and grow, the downward spiral will not end and the consequences will be felt by us all.

We have made commitments in the past to help people in other parts of the world when their problems were not necessarily of our making. Does the resistance to being seen to help flow from antipathy to the European Union and the euro? I hope not. What is our attitude to help through the IMF, the European Bank for Reconstruction and Development or the European Investment Bank? What do we propose to help stave off not just financial meltdown but a social breakdown that could have consequences as yet unforeseen? Britain has never been able to stand aside from the problems of Europe and we must ensure that we do not leave it too late on this occasion.

Leadership is also required in other areas. We were willing to lead some of our EU partners in Libya, but what of other areas of great concern in our own backyard that are in serious need of attention and need to be brought up the political agenda? It is a long list: Serbia and Kosovo; Ukraine, which has been mentioned already today; Moldova; Transdniestria; Bosnia-Herzegovina; and Macedonia, where Greece alone is holding up progress on that country’s candidature for the EU. Membership of the EU for the states of the western Balkans is supposed to be a key element of our foreign policy.

What about the problem of Cyprus, where we are not only a partner EU state and a fellow Commonwealth state but one of the guarantor powers? Unresolved, that problem creates problems within NATO and between NATO and the EU, and with claims about the entitlement to possible oil rights off the coast of Cyprus there is the potential for even more tension in a region where, without help, one state faces a possibly disastrous future.

Governments of all persuasions like high-profile world-stage foreign policies. It is eye-catching to be photographed with victorious forces or powerful, iconic figures in foreign parts. I accept that there are not too many front-page photo opportunities in the problem areas in Europe that I have just mentioned. We disregard our own immediate neighbourhood at our peril, but unfortunately successive Governments have failed to give a lead to the British people, and have not explained that the EU is more important than just a trading bloc but has achieved a great deal as a unique institution created voluntarily by its individual member nation states. They have failed to advise people of the EU’s advantages for fear of upsetting the Eurosceptic minority. That policy has totally failed—the real Eurosceptics will never be appeased—and, as a consequence of the failure of leadership and the generally lukewarm enthusiasm for the EU, we see the rise of UKIP.

The Chancellor famously has said of the Labour Party on a number of occasions that it failed to fix the roof while the sun was shining. To pursue that analogy, I fear that the desire to have a magnificent front door on the wider world and a large doorstep on which to pose, secured by state-of-the-art locks and security devices, is leading to leaving our own back door to Europe dependent on a rather badly maintained rim lock. We should get it fixed before it is too late.

16:18

[Lord Avebury]

My Lords, I join other noble Lords in expressing pleasure at the Government’s commitment to spend 0.7% of gross national product on development assistance starting next year. I do not share the concern that some of your Lordships have expressed at the fact that this is not in the legislation. I am pleased to accept the solid commitment that our Government have made, from which I do not think there is any possible chance of backsliding. We can wait for the legislation until some time later in this Parliament.

Our aid programme is one of the most cost-effective in the world, and as co-chair of the All-Party Parliamentary Group for Global Action Against Childhood Pneumonia, I particularly congratulate the Government on being the largest contributor to the Global Alliance on Vaccines and Immunisation. I was delighted to hear the noble Lord, Lord Jay, on this subject. None of the money which we contribute to the GAVI Alliance goes into someone’s back pocket. That is one of the reasons why I applaud the Government’s decision to be the largest contributor to this project. I am very proud that we are helping to protect the lives of children, among others, in the Somali refugee camps of Dadaab in Kenya and Dolo Ado in Ethiopia, which together hold some 650,000 refugees.

My noble friend Lord Sheikh and Malcolm Bruce MP were in Bangladesh last year on World Pneumonia Day urging that country to press forward with its plans to vaccinate children against pneumonia and rotavirus, which together kill 1.5 million children every year. The noble Lord, Lord Boateng, was in Ghana only last month helping to celebrate the rollout of vaccines against both those diseases. Will the Government continue to respond to the GAVI Alliance’s appeals as new vaccines are developed, such as the two which have now been approved against HPV, the cause of cervical cancer that kills many hundreds of thousands of women every year?

The gracious Speech says that the Government will work to bring greater stability to the Horn of Africa, and the London Conference on Somalia in February was a great success, not least because it allowed for independent participation by Somaliland, which is already de facto a stable and democratic state with which I am glad to say the UK has close relations. I understand why the Government are not going to be the first to recognise Somaliland’s independence, but can we not encourage moves within IGAD and the AU towards regional and continental acceptance of Somaliland’s right of self-determination? I also welcome the EU’s helicopter operations against pirates, which have been mentioned, and I hope that now we have these assets off the coast of Somalia, we might consider, with the EU, also helping AMISOM, which has no helicopters, in the operation that I hope will take place to occupy Kismayo and deny that port to al-Shabaab.

I was glad to hear the Minister say that we will uphold human rights and religious freedom. With Pakistan’s universal periodic review coming up soon, I hope the Government will be taking a robust line on the failure to protect minorities in that country. The blasphemy laws bear harshly on Ahmadiyya Muslims. They are denied the right to vote, and the law brands them as non-Muslims. In the armed forces, or if they apply for a post at a university or in the civil service, they suffer discrimination, and there is a glass ceiling above which they will not get promotion, whatever their merits. Worse, there is a chorus of hate speech against Ahmadis from Salafist mosques and madrassahs, and from a perfectly lawful organisation, the Khatm-e-Nubuwwat. Regularly, members of the community are assassinated in cold blood or are arrested on trumped-up charges and gratuitously tortured and Ahmadi mosques are destroyed by terrorists. My noble friend says that we make frequent representations to Pakistan, but this does not work because the situation of Ahmadis and other religious minorities gets worse every year. Can we not consider more effective methods of bringing home to Pakistan and, for that matter, to Indonesia and other Islamic states, that religious pluralism and freedom are mandatory, not optional extras to other human rights?

Bangladesh has not been infected so badly with the virus of Salafism although it has periodic outbreaks of persecution. As co-chair of the Chittagong Hill Tracts Commission, I am particularly concerned with the failure to implement the CHT peace accords of 1997 in accordance with the pledge in the Awami League manifesto, which has been repeated several times since the election by the Prime Minister Sheikh Hasina. The military remain present in the CHT in force, land grabs by settlers against indigenous people continue and violence against indigenous people is perpetrated with impunity. What can we and the European Union do to help Sheikh Hasina solve these problems, and particularly to sort out the dysfunctional land commission?

In Bahrain, after 15 months of bloodshed, torture, extrajudicial executions, and arbitrary detention of human rights activists, there is no sign of an Arab spring. The four leading human rights activists in the country are in custody, two of them awaiting retrial before a civilian court having already been tried before a military court and held, pending that trail, incommunicado for weeks and finally sentenced to life imprisonment. Yet Ministers were content to let the Formula 1 race go ahead amid the misery and mayhem. Worse, they advised Her Majesty the Queen to invite King Hamad, the hereditary dictator, to come here for the Jubilee celebrations. I realise that diplomatic requirements have compelled Her Majesty to meet some gross human rights violators over the 60 years of her reign, but is it not nauseating that in this Jubilee year she will have to shake the hand that is stained with the blood of dozens of the regime's victims? Let it be clear to those who believe in human rights and democracy that King Hamad is not welcome at the Jubilee celebrations.

Finally, on the Chagos Islands, the European court will soon declare on the admissibility of the islanders’ claim for the right of return to the outer islands. The Foreign Secretary was in favour of a “just and fair settlement” when he was in opposition, but now he says that the FCO’s policy is not to be changed until after the Strasbourg court gives its decision. Meanwhile, the judgment is expected imminently in the judicial review proceedings against the Foreign Office in regard to the marine protected area. Colin Roberts, then FCO director of overseas territories, told US embassy political counsellor Richard Mills on 12 May 2009 that,

“establishing a marine park would, in effect, put paid to resettlement claims of the archipelago’s former residents”.

According to the Government’s thinking on the reserve, as Mr Roberts put it,

“there would be ‘no .. Man Fridays’ on the BIOT’s uninhabited islands”.

This was the real reason for creating the MPA. I ask my noble friend whether the FCO’s position can be reviewed now that its motive has been exposed and whether it will now reconsider settling out of court rather than persisting with expensive trials on which it has already spent over £3 million—not counting the cost of the Civil Service and Treasury solicitors—in which its chances of success must be reduced?

16:27

[Baroness Cox]

My Lords, I will focus on recent developments in Sudan and South Sudan and in Burma. I return to the former having already raised it in Oral Questions today because a humanitarian catastrophe is imminent, the statistics should be compelling and the need for a response is so urgent.

First, in Sudan, half a million people are displaced from Abyei, the Nuba Mountains and Blue Nile by Khartoum’s ground and aerial offensives, with many sheltering in caves with deadly snakes or in forests, many dying from hunger as they cannot harvest crops and many killed and injured by bombs. In Blue Nile, on 11 May, Sudan Armed Forces—SAF—bombed a mountainous area crowded with internally displaced people near Baw with missiles fired from east and west of the county. Last week, over 3,000 IDPs fled from south-west Baw county and were trapped at the border without transport or food. More than 240 IDPs had already died in the first week of May, including Chief Haj Jabir Dafalla and his family. Many more lives will soon be lost unless humanitarian assistance reaches the area within days, but the Khartoum Government have denied access by aid organisations to those in need.

Secondly, 250,000 refugees have been forced to flee into South Sudan by Khartoum’s offensives. I recently visited Yida camp, where there are now at least 30,000 refugees, with 700 arriving in a single day, many ill, having walked for seven days without adequate food or water. With the imminent rainy season, there will be no access for food supplies. In Jamam camp, with nearly 37,000 refugees from Blue Nile, Oxfam’s director of emergency response calls the situation desperate, saying:

“There is simply not enough water and we are running out of options and we are running out of time”.

We have also met refugees from Abyei who fled last year’s fighting. Khartoum’s forces have defied a UN Security Council requirement to withdraw, thereby preventing people from returning home for fear of atrocities perpetrated by SAF last year, including murder, rape and torture. We visited camps in Bahr el Ghazal without clean water, food or other essential supplies.

Thirdly, tens of thousands of people are suffering from al-Bashir’s commitment to turn Sudan into an Arabic, Islamic state and to evict those deemed “southerners”. The BBC estimates that there are more than 500,000 ethnic South Sudanese in the north. Following an 8 April deadline from Khartoum to formalise their status or leave the country, many fled to South Sudan. Some 15,000 were stranded in Kosti, unable to take boats to South Sudan because of restrictions from Khartoum. They are now being airlifted to Juba, to an unknown fate. Others who have previously fled include thousands in camps near Renk. When we visited them last month, they were living in makeshift shelters, which will never withstand the imminent rains.

Fourthly, Khartoum is also bombing targets across the border in South Sudan. On 23 April, while we were still there, two MiGs bombed a market in Bentiu. On 7 and 8 May, locations in Unity, Upper Nile, and Northern Bahr el Ghazal states were bombed.

When independence was achieved in South Sudan, the war had left a dire humanitarian situation. Now this new nation also has to cope with the massive influx of refugees and forced returnees and the aerial bombardment of people by its northern neighbour. I ask the Minister whether a more robust response to Khartoum’s aerial bombardment is not now needed, such as targeted sanctions, including, for example, the refusal of diplomatic visas to government members. At the moment, they are carrying on their policies with impunity.

Too often there is a response that implies moral equivalence between the policies of the Governments of Sudan and South Sudan. There is no such equivalence. As my noble friend Lord Alton has highlighted, Sudan’s President is indicted by the ICC. He has dismissed the elected governor of South Kordofan and replaced him with another ICC-indicted war criminal. As has been highlighted time and again, he is also carrying out constant aerial bombardment of civilians in his own country and transgressing an international border to bomb civilians in South Sudan. He is pursuing a ruthless racist policy of intimidation, with the expulsion of citizens deemed to be “southerners”.

In contrast, the Government of South Sudan have many problems and inevitable weaknesses but they are not guilty of any such abhorrent policies. South Sudan was fiercely criticised for taking the town of Heglig. However, it was being used by Khartoum as a base for attacks on the South. President Salva Kiir has withdrawn his troops, unlike Khartoum, which has refused to withdraw its troops from Abyei. South Sudan has also been criticised for closing the oil pipeline, but this can be seen as a desperate response to Khartoum’s imposition of extortionate prices. This morning the Minister confirmed that DfID has withdrawn or reduced its development aid for South Sudan in response to the closure of the pipeline. Will the Government rethink this harsh policy? The humanitarian needs of South Sudan are legion and have been detailed in previous debates, so I will not repeat them. However, it cannot be acceptable for DfID to reduce development aid to a nation that is trying, albeit with many problems and fallibilities, to develop democracy and civil society in face of massive challenges, many inflicted by its northern neighbour with impunity.

I turn briefly to Burma, and especially to the plight of ethnic nationals, whom I have visited twice this year. There is much to commend and celebrate in today’s Burma, including the freedom and political engagement of the heroic Aung San Suu Kyi and the release of hundreds of political prisoners. However, the plight of ethnic national peoples, such as the Shan, Kachin and Rohingya, is still cause for great concern. We were in Shan state when the brief ceasefire was broken by intense fighting, and Kachin state is experiencing some of the most intense conflict and violations of human rights in Burma’s recent history. The oppression of the Rohingya people remains as brutal as ever.

Deep concern was graphically expressed by one of the leaders of Shan state, who said that when the light went on in Rangoon, everyone ran to the spotlight and did not wait to see them hiding in the darkness. The ethnic national peoples fear that, as the Burmese Government gain credibility, the country will be open to massive aid and investment, which may be used to exploit further the ethnic national people’s resource-rich lands. For example, the plans for 25 new dams could force tens of thousands from their previous homes with no compensation and destroy the environment. Many voices express caution about premature optimism and lifting of sanctions—rightly so.

Therefore, I ask the Minister whether the Government will reassure the ethnic national peoples that they will be fully included in all discussions about the future of Burma, so that they no longer feel marginalised, vulnerable to exploitation and left in the darkness. Only then will we all be able to celebrate with genuine joy and integrity the new-found freedoms of the beautiful, but in many places still tragic, land of Burma.

16:34

[Lord Flight]

My Lords, towards the end of the gracious Speech there are the somewhat opaque words:

“My Government will build strategic partnerships with the emerging powers”.

I would have liked that to refer specifically to our friends in the Commonwealth, but I was very heartened by what the noble Lord, Lord Howell, had to say in his excellent opening speech. To me it is particularly relevant in the face of the likely impending break-up of the eurozone and the impact that that is likely to have on European economies and our relations. The immediate and most important foreign affairs issue is what is happening on the continent. There is the obvious fight to the death between economic and market forces and political commitment, where the lessons of history tell us that major economic forces tend to prevail. There is the obvious point that many have made before—that for disparate economies to share a currency is extremely difficult at the best of times. Indeed, I was surprised to see an article arguing that the Commonwealth was likely to be a more successful group of economies to share a currency than the EU countries.

Everyone knows that if you are going to share a currency you have to have transfer payments from the more successful to the less successful. It boils down to whether Germany is willing to make the necessary transfer payments on a regular basis to the uncompetitive economies, which would amount to some 35% per annum of German GDP. That seems pretty unlikely. We live at present with the likely impending default and exit from the euro of Greece. I expect that a firewall will probably prevail in the near term to protect Spain, Portugal and Italy, but that does not address the fundamental problem of lack of competitiveness. These economies cannot recover and grow, and they cannot put their public finances right, if they are 35% uncompetitive against the successful parts of Europe. The issue is whether the break-up will be chaotic or orderly. We all hope that it will be orderly but, whatever, there would be economic pain in the short term, although once the necessary devaluations have occurred and these currencies are competitive again, do not understate their ability to bounce back within two or three years.

What British foreign policy needs to focus on right now is what our attitude is towards the EU in the wake of these likely events. What will be happening is centrifugal forces. The nation states of Europe with their own currencies and central banks returned will need to follow economic policies appropriate to their circumstances. Some may even need to impose capital controls. The EU, which has been centralising for 40 years and trying to move towards a single political unit, is suddenly going to be pulled in the other direction. What is our view towards this? What would be our view if there were an attempt to leap towards political union? I very much doubt it, but that obviously could be one reaction.

What the UK has always wanted to see is an area of free trade and co-operation, achieving consensus, not enforcing policies but moulding more and more European co-operation together over time—but naturally and not coming by command from the centre. It will also need a much cheaper EU. I checked with the Treasury, because I could not believe a report in the newspapers that in 2013-14 Britain’s net contributions to the EU would be £31.3 billion. The Treasury confirmed that figure to me. I thought that it was still only £12 billion or £13 billion. It is not a sum of money that this country can afford. But, more than that, I cannot see that Italy and Spain, the countries that are going to be experiencing problems with the euro, will be willing to make large financial contributions to a massive EU structure. We may not necessarily say it in public, but this country needs to think about the political implications of the euro imploding and what policies it will adopt in that event.

For some time the EU clearly has not been the engine of growth that people thought it would be when we first applied to join it way back in the 1960s and 1970s. It has turned out to be a relatively failed economic region. I go back to where I started. We need quickly to develop effective commercial and investment relations with the emerging BRIC economies, in particular with the Commonwealth economies. As I have pointed out before, my particular plea is for a much closer relationship between this country and India—politically, economically and potentially even defence-wise. The University of Cambridge will tell you that the only two countries that matter in terms of our universities and their quality of students are America and India. The Prime Minister of India has virtually indicated that he would like to see a special relationship being established for top postgraduate students coming to this country, which would enable a lot of the hassle of the visa process to be handled in a friendlier fashion.

I can think of other areas where there is considerable scope for special relationships between this country and India. We are all aware that certain problems need to be resolved but I do not think that they are insoluble. The Indian community is a successful and dynamic part of this country and there is a great deal of sympathy between the people of India and the people of Britain. It is time to galvanise that while not ignoring the other members of the Commonwealth. Important things are going on in Africa and in the older members of the Commonwealth, particularly Canada, where there is much scope for this country to find commercial partners.

There is a nice commitment in the gracious Speech. I know that the noble Lord, Lord Green, is travelling the world doing his best to generate trade deals on the ground, but more needs to be done in terms of political initiatives. We need to face up to the fact that the Europe that will emerge on the back of what is likely to happen to the euro will not be a great economic engine for this country.

16:42

[Lord Gilbert]

My Lords, I congratulate my noble friend Lord Wood of Anfield on taking up his new responsibilities, on which he made a very distinguished “maiden speech”. I sincerely hope that we will hear more from him in the future, as our debates will be enriched by his contributions.

I wish to tackle only two issues, one of which I have not talked about before in your Lordships’ House. International terrorism constitutes a threat to all of us. It is a threat to Shi’ites, Muslims, Pakistanis, Arabs, Mr Putin and to every civilised country. So far as I know, outside South America it has spread almost everywhere. However, I am concerned that up to now I have seen no concerted attempt on the part of international Governments to take on this threat. We spend a huge amount of money on physical protection at our airports and that sort of thing and on making sure that we can deal with any suicide terrorists—it is the suicide terrorists that I am talking about—before they detonate their weapons, but we do nothing to prevent their being poisoned into believing that suicide terrorist acts are worthy things to do. These terrorists are not just indifferent to death; they actually welcome it because they are taught to do so by some very evil men. I do not for a moment think—I am sure that neither do your Lordships—that all mullahs are tainted in this way but quite a lot of them are. It is high time that we organised the international community to tackle this issue. I hope that this Government will take a lead in letting the world know precisely who are the mullahs responsible for indoctrinating young men and women into the belief that suicide terrorism is an admirable thing that will produce material rewards for them and their families. It is up to us as an international community to try to silence them by whatever means necessary—I would not be too squeamish about that myself—and I do not see any sign of it. We should also make sure that the message they put out is countered by the whole international civilised community.

The other matter that I want briefly to talk about is aeroplanes—the C-17—which should not surprise those noble Lords who have heard me speak before on defence matters. A couple of days ago, the Minister teased me, quite fairly, about the A400M. I am quite happy to be teased by him about that, but he should do so on the right grounds. I have no objection whatever to the A400M in terms of its capability; I am just absolutely convinced that it is not the plane that this country needs and, much worse, if we have it, we will lose the C-130 and our interoperability over a whole range of air transport capabilities, as he knows.

More importantly, I want to draw your Lordships’ attention to the fact that the C-17 is a remarkably capable aircraft that is now being run by Australia, Canada, India and this country—to say nothing of the United States. It is a remarkable plane, in that it has an excellent short-field capability and can get into airports that are quite inaccessible in mountain areas. It has a very good turning capability on the ground, and is also good at handling non-tarmac runways. All in all, it is a piece of kit that would go down extremely well in international aid missions.

I have said privately to Ministers in the past—and I am now saying it publicly—that they should talk to our Commonwealth friends to see if we can get a group together, consisting of all the countries I mentioned that fly the C-17, including Australia, India, ourselves and Canada. It is admirably available for dealing with natural catastrophes, and we are shortly about to acquire our eighth C-17. I think the last one is being delivered in response to what the noble Lord, Lord King, talked about earlier, regarding whether or not we would be able to get all the kit that we want out of Afghanistan. I am delighted that we are acquiring the plane for that. If we get the kit out by C-17, there is nothing that the Pakistanis could do about it, even if they wanted to. That is a wholly admirable development.

I suggest that the Minister holds talks with the countries that I have named. Although I have not counted them, they cover many degrees of longitude on this planet and, for that matter—with Australia in the southern hemisphere—many degrees of latitude. That is the footprint of where these planes are based. Not only are they enormously valuable in themselves, they are extremely well placed to run international aid missions after catastrophes. I very much hope that the Minister can tell the House that he would be prepared to talk to his colleagues in other Commonwealth countries to see if we can set up a proper group based on the C-17 to engage in that sort of activity.

16:48

[Lord Hannay of Chiswick]

My Lords, one consequence of the extraordinarily long opening Session of this Parliament, which has just ended, is that this is, in fact, the first opportunity that we have had to debate the coalition Government’s performance and foreign policy priorities. If I had to sum up that performance in one phrase, I would be a little tempted to turn to Winston Churchill’s lapidary comment:

“This pudding has no theme”.

In so doing I am not, I hope, falling into the error of suggesting that one can draw up a blueprint for foreign policy and simply apply it, come what may. But the lack of strategic objectives in the main areas of Britain’s foreign policy and the absence of a clear public narrative are becoming increasingly apparent, and increasingly a source of weakness and waning influence. Too often, the Government seem to be following Lord Salisbury’s description of Britain’s foreign policy as floating down a broad river, occasionally fending off the banks. Well, that policy ended in far from splendid isolation at the time of the Boer War, and 21st-century Britain can even less afford to be isolated than it could then.

Nowhere has that sense of drift been more apparent than in the handling of Britain’s vital relationship with the European Union. Last December, whether by bad luck or bad judgment—and I suspect that it was a combination of the two—we stumbled into a completely unnecessary confrontation with all but one of our 26 partners. It was never going to be easy to handle the European dimension of the great world financial and economic crisis that began in 2008, with some countries within the eurozone and some countries outside it but all depending crucially for their future prosperity on achieving the right policy mix, but it cannot be said that any of the parties to it, including ourselves, have so far emerged with a lot of credit.

Now a new phase is opening with much churn in European politics, and a major debate is beginning over how to put a proper emphasis on growth while still moving decisively towards a sound and sustainable fiscal balance. It is surely vital that Britain plays a full and constructive part in that debate and that it is a full party to any growth strategy, which should be composed of structural reforms, further development of the single market and well targeted use of European financial instruments. In that way, too, some of the damage done last December could be repaired. I hope that the Minister replying to this debate can assure the House that that—a full British involvement in and contribution to the discussion and agreement on the growth strategy—is the role that Britain intends to play in the extremely important weeks ahead of us.

However, the problems over the Government’s European policy go far wider than the eurozone crisis. There is simply a complete lack of an overall sense of direction to it. There is no articulation of the sort of European Union that we would like to see set out in terms that would appeal to other member states which attach a similar insistence and importance to the completion of the single market, to further enlargement, to freer and fairer world trade, and to a European Union able to play an effective role in the diplomacy and security of its own region and more widely.

A vision composed exclusively of red lines, no-go areas and referendum locks is going to appeal to no one—not even, I suspect, to our own electorate. This is surely a moment when, with a new French President in office, we should be thinking about what more we can do to strengthen Anglo-French defence co-operation and how we can use that to strengthen overall European performance in a field where the policies of austerity require us to do more together or, alternatively, to see ourselves sliding into irrelevance. That was the clear message of the report of your Lordships’ EU Select Committee, recently distributed.

Looking beyond Europe and its immediate neighbourhood, I cannot say that the picture there is entirely encouraging either. Some brave and successful decisions have been made by the Government—for example, over Libya. Policy towards the ferment in the rest of the Arab world, including towards Syria, where no easy choices exist, seems to be on the right track, although a long and probably painful route remains to be travelled. The twin-track policy towards Iran, pushing active diplomacy while strengthening economic sanctions, is the only one with the slightest prospect of avoiding much worse outcomes. However, in this wider field, too, a lack of strategic vision—a tendency to regard pragmatism as an end in itself and not a method—does seem prevalent.

Such indications as the Government have given about the governing principles of their foreign policy seem to be either a little naive or contradictory. Take the often-repeated mantra that we live in a “network world”. What on earth is that meant to signify? Is it simply a blinding glimpse of the obvious reflecting the communications revolution through which we are living which reinforces the concepts of interdependence and globalisation? Or is it a faint echo of something that I first came across nearly 40 years ago in Chairman Mao’s Beijing, where the government hotel’s lobby was adorned with the slogan, “We have friends all over the world”? Take, too, the frequently repeated phrase, “We no longer live in a world of blocs”. Really? Britain’s ultimate security rests today, as it has done for more than 60 years, on NATO, which is certainly a bloc; and its prosperity depends to a great extent on the European Union, which is another bloc. We also look to a number of regional blocs—the African Union, the Arab League and ASEAN—to share the burden of international security, so what on earth does that phrase signify? I suppose it is just another dog whistle to the Eurosceptics on the government Back Benches.

There is then the Government’s claim to have reinvented bilateral diplomacy. I warmly welcome and commend the extension of our bilateral diplomatic network which is being achieved, despite the pinch of austerity. But bilateral diplomacy and multilateral diplomacy are not an either/or choice for a middle-ranking power with worldwide interests like Britain. They are a both/and necessity.

I urge the Government to put rather more emphasis on the need to strengthen the great multilateral institutions on which we depend for our security and prosperity. Here I join with what the noble Lord, Lord Wood, said. Every one of them—the UN, NATO, IMF, WTO— sails through troubled waters; every one of them needs reform and needs to adapt if it is to operate successfully in the emerging multipolar world. Yet the Government’s response—indeed, in some cases, the Opposition’s response—to the IMF’s recent call for increased resources was pusillanimously feeble. Surely it is in Britain’s interest that these rules-based organisations should be sustained against the increasingly shrill calls to turn back the tide of globalisation and to revert to protectionist and isolationist policies. Surely on that ground there is a cause that the coalition Government should make their own and where they should give a lead.

16:57

[Baroness Kinnock of Holyhead]

My Lords, I think we can all agree that we have had a very interesting, wide-ranging and excellent debate across a whole range of foreign policy, defence and international aid issues. I strongly support the analysis by the noble Lord, Lord Howell, of Africa, the BRICs, South Sudan and other concerns of this House. As always, the Minister showed commitment to working to build global peace and security.

As other noble Lords have done, I pay tribute to the excellent presentation made by my noble friend Lord Wood, who gave us a compelling overview on a range of issues of concern to noble Lords. His strong and realistic analysis of the UK’s current relationship with the European Union was timely and very interesting for many of us to hear. The noble Lord, Lord Howell, my noble friend Lord Wood and other noble Lords mentioned Afghanistan, as did the noble Baroness, Lady Tonge. I trust that we will hear more from the Government today about the need to ensure that women’s voices are heard and that they are invited to join the deliberations on Afghanistan post-2014. Women in Afghanistan tell us all the time that they fear for the future and they fear that they will lose what has been achieved for women in Afghanistan, which includes women parliamentarians, some of whom visited this building this week.

A number of noble Lords raised the issue of hunger and famine in the Sahel. Urgent action needs to be taken to tackle hunger; 170 million children suffer from chronic malnutrition, which leads to physical and intellectual stunting. The noble Lord, Lord King, raised these issues. There is no shortage of food; it is a realistic ambition to feed the world.

A number of noble Lords eloquently—the word was used in particular about my noble friend Lady Blackstone—drew attention to the problems of the Palestinians, and to the wider problems in that region. The overriding message we took from those noble Lords was that peace was about securing justice. I pay tribute, too, to the noble Lord, Lord Chidgey, who correctly drew attention to the need for the commitments at Busan to be honoured, and to the fact that effective monitoring was essential. As he knows, I particularly support his point about the need to do more to support parliaments in developing countries, because they are responsible for holding Governments to account and scrutinising budgets. Those important tasks fall within their remit.

The noble Earl, Lord Sandwich, again revealed his strong and informed commitment to international development, as did the noble Lords, Lord Jay, Lord Sheikh, Lord Rana and several other noble Lords. My noble friend Lord Judd shared with noble Lords his usual insights and magnificently made the case for solidarity with the world’s poor. The noble Lord, Lord Alton, and the noble Baroness, Lady Cox, drew attention to the suffering of the people of Sudan and South Sudan, and the violence and aerial bombardment that they are suffering. As the noble Baroness said, it is a humanitarian catastrophe. The noble Lord, Lord Teverson, mentioned the issue of the oil pipeline that I raised today at Question Time. Noble Lords should understand that there may be a problem with what has happened, but it is not acceptable that the poor people of South Sudan are penalised for the actions of their Government, which is absolutely the case. To withdraw long-term development assistance in education and health and to fail to meet the other needs of South Sudan would be untenable.

The noble Baroness, Lady Tonge, was, albeit briefly, liberated from the naughty step. We were very thankful that she was and that she found a microphone and gave us again the benefit of hearing her, especially on the need for the world’s women to have the status and respect that they need and deserve.

I will confine my remarks to international development. The reality is that we are living in an age of unprecedented human development. We celebrate the fact that millions of people have a better, more fulfilling and healthier life than their parents did. On every continent, including Africa, precious children’s lives have been saved. More are surviving infancy and, as the noble Lord, Lord Avebury, said, more are being vaccinated against deadly diseases. More are going to school, and real progress is being made on child well-being generally, as UNICEF and Save the Children confirm. Children have so much more than their parents had. Even in Congo, Haiti and Burma, infant mortality rates are lower than they were in any country at the beginning of the last century. Those are the conclusive facts.

Those who claim that aid does not work should try telling that to mothers of children in Africa who sleep safely under antimalarial bed nets provided directly by aid—to take just one of countless examples. Every day, 485 children are saved by these nets, which are paid for with aid. That is the equivalent of 80 primary school classes a week. With those realities in mind, the argument has to be that we should do more and do better so that we succeed in underpinning what we all ultimately seek: shared prosperity and security.

The tendency has been for there to be too much focus on income levels rather than on key indicators such as health, education and the general provision of basic services. Of course we should recognise that progress has been patchy, but we must also assert that Congo and Zimbabwe are not actually the norms. That is why aid works. These “aid works” arguments must be made and we must emphasise that people’s lives are longer and better because aid enabled them to have access to income, education, social protection and better government.

On that last point, we have proof. The recent advances in Brazil, for instance, show that growth with redistribution can act as a powerful force for greater access to equity within countries. That is obviously in everyone’s interest. We know that new forms of organised violence and conflict thrive on inequalities. I want to hear the whole Government and not just DfID civil servants referring much more to the need to combat inequality within and between countries. That is especially important when people here and abroad face such terrible shocks and crises. The well-off and the elites are of course better able to weather the storm. It was ever thus.

The UK has for many years been recognised as one of the world’s most effective donors and has pushed concerns about action against poverty up the international agenda. That has rightly brought with it substantial diplomatic benefits to the UK. The international commitments that we have had for many years have, we know, brought to the UK prestige, trust and respect. That again means that it makes sense to continue to promote fairness, social justice and moral responsibility to retain our country’s reputation for practical fairness and international responsibility. It is essential to our efforts to define what Britain stands for and what Britain wants to improve—whether trade, information, protection against and prevention of security threats, including terrorism, organised crime, climate change, pandemics and the instability that affects us all when there is violent conflict.

Development also gives us a chance to tackle some of the knock-on effects of globalisation and the implications for all of us of state fragility that generates so many perils for all of us. We have to ask ourselves how we can not continue to push international development and poverty up the international agenda when it is an integral part of the UK’s overall global priorities and foreign and security policies.

At this time, most poor countries are not on target to meet their MDGs, and that must remain at the top of the UK agenda. Now the Prime Minister has a critical opportunity at the G8 and in his new role chairing the UN committee to show that he can offer real leadership by a UK Government such as we saw at the Gleneagles G8 summit in 2005. That is sorely needed now, at the G8 next year and of course as other noble Lords said at the UK-hosted G8 next year. In many ways, we are awaiting confirmation of the vital aid/GNI credential, but also a clear determination to actively leverage real change.

I said earlier that aid works and the clear evidence is that quality aid has substantially reduced aid dependency. One argument that people make against aid is that it creates aid dependency, but dependency has fallen from 47% to 27% in Ghana, for example, and from 85% in 2000 to 45% in 2010 in Rwanda. That is evidence of real transformation, and many Governments are now in the driving seat, pressing for fairer agricultural trade, combating tax evasion and climate change, promoting technology transfer, regional integration and managing migration. Those are their priorities and they are pressing them.

However, we still have work to do to justify 0.7% and the ring-fencing of development aid in the context of the so-called fiscal crisis. We have to tell the good news story, which is true and encouraging, and also point out that, after all, UK aid currently accounts for about 1p in every £1 of tax revenue. Frankly, it is nonsense to say that we cannot afford it when so much is achieved by it. Aid works and it is the smart thing to do.

The 0.7% target is arbitrary in that it is linked to specific MDG financing plans, but I would argue that the same could be said of any other area of public spending. However, we must never let up on the task of winning over public opinion and explaining how aid fits in to the wider vision of equity and fairness. Will the Government now frame a public dialogue on what aid has done and is doing and what the challenges are? It really is time for an informed debate on these issues.

It was a considerable disappointment to many of us that the gracious Speech did not contain a reference to legislation for 0.7% at any specific time. At the previous election, the Conservative manifesto said:

“We will legislate in the first session of a new Parliament to lock in this level of spending for every year from 2013”.

That was subsequently included in the text of the coalition agreement in 2010, which said:

“We will honour our commitment to spend 0.7% of GNI on overseas aid from 2013, and enshrine this commitment in law”.

Those undertakings were emphatic and explicit. However, two weeks ago I was told by the noble Baroness, Lady Northover, that the commitment would be legislated for only “when time allows”. In addition, she said that time could not be found in the last parliamentary Session because of the time that had to be given to what she described as

“reforms to tackle the fiscal deficit”.

I must say that I found that explanation rather unconvincing when the 2010-12 Parliament was actually the longest in post-war history. This Session really should be no such impediment to progress on the 0.7% Bill, and the Government must urgently seek to redeem themselves first and foremost by guaranteeing that the target is reached in 2013 and, secondly, by ensuring that legislation giving legal force to that commitment is enacted in this parliamentary year.

Let us be clear: the Bill exists. It has already had pre-legislative scrutiny from the Commons International Development Committee. It is not complex. It has a few clauses. It is short. There is agreement between the coalition parties, and they know that Labour will co-operate fully in legislation, so why do we not just get on with it?

Of course, I have heard the Government claim that the intention to reach the 0.7% figure is so strong that legislation is not really necessary. My response to that claim is to ask: if legislation is not necessary, why bother to promise it in the first place? Why was it vital to “lock in” the commitment? Why was it essential “in the first session” to “enshrine” the undertaking? The answer, as everyone knows, is that specifying the 0.7% in statute is a solemn undertaking, an expression of multiparty irreversible seriousness, and that is what we are looking for. It is as vital now as it was on the day we started to demand it. The reasons for that are clear and compelling, as noble Lords have said.

Let us stop swapping contradictory numbers, peddling gloomy aid pessimism and exchanging negative anecdotal information about aid. Like most things, aid is clearly not an unmitigated triumph, but there are remarkable successes and real progress, as we have heard, and much more prominence should be given to the plain truth. We welcome the Government’s commitment to wanting to reach the 0.7% target. Now the paramount need is to see that that commitment is fulfilled, as promised, in 2013. As we work for that, we need to ensure that the guarantee that it will be sustained in real terms is given statutory force.

Not long ago, Andrew Mitchell said:

“On the whole, politicians should do what they say they are going to do”,

and he confirmed that legislation would take the 0.7% commitment beyond doubt. I agree with him, so let us do it.

17:15

[The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Astor of Hever)]

My Lords, it gives me great pleasure to close this debate on Her Majesty’s gracious Speech. The many issues raised today are a powerful reminder of the dangerous and uncertain world that we live in, as my noble friend Lord King pointed out. We are lucky to have men and women of calibre and commitment across the FCO, DfID, MoD and the agencies working tirelessly on our behalf. It is worth remembering that many of them are working in difficult and sometimes dangerous environments. We are grateful to and proud of them.

I pay tribute in particular to our Armed Forces. We ask a lot of them and they always deliver. Their professionalism and courage are inspirational, and we owe them and their families a tremendous debt of gratitude. It is a job which often carries many risks, as we know from our current operations in Afghanistan.

Earlier in the debate my noble friend Lord Howell said that we have a foreign policy with two clear aims—to respond to urgent challenges and crises in ways that promote Britain’s national interest and our democratic values, including human rights, poverty reduction and conflict prevention; and to equip our country to be a safe, prosperous and influential nation in the long term. We will continue to honour our commitment to the world’s poorest people, and we will enshrine that historic commitment in legislation as soon as parliamentary time allows.

Tackling poverty is not only the right thing to do but is in the interests of Britain’s own security. If we do not invest in countries before they become broken, we end up paying the price in terms of terrorism, crime, mass migration and piracy. That is why the Secretary of State for International Development has a seat on the National Security Council and why the Government’s Building Stability Overseas Strategy recognises the crucial interplay between defence, diplomacy and development.

It is the role of defence to support this effort as we look to the future. Indeed, defence diplomacy is now a central pillar of our defence effort, and is important particularly when it comes to maintaining support for operations as well as upstream conflict prevention. Defence diplomacy is also an important part of my ministerial portfolio, in particular my membership of the cross-Whitehall Gulf Initiative ministerial team, led by the FCO. I am grateful to those noble Lords from all sides of the House who have given me the benefit of their advice and knowledge of this region which is of such strategic importance to this country.

Defence has a clear mission: to protect this country, project power and provide the ultimate guarantee of its security, as well as helping to protect our interests abroad. For the first time in decades, we have a balanced defence budget. We can now get on with the important job of transforming defence and building the Armed Forces of the future. We are, and expect to continue to be, in the top four military spenders in the world. Our intent for Future Force 2020 is clear: the development of versatile, agile and battle-winning Armed Forces supported by a professional Ministry of Defence, with people ready to lead, accept responsibility and spend wisely. We need the right equipment, support and force structures to deliver military success on operations whether that be overseas or here at home, where we are always in readiness to support civil contingency work, as demonstrated by our recent preparations in training military personnel to replace striking fuel tanker drivers. Of course, this summer our Armed Forces will support the security effort for the Olympic Games. That is a sizeable undertaking, involving around 13,500 service personnel at the height of the Games.

Our main effort will remain focused on Afghanistan. We are now in the final phases of our military mission there. International forces are gradually handing over security responsibility to the Afghans, who will have full responsibility in all provinces by the end of 2014. The last of the three districts in the UK’s area of operations, Nahr-e Saraj, has now entered the transition process. This is testament to the increasing capability of the Afghan national security forces and to the impressive work of the British and allied troops who have trained and partnered them. Of course, Nahr-e Saraj remains a challenging area and the ANSF, supported by us and our international partners, will continue to face difficult and challenging days ahead. Yet we should not allow that to cloud the real and tangible progress that has been made and which will now continue under an Afghan security lead. The UK will be out of a combat role by 2014, but we will continue to support Afghanistan. We will provide £70 million a year to help support ongoing development of the Afghan national security forces. We will also take the lead in the setting up and running of the Afghan national army officer academy. As the Prime Minister has stated, our goal will be to leave,

“Afghanistan looking after its own security, not being a haven for terror, without the involvement of foreign troops”.

I will do my best to answer all the specific questions and issues raised during the debate, but I am in no doubt that I will run out of time. I will undertake to write to all noble Lords who asked me questions.

The noble Lord, Lord Wood, seemed gloriously unaware of what we are doing in NATO, the Commonwealth, the United Nations and rows of other international bodies. I will try to answer his questions. The first was whether the eurozone should survive or break up. As the Chancellor said, resolving the eurozone crisis would be the single biggest boost that the British economy could get this year. It is in our national interest that there is a coherent, comprehensive and lasting solution. The noble Lord also asked about Palestine and the UN. We see negotiations as the best way of achieving the two-state solution. We reserve the right to recognise the Palestinian state bilaterally, at the moment of our choosing and when it can best help bring about peace.

The noble Lord asked if the Government are seeking a ban on protection and indemnity insurance in relation to Iran. We are committed to the dual-track approach of engagement and increasing the pressure on Iran through far-reaching sanctions. We strongly support the unprecedented package of EU Iran sanctions that were agreed earlier this year. The EU is taking time to review aspects of the protection and indemnity insurance ban before 1 July to ensure that the pressure on Iran is maximised while avoiding any undesired impact elsewhere. We are in discussion with several other EU member states on this issue. On our agenda for the P5+1 talks in Baghdad on 23 May, which we look forward to, we now need agreement on urgent, practical steps to build confidence that Iran will implement its international obligations and does not intend to build a nuclear weapon.

What are our priorities for the G8 and G20? We take over the presidency of the G8 on 1 January next year. We will say more about the priorities for our presidency nearer the time. The British Government are working closely with G20 partners to deliver a meaningful and successful summit in Los Cabos in June. It is fundamental that the G20 takes the necessary actions to address ongoing risks to the global economic recovery and secures strong, sustainable and balanced growth which supports employment and job creation.

The noble Lord, Lord Gilbert, mentioned the C17. In my department, we agree 100% with him. We have just ordered an extra C17 which, from memory, is coming in July. It is a wonderful aircraft and I will take back with me the noble Lord’s suggestion about approaching Commonwealth countries.

My noble friend Lady Falkner asked about Syria and whether we had considered withdrawing the passport of the President’s wife. She raises a valid point, and I will convey her concerns to my Home Office colleagues, who have responsibility in this matter. The noble Lord, Lord Cameron, asked about support for African countries. Many of DfID’s 18 country programmes in Africa have a strong focus on supporting rural and small-scale agriculture. We are co-chairs and strong supporters of the Africa Enterprise Challenge Fund governing council. We gave it £44 million between 2008 and 2011, which has helped about 1 million rural farmers in Africa.

The right reverend Prelate the Bishop of Wakefield asked about the viability of a lasting peace in Afghanistan. We encourage all parties to take forward reconciliation, a process that must be Afghan-led. That includes members of the Taliban who are prepared to renounce violence, break ties with al-Qaeda and respect the Afghan constitution. He also asked about the covenant and how the challenge of looking after families and injured personnel will be met after combat operations in Afghanistan cease. Our commitment, in particular to those injured on operations, is for long-term operations. Just as their difficulties will not disappear at the end of 2014, neither will our support.

The right reverend Prelate also asked, if unrest in the Middle East persists, what contingency do we have to respond? We have a range of contingency plans for the Middle East and maintain forces at readiness to deal with and respond to contingencies, depending on the circumstances. I am sure that colleagues would not want me to go into too much detail on that issue.

My noble friend Lord Chidgey asked: what are the Government doing about international corruption in the DRC and Zimbabwe? We believe that a combination of voluntary approaches by business and existing legal and regulatory methods will provide sufficient incentives to achieve greater transparency. However, we are interested to see how the United States Government will implement their new legislation on conflict minerals, and are monitoring it very closely. My noble friend was also concerned that poor people are not benefiting from mineral wealth in their countries. Her Majesty’s Government are a strong supporter of the Extractive Industries Transparency Initiative, which enables people to hold their Governments to account for mineral revenue. We are also working with countries to strengthen their public financial management systems and the capacity of their tax departments to stop tax avoidance.

The noble and gallant Lord, Lord Stirrup, asked: has there been international agreement on long-term financing for Afghanistan? The continued support of the international community for Afghanistan after 2014 is vital for our shared national and international security. At the Bonn conference last December, the international community reiterated its long-term commitment to Afghanistan. The UK announced in April that we would provide £70 million per year, as I mentioned, and international partners have announced significant contributions in the build-up to the NATO Chicago summit this weekend. However, our support to Afghanistan will be more widely focused than on security elements alone. We look forward to the Tokyo conference in July, where the international community will deliver long-term commitments for development assistance.

My noble friend Lord Teverson and several other noble Lords asked about South Sudan and the Sudan crisis. My noble friend was particularly interested in China’s involvement in discussions. It is significant that the UN Security Council resolution was unanimously supported by all members, including China.

My noble friend also asked what the commitment is of the new French Government to the UK-French treaty. We are pleased that initial contacts with the new French Government suggest that they remain committed to the co-operation which we agreed in 2010.

The noble and gallant Lord, Lord Craig, asked about the 1% increase in defence spending. That increase in spending on equipment and equipment support in the period beyond the spending review brought over £3 billion of new money into defence over the 10-year planning period. The increase applies only to equipment and equipment support. In balancing the programme, we have assumed that the non-equipment programme will increase in line with inflation. An exact defence budget for the years beyond 2014-15 will be set during the next spending review.

The noble and gallant Lord also asked what the next stages are in the coalition’s defence thinking. The SDSR concluded that we should assume an adaptable strategic posture, which means that we will remain ready to use armed force where necessary to protect our national interests. However, we will be more selective in its use and focus our Armed Forces more on tackling risks before they escalate and on exerting UK influence as part of a better, co-ordinated overall national security response. The SDSR also made it clear that we must give priority over the next decade to recovering capabilities damaged or reduced as a result of overstretch. This takes time and investment but is needed to rebuild the strength and restore the capability of our Armed Forces to react effectively to new demands.

The noble and gallant Lord asked about Afghan gifting. We are currently examining options for the future of equipment procured as urgent operational requirements for Afghanistan, but no decisions have yet been made and we will not dispose of equipment that is required as part of the future contingent capability.

Finally, the noble and gallant Lord asked about the MRA4. Following the removal of the Nimrod from service, the department has conducted a number of studies into the resulting capability implications but no decision has been made on whether a long-term manned or unmanned replacement for the marine patrol aircraft is required.

The noble Baroness, Lady Kinnock, the right reverend Prelate the Bishop of Lichfield and the noble Earl, Lord Sandwich, mentioned the 0.7% commitment and the timing of legislation. We will continue to honour our commitment. That is why we will not only enshrine that historic commitment in law—the Bill is already prepared—but be the first G8 country to deliver.

The noble Earl also asked about the post-MDG framework. We are delighted that the Prime Minister has been asked to co-chair the Secretary-General’s high-level panel on a framework to replace MDGs, alongside the Presidents of Indonesia and Liberia. We will do all we can to support the UN process to secure global agreement on a successor framework that will help meet the needs of the world’s poorest people.

My noble friend Lord Luke asked a number of questions about the carriers and the JSF, which is an important issue. As a result of the recent decision to switch back to the stable variant of JSF, we will have two carriers capable of flying stable aircraft and thus the ability to deliver continuous carrier availability. As we set out in the SDSR, a final decision on the use of the second carrier will be taken as part of the SDSR in 2015. Overall, the Queen Elizabeth-class carrier costs will be subject to a detailed review and thorough scrutiny by the MoD approving authorities. Until this work has been undertaken, it is too early to comment on the revised cost of the programme. I think that my noble friend’s other questions were covered in the Statement that I made last week on the carriers.

My noble friend Lord Sharkey asked about Cyprus. Successive UK Governments have long been advocates of a comprehensive settlement. We are committed to assisting Cyprus in its preparation for the EU presidency.

The noble Lord, Lord Williamson, asked how useful the EEAS is. The Government see it as an important tool to support member states of the EU in making the best use of their collective weight in the world, in areas where we agree to act together. The real potential of the EEAS lies in its ability to mobilise the combined resources of the EU institutions and the member states. This is apparent in the Horn of Africa, where we are beginning to see an effective, comprehensive approach that brings together the EU’s diplomatic development and CSDP mission activities into one approach.

We must adapt to stay ahead, configure our capability to address tomorrow’s threats not yesterday’s, build more versatile and agile forces for the future and ensure that our people have what they need in this important endeavour—the defence of our nation in a changing world. I beg to move.

Motion agreed nemine dissentiente, and the Lord Chamberlain was ordered to present the Address to Her Majesty.

House adjourned at 5.36 pm.